Shades of 1999

Around 1998 it became trendy to rebrand existing companies with a “.com” at the end.

And it made sense. Doing so got you written up in the Wall Street Journal… and likely sent your stock price soaring.

We saw a similar trend unfold about 20 years later during the first Bitcoin craze in 2017 with the most absurd example Long Island Ice Tea Corp renaming itself Long Blockchain Corp.

And more recently, we’ve seen plenty of AI rebranding. As an example, Sarcos Technology & Robotics Corporation rechristened itself Palladyne AI last year.

Now we’ve entered a strange new phase of name associations. Mere mention of a deal with ChatGPT creator OpenAI is enough to send a company’s share price soaring.

From Bloomberg this morning:

AMD’s deal with OpenAI will go down as one for the stock-market history books, kicking off a 24% one-day gain that added $63 billion to its market value. Last month, Oracle surged 36% in a single session after it gave blockbuster guidance for its cloud business, including an agreement with OpenAI worth $300 billion over five years.

It’s not just jumbo deals — a mere mention at OpenAI’s annual developers event was enough to push up a whole host of stocks, like Figma, HubSpot and Salesforce. Most were named as partners whose apps are being incorporated into ChatGPT. Even CEO Sam Altman admitted his company’s impact on other stocks is “weird.”

ChatGPT is amazing. I use it daily. At this point, I would struggle to function without it.

But OpenAI isn’t profitable. It’s projected to burn through $115 billion by 2029. Given its massive investment needs to stay competitive with Grok, Anthropic and the rest, it may never be profitable. And it constantly runs the risk that an upstart like China’s DeepSeek will be able to match or exceed it at a lower cost.

So, what happens to Nvidia, AMD and the rest if OpenAI hits a bump in the road and has to scale back?

We’ve seen this movie before.

In 2000, it became painfully obvious that internet infrastructure was overbuilt. And in the shakeout that followed, Intel and Cisco Systems — the two most critically important suppliers to the internet revolution — both fell over 80%. Neither has ever made it back to its old 2000 highs…. more than 25 years later.

Are we looking at a similar crash this time around?

I don’t have a crystal ball. But I’d point out that technology accounts for more than a third of the S&P 500 today. It was only 15% back in 1999.

So, if we do see another tech bust, it’s really going to hurt this time around.