Fidelity Global Macro Director Says AI Boom Follows Path of Late 1990s Internet Bubble
Jurrien Timmer, Fidelity's Global Macro Director, stated that the AI boom is following the blow-off phase of the late 1990s, with the performance of the GS data center basket closely aligning with the IIX internet index at that time.
Both sets of indices are standardized from a starting point: the 1995 Netscape IPO corresponds to the 2022 ChatGPT release; the 1990s S&P 500 analog also remains in sync.
Mechanically, institutional funds are accelerating their pursuit of AI themes and data center stocks, driving capital from defensive positions to high Beta tech stocks, benefiting AI infrastructure and related sectors, while investors cautious about bubble risks are under pressure.
Source: Public Information
ABAB AI Insight
Jurrien Timmer has long used historical cycle comparisons to analyze the market. This AI vs. Internet chart continues his past updates on the dot-com bubble analogy, including the synchronization of the post-April 2025 tariff tantrum rebound with the 1998 LTCM crisis trajectory, emphasizing multiple expansion phases during capex booms.
In terms of capital flow, Fidelity is directing institutional funds towards data centers, semiconductors, and AI-themed ETFs through macro research and client allocation advice, motivated by capturing the accelerated profit dividend as AI capex doubles its revenue share to 9% post-ChatGPT release, while also cautioning about left tail risks to manage positions.
Similar cases include Timmer's predictions of the early cycle of AI in 2022-2023 using similar charts, as well as the final melt-up of the internet index in 1999-2000. The current AI market is transitioning from stable expansion to a potential blow-off phase, with mainstream macro analysts updating comparisons to accelerate consensus formation.
Essentially, this reflects capital concentration: the top-level concentrated market driven by AI themes is likened to the bubble path of the late 1990s, with the root mechanism being the capex boom leading to synchronized acceleration of revenue and profits, creating a positive feedback loop of multiple expansions. However, history shows that such vertical trends ultimately face oversupply and valuation corrections, leading to a structural evolution from a secular bull to a potential bubble conclusion.
ABAB News · Law of Cognition
Historical analogies do not predict outcomes but always reveal the same paths of capital in euphoria. Accelerated profits are not proof of a bubble but typical fuel for the blow-off phase. Those who study history may not necessarily avoid repetition but at least know when left tail risks may arise.