They Called the Internet a Fad, Too
Why ignoring AI is a dangerous bet
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Over the past few months, I’ve watched more and more colleagues quietly step back from AI. Not with a dramatic announcement, just with a shrug. The chatbot continues to write mediocre lesson plans. Students use AI to cheat. In general, the hype has cooled. The conclusion feels all too obvious to them. The technology has plateaued, the moment has passed, and their limited professional energy is better spent elsewhere.
I understand the impulse. And I fully acknowledge that the numbers seem to support that sentiment. Most organizations have now experimented with generative AI. And yet, a 2026 Gallup survey found that only about one in seven U.S. employees use it daily, and nearly half say they never use it at all. If that’s the reality after three years of relentless promotion, surely the revolution must have been oversold.
But this is where the mistake lies. Because that conclusion confuses the interface with the technology. The consumer-facing chatbot, the text box we all learned to use, has indeed largely stopped surprising us. But beneath that familiar interface, the technology is accelerating in ways most of us never get to see.
The thing is that we have been here before. Twenty-five years ago, in fact. And the last time we made this mistake, the people who checked out spent the next decade catching up.
The winter of 2000, when the internet died
On December 5, 2000, at the height of the dot-com collapse, the Daily Mail ran an article declaring the internet a passing fad.
This was not just tabloid provocation. The piece summarized findings from the Virtual Society project, an academic study spanning twenty-five European and American universities. Its director, Steve Woolgar, documented widespread user drop-off. Early web surfers had satisfied their curiosity, realized there was more to life offline, and abandoned their modems. His colleagues added that email, far from delivering the paperless office, had mostly delivered information overload.
At that time, the market agreed. Between March 2000 and October 2002, the Nasdaq lost roughly 77% of its value. Pets.com, Webvan, WorldCom, and Global Crossing, just to name a few, went under. To a reasonable observer in 2001, the digital economy looked like a collective delusion that had finally been exposed. It was a reasonable interpretation at that moment.
But as we know now, this was utterly wrong.
What the crash destroyed was the speculative valuation, and not the technology underneath it. The bubble’s real legacy was a massive, debt-financed overbuild of physical infrastructure consisting of millions of miles of fiber-optic cable, much of it laid after the Telecommunications Act of 1996. A lot of that cable then sat unused as “dark fiber” while the companies that laid it went bankrupt. That oversupply then drove the unit cost of bandwidth toward zero, carrying broadband into ordinary homes through the mid-2000s.
The effects were measurable. An econometric study of OECD countries, published in The Economic Journal, estimated that each ten-point rise in broadband penetration lifted annual per-capita GDP growth by roughly a percentage point. New technologies, including Web 2.0, e-commerce, streaming, and the cloud, were all built on infrastructure that was financed during the pre-crash mania and dismissed during the post-crash hangover.
Public disillusionment had peaked while the real transformation was still being built. It was just out of sight. The people who wrote off the web in 2001 were not wrong about 2001. They were wrong about the decade that followed.
