Every AI capex chart published this year gets laid over the same overlay: 1999-2000. Capex-to-sales ratios, VC concentration, IPO froth, Fed warnings — the comparison is everywhere, and it is not baseless. But it is incomplete in a way that matters, because it measures this cycle using the only historical yardstick available and assumes the yardstick still applies.

The Comparison Investors Keep Reaching For

The parallels are real and worth taking seriously. Big Tech’s combined AI capex is expected to reach $650-700 billion in 2026, and one Wells Fargo analysis noted this drove 42% of Q1 GDP growth while representing 2.4% of total US GDP — a figure some analysts expect to surpass dot-com-era peaks by Q4 2026. MIT research found that 95% of organizations report zero measurable return on their GenAI investments so far, and the ratio of infrastructure spending to actual AI software revenue runs close to twenty-to-one. Morgan Stanley has pointed out that capex-to-sales ratios are on track to exceed the 32% peak hit at the top of the dot-com bubble.