Former Cisco CEO John Chambers Warns of AI Boom Parallels to Dot-Com Bubble

'We are going to destroy jobs faster than we can replace them': The CEO whose 80% stock plunge personified the dotcom bubble on AI's impact | Fortune

Former Cisco Systems CEO John Chambers learned all about technology's volatile highs and lows as a veteran of the internet's early boom days during the late 1990s and the ensuing meltdown that followed the mania. And now he is seeing potential signs of the cycle repeating with another transformative technology as a whirlwind of investments and excitement about artificial intelligence has propelled the stock market to new highs. Chambers took a similarly meteoric ride in his early days running Cisco, which had a market value of about $15 billion in 1995, when networking equipment suddenly became must-have components for the buildup of the internet. The feverish demand briefly turned the firm into the world's most valuable company -- worth $550 billion in March 2000 -- before the investment bubble burst. The crash caused Cisco's stock price to plunge more than 80% during a period that Chambers still recalls as the worst of his career. Cisco bounced back to deliver consistent financial growth to help establish Chambers as one of Silicon Valley's most respected leaders before he stepped down as CEO in 2015, but company's stock price has never approached the peak it reached a quarter century ago. While remaining Cisco's chairman emeritus, Chambers is now as fascinated by the AI's transformative powers as he once was by the internet revolution. Only this time he is advising CEOs as a venture capitalist investing in AI startups rather than running a company himself. Chambers, 76, recently discussed the promise and perils of the AI boom with The Associated Press. The interview has been edited for clarity. Q: Does the current AI mania remind you of the internet boom of the 1990s? A: Absolutely. There are a lot of parallels but there are also some spectacular differences. AI is moving at five times the speed and will produce three times the outcomes of the internet age. In the internet age, a startup would develop products for two years and then in year three, they would take that out into the market. Today, AI startups develop the product in a month and sometimes in a week, and then they bring it to market in one or two quarters. In the internet age, there was an irrational exuberance on a really large scale. In this AI one, there is a lot of tremendous optimism that does indicate a future bubble for certain companies. Is there going to be train wreck? Yes, for those that aren't able to translate the technology into a sustainable competitive advantage, how are you going to generate revenue after all the money you poured into it? Q: Do you think AI is going to eliminate a lot of jobs? A: It happened with the internet. The problem this time is that if I am right about AI moving at five times the speed of the internet, we are going to destroy jobs faster than we can replace them. Will we be able to replace them over time? Yes, but there is going to be a drought while we have to re-educate lots of people. Q: What do we need to be doing to be prepared for this upheaval? A: We need to change education. Entry-level jobs, both white and blue collar, are going to disappear fast. We are creating more productivity, but we have to create more jobs as well. If companies start making more money, they are either going to increase the dividend or invest in new areas. Hopefully, the majority will invest in new areas to create new jobs. You will see successful companies expand and grow dramatically, but you are probably going to see 50% of the Fortune 500 companies disappear and 50% of the executives of the Fortune 500 disappear. They won't have the skills to adjust to this new innovation economy driven by AI because they were trained in silos they were trained to move at the speed of a five-year cycle as opposed to a 12-month cycle. Q: Do you think this is one of the most uncertain times you have ever seen? A: It's the most uncertain time on a global basis, ever. I would argue that this is the new normal. With the speed the market is moving at now, you have to be able to reinvent yourself, which most CEOs and business leaders don't know how to do, especially with AI. Q: What's your view of how Big Tech has been working with President Donald Trump during his second term in office? A: Let's be realistic. Silicon Valley moved right, there shouldn't be any doubt. They did it for economic reasons. And practicality, they did it for their shareholders but also regulation was getting out of control. They weren't able to grow and China was plainly beating us. A: I think China has full intention to win at the U.S.'s expense. In China, there are no rules, there is no intellectual property, there are no issues about misusing the power. They intend to blow past militarily, economically, and in every other way. I do not view them as a partner, I view them as a serious competitor on all fronts and someone I don't trust. I think over time people are going to recognize it's in the U.S.'s best interest and it's in China's best interest for us to get along. So go out 10 years, and that's the most likely outcome. But I think the next five years are going to be really bumpy and dangerous. We should have no illusions that they intend to crush us.

Silicon Valley leader who navigated the internet's boom and bust sees another wild ride with AI

SAN FRANCISCO -- SAN FRANCISCO (AP) -- Former Cisco Systems CEO John Chambers learned all about technology's volatile highs and lows as a veteran of the internet's early boom days during the late 1990s and the ensuing meltdown that followed the mania. And now he is seeing potential signs of the cycle repeating with another transformative technology as a whirlwind of investments and excitement about artificial intelligence has propelled the stock market to new highs. Chambers took a similarly meteoric ride in his early days running Cisco, which had a market value of about $15 billion in 1995, when networking equipment suddenly became must-have components for the buildup of the internet. The feverish demand briefly turned the firm into the world's most valuable company -- worth $550 billion in March 2000 -- before the investment bubble burst. The crash caused Cisco's stock price to plunge more than 80% during a period that Chambers still recalls as the worst of his career. Cisco bounced back to deliver consistent financial growth to help establish Chambers as one of Silicon Valley's most respected leaders before he stepped down as CEO in 2015, but company's stock price has never approached the peak it reached a quarter century ago. While remaining Cisco's chairman emeritus, Chambers is now as fascinated by the AI's transformative powers as he once was by the internet revolution. Only this time he is advising CEOs as a venture capitalist investing in AI startups rather than running a company himself. Chambers, 76, recently discussed the promise and perils of the AI boom with The Associated Press. The interview has been edited for clarity. Q: Does the current AI mania remind you of the internet boom of the 1990s? A: Absolutely. There are a lot of parallels but there are also some spectacular differences. AI is moving at five times the speed and will produce three times the outcomes of the internet age. In the internet age, a startup would develop products for two years and then in year three, they would take that out into the market. Today, AI startups develop the product in a month and sometimes in a week, and then they bring it to market in one or two quarters. In the internet age, there was an irrational exuberance on a really large scale. In this AI one, there is a lot of tremendous optimism that does indicate a future bubble for certain companies. Is there going to be train wreck? Yes, for those that aren't able to translate the technology into a sustainable competitive advantage, how are you going to generate revenue after all the money you poured into it? Q: Do you think AI is going to eliminate a lot of jobs? A: It happened with the internet. The problem this time is that if I am right about AI moving at five times the speed of the internet, we are going to destroy jobs faster than we can replace them. Will we be able to replace them over time? Yes, but there is going to be a drought while we have to re-educate lots of people. Q: What do we need to be doing to be prepared for this upheaval? A: We need to change education. Entry-level jobs, both white and blue collar, are going to disappear fast. We are creating more productivity, but we have to create more jobs as well. If companies start making more money, they are either going to increase the dividend or invest in new areas. Hopefully, the majority will invest in new areas to create new jobs. You will see successful companies expand and grow dramatically, but you are probably going to see 50% of the Fortune 500 companies disappear and 50% of the executives of the Fortune 500 disappear. They won't have the skills to adjust to this new innovation economy driven by AI because they were trained in silos they were trained to move at the speed of a five-year cycle as opposed to a 12-month cycle. Q: Do you think this is one of the most uncertain times you have ever seen? A: It's the most uncertain time on a global basis, ever. I would argue that this is the new normal. With the speed the market is moving at now, you have to be able to reinvent yourself, which most CEOs and business leaders don't know how to do, especially with AI. Q: What's your view of how Big Tech has been working with President Donald Trump during his second term in office? A: Let's be realistic. Silicon Valley moved right, there shouldn't be any doubt. They did it for economic reasons. And practicality, they did it for their shareholders but also regulation was getting out of control. They weren't able to grow and China was plainly beating us. Q: How worried are you about China? A: I think China has full intention to win at the U.S.'s expense. In China, there are no rules, there is no intellectual property, there are no issues about misusing the power. They intend to blow past militarily, economically, and in every other way. I do not view them as a partner, I view them as a serious competitor on all fronts and someone I don't trust. I think over time people are going to recognize it's in the U.S.'s best interest and it's in China's best interest for us to get along. So go out 10 years, and that's the most likely outcome. But I think the next five years are going to be really bumpy and dangerous. We should have no illusions that they intend to crush us.

Silicon Valley leader who navigated the internet's boom and bust sees another wild ride with AI

SAN FRANCISCO (AP) -- Former Cisco Systems CEO John Chambers learned all about technology's volatile highs and lows as a veteran of the internet's early boom days during the late 1990s and the ensuing meltdown that followed the mania. And now he is seeing potential signs of the cycle repeating with another transformative technology as a whirlwind of investments and excitement about artificial intelligence has propelled the stock market to new highs. Chambers took a similarly meteoric ride in his early days running Cisco, which had a market value of about $15 billion in 1995, when networking equipment suddenly became must-have components for the buildup of the internet. The feverish demand briefly turned the firm into the world's most valuable company -- worth $550 billion in March 2000 -- before the investment bubble burst. The crash caused Cisco's stock price to plunge more than 80% during a period that Chambers still recalls as the worst of his career. Cisco bounced back to deliver consistent financial growth to help establish Chambers as one of Silicon Valley's most respected leaders before he stepped down as CEO in 2015, but company's stock price has never approached the peak it reached a quarter century ago. While remaining Cisco's chairman emeritus, Chambers is now as fascinated by the AI's transformative powers as he once was by the internet revolution. Only this time he is advising CEOs as a venture capitalist investing in AI startups rather than running a company himself. Chambers, 76, recently discussed the promise and perils of the AI boom with The Associated Press. The interview has been edited for clarity. Q: Does the current AI mania remind you of the internet boom of the 1990s? A: Absolutely. There are a lot of parallels but there are also some spectacular differences. AI is moving at five times the speed and will produce three times the outcomes of the internet age. In the internet age, a startup would develop products for two years and then in year three, they would take that out into the market. Today, AI startups develop the product in a month and sometimes in a week, and then they bring it to market in one or two quarters. In the internet age, there was an irrational exuberance on a really large scale. In this AI one, there is a lot of tremendous optimism that does indicate a future bubble for certain companies. Is there going to be train wreck? Yes, for those that aren't able to translate the technology into a sustainable competitive advantage, how are you going to generate revenue after all the money you poured into it? Q: Do you think AI is going to eliminate a lot of jobs? A: It happened with the internet. The problem this time is that if I am right about AI moving at five times the speed of the internet, we are going to destroy jobs faster than we can replace them. Will we be able to replace them over time? Yes, but there is going to be a drought while we have to re-educate lots of people. Q: Does that worry you? A: Big time! Q: What do we need to be doing to be prepared for this upheaval? A: We need to change education. Entry-level jobs, both white and blue collar, are going to disappear fast. We are creating more productivity, but we have to create more jobs as well. If companies start making more money, they are either going to increase the dividend or invest in new areas. Hopefully, the majority will invest in new areas to create new jobs. You will see successful companies expand and grow dramatically, but you are probably going to see 50% of the Fortune 500 companies disappear and 50% of the executives of the Fortune 500 disappear. They won't have the skills to adjust to this new innovation economy driven by AI because they were trained in silos they were trained to move at the speed of a five-year cycle as opposed to a 12-month cycle. Q: Do you think this is one of the most uncertain times you have ever seen? A: It's the most uncertain time on a global basis, ever. I would argue that this is the new normal. With the speed the market is moving at now, you have to be able to reinvent yourself, which most CEOs and business leaders don't know how to do, especially with AI. Q: What's your view of how Big Tech has been working with President Donald Trump during his second term in office? A: Let's be realistic. Silicon Valley moved right, there shouldn't be any doubt. They did it for economic reasons. And practicality, they did it for their shareholders but also regulation was getting out of control. They weren't able to grow and China was plainly beating us. Q: How worried are you about China? A: I think China has full intention to win at the U.S.'s expense. In China, there are no rules, there is no intellectual property, there are no issues about misusing the power. They intend to blow past militarily, economically, and in every other way. I do not view them as a partner, I view them as a serious competitor on all fronts and someone I don't trust. I think over time people are going to recognize it's in the U.S.'s best interest and it's in China's best interest for us to get along. So go out 10 years, and that's the most likely outcome. But I think the next five years are going to be really bumpy and dangerous. We should have no illusions that they intend to crush us.

Silicon Valley Leader Who Navigated the Internet's Boom and Bust Sees Another Wild Ride With AI

SAN FRANCISCO (AP) -- Former Cisco Systems CEO John Chambers learned all about technology's volatile highs and lows as a veteran of the internet's early boom days during the late 1990s and the ensuing meltdown that followed the mania. And now he is seeing potential signs of the cycle repeating with another transformative technology as a whirlwind of investments and excitement about artificial intelligence has propelled the stock market to new highs. Chambers took a similarly meteoric ride in his early days running Cisco, which had a market value of about $15 billion in 1995, when networking equipment suddenly became must-have components for the buildup of the internet. The feverish demand briefly turned the firm into the world's most valuable company -- worth $550 billion in March 2000 -- before the investment bubble burst. The crash caused Cisco's stock price to plunge more than 80% during a period that Chambers still recalls as the worst of his career. Cisco bounced back to deliver consistent financial growth to help establish Chambers as one of Silicon Valley's most respected leaders before he stepped down as CEO in 2015, but company's stock price has never approached the peak it reached a quarter century ago. While remaining Cisco's chairman emeritus, Chambers is now as fascinated by the AI's transformative powers as he once was by the internet revolution. Only this time he is advising CEOs as a venture capitalist investing in AI startups rather than running a company himself. Chambers, 76, recently discussed the promise and perils of the AI boom with The Associated Press. The interview has been edited for clarity. Q: Does the current AI mania remind you of the internet boom of the 1990s? A: Absolutely. There are a lot of parallels but there are also some spectacular differences. AI is moving at five times the speed and will produce three times the outcomes of the internet age. In the internet age, a startup would develop products for two years and then in year three, they would take that out into the market. Today, AI startups develop the product in a month and sometimes in a week, and then they bring it to market in one or two quarters. In the internet age, there was an irrational exuberance on a really large scale. In this AI one, there is a lot of tremendous optimism that does indicate a future bubble for certain companies. Is there going to be train wreck? Yes, for those that aren't able to translate the technology into a sustainable competitive advantage, how are you going to generate revenue after all the money you poured into it? Q: Do you think AI is going to eliminate a lot of jobs? A: It happened with the internet. The problem this time is that if I am right about AI moving at five times the speed of the internet, we are going to destroy jobs faster than we can replace them. Will we be able to replace them over time? Yes, but there is going to be a drought while we have to re-educate lots of people. Q: Does that worry you? A: Big time! Q: What do we need to be doing to be prepared for this upheaval? A: We need to change education. Entry-level jobs, both white and blue collar, are going to disappear fast. We are creating more productivity, but we have to create more jobs as well. If companies start making more money, they are either going to increase the dividend or invest in new areas. Hopefully, the majority will invest in new areas to create new jobs. You will see successful companies expand and grow dramatically, but you are probably going to see 50% of the Fortune 500 companies disappear and 50% of the executives of the Fortune 500 disappear. They won't have the skills to adjust to this new innovation economy driven by AI because they were trained in silos they were trained to move at the speed of a five-year cycle as opposed to a 12-month cycle. Q: Do you think this is one of the most uncertain times you have ever seen? A: It's the most uncertain time on a global basis, ever. I would argue that this is the new normal. With the speed the market is moving at now, you have to be able to reinvent yourself, which most CEOs and business leaders don't know how to do, especially with AI. Q: What's your view of how Big Tech has been working with President Donald Trump during his second term in office? A: Let's be realistic. Silicon Valley moved right, there shouldn't be any doubt. They did it for economic reasons. And practicality, they did it for their shareholders but also regulation was getting out of control. They weren't able to grow and China was plainly beating us. Q: How worried are you about China? A: I think China has full intention to win at the U.S.'s expense. In China, there are no rules, there is no intellectual property, there are no issues about misusing the power. They intend to blow past militarily, economically, and in every other way. I do not view them as a partner, I view them as a serious competitor on all fronts and someone I don't trust. I think over time people are going to recognize it's in the U.S.'s best interest and it's in China's best interest for us to get along. So go out 10 years, and that's the most likely outcome. But I think the next five years are going to be really bumpy and dangerous. We should have no illusions that they intend to crush us.

Former Cisco CEO John Chambers Warns AI Market Surge Mirrors Dot-Com Bubble, Predicts Faster Job Displacement, Market Volatility - Cisco Systems (NASDAQ:CSCO), Goldman Sachs Group (NYSE:GS)

John Chambers, former CEO of Cisco Systems Inc. (NASDAQ:CSCO), who navigated the internet boom and bust, now sees troubling similarities in today's AI surge, warnings now echoed by mounting Wall Street concerns, even as some tech leaders highlight AI's productivity benefits over potential job losses. Check out the current price of CSCO stock here. From $550 Billion To Reality Check Chambers experienced technology's extremes firsthand during his tenure as CEO of Cisco, according to a Fortune report. The California-based company's value jumped from $15 billion in 1995 to $550 billion by March 2000, briefly making it the world's most valuable company, before the dot-com bubble burst. The crash caused Cisco's stock to drop more than 80%, a period Chambers still describes as the worst of his career. See Also: Jeff Bezos Predicts Gigawatt-Scale Orbital Data Centers In 10-20 Years, Compares AI Boom To Early 2000s Dot-Com Era Now 76 and serving as chairman emeritus of Cisco, Chambers works as a venture capitalist advising AI startups. He brings a perspective that helps him spot potential warning signs of another market correction. Speed, Scale Differences "AI is moving at five times the speed and will produce three times the outcomes of the internet age," Chambers told the Associated Press. AI startups now develop products in weeks versus the two-year cycles of the 1990s, bringing solutions to market within quarters rather than years. Job Displacement Concerns The visionary executive warns of major workforce disruption, saying jobs will be "destroyed faster than we can replace them." He predicts that half of the Fortune 500 companies could vanish, along with many executives unprepared for AI-driven 12-month business cycles compared with traditional five-year planning. Bubble Warning While acknowledging AI's transformative potential, Chambers warned of "tremendous optimism that does indicate a future bubble." Companies unable to translate AI investments into sustainable competitive advantages face a "train wreck," he said. Market Data Supports Concerns Recent data support Chambers' warnings. The Bureau of Labor Statistics revised 911,000 jobs downward through March, with economists pointing to AI-driven automation. Goldman Sachs Group Inc. (NYSE:GS) estimates that AI could replace 6-7% of U.S. jobs over the next decade, while Jefferies strategist David Zervos cautioned that 3-5 million jobs might vanish within just four years. OpenAI CEO Sam Altman forecasts that AI will soon replace 30-40% of work tasks. Contradictory Views Wall Street remains divided, with Palantir Technologies Inc. (NYSE:PLTR) Chief Technology Officer Shyam Sankar and investor Kevin O'Leary arguing that AI boosts productivity rather than eliminating jobs, presenting a sharp contrast to Chambers' cautionary stance. Read Next: OpenAI's Sam Altman Prepared To Swap CEO Role For Farming If AI Supersedes Him Photo courtesy: Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. CSCOCisco Systems Inc$67.90-0.60%OverviewGSThe Goldman Sachs Group Inc$791.001.49%PLTRPalantir Technologies Inc$175.43-6.21%Market News and Data brought to you by Benzinga APIs