Every era of technology has its mania phase - railroads, radio, dot-com, mobile apps, and now AI. The signs are already forming: declining model differentiation, soaring compute costs, consolidation around a few infrastructure giants, and an investor base assuming exponential growth forever. When the AI bubble finally bursts while crypto continues its multi-year downtrend, the impact won’t look like a simple correction. It will be a dual collapse that resets the entire digital economy.

This is what the reset looks like.

1. Valuations Detach From Reality - Then Snap Back Hard

Right now, AI startups with no revenue and no moat are getting billion-dollar valuations simply because they have “AI” in their pitch deck. When the market reprices risk, these companies will evaporate overnight.

• Compute-heavy models will die first.
• “Wrapper startups” around OpenAI/Anthropic APIs will disappear.
• Investors will demand profitability, not hype.

The correction will be brutally fast because AI companies burn cash at a rate unmatched in tech history. The cliff isn’t a dip - it’s a freefall.

2. Crypto’s Downtrend Becomes a Liquidity Drain for AI

For the last decade, crypto profits quietly subsidized a lot of speculative investing. Every bull run created thousands of new angel investors and “degens turned VCs.” That liquidity pushed into AI, Web3, LLM tooling, and on-chain x AI narratives.

If crypto continues to bleed while AI cracks:

• Retail exits completely.
• Altcoins die in batches.
• Token treasuries that funded AI/XR/infra teams run dry.
• Startups lose their last source of fast, dumb money.

The two markets collapse into each other like twin lungs deflating.

3. Talent Exits the Bubble Industries

When the bubble bursts, thousands of developers, creators, and founders trained on AI hype cycles will leave the field entirely.

• Junior AI devs realize the market is saturated.
• Prompt engineers disappear like Flash developers in 2011.
• Crypto “builders” go back to traditional software or trading FX.
• AI influencers vanish overnight because the audience dries up.

The signal-to-noise ratio increases, but the ecosystem temporarily shrinks by 60-80%.

4. Hardware Giants Become the Only Survivors

NVIDIA, TSMC, AMD, and a few cloud providers remain standing. Everyone else fights for scraps.

This is the same pattern as the dot-com crash: bandwidth, semiconductors, and infrastructure outlive the hype cycle because they sell picks and shovels, not dreams.

Startups die. Hardware doesn’t.

5. Governments Step In - But Too Late

AI safety regulation, crypto AML rules, and model licensing frameworks all show up after the

collapse, not before. Policymakers always regulate the corpse, not the living creature.

Expect:

• New “AI Stability” requirements
• Heavy surveillance on crypto flows
• Mandatory disclosures for model training data
• Massive fines for model hallucinations or misinformation

The regulatory burden will suffocate small teams and force consolidation.

6. Real Businesses Rise From the Rubble

This is the part most people underestimate: the next giants are born after the crash, not before it.

Post-burst winners:

• AI tools that cut real costs for real businesses
• Vertical models (medicine, legal, logistics)
• Crypto projects tied to real cashflow (tokenized assets, RWAs)
• Automation companies replacing white-collar labor
• Data companies that clean, structure, and sell high-quality corpora

Hype dies-but utility survives.

7. The Market Enters the “Age of Proof”

The speculative era ends. The execution era begins.

Investors stop asking “How big could this be?”
They start asking:

• “Does this product save money?”
• “Does this protocol generate revenue?”
• “Will this model outperform open-source alternatives?”
• “Can this business run without billions in compute subsidies?”

It becomes a market where vision matters less than proof.

8. User Behavior Shifts Dramatically

After two collapsed hype cycles, users get cynical.

• People stop paying for AI subscriptions they don’t use.
• They gravitate to cheaper open-source models.
• They abandon worthless tokens permanently.
• They spend more time on practical tools and less on speculation.

The user base matures-and the easy money era ends.

9. Geopolitics Intensify Around Compute and Capital

A dual crash doesn’t remove demand-it concentrates it.

• China, US, India, and UAE race for GPU dominance.
• Energy becomes the new oil.
• Nations start stockpiling models and datasets like weapons.
• Only sovereign wealth funds and mega-corporations can afford frontier AI.

The future still belongs to AI-it just won’t belong to everyone.

10. The Final Outcome: A Harsh but Healthy Reset

Both bubbles crashing at the same time isn’t the end-it’s a purification.

The froth dies. The fundamentals survive.
The hype ends. The real innovators emerge.
The noise collapses. The signal grows stronger.

AI doesn’t disappear. Crypto doesn’t disappear.
They evolve.

The next era is built not by hype merchants, but by disciplined operators, real builders, and companies that create actual economic value.