AI investment boom is at the peak of inflated expectations, heading for a 'trough of disillusionment'

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The current AI investment boom, characterized by massive capital inflows and high expectations, is following the Gartner Hype Cycle, which historically leads to a 'trough of disillusionment' as reality sets in. This pattern was observed during the 1840s railway mania and the dot-com bubble, where investments peaked around a 7% threshold, similar to AI's current state, often followed by a period of no return on investment, especially when interest rates rise.