The Valley bubble breaks

Silicon Valley’s AI-driven dominance is beginning to crack as the sector’s hype shows early signs of faltering, with the author arguing that the region’s standing has been permanently damaged. The core problem is that AI, unlike earlier consumer tech innovations, is neither free nor cheap, and its true costs will become apparent once the hundreds of billions in annual funding from investors dries up. The Valley has failed to grasp how weary ordinary people are of AI—reportedly the first technological advance to be so widely disliked—leaving an industry with no experience of public disapproval unable to detect it. As a result, US tech is losing its global center of gravity, with no single replacement hub emerging; instead, the author expects a multi-hub world, which he views as a positive development. Inertia will keep the Valley important for decades, but it has permanently lost its natural dominance of hearts and minds. The author stresses this is not a verdict on AI itself, which he concedes will change programming—though less radically than US doomsayers claim, since AI can copy but cannot innovate.