TED Talks Daily - Is the AI bubble about to burst? | Henrik Zeberg

Episode Date: December 12, 2025

We are living through what may be the largest economic bubble in history, spanning AI, cryptocurrency and tech company stocks, says financial analyst Henrik Zeberg. He explores why the current AI-crypto bubble mirrors the great economic frenzies of the past, revealing the psychological forces behind them — and why it looks like we're repeating the same patterns again. Hosted on Acast. See acast.com/privacy for more information.

You're listening to TED Talks Daily, where we bring you new ideas to spark your curiosity every day. I'm your host, Elise Hugh. It sometimes feels like it's the only thing anyone's talking about, but are we actually living through what may be the largest economic bubble in history, spanning AI, mega-cap tech stocks, and cryptocurrency? In this talk, financial analyst Hanrick Zberg, takes us on a journey through history's economic bubbles from tulips and South Sea shares to the dot-com craze showing how crowd psychology and speculation keep luring us in. By recognizing the patterns of this past, he says, we can better navigate today's frenzy. Don't think you're special. Don't think that you know more than we do.

These are some of the statements from the law of Yante. And I think that is dangerous. I think that is actually driving a common thinking that can bring, you know, hazard outcomes. And today I want to talk about something that may be a little more dry, which is Bitcoin, crypto, bubbles, financial bubbles. Bitcoin is a mineral disease. Bitcoin is rat poison squared.

These are not my words. These are the words of Charlie Munger and Warren Buffett. Two of the most prominent investors this world has ever seen, most successful investors, 5 million percent in returns over their investment careers, speaks for itself. So when they talk and speak, And unfortunately, Mr. Munger is dead. But when they did talk or when they speak, we have to listen. And I definitely listen.

Bitcoin has, of course, had a fantastic journey. And we all need to praise, of course, the amazing returns that that has given over the years. But when we hear about it, of course, we have to wonder, why are the two most successful investors in the world talking about it like rat poison? And I can tell the personal story. In 2016, I was close to investing in Bitcoin, actually buying around maybe $150,000 worth of Bitcoin, which today would have had a value of around $20 to $25 million.

I didn't do it. I didn't get to it because of the difficulties in actually getting the money transferred from a bank to a wallet back then. But one of my friends actually did enter, did take the crypto plunge. And he entered Ethereum, which is another crypto, at the time it was at 50 cents. And he held on to it until the moment it was actually reached around $1,400. So, 2,800 times.

And he's not the only one that has done well when it comes to crypto. We've all heard of these Lambo guys or people that have jumped into something that seems ridiculous, only to see it go up a hundred times. I don't know about you, but I definitely can feel the FOMO. FOMO, what is that? FOMO, fear of missing out. Well, fear of missing out is something that is very deep in the human mind. It goes back to the times of, as we lived in hundreds and gathers, in groups,

being part of the group, in short, food, security, mating, and being outside was dangerous. And that's something we have taken on to us today also. If we're not part of the group, if we don't think alike, like the Jantelow is also kind of commending, well, then it's dangerous. So fear of missing out, FOMO is something that is deeply in us. And it's something that can make us make we come up to conclusions or do things we don't necessarily would do if we were just ourselves. And this is not something just maybe I as a stupid person or people that don't understand things do. Sir Axick Newton is probably one of the most intelligent people that has ever lived.

And in the 1700s, he actually were a victim of FOMO. So that was the time of the South Sea bubble. Newton invested in, saw his stock rise, earned a good money, got out, but saw his friends actually staying in and becoming even more rich. He phomoed in, invested more actually a lot, and the bubble burst. He famously said afterwards, I can calculate the movement of heavenly bodies, but not of the madness of men. So FOMO can make us do things we don't want, that can be against what we actually, yeah, what is good for us.

And that is actually also very visible, that crowd dynamics, that is a part, of when we talk about what is called a smoked room experiment. This is an experiment from the 1968, where a group of applicants to a job are invited in to a room. Eight of the nine applicants are actors. They're told to stay seated, just work on their assignment no matter what happens. One person is a real applicant. All of us. sudden, while they do their application, smoke comes through the door. When there are other people, the other eight actors are in the room, 90% of the time, people stay seated and do not report on the smoke, on the potential hazardous event that is unfolding.

But when that person, the applicant, is alone, 75% of them got up and actually reported on the smoke. So, crowd dynamics is something that changes the way we think. And that is what actually also is part of why we see financial bubbles developing. If you look at financial bubbles, then we saw one of the largest financial bubbles back in the 1630s, which was called the tulip mania. It was at a time where the tulip had been introduced from the Osman Empire and for some reason it became the center of attention. People started buying it, a fantastic market arose up,

and people kept buying this tulip or the tulips not because of its utility, but because they thought they could sell it off the next day to earn money. The bubble burst at the peak. of that hype, of that mania. And that's just to explain how mad it can become. One tulip bulb had the price of a house at that time. Then we can fast forward to the 1840s, Britain. And this was at a time where a fantastic technology came out.

Steam engine, the locomotive, promised to change the world, and it certainly did. But the thing was, everybody thought that this is now changing ways also we'll earn money. And everybody FOMO'd in. Thousands of companies rose up were established. People thought this is a cannot lose opportunity. And again, we saw how a bubble burst and a lot of people actually lost money. And this was still because even though there was a really fantastic technology that changed the world. world. We can then fast forward to the Roaring Twenties and try and imagine. That was at the time

where we just saw the, you've just seen the end of the First World War. We saw the electrification. We saw the technology of a car. We saw radio coming out. Try imagine. Sitting there in your silent home, all of a sudden you can turn on the radio and you can hear people speaking to you. That was quite something. Turning on the light. Sitting on the light. Sitting. getting yourself into the car and driving instead of having horses. We think we have seen technology leap in technology. Well, I can tell you that was special. And what happened then?

Again, we saw people phomoing into it. Because this is, of course, a new world. This is a new time. Forget about the old world. And a massive bubble unfolded. Again, it burst, and as we probably noticed, we were heard from school, we saw the stock market trashing, we saw the large depression in the U.S. and elsewhere, because of this FOMO. And then we can fast forward to something we may be able to remember, at least some of us with

a little more gray hair. So, that was the dot-com bubble. And this was at a time where another new technology came out, just like the steam engine and the radio and now we had the internet. And everybody again, FOMO it in. What's not to like? Fantastic opportunity. The world is new. New economy, they called it.

And it's no longer about how much you earn. It's about how much you spend on marketing. And there were a fantastic support to this. Wall Street were all behind it. Media were all behind it. There were media darlings like Webvan and Hets.com. So the media were all over this. Everybody was praising this new fantastic and brave world.

Did the Internet change the world? Absolutely. But is that the same as a promise that you cannot see that the market can crash or that people get exuberant? No. So now I want to talk about Bitcoin, because I think Bitcoin is the very definition of this financial bubble we have at this point. AI and crypto bubble. But before I do that, now we talked about Yanta, but I'm from Denmark.

In Denmark, we have a famous fairy tale teller, Hans Christian Anderson, who had the story or told the story of the Empress New Clothes. And this is the story for the ones who don't know it already, of course. This is about the emperor who lived in his empire. And one day, two frosters came to town, and those were tailors. They would be able to make the most fantastic clothes that he had ever seen. So he could stand out really nice. He was very vain. And he, of course, got intrigued.

There was, however, this one caveat to it, that if people were especially stupid or were not good at what they do, they would not be able to see the clothes. And the emperor thought that was interesting, and he sent them off, and they started to work the two fraudsters on their looms, weaving, and making the clothes. The emperor got impatient and sent off his best advisor and said, can you go to see the check on how it's going? The advisor came to the fraudsters and couldn't see the clothes. And he thought, what is that going to tell of me? If I can't see that close, I'm not going to do that. So he went back to the emperor said, oh, that's amazing, sir. You love it. It's fantastic.

And then the emperor thought, okay, I got to go see myself. And he went, and again, he couldn't see the close. And he thought, what is that going to tell my people? about who I am and how I run the country. So what he did was, again, like his advisor, to simply just keep silent. And the day came where he was supposed to walk down the street, as we do, when we get new clothes, we like to show it off. And he was, the fraudster helped him put on the clothes, and he walked down the street.

And everybody, all in the crowds, were saying how fantastic this was, especially the elite. Wow, amazing garment. until a little boy cried out. But why isn't he wearing any clothes? Now, why I'm saying that? What is the morale? Of course, that sometimes it takes an innocent mind, naive mind maybe,

to point out what is the obvious. And now I want to turn to Bitcoin. Because, as I said, we currently have the largest financial bubble that we have ever seen. We had just told you about four measurements, I'm claiming we have one that is even bigger. Warren Buffett and Charlie Monger had a way of looking at the market capitalization to GDP. The higher it is, the bigger the bubble.

2000, massive bubble. We laughed afterwards. It was 136%. 2007, it was at 107%. This is where we are today. 226%. And we can just look at some of the Businesses that is doing well today, as I said, a crypto and AI bubble,

Nvidia, Palantir, I mean, don't need to know much about finance to see that, you know, 94,000 percent in a matter of 15 years, that's pretty frothy. NASDAQ, Bitcoin, Bitcoin is up 1.2 million percent since 2012. So now people say, yeah, but, you know, it can keep going up. Well, if you have a bubble and it burst, and NASDAQ and Bitcoin are following each other very, very closely, and you also know that NASDAQ actually tumbled, crashed 85% after 2001 in that massive bubble that is way smaller than what we have today. Now, guess what is going to happen to Bitcoin when Bitcoin crashes much, much more

every time we see a decline in NASDAQ? I say Bitcoin is going to crash by 95%. That's not what we hear when we hear the media, the academia, the crowd, and the Empress New Close talking about this. And then we also have a situation where we have a slowdown in the economy. It's very visible.

A recession is where bubbles burst. And when a bubble burst, you're going to hurt if you have those assets that are crashing. So let's say, I'm right, we have a recession coming. And NASDAQ dropped by 85% in 2001. And we have a larger bubble this time, much larger, what is going to happen if the economy falls into a recession? And we see NASDAQ crashing in this AI bubble we have. I say Bitcoin, crypto is a massive bubble. It doesn't take away that there is a technology, just like in the locomotive steam engine and all.

also what we saw with the radio and so on, but it's not the same as guaranteed returns. And I think we're going to see this in a not too distant future. It's a bubble that is going to burst. I think Warren Buffett and Charlie Munger are right. Bitcoin, crypto, is like a venereal disease. Thank you. at TEDx Lilatorg in Malmo, Sweden, in 2025. If you're curious about Ted's curation, find out more at TED.com slash curation guidelines.

And that's it for today. Ted Talks Daily is part of the TED Audio Collective. This talk was fact-checked by the TED Research Team and produced and edited by our team, Martha Estefanos, Oliver Friedman, Brian Green, Lucy Little, and Tonicaa Sung Marnivong. This episode was mixed by Christopher Faisie Bogan. Additional support from Emma Tobner and Daniela Balezzo. I'm Elise Hugh. I'll be back tomorrow with a fresh idea for your feed. Thanks for listening.