I believe we're at the end of what I call the Rot-Com boom: the tech industry's hyper-growth cycle, where there were so many lands to conquer, so many new ways to pile money into so many new, innovative ideas, that it felt like every tech company could experience endless growth.

And it explains why so many tech products — YouTube, Google Search, Facebook, and so on — feel like they’ve gotten tangibly worse. There’s no incentive to improve the things you’ve already built when you’re perpetually working on the next big thing.

This belief — that exponential growth is not just a reasonable expectation, but a requirement — is central to the core rot in the tech industry, and as these rapacious demands run into reality, the Rot-Com bubble has begun to deflate. The tech industry is grappling with a mid-life crisis where it desperately searches for the next hyper-growth market, eagerly pushing customers and businesses to adopt technology that nobody asked for in the hopes that they can keep the Rot Economy alive.

Over the past decade, we’ve been sold ideas about technologies that were going to change our lives but somehow haven’t moved the needle. We were told that NFTs would replace physical, tangible collectibles. That cryptocurrency would replace regular money. That we would eventually live in a metaverse. Here’s where we are: the NFT market crumbled in 2022. Cryptocurrency is nowhere near universal. And the metaverse is a laughably wonky virtual-reality space that Mark Zuckerberg, as of 2022, had burned $36 billion to make.

Today we're told that our glorious AI-powered future is imminent, yet what we actually have is unprofitable, unsustainable generative AI that has an acute issue with spitting out incorrect information. At the forefront of the AI boom is Sam Altman's $80 billion juggernaut, OpenAI, a company that says it will build "artificial general intelligence" that experiences human-like cognition, an idea that is simply not possible based on how generative AI works. Meanwhile, Google CEO Sundar Pichai said that the AI technology he’s now plugged into his search engine is “an inherent feature” despite its proclivity to generate hilariously incorrect "answers" to queries based on the links of a decaying search engine.

It’s getting worse. Windows laptops will soon integrate an AI-powered "Recall" feature that allows you to search everything you've done on your computer for the past three months, recording everything from the meetings you've been in to the things you've written — a feature nobody asked for and that inherently encroaches on the user’s privacy, as it involves taking screenshots of the user’s machine every few seconds.

It seems as if every major tech company is "integrating AI" into their products and services, yet underneath the hood the "AI" they're integrating doesn't seem to do anything new, or solve any particular need, or even generate a profit. Even the companies themselves seem incapable of explaining why AI is such a big deal, to the point that Microsoft's Super Bowl commercial for its OpenAI-powered CoPilot assistant featured multiple things that it can't actually do, like generate the code for a 3D open-world game.

The tech industry is remarkably good at coming up with both innovative products and ways to turn them into huge new markets for hyper growth: search engines, digital maps, smartphones and apps, social media, cloud computing, software as a service, electric cars, streaming audio and video. Since 2008, the number of people who use the internet has nearly tripled. There were obvious, meaningful markets to move into — ways to connect people, ways to get people the content they wanted, ways to sell people things that solved problems that were important to solve and solvable.

The tech industry’s flywheel is slowing down

Tech has perpetually succeeded at building things new things that neatly create new markets, and incentivized — in the private and public markets — growing companies as fast and as big as possible to dominate these markets, with the assumption that there would always be more massive, multibillion- or multitrillion-dollar markets to conquer in the future. 

Between 2022 and 2023, only 100 million additional people got online, the slowest rate of  growth in the past 18 years. And that’s despite the ongoing need to bring connectivity to the masses — particularly those in the Global South — a problem that has yet to be solved as the most recent figures from the UN’s International Telecommunication Union shows, with 33% of the world’s population (or 2.6 billion people) having never used the internet. 

More worryingly, data from Similarweb shows that the majority of the internet’s top 100 web properties have seen significant declines in traffic since 2021. In the three years since the world slowly emerged from lockdown, google.com has seen a decline of 5.3% in visits, as has YouTube (-3.8%), Facebook (a remarkable -27.7%), Twitter (-3.5%), Amazon.com (-11.6%), Twitch.tv (-17.5%), Wikipedia (-24.8%), and even porn sites like xVideos (-27.4%) and Pornhub (-17.1%). 

Though you might be tempted to dismiss this as the result of life returning to normal, you shouldn’t. The trend began earlier, with SimilarWeb data showing the decline starting in 2019. My analysis focuses on the 2021-24 period because that’s the one I have the most detailed month-by-month and year-by-year breakdowns for. 

When you look at the trajectory of the web’s most valuable properties on a year-over-year basis, things look especially bleak, with, Google (-0.9%), YouTube (-4.4%), Facebook (-7.7%), Twitter (-6.2%), Twitch (-11.9%), and Amazon (-2.7%) all still seeing significant declines. Only a handful of sites —, like Reddit (+31.3%), TikTok (+11.6%), Instagram (+9.9%), and LinkedIn (+17.9%) — are seeing any form of year-over-year growth. (Note that Insta growth has been trending down every year since 2019.)

While it’s important to note that these are visits rather than active users (and, in fairness, only covers visits made through a browser rather than an app, this is still an astounding trend that suggests that the web’s largest platforms are seeing their own kind of digital recession. While there might be revenue coming from these companies, and they might be still acquiring new users, there’s no good way to spin the fact that traffic to platforms like Amazon and Google plateaued and begun a slow, painful decline for the past five years. Perhaps this explains why Google and Facebook have kept making changes to make each user journey more profitable to sustain growth, because fewer people than ever are visiting their platforms. 

The Rot Economy and tech's growth-lust aren’t new. Venture capital has been encouraging and monetizing the rot for over a decade, with Marc Andreessen advocating in 2011 that we should look to "expand the number of innovative new software companies created" rather than "constantly questioning their valuations." Just one year earlier, in March 2010, his VC partner, Ben Horowitz, advocated for "fat startups," saying that you "can't save your way to winning the market," and that “worse than startup hell” is ending up "stuck with the small company," even if it's cash-flow positive.

At the time it made sense. In 2010, it felt like we were making our first tentative steps into an unexplored digital frontier. There was no Instacart, no Zoom, no Snapchat, no Tinder, no Slack, no Doordash, no TikTok, and no Discord. Tesla, Facebook, LinkedIn, Airbnb, Uber, Square, Atlassian, Okta, Workday, Asana, and Spotify had yet to go public. Instagram was yet to be acquired by Facebook, consumer drones had yet to reach ubiquity, voice assistants were yet to be launched, 4G LTE networks were just launching, and Amazon Web Services was a baby projected to generate just $600 million in revenue in 2010, or around 2.5% of the $24 billion it made in Q1 of this year. Google’s and Apple’s stock prices were worth less than a tenth of what they are today, and Nvidia — a stock now worth over $1,000 — traded at under $3 a share.

Between 2005 and 2018, we saw an incredible surge of innovation and tech valuations — a seemingly unstoppable period of growth and big, sexy ideas that created huge new markets. While "applications" existed in 2008, Apple's app store — and the perpetually connected nature of smartphones — consumerized the concept of distinct service-based applications, as well as the concept of software ecosystems, a philosophical and economic force that would permanently change both consumer and business software spending. 

While today there are new ideas, the fundamental technology required to innovate may not exist, making those ideas primarily theoretical. 

The necessary tech to create the growth investors are accustomed to doesn’t actually exist

Connecting people digitally — through social media, voice, and video — has been central to the hyper-growth cycle, with innovations in connectivity and cloud infrastructure allowing several companies to carve out hundred-billion- or trillion-dollar ecosystems doing so. On some level, big tech companies could put more money (through R&D, investment, or acquisitions) wherever they needed to, as a means of making the future a reality — and, thanks to rock-bottom interest rates and the frothy investment market, they were never short of cash.

Yet  hype began to outpace innovation, and while today there are new ideas, the fundamental technology required to innovate may not exist, making those ideas primarily theoretical. 

When Zuckerberg renamed Facebook to Meta, he said the metaverse was "an embodied internet" that was a “persistent, synchronous environment” that would resemble social media but also be "an environment where you're embodied in it." This is, of course, total nonsense.

What he delivered was a half-arsed virtual world accessed through niche virtual-reality technology that Meta couldn't build and nobody needed. What he wanted to do was build "the successor to the mobile internet" in the hope that "the metaverse" would be another hyper-growth industry where people would buy land (they didn't), hang out en masse (they didn't), or have meetings (they didn't), all while sharing data with and watching ads served by Meta and other companies. 

And the tech was never there. Zuckerberg’s vision hinged on the idea that technology can immerse the user, allowing them to exist in a digital world that feels real. The reality was far worse — nausea-inducing headsets that led you into a clunky, cartoonish world that was neither fun nor practical, and tens of billions of dollars of R&D costs developing headsets that lost money on every sale.

$36 billion later, Zuckerberg's glossy metaverse video showed exactly what he hoped he could build, but the metaverse is no closer to succeeding. Zuck hasn’t given up — he keeps burning cash in the hope he can get just one more hit of hyper-growth. That's all he needs, man.

It’s why Zuckerberg is so full force on generative AI, shoving it into every Meta platform regardless of whether it does anything useful or says extremely strange things. It's the same reason that Sundar Pichai and Google’s head of search, Liz Reid, are forcing generative AI into Google Search even as it actively misinforms their customers. The tech industry has withdrawal symptoms. They are realizing that there might not be any massive new markets to turn into further billion-dollar arms of their trillion-dollar enterprises, and on some level I believe that the industry-wide alignment around an unprofitable, unsustainable tool is proof that things are getting desperate.

Companies that build useful things that people need don't need to talk about what they'll build in the future; you can see it in the things they're selling you today. Using the first iPhone, one could imagine that you might one day make video calls with it, or use third-party apps like you did on a computer — and while Steve Jobs did talk about what was coming next, he did so by saying that it would add "3G and amazing things in the future" just before showing the actual, real features of the first iPhone, things that people wanted. These promises were believable, either because they felt like a next logical step or because they could be found in other competing products. Apple has always been a company of iteration, rather than sheer, forceful, explosive creation. It didn’t make the first smartwatch, tablet, or ARM-based PC. But it made those things good. 

Conversely, Altman, Sundar Pichai, and Satya Nadella seem intent on discussing what AI will do — it will have a "monumental impact,"be a smart person who knows everything about your life — and yet when asked what it does today, we get Nadella’s underwhelming answer that Microsoft copilot helps him compose emails better.

It’s worth noting that Nadella said in 2021 that Microsoft was, with the metaverse, creating "a new platform and a new application type" that was similar to how it talked about the web and websites in the early '90s, and that he "could not overstate" how much of a breakthrough it was, only to dump it two years later for artificial intelligence. Two years before that, Nadella called HoloLens 2, Microsoft's augmented-reality glasses, “an absolute breakthrough" a few months after its demo failed live onstage at Microsoft Build 2019.

Generative AI isn’t actually able to produce the industry-defining shifts that are being promised

What makes generative AI so tantalizing is that it has the hint of utility, the scent of a product, and as a result can be sold to the markets as the next big boom that justifies hundreds of billions of dollars of investment and increased market capitalization. Every single company chasing the generative AI dragon is hoping that it's the next Amazon Web Services —the ubiquitous cloud product that went from a side project to a bigger revenue driver than Amazon's store — because it sort of, kind of seems like it's "the next big thing in cloud," even if it doesn't seem to do anything useful, let alone incredible.

But nobody can explain why or how generative AI is the next big thing. ChatGPT, Gemini, Claude, and other large language models can do some things that are superficially cool. They can generate images, quickly query datasets (albeit with no guarantees of accuracy), and craft poetry, but there is no endearing reason to pick up one of them every day and use them. The use cases they enable are neither exciting nor ubiquitous, nor are they anything like what tech executives are trying to sell us. And the problem might not be that it's useless, but that as a piece of technology, it just isn't a hyper-growth market or industry changer, no matter how many hundreds of billions they put into it.

Altman isn't asking Microsoft for a $100 billion supercomputer because generative AI is going to get better; he's doing it because what we have today isn't the world-changing boondoggle that the tech industry needs it to be, and his only prospect of fulfilling the lofty promises he’s made is with a tech industry equivalent of the Marshall Plan.

Yet, without generative AI, what do these companies have left? For the best part of 15 years we've assumed that the tech industry would always have something up its sleeve, but what's become painfully apparent is that it might have run out of big, sexy things to sell us and markets it could disrupt. A paper from Nature from last year posited that the pace of disruptive research is slowing, and perhaps the same might be happening in tech, except we've been conflating "innovation" and "finding new markets to add software and hardware to" for two decades. 

This isn't to say that there can't be successful tech companies, or that there won't be any more innovation — just that there will be less innovation and at a smaller scale. And I don’t think we should fear this. 

The tech industry can no longer rely on the idea that every year (or couple of years) somebody will find an idea that will create 200 more startups or trillions of dollars in market capitalization. It must reconfigure both VC investment and public tech companies to a more sustainable, profitable and useful model where — get this — existing products are made better and more profitable with the understanding that products cannot be built with the assumption that more and more users will always exist — we’re approaching Max Internet.

I am sure there are some that will say I'm wrong, that tech's hyper-growth era isn't over, and that generative AI will usher in a glorious new future of powerful assistants. But seriously, what does that look like? What happens next? Where does generative AI go from here? How will OpenAI train GPT-5?Has it found five times the amount of training data used to train GPT-4 yet? Has Google, or Meta, or Microsoft found a way to make generative AI profitable yet?

And crucially, when does generative AI suddenly prove itself useful? Where is the big moment that changes everything?

The answer is simple: it isn't coming. Generative AI is probably not going to change the world, and it isn't going to do so in the hands of Altman and OpenAI. When the bubble bursts, I imagine these firms will be absorbed by the massive tech companies that have put billions of dollars into them in exactly the same way that Microsoft absorbed Inflection, quietly hiding their failures and repurposing the massive compute investments to bolster the already existent cloud infrastructure.

In the end, this is far better for the tech industry. To have a better world — one with more interesting things, and where society doesn't constantly feel at odds with technology — tech companies must shed their growth addiction, and I believe they'll be forced to do so whether they like it or not. There will likely still be many, many hundred-million or billion-dollar companies — just far fewer hundred-billion or trillion-dollar ones.

Until that happens, billions will be plowed into building hardware and software to inflate the Rot-Com bubble in the hope that the growth-at-all-costs party will never end. I just don't think that anyone in big tech is prepared for the inevitable pop.

Ed Zitron is the CEO of national Media Relations and Public Relations company EZPR and the author of the newsletter Where's Your Ed At.