Nvidia

Gartner hype cycle shows generative AI well down the slope into the trough if disillusionment

Credibility and fortunes at risk with AI

Lou Covey

The failure of the current iteration of generative AI to live up to its promises is putting severe strain on its credibility. A collapse could result in the destruction of personal wealth on a massive scale. While it is probably a given that the artificial intelligence (AI) industry is here to stay, questions are many. What form will survive, what will it really cost, and what is the near-term effect on other sectors like the cybersecurity industry?
There are more than 5,000 cybersecurity tool providers and thousands more MSSPs and all of them, in some form, are reliant on AI to some degree. Cybersecurity marketing, investment, and especially technology development could be a disastrous dependency… or not.
AI startup funding reached $333 billion in 2024 AI in 2024. Global venture capital funding for generative AI reached approximately $45 billion in 2024, from $24 billion in 2023 AI Investment Trends 2025. AI-related investments accounted for 33 percent of total investments into VC-backed companies in the U.S. This year, global venture capital investment in generative AI appears ready to dwarf those totals, with $49.2 billion in the first half of 2025. It is on track to exceed $100 billion this year .
The big knock on AI is the lack of an effective infrastructure to support the claims the AI companies are making on potential uses. In response, tech giants are making massive infrastructure investments: More than $300 billion has been invested this year on AI infrastructure tech megacaps plan to spend more than $300 billion in 2025 as AI race intensifies.

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Engineer blowing a popping bubble labeled AI industry

AI bubble about to pop for cybersecurity?

Lou Covey

As quickly as the artificial intelligence (AI) industry appeared, it may disappear just as quickly. That may have significant ramifications for cybersecurity, according to industry watchers, as the technology falls into the trough of disillusionment.

When OpenAI burst on the scene more than two years ago, Microsoft was a significant instigator in its growth and adoption. Microsoft invested billions in the not-for-profit enterprise for early access to cutting-edge AI technologies and helping accelerate OpenAI's research. It transformed its Azure cloud platform into a leading infrastructure provider for AI development, offering specialized hardware (like GPUs and TPUs) and services tailored for machine learning workloads. AI capabilities were embedded across its product suite, and Microsoft Research contributed significantly to AI advancement in computer vision, natural language processing, and deep learning.

All of that came with extreme demands on computing resources. Microsoft began a buying spree in data centers, both to secure resources and build new centers. They even entered into a deal to reopen the notorious Three Mile Island nuclear power plant.

Spree ends

That has all come to an end. As reported in Bloomberg last week, the company decided to scale back data center projects in the UK, Australia, and Indonesia. Data center development in Illinois, North Dakota, and Wisconsin is also canceled. All tolled, Microsoft has walked away from more than 2GW. That’s on top of the news that Microsoft had walked away from two data center projects in the US and Europe, piling on to a February announcement that it was canceling data center leases.

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