Beyond the boom: building lasting value from the AI revolution

Thirty years ago, Netscape made its stock market debut, ushering in user-friendly web browsing – and the tech exuberance that would inflate the dot-com bubble. The rest is history: a groundswell of start-ups, surging investment, and the eventual collapse of some of the period's most celebrated names.

That bubble may have burst, but the dot-com legacy is still going strong. It rewired how people interact and created the infrastructure, business models, and risk-taking mindset that define our century. Without it, digital commerce, cloud platforms, and the connected world as we know it wouldn't exist.

Today, investment in AI and its supporting infrastructure is surging, prompting comparisons to the early dot-com-era internet. People are wondering if the AI boom also sits on a knife's edge: will this technology's adoption and monetization diffuse smoothly, or will it fracture?

Of course, there are clear differences. Dominant AI firms today differ fundamentally from dot-com start-ups; AI investment is being driven by well-established companies with strong margins and cash flow. Still, competing views abound over the sustainability of AI spending.

So, what will it be: AI revolution or illusion? The answer is unfolding, but I believe AI's productivity-boosting substance will ultimately prevail, much as the dot-com era's winners have transcended the late-1990s hype.

Then as now, the real story is the foundations being laid for long-term impact. After all, for every pets.com or boo.com that failed, there’s an Amazon, a Google, or an Alibaba that have demonstrated real staying power. Even Netscape's innovations live on, including in web scripting language that makes our digital lives possible.

Despite some inevitable irrational exuberance, AI will likely follow a similar path. Investments in chips, software, data centres, and the energy to run them are laying the groundwork for the next technological and economic transformation. At Swiss Re, AI is a key pillar in our efforts to advance re/insurance and create lasting value. As adoption accelerates and use cases scale, we're building the momentum necessary to thrive in an AI-powered future.

Among milestones, ClaimsGenAI helps our Corporate Solutions claims handlers detect recovery opportunities and fraud, while Underwriting Ease streamlines Life & Health Reinsurance clients' underwriting of complex applications. We have additional AI initiatives that have similar promise.

Some things haven't changed. Just like in the dot-com days, AI excursions that confuse novelty with value can quickly become costly dead-end detours. Our priority is to embed AI at the core of the business to transform critical insurance functions like underwriting and claims with a focus on its impact across two areas central to re/insurance: enhancing high-value knowledge work and unlocking the potential of unstructured data.

Over the last eight years, we've built state-of-the-art data and tech foundations that allow us to leverage AI's full potential at scale, with speed and in a safe, compliant and responsible way. These foundations enable us to scale AI use cases with focus and impact, rather than falling into the trap of fragmented pilots and low-return experimentation. 

Most importantly, the value of AI comes from combining AI capabilities and human expertise. Our human colleagues remain at the core, with AI playing a supporting role so experts can focus their time and talent on higher-value activities.

I've written before how these principles are fundamental, especially when the excitement around AI sometimes obscures just how much discipline and structure are needed to translate promise into impact.

Not coincidentally, dot-com winners followed guiding tenets that weren't so different from those I've described. The companies that combined technology with real business and consumer needs while earning the trust of customers, investors, and regulators are still going strong.

They understood data was fundamental and that real success required scaling beyond experiments. After all, the big winners didn’t stop at selling books; they reinvented global logistics.

Likewise, the AI era will produce its own leaders, with those who deploy the technology well reaping increasing gains over time.

As debate continues over AI’s future, Bill Gates’s 1996 reminder, delivered as the dot-com boom gathered steam, holds true: “People overestimate what will happen in the next two years and underestimate what will happen in 10.” AI deserves the same long-term perspective. We’re investing not for the moment, but for sustained impact.

A version of this article first appeared in Insurance Day