VC Insider: AI Bubble Burst Is a Necessary Path to the Golden Age
Alina Collins
VZ.VC founder Vijay Pande publicly called for the AI bubble to pop, citing a 250-year pattern in technology cycles — the crash completes the infrastructure, but the real variable is how society responds.
Why is a venture capitalist cheering for his own asset class to crash?
Pande posted on X on June 30, calling current AI valuations "absurd" and data-center spending "frenzied." He says half the people he talks to are quietly preparing for a downturn.
His stance is counterintuitive: as a VC, a burst bubble would directly burn his own asset class — yet he is openly welcoming the crash.
This means → when the people with the strongest incentive to defend high valuations say prices have lost touch with reality, that is itself a market signal.
What makes him believe a crash is actually a good thing?
Pande invokes economist Carlota Perez's framework: every major technology wave over the past 250 years follows the same arc — technological revolution → financial bubble → market crash → golden age.
Railways, automobiles, and computers all traced this path. AI is no exception.
In plain terms = the bubble is not an accident; it is the "standard script" of technological revolution. The crash is act three, not the finale.
After the bubble pops, what survives?
Pande draws a line between "what depreciates" and "what endures": chips will lose value, but chips were never the real infrastructure.
What endures is power, grid access, data-center shells, and a generation that learned to think alongside machines.
This reflects his core bet: the "rails" laid during the bubble — compute, data centers, human-machine collaboration habits — will underpin the next growth cycle after the crash.
Why could the same turning point lead to opposite outcomes?
Pande also issues a warning: historically, the same post-crash turning point has produced both American suburban prosperity and Gulag-scale disaster.
"The only variable is how we respond."
This means → infrastructure is a necessary condition, not a sufficient one. Whether the outcome is a golden age or a catastrophe depends on the institutional path society chooses after the crash.
Content is for reference only, not financial advice.