The thing about "vibe shifts" is that a big part of the shift occurs among people who have no idea what's going on. They've played with ChatGPT twice, talked about it at parties, and then invested $50,000 in NVIDIA stock. Or they're a corporate VP who doesn't understand this stuff but knows it's trendy and that it impresses the C-suite. When those people bail, the market retrenches hard, trading irrational enthusiasm for equally irrational panic and gloom.
My guess is that the highly-visible switch from the sycophantic GPT 4o to the underwhelming GPT 5 is what made this concrete in the minds of the least informed investors and customers.
The value of it wasn’t ColdFusion or Flash, it was the novel ways that people used the foundational tech.
So yeah, the AI bubble may burst and one model or another (or a company like OpenAI) may fail, but I don’t think we have even scratched the surface on the novel things this tech can do.
Fixes one pain point good. Can’t really be applied to everything.
So just another tool, not a magic bullet like it is being marketed.
On the other hand, its ability to eliminate toilsome work in a variety of areas (it can generate a basic legal contract as well as a basic rails app) is pretty astounding. There are many other industries besides software dev where having tools that can understand and communicate in human language and context could be totally transformative, and they have barely begun to look into it. I think this is where startups should be focused.