The Shape of Overheating
How Technology Forces Society to Rebuild
By the mid-1840s, Britain had caught railway fever. Parliament approved more than two hundred new companies in a single year, sketching lines that together would stretch nearly 10,000 miles [1]. With only a tenth of the price required up front, clerks and schoolteachers joined aristocrats in buying shares. Even Darwin and the Brontë sisters speculated [2,3]. Railway share prices doubled between 1844 and 1846, and capital investment reached nearly seven percent of the nation's income [2,4]. It was enthusiasm turned architecture.
A century later, the stage lights shifted from rails to routers. Between 1995 and 2000, the NASDAQ rose almost 400 percent as venture capital flooded internet startups [5]. Seventeen dot-com firms spent over forty million dollars on Super Bowl ads that year alone [6]. By the time insiders cashed out billions in stock options, retail investors were still buying the dream [7]. When the reversal came, the NASDAQ lost seventy-eight percent of its value, erasing five trillion dollars of paper wealth [5,8,9].
In 2024, the pattern repeated under a new name: artificial intelligence. Over one hundred billion dollars in venture funding poured into AI startups, accounting for a third of all U.S. venture capital [10,11]. Foundation model companies absorbed two-thirds of that capital [12], while major firms began investing in one another's infrastructure to sustain the boom [13]. Circular confidence replaced external validation; belief itself became currency [14,15].
Each cycle followed a rhythm familiar to history. Technology proved its utility, capital responded, and optimism magnified itself. Media amplified transformation narratives until participation became a form of belonging. The cycle accelerated until limits—economic, physical, or psychological—broke its momentum.
Overheating is not disorder but a stage of adjustment. Railways required new land laws, engineering methods, and labor coordination that Britain had yet to invent. The internet needed payment systems, consumer trust, and logistics before it could become commerce. AI now demands energy grids, regulatory frameworks, and social agreements still under construction. In each case, speculation built ahead of understanding, leaving behind infrastructure that outlived the fever.
Each surge leaves a residue of reality. Rails became the backbone of industry; fiber became the nervous system of the digital world. What AI will leave behind is still forming: data centers, learned weights, and workflows that assume automation as default. The question is not whether overheating will recur, but what form the next adjustment will take.
References
[1] Wikipedia. Railway Mania.
https://en.wikipedia.org/wiki/Railway_Mania
[2] FocusEconomics. Railway Mania: The Largest Speculative Bubble You've Never Heard Of. July 2018.
https://www.focus-economics.com/blog/railway-mania-the-largest-speculative-bubble-you-never-heard-of/
[3] Odlyzko, A. Collective Hallucinations and Inefficient Markets: The British Railway Mania of the 1840s. January 2010.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1537338
[4] Property Chronicle. Media and the British Railway Mania of the 1840s. September 2019.
https://www.propertychronicle.com/media-and-the-british-railway-mania-of-the-1840s/
[5] Wikipedia. Dot-com Bubble.
https://en.wikipedia.org/wiki/Dot-com_bubble
[6] Time. What Did We Learn From the Dotcom Stock Bubble of 2000? April 2015.
https://time.com/3741681/2000-dotcom-stock-bust/
[7] TED Ideas. A Revealing Look at the Dot-com Bubble of 2000.
https://ideas.ted.com/an-eye-opening-look-at-the-dot-com-bubble-of-2000-and-how-it-shapes-our-lives-today/
[8] International Banker. The Dotcom Bubble Burst That Caused Recession. December 2021.
https://internationalbanker.com/history-of-financial-crises/the-dotcom-bubble-burst-2000/
[9] Modern Wealth Management. Dot-Com Bubble History Remains Relevant. 2022.
https://www.modwm.com/dot-com-bubble-history-remains-relevant/
[10] Crunchbase. Startup Funding in 2024: The Year of AI and Resilience. January 2025.
https://news.crunchbase.com/venture/global-funding-data-analysis-ai-eoy-2024/
[11] Tech Startups. AI Investments Make Up 33% of Total U.S. Venture Capital Funding in 2024. October 2024.
https://techstartups.com/2024/10/30/ai-investments-make-up-33-of-total-u-s-venture-capital-funding-in-2024/
[12] National Law Review. The State of Funding in the Market for AI Companies: 2024 & 2025 Outlook. January 2025.
https://natlawreview.com/article/state-funding-market-ai-companies-2024-2025-outlook
[13] Bloomberg. OpenAI's Nvidia, AMD Deals Boost $1 Trillion AI Boom With Circular Deals. October 2024.
https://www.bloomberg.com/news/features/2025-10-07/openai-s-nvidia-amd-deals-boost-1-trillion-ai-boom-with-circular-deals
[14] McKinsey & Company. The State of AI in 2024. June 2024.
https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai
[15] Carta. Five Charts on AI Fundraising Trends in 2024. January 2025.
https://carta.com/data/ai-fundraising-trends-2024/
All sources accessed and verified as of October 2025.
