The Prefix Bubble

A mobile gadget shop in my location, three centuries of evidence, and the part of the AI debate that almost no one is having.

I walk down near my location after luch on a humid afternoon, I pass a mobile-phone shop. It is a modest place. It sells SIM cards, prepaid top-ups, refurbished phones, laptop accessories. The shopkeeper has been there for years.

A few days ago, the signboard above the door changed. The new name is Ai Gadgets.

There is no neural network in the building. There is no model, LLM or GenAI running anywhere on the premises. There is a counter, a glass case, a tired shopkeeper, and a freshly printed sign in a font that wants you to think of something other than what is actually being sold.

I took a photograph of it because it made me laugh. Then I wrote a short story with bit of research, comparing the rebrand to Long Blockchain Corp and the dot-com renames of 1999. The post was well received. It was also, I realised the next morning, only the first inch of the argument it had started to make.

The shopkeeper is not stupid. The shopkeeper is participating in a global ritual that is at least three hundred years old.

Every general-purpose technology produces a naming bubble. Every one. The label changes; the human does not.

A short history of prestige labels

Figure 1. Three centuries of prefix manias. The label changes; the human stays the same.

Look at the timeline above and a pattern becomes visible that any one cycle hides. South Sea, 1720. Canal Mania, 1825. Railway Mania, 1845. The Electric Belt era, the 1880s. The American auto boom, the 1900s. Radio Mania, the 1920s. Atomic this and Space-Age that in the 1950s. Bio- and Nano- prefixes in the 1980s. Dot-com in 1999. Blockchain in 2017. AI in 2024.

The intervals shorten as you approach the present, which is its own observation worth holding. But the shape repeats. Each of these episodes was, in its moment, treated as the singular event of its century. Each was preceded by a real technological breakthrough and accompanied by an explosion of operators who attached themselves to the label without participating in the breakthrough. Each ended, eventually, with a culling — and each left behind real infrastructure that compounded for the next fifty years.

The Carlota Perez framework, which I’ll come to in a moment, is the most rigorous attempt to name this regularity. But you don’t need a framework to see it. You need a long enough timeline. The shopkeeper at 28 Veerasamy Road is the 2026 instance of a phenomenon I could have photographed in 1845 London, 1899 New York, or 1920 Chicago, and would have photographed in every one of those places, with a different label on the sign each time.

The pattern is so consistent that its absence would be the historical anomaly.

1720: a company for nothing in particular

The earliest case in modern memory is the South Sea Bubble. England had just invented the joint-stock company. Speculators noticed that the word company, attached to almost anything, could pull money out of pockets that had previously kept it.

The most famous prospectus of the period offered shares in “a company for carrying on an undertaking of great advantage, but nobody to know what it is.” The promoter collected £2,000 in five hours and left town the same evening.

The magic word in 1720 was not a technology. It was a legal form — the joint-stock incorporation itself, less than a century old at the time, untested in most of its applications, and attached to a public imagination that had just glimpsed what it might do.

This matters because it tells us something about the underlying mechanism. The prefix is not specifically about science or engineering. The prefix is about whatever is the newest authoritative pattern of legitimacy. In 1720 it was incorporation. In 1845 it would be the railway. In 1899 it would be electricity. In 2026 it is artificial intelligence. The word changes. The function does not.

Isaac Newton, then in his late seventies and Master of the Royal Mint, lost most of his personal fortune in the South Sea Bubble. He had sold early at a profit, then re-bought near the peak. His reported confession afterwards was that he could “calculate the motion of heavenly bodies, but not the madness of people.”

The smartest man in England could not see the prefix coming. Neither, in their own time, can we.

1845: the railway that was never built

If you want one historical episode to project onto the current AI cycle, it is not the dot-com bust. It is the British Railway Mania of 1844 to 1847. Almost every element rhymes.

The Liverpool and Manchester Railway had opened in 1830 and proved that passenger rail was a real industrial revolution. By the early 1840s the Bank of England had cut interest rates, the Bubble Act had been repealed, and railway shares could be bought on a ten per cent deposit. By 1846, two hundred and sixty-three Acts of Parliament for new railway companies were passed in a single year, with nine thousand five hundred miles of proposed track.

About a third of these companies were never built. They either collapsed from poor financial planning, were absorbed by stronger competitors, or were outright fraudulent — vehicles for channelling investor capital into entirely other businesses. The press was complicit. There were fourteen bi-weekly railway papers at the peak, plus a daily morning and evening edition, mostly funded by the very promoters they covered.

George Hudson, the so-called Railway King, at his peak controlled over a thousand miles of track. He ran what was retrospectively recognised as a Ponzi-like scheme, paying dividends out of fresh capital. He died in poverty.

And yet — this is the part nobody wants to integrate — Railway Mania was not a waste. By 1850 Britain had a six-thousand-mile network that formed the spine of the world’s most advanced transport system. Roughly ninety per cent of the modern UK rail network was built during those mania years. The bubble was the financing mechanism for the deployment.

This is the lesson the AI cynic and the AI evangelist both miss. The bubble is real money being wasted on stupid signs — and the same bubble is laying the rails on which the next half-century will ride. The two facts are not in tension. They are the same fact, looked at from two different distances.

Saying “AI is a bubble” and “AI is the next industrial revolution” are the same statement. They are separated by about ten years and one crash.

1880: an electric belt for what ails you

Forty years after the railway crash, Edison and Tesla were household words. Electricity had moved from laboratory to lightbulb to street. The prefix of the new era was Electric.

And so we got the Pulvermacher Hydro-Electric Chain — a vinegar-soaked voltaic belt worn around the waist, which claimed to cure impotence, rheumatism, kidney pain, sciatica, dyspepsia, “weaknesses peculiar to men,” and most other diseases known to the Victorian gentleman. It was sold in the Sears Roebuck catalogue alongside guns, sewing machines, and laudanum. Tens of thousands of units moved.

Competitors swarmed: the German Electric Belt Company (which was, despite the name, based in New York), Dr. Sanden’s Electric Belt, Dr. Crystal’s, Dr. Horn’s, Owen’s, Heidelberg’s — and, hilariously, Edison’s, founded by Thomas Edison Junior, against whom his own father took out lawsuits.

The 1887 U.S. Congress had electric medical equipment wired directly into the Capitol Building so congressmen could be “treated” during sessions. The medical journals of the period are full of the same exasperated tone you find in modern AI-skeptic Twitter. The British Medical Journal called one prominent manufacturer an egregious quack. They were ignored for thirty years.

If you had walked into a New York drugstore in 1892, you would have seen electric corsets, electric brushes, electric tonics, electric baths, electric magnetic insoles. Real electricity existed. None of these products contained any. The label was doing all the work — exactly as “AI” does on a 2026 food-delivery app’s new menu-suggestion feature.

The label is the product. The product is the label. The actual technology is at most a coincidence.

Eighteen hundred companies, three winners

The automobile arrived around 1885 in Germany. By the early 1900s in the United States, over eighteen hundred separate car companies had been founded. Almost all are forgotten. Abbot-Detroit. Adams-Farwell. Armstrong Electric. The Berg. Three different companies called Courier. The 1914-only Motor Bob.

Henry Ford’s own first attempt — the Detroit Automobile Company, incorporated in August 1899 — went bankrupt in January 1901. Production problems. Quality problems. He came back later.

By 1929, the so-called Big Three — GM, Ford, Chrysler — were the only survivors at scale. The survival rate from the original cohort is roughly two-tenths of one per cent. The capital was not burned. It was redirected through a winnowing process that left an industry.

The instructive part is the naming. The survivors generally had personal names (Ford, Buick, Dodge, Chrysler, Olds) or geographic names (Detroit, Cadillac). The casualties disproportionately had prestige-tech names: Electric, Power, Motor, Automatic, Steel. The label-heavy companies died at a higher rate than the company-heavy companies.

I do not think this is an accident. I think it is a quiet signal of which founders were trying to participate in the technology and which were trying to participate in the prestige around it. The market sorted, with great cruelty, between the two.

The louder the prefix in the name, the shorter the company’s future.

The curve that keeps rhyming

The most rigorous frame for what we are watching is Carlota Perez’s Technological Revolutions and Financial Capital, published in 2002. Perez identifies five technological revolutions in the last two hundred and fifty years: the Industrial Revolution, Steam and Railways, Steel and Electricity, Oil and Mass Production, and Information and Telecommunications. Each follows the same four-phase surge.

Figure 2. Carlota Perez’s surge cycle, fitted to the present AI moment. The naming bubble peaks in Frenzy. Operators emerge in Synergy.

The phases are: Irruption (the technology arrives quietly, used by specialists), Frenzy (capital floods in, labels appear everywhere, valuations decouple from reality), Turning Point (a crash, a sorting event), Synergy (the survivors deploy the infrastructure at scale, labels drop, the operators take over), and Maturity (saturation, the next big bang waits in the wings).

The crucial point — which my LinkedIn post elided — is that the naming bubble is a feature of the Frenzy phase, not a sign that the underlying technology is fake. Steam was real. Electricity was real. Cars were real. Radio was real. The internet was real. And each of them had a Pulvermacher Belt era of its own.

Saying “AI is a bubble” and saying “AI is the next industrial revolution” are not opposing positions. They are the same position, looked at from two different points on the same curve. The bubble produces the infrastructure that the revolution will ride. The cynic and the evangelist are arguing across a temporal gap they have not noticed.

Where on the curve are we now? Probably mid-Frenzy, possibly approaching Turning Point. The shopkeeper near my local is one of the better leading indicators. When the prefix has reached the high-street signboard, you are not early.

The bubble is the financing mechanism for the deployment. Both halves are required.

The compressing half-life

Here is something that has changed, and matters. The half-life of each prestige prefix has shortened with every cycle, in rough proportion to the acceleration of media and capital flows.

Figure 3. The half-life of prestige labels has shortened with every cycle. Calibrate accordingly.

Railway lasted forty years as a viable prestige name in a company. Electric lasted about twenty-five. Radio about fifteen. Atomic about ten. Cyber about seven. Dot-com about five. Blockchain about three. The trend is not gentle. It is exponential decay.

What does this imply for AI? Plausibly, the prestige half-life of the label is forty months, not forty years. If you are building a career identity around the prefix — AI Strategist, AI Transformation Lead, Head of AI Anything or Head of Quantum — you are betting on a label whose viable shelf life is shorter than yoghurt.

The technology will last. The label will not. These are different things, and conflating them is exactly the cargo-cult error this whole essay is about.

If your identity is the prefix, your obsolescence runs on a faster clock than your competence.

Operators and name-changers

Here is the cleanest historical pattern, and the one most absent from the original LinkedIn post: the long-run winners almost never carried the prestige prefix in their name.

Watch who is still here in 2030 and not called “Acme AI Solutions.”

The table above is the historical record, written one cycle per row. The column on the left is the railway, electric, auto, dot-com, blockchain, and AI companies that put the era’s prefix on their letterhead and disappeared. The column on the right is the companies that did the same work without the prestige label, and which are still in operation, or whose successor entities are.

Ford, not Armstrong Electric. Amazon, not Pets.com. Coinbase, not Long Blockchain Corp. The Great Western Railway, not the Yorkshire and Berwick Promoters’ Consortium.

The signal is so consistent across centuries that I am willing to state it as something close to a law of the industry. Operators do not need the prefix. The prefix is a substitute for the operation. When you see it on a name, in any era, you are watching someone short the difference between what they are doing and what they want to be seen as doing.

Bet on the named, not the labelled. Ford, not Electric. The shopkeeper, not the strategist.

A test you can run on Monday

If you want to know whether the company you work for, or the role you are about to take, or the stock you are about to buy is participating in the substance of the cycle or merely the label of it, there is a five-minute test.

Take the entity’s name and strip the prestige prefix. Read what remains. Does the description still describe a business?

Ai Gadgets, with the prefix stripped, is Gadgets. That still describes a business. The shopkeeper is fine. He sells real phones to real people, and the prefix is decoration.

AI Transformation Lead, with the prefix stripped, is Transformation Lead. That, in most organisations, also describes a role. Probably not good one, but a recognisable one. Mostly fine.

Long Blockchain Corp, with the prefix stripped, is Long Corp. That describes nothing. Long what? The company name relied on the label so completely that removing the label collapsed the description. The market eventually noticed.

Pets.com, with the prefix stripped, is Pets. That is not a company, that is a category. The dot-com was load-bearing.

Run this on your own employer. Run it on your own title. Run it on every “AI-native” startup that crossed your inbox last quarter. Notice which descriptions hold and which collapse. The ones that collapse are the ones whose viability is the label, and whose half-life is whatever this cycle’s prefix-clock turns out to be.

The test costs nothing. It takes five minutes and a piece of paper. The fact that almost no one in a boardroom does it before signing the brand is the most damning thing you can say about the current state of strategic judgement.

If the description collapses when you remove the prefix, the prefix was the description.

Walk past the same Road

I want to close where I started, because the essay is really about one specific shopkeeper and what he has to teach a city’s worth of AI strategists.

Walk past the same Road on this sunday afternoon. The shopkeeper is selling a refurbished phone to a tourist. He has paid his rent. He has stocked his inventory. The signboard above his head reads Ai Gadgets and means nothing, and he knows it means nothing, and the tourist knows it means nothing, and the transaction proceeds anyway, because the label is doing exactly what labels have done since 1720: providing a small, harmless permission to participate.

One mile north, in a glass office tower, an AI Transformation Lead is preparing slides for an Architecture Review Board. He has never shipped a model. He has never read a Goodhart paper. He has never heard the name Pulvermacher. His org chart reports to an AI VP who reports to an AI CIO. None of them have read Perez. They believe they are at the beginning of something genuinely new.

They are at the middle of something very, very old.

The shopkeeper has skin in the game — his rent, his stock, his children’s school fees. If his Ai signboard pulls in one extra tourist a week, he has won. Litrally kind of less bet. If the wave breaks, he changes the sign, paints over the Ai, and the business continues. He is doing the same thing he was doing before. The prefix was always cosmetic; he knew that.

The AI XXXXXXX Lead has no skin in any game. If the wave breaks, he becomes a Quantum Transformation Lead by Q3. By Q4, a Post-AGI Strategic Officer. His résumé will absorb the next prefix without resistance, because the prefix was always the résumé.

The shopkeeper sells real phones. The strategist sells the prefix.

Bet on the shopkeeper he hedge less.