Celebrity founders are a sign that your tech hype bubble might be about to pop

The first thought I had upon reading that Colin Kaepernick is starting his own AI startup was: It’s so over for AI. Comparing the hype and exuberance over artificial intelligence to a similar froth that crypto saw is becoming more common, but nothing tells you a market is nearing its top like celebrities, especially in sports, hopping on the bandwagon.

Take Tom Brady, who, after putting his and his then-wife’s money into crypto exchange FTX, decided to go even bigger and launch his own NFT platform in August 2021. FTX also drafted Steph Curry, Shaquille O'Neal, Naomi Osaka, and others into its lineup of endorsers, which did not end well for any of them. As bitcoin steadily climbed to a record high of nearly $69,000 in November of that year, athletes from the NFL, MLB, and NBA even pledged to take their salaries in bitcoin including Shohei Ohtani – who also got involved in FTX and definitely knows what’s up with his own finances!

Perhaps the real death knell of the hype cycle was the “crypto Superbowl” of 2022, when not one, not two, but four crypto companies laid down big bucks to air ads during the most-watched sports event in the US. LeBron James should be happy Matt Damon’s terrible “Fortune Favors the Bold” Crypto.com ads took the focus off his spot where he spoke to his CGI-generated younger self about the future. The future that soon held the astounding collapse of entire crypto ecosystems leading to the bankruptcy of Three Arrows Capital, the cratering of bitcoin’s price to under $20,000, and finally the shocking collapse of FTX… and no more Super Bowl ads. 

Meanwhile, Kaepernick’s goal to “use AI’s capabilities to give aspiring creators tools” with his new Luna AI harkens back to the original value proposition for NFTs, which allowed digital artists to dream they could break barriers and records like Beeple’s $69 million sale. Even better, they were promised royalties baked into those unchangeable blockchain contracts would help artists earn money on future sales. 2021 was NFT’s peak, with $25 billion changing hands in the market — they even got an SNL skit about them: 

But while many might guess the top signal for NFTs was the cringey interchange between Jimmy Fallon and Paris Hilton about their Bored Apes, that was months before April 2022, when laser-eyed Tom Brady bought his Bored Ape and announced that his NFT marketplace, Autograph, inked a partnership with ESPN. Also that same month, royalty payments for NFTs hit a two-year low, as those smart contracts for NFTs turned out to have ways around paying creator royalties that marketplaces exploited. So, given the choice, no one paid royalties – what a shock! The final red flag for NFTs may have been the June 2022 announcement from soccer superstar Cristiano Ronaldo, who announced a four-year deal with Binance to launch NFTs with the company in June, 2022. 

None of that went well. Ronaldo is now the subject of a $1 billion class-action lawsuit for his promotions with Binance and Autograph laid off round after round of employees and ultimately pivoted entirely away from NFTs to become, as far as I can tell, just a sports fandom app. 

Kaepernick is the first high-profile athlete to get into the AI game, which has seen record inflows from VC investment and big tech capital expenditure spending. But his splashy entrance may be a sign the tide is turning as the cycle turns from pure hype to more people asking when all this investment is going to turn into profit. If crypto has taught us anything, the answer is: it won’t.