Lately, it seems like any company AI related is shooting up double digit percentages on a daily basis. Tiny companies sign deals or announce partnerships with tech giants, and their stocks go to the moon within minutes. Even big companies are making big moves. Marvell Technology gained 32% in one day, adding more than $60 billion in market cap, because Nvidia’s CEO said five words about it. One after the next, this market is heating up rapidly for anything related to technology and specifically AI technology. The Magnificent Seven are pouring money into AI buildouts at a record pace, and investors are pouring money into the markets seemingly just as quickly. AI startups are gobbling up unprecedented amounts of venture capital dollars. But how much more vertical can these stocks go? And will they all win in the end, or will some inevitably crash and burn? Let’s explore Nikola Tesla’s forgotten dream at Wardenclyffe, the ultimate cautionary tale of speculative technology.
Source: Google Search / Marvell Technology Inc. (MRVL) stock chart as of June 2, 2026.
AC over DC? I See.
At the end of the nineteenth century, a brilliant inventor named Nikola Tesla was designing the foundation of our modern technological civilization as we know it. While electricity was still in its infancy, Tesla developed and advocated for alternating current, or AC power. It was a system that was much more efficient for transmitting electricity across long distances than the direct current, or DC, systems developed and promoted by Thomas Edison. The rivalry between the two became known as the “War of Currents”. With Tesla as the ultimate victor, he achieved great wealth and worldwide fame.
Tesla’s AC system led to the first hydroelectric power station built at Niagara Falls, and the AC system prevailed because it solved a real economic and engineering problem. Electricity could now travel farther, scale larger, and power expanding cities far more efficiently. It was a great idea, but as we’ll see, the key was that it was a financially viable one.
His potential was limitless, and his ideas kept flowing. Like a mad scientist, Tesla envisioned technologies that sounded almost impossible for his time: “Tesla coils”, the foundation of the radio, the “death ray”, remote-controlled machines, and possibly even wireless energy transmission itself. Decades before satellites, smartphones, remote controlled everything, or the internet, Tesla was already imagining a globally connected world.
Wardenclyffe, the Graveyard of Unfunded Ambitions
To bring one of his boldest visions to reality, Tesla rode on the coattails of his success and reputation to secure funding from famed banker JP Morgan to construct Wardenclyffe Tower on Long Island. Tesla proposed a wireless communications system that could transmit information such as news, music, military communications and stock market quotes anywhere in the world. Morgan saw a potentially huge advantage in having a system that could wirelessly transmit information between New York and London faster than the expensive, undersea copper cables owned by his rivals. However, as the project evolved, Tesla’s ambitions appeared to grow even larger. He increasingly described systems that could potentially transmit not only communication, but energy itself, across vast distances.
This created multiple problems. First, the vision that Morgan agreed to invest in had drastically and fundamentally changed. Second, the magnanimous idea of transmitting energy itself, possibly for free, was directly in conflict to the profitability of JP Morgan’s other businesses. And maybe most importantly, while Tesla worked on Wardenclyffe and dealt with delays in execution, a competitor had emerged and was rapidly making progress utilizing Tesla’s own patents and technology in the creation of the exact wireless communications system Wardenclyffe was supposed to create: the radio.
Investors fund businesses that have a measurable profit potential, but Tesla increasingly described a civilization altering transformation with no way to measure the dollars and cents. Before he could even finish building the agreed upon blueprint of Wardenclyffe, his idea had expanded so far in scope that it likely became uninvestable in Morgan’s eyes. Without Morgan’s willingness to provide additional backing for the now expanded project, Tesla burned through all of his substantial savings and was forced to seek funding year after year in a desperate attempt to get it to the finish line. He came tantalizingly close, but was never able to complete the increasingly expensive project. Out of cash and with debts piling up, the property was unceremoniously foreclosed upon, and the tower was dismantled with the parts sold off as scraps for pennies on the dollar. Wardenclyffe became a symbol of Tesla's failure, likely because the project became too expensive, too uncertain, and too difficult to monetize. I can’t help but wonder if creating the radio might have seemed just “too simple” for Tesla and his ideas kept expanding off of that until what he wanted to build no longer became financially feasible. Wardenclyffe Tower might have become a revolutionary technology, but instead it became just another untenable idea relegated to the dustbin of history.
Tesla (Inc) Prevails, but Nikola (Corp) Fails
Ironically, more than a century later, financial markets produced a remarkable parallel. Two car companies carrying the legacy of Nikola Tesla’s name produced radically different results for investors.
Ever since Elon Musk took over full control in 2008, Tesla, Inc. and particularly Musk has had no shortage of very public criticisms and controversies, from supply chain delays, deadline misses, making unrealistic promises, calling his own stock overpriced, facing (and winning) multiple shareholder-initiated lawsuits, controversially acquiring his cousins’ solar company, to smoking blunts on a podcast, just to name a few. Skeptics questioned whether electric vehicles could even achieve mass adoption, and if the company could survive the enormous capital demands of manufacturing.
But over time, Tesla, Inc was able to execute its transition, from a speculative, cash burning startup to a high moat business with sustainable profits. Headed by a visionary leader with grandiose ideas and an equal amount of controversy, Tesla, Inc evolved into one of the most valuable companies in the world, eventually surpassing a trillion-dollar valuation in 2021.
Meanwhile, Nikola Corporation was founded in 2015 by charismatic entrepreneur Trevor Milton. The future of Nikola Corp was based on the idea of manufacturing a hydrogen electric semi truck. They created a promotional video of a truck “in action” when in reality they just rolled it down a hill to mislead investors into thinking it was functional. On June 9, 2020, during the highly speculative bubble peak of SPAC Mania, Nikola Corp, a company that had 0 revenue and produced 0 vehicles until that point, had a market cap that eclipsed car giants like Ford or Chrysler. In September, Nikola Corp landed a partnership with GM, validating itself to its biggest doubters. But just 2 days after landing said partnership, Nikola Corp's smoke-and-mirrors operation was exposed. The stock price collapsed like a house of cards, and Nikola Corp went bankrupt and was forced into total liquidation. Milton was convicted of fraud and sentenced to four years in prison. Miraculously, Milton never set foot inside a jail cell, as he received a presidential pardon. And like a phoenix rising from the ashes, he’s back in business, shamelessly taking on the role of CEO of a bold new venture called SyberJet Aircraft, trying to raise funding for…….AI powered autonomous airplanes. You just can’t make this stuff up. Wherever the latest and hottest trend is, it seems Milton wants a piece of the pie.
You can do ANYTHING you set your mind to! But…should you?
It’s easy to get swept up by the greed and fear of missing out on colossal daily seemingly endless returns. Our minds play tricks on us, and all of a sudden we forget what risk means. But doing just a little bit of history homework shows that jumping on a groundbreaking concept or following a big trend does not automatically mean a winning investment, especially when arriving late to the game. Even the greatest visionaries could have equally big winning and losing ideas. We saw that while early backers of Nikola Tesla’s alternating current systems prospered, those who funded his later Wardenclyffe project lost everything. Fast forward to current times, and now with the power of technology, even retail investors have the power to pour money into virtually any hot idea. And just a few years ago electric cars were the hottest trend. If you invested early in Tesla Inc, you likely performed quite well. But if you invested in Nikola Corp, you may have gotten wiped out. Now AI is the new gold rush, and we can see a lot of speculative money has been flowing indiscriminately into anything with an AI label. But if there’s one speculative AI venture I think no one should ever touch, I’d go out on a limb and point to the one currently being led by a man convicted of massive investor fraud who got a literal Get Out of Jail Free card.
Things certainly look a bit frothy at the moment. It helps to navigate these moments with a steady hand, rigorous research, and as objective a perspective as possible. You do not have to evaluate complex tech trends, market projections, or emerging asset classes by yourself. Feel free to reach out to me to schedule a comprehensive investment review, assess your exposure to high-growth sectors, and ensure your investments are positioned for sustainable, long-term success.