People pattern match with a very low-resolution view of the world (web3/crypt/nfts were a bubble because there was hype, so there must be a bubble since AI is hyped! I am very smart) and fail to reckon with the very real ways in which AI is fundamentally different.

Also I think people do understand just how big of a deal AI is but don't want to accept it or at least publicly admit it because they are scared for a number of reasons, least of all being human irrelevance.