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> The question I want to ask anyone reading this who might have invested in or in some way backed the hyperscalers and the greater AI industry: > What is it you think you’ve gotten yourself into? Because I think you’re being sold a lie. Hundreds of thousands of dollars of realized gains. And the question I want to ask to anyone paying $70/year for Ed's newsletter: what has throwing the AI baby out with the bathwater…
This is a bit of a doomer article, but quite honestly, 200 billion dollars a year on a 30 billion dollar a year business that is growing does not really sound as bad as the author makes it out to be, especially when that business consists of growth startups that are currently primarily concerned with completely automating your current revenue stream. The obvious way to recoup spend is to grow, rugpull by cranking up…
This is the thing: let's just reason it out. What if OpenAI and Anthropic both fail and end up in bankruptcy? What is the impact to the hyperscalers?
...they just start selling open weight model inference to businesses, or whatever other entity picks up the scraps from the collapsed labs.
It's abundantly evident that there's major demand for compute, and that it isn't going anywhere.
This guy has zero zip nada null AI background. He is a videogame reviewer and PR guy. He is a pure influencer feeding on the AI backlash he helped to create. He has been predicting a crash for how many years now? And while I can totally see Anthropic and OpenAI going through some things on the way to post-IPO FMV, those things do not include AI going away. It truly doesn't matter whether closed source Frontier lab mo…
Ed Zitron is enjoyably mouthy and rude about AI and AI people, but it’s a bit of a stretch to suggest that someone most people have never heard of helped create the AI backlash. He is just putting it into words. You know what created the AI backlash as well as anyone, and it is: AI and AI people. If e/acc voices were not so abrasively, obtrusively YOLO about their technology, if their entire take on what they earn mi…
Another read: Ed provides great content to help people afraid of AI self-soothe and pretend that it's not going anywhere.
https://x.com/edzitron/status/1817955630784917548
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I largely agree with this take. What gives me disquiet is that I thought more or less exactly this about Uber, and was proven comprehensively wrong. Despite burning money like a furnace on an app for taxis, it seems that anyone who invested privately made a handsome return, and they are at a profitable steady state. Is AI the same?
I don't know. But the economics of it, at least from the outside, smell funny. Some people are anxious that AI will take people's jobs. I'm not. I say this as a daily user. LLMs can be very useful, but they need to be carefully steered. It feels like a superpower the more I am an expert on the subject matter. What I am afraid of is that I suspect that once the dominoes start to fall, the economic downturn that it wil…
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Ed Zitron is enjoyably mouthy and rude about AI and AI people, but it’s a bit of a stretch to suggest that someone most people have never heard of helped create the AI backlash. He is just putting it into words. You know what created the AI backlash as well as anyone, and it is: AI and AI people. If e/acc voices were not so abrasively, obtrusively YOLO about their technology, if their entire take on what they earn mi…
> Ed Zitron is enjoyably mouthy and rude about AI and AI people Another read: Ed provides great content to help people afraid of AI self-soothe and pretend that it's not going anywhere.
He does think the market is going to crash.
Like I say, I find his tone enjoyable, some of his predictions are interesting (and he has already been proved right on its risks to Oracle for example).
I'm not interested in self-soothing and I am not afraid of AI. I am even a bit less bearish than Zitron. I am concerned about a world that is fucking stupid enough to fall for the elements of grift, but I am insulated enough from the consequences, for now, that it's not my primary concern.
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He doesn't have a finance background either and it's quite a job going through the 7482 words or whatever he's rattled off this week to analyse where he's gone wrong. His fundamental error I think, illustrated here https://www.youtube.com/watch?v=C0Gcx-6hJJw&t=196s is he thinks AI is just another tech product to hype rather than a comparable revolution to the industrial one.
This is the thing - I enjoy Zitron's work. His criticism to AI has two angles. The weak angle is on AI usability. I think he is wrong there; AI is clearly useful. Now, there is a discussion if it is multi-trillion dollar useful; I think it isn't, but it is useful nonetheless. Now, there is a strong angle, which is the economic viability of AI, and the gargantuan amount of money being burned in what is a very risky be…
Of course, he may just be deceiving himself or his audience about this belief. I don’t think he is actually dumb. But this alternative is equally problematic.
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For the record, I agree that the generative AI industry might collapse. But I think Ed Zitron is ideologically committed to this belief in a way that is not a reflection of the evidence, and doesn't seem to update this belief based on new evidence. >What the AI bulls don’t seem to understand is that AI could be a great technological achievement AND an impending economic collapse This doesn't seem to be Ed Zitron's po…
This is his position, he doesn't have time to say it on corporate media that give him 5 minutes but he starts basically every podcast with (paraphrasing) "LLMs are rightfully a boring several-hundred-million-dollar business that will be important in some industries like coding but the vast majority of the population won't care about".
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If you fervently posit a theory but its predictions fail, why would anyone believe it?
Because it’s economics, a social science. Not a physics experiment you can replicate in a lab. You do what a serious person does: look at the thesis, look at the sources, look at the numbers, and do your own analysis
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This is the thing - I enjoy Zitron's work. His criticism to AI has two angles. The weak angle is on AI usability. I think he is wrong there; AI is clearly useful. Now, there is a discussion if it is multi-trillion dollar useful; I think it isn't, but it is useful nonetheless. Now, there is a strong angle, which is the economic viability of AI, and the gargantuan amount of money being burned in what is a very risky be…
I don’t trust someone who is dumb enough to think LLMs aren’t useful at all. Of course, he may just be deceiving himself or his audience about this belief. I don’t think he is actually dumb. But this alternative is equally problematic.
I think Zitron is wrong in the usefulness of AI; but then again, so are the people hyping AI way beyond its capabilities.
The numbers he brings up in the article are solid though.
That said, if Zitron irks you, you can watch the most recent Patrick Boyle video on the big tech debt: https://youtu.be/NufJ7g63KSY?is=2Eh70U7gleoriLO9
This is a guy that comes purely from the financial angle as has no obvious ideological stance in being either pro or against AI. Also pretty balanced in his delivery.
Some numbers he brings up should make even AI hypers question the sanity of this whole thing.