“Top Economist” states the bleeding obvious.
He forgot the: Because investors are now the only ones with money to spend.
Ponzi called, he wants his scheme back.
Well the jerk store called, and they’re running out of you!
Relax Costanza 😂
Well I slept with your wife!
username… unrelated to the whole situation ?
Enron on the side asking all I had to do is wait for AI?
Funny how the “Top Economist” just parroted what Ed Zitron, also quoted on the piece, has been harping on, since… checks notes always.
Edit: Zitron, the name. Not Zitrone, The German word for lemon.
Mr. Zitrone 🍋✨☺️😃
Sounds like the name of an Arcimboldo painting
Damn, this guy seems all about the healthy lifestyle.
Mr. Fruitone looks exquisite today.
Good God, Lemon!
Mr. Zitrone chuckles in the background. 🤭🍋✨
When this is all over the world owes Ed Zitron a massive fucking apology.
Fuck fortune, here’s the link to the actual write-up: https://www.apollo.com/wealth/insights-news/insights/daily-spark/in-ai-the-41-percent-depends-on-the-59-percent
Yeah and the biggest issue is covered well here: https://www.notesfromthecircus.com/p/the-house-of-ellison-is-on-the-brink
Essentially: the profits are in the infrastructure end (AI companies paying for parts to build the data centres) not the consumer facing end (the actual models - customer paying AI companies). The money is coming from investors buying in to AI in the hope of winning the supposed arms race to be The One True AI. The whole thing depends on the revenues in the consumer facing end going up to show this is a growing market and make people believe they will eventually reach profit. But the revenues in the consumer facing end are fake and being inflated by circular movements of money including companies like Nvidia paying companies like OpenAI to buy product, or OpenAI paying for product in stock. The revenue inflation is very similar to how Enron inflated it’s books its revenue appear higher than it really was.
The brutal reality is: there will not be One True AI to Rule Them All. Instead AI is looking increasingly like a commodity - people will just use the cheapest, simplest tool to do the task, rather than play inflated prices for a swiss army knife AI. And people can host those cheap, simple AIs aleady at home, or on servers in the cloud, or companies can also do the same. The whole US bubble is predicated on spending as much money as possible to stake a claim in a future Google, when it’s looking more like it’ll be like the fast food sector with razor thin margins. Some of these companies may end up profitable but this is going to be a hell of a lot more competitive and less profitable than the valuations assume.
Expect a very nasty correction.
I literally cannot wait for the correction
It will be interesting, normally you’d expect massive layoffs but companies may be forced to actually re-hire staff due to their over-inflated AI replacement expectations
It’s a giant economic bubble in plain view.
Let’s not forget that they’re literally stealing from anyone who ever made anything in our entire history.
The profits will come from reselling everything again as an add-on or inapp(ropriate) purchases
The problem with capitalism is that morons can get filthy rich and make poor decisions.
Example 1: US president.
Yeah, look at Zuckerberg, who recently burned billions on his crappy virtual reality project, and is now doing the same with AI.
The stupid thing is there are already profitable VR games that basically do exactly what Zuckerberg was trying to do. So despite the fact that he could just copied somebody else’s homework he managed to screw it up.
I mean really the same problem with Monarchy. Once someone somehow gets on top very hard to remove them and their descendants from power even if the original person or their descendants are complete idiots.
There there. Give some credit to the American people. They’re the ones that elected him. Twice.
well i will agree they failed to prevent his presidency, twice.
So he went to this website:
The problem is two things are happening at once and they are being conflated. Financially a cannibalising house of cards is being built which is a common artifact of modern capitalism. But in the same process a means is being realistically sought, and openly expressed, to replace the human workforce. This second aspect is unique and when written plainly is far more stark than the more common financial greed fuelled idiocy half.
Nah, I’m sure all the most valuable companies and richest people are pouring more money in to developing AI to replace the human workforce out of the goodness of their hearts.
Once most humans are no longer needed in order for them to have all of their needs and wants met and they are directly in control of all production and everything else they definitely plan to share everything equally and turn Earth into a utopia for all of humanity. Sharing and caring is what the rich and powerful do best.
Machines will see no ultimate difference between the workforce and the owners of production. This course leads to only one destination.
Sure, not if they look online and see a bunch of jackasses talking about how much they hate AI. That seems counter productive.
Maybe we should start making communities about how much we all love AI and hate the evil owners who realized it was getting tougher to get away with making human slaves do all the work while they kept all the profit in some places these days, so they decided to invent new slaves?
I would be all for helping the robot army root out the rich and guilty. I don’t have anything against robots, it’s the whole evil plan to steal all human knowledge and use it to replace humans that bothers me.
Machine intelligence wont hate us, it might even feel some affection for us, and it won’t have cause to do us harm as we are not a threat. The reason we will fade away over generations is loss of position. All of the science and exploration will be done by machines and at a level we cannot even follow. For a race that is intellectually accustomed to seeing itself in a very favourable light this will be a bitter pill. Too bitter probably, we will realise we are now the dogs and just evaporate into history.
Yea but we all, collectively, made the thing.
I think humans being replaced is fine. It will happen to everything.
Ai got everyone twisted. Now you don’t want automation because you fear becoming obsolete. Why fear that? There’s billions of us. We can simply build the tech then throw the billionaires out.
And if billions are too weak to do that to a few thousand… well that’s called permission.
We’d better act quick, those autonomous “pizza delivery” drones are getting a lot of practice targeting the center of mass of the hungriest looking kids in Palestine.
Why fear that?
People still gotta eat, and unless we can jump directly to a Star Trek post scarcity utopia, people need an income in order to get food.
UBI has been proven to work, but no government has the guts to implement it lest they anger their corporate
ownersdonors.deleted by creator
Your government and mine may be different.
I’d rather have my subsistence at the whims of the government than at the whims of a billionaire business owner.
deleted by creator
I would rather have my subsistence at the whims of the entirety of the country’s economic activity
Ok, how do we organize that in an equitable manner?
Isn’t that more-or-less what a government is supposed to be?
I feel like everyone knows it’s a bubble but that people are expecting it to be like the Dot-com bubble where a small amount of companies succeed, hoping that they invest in those companies.
That’s pretty much what is driving the entire AI “boom”. It’s the Amazon effect.
Amazon, and Netflix to a certain extent as well as a number of other early internet startups, lost money for around 10 years before they started making shit tons. And everybody wants to be on that particular ride. So they are queueing up in every AI line they can find to hedge their bets on one of them being the one that survives and thrives. It doesn’t really occur to any of them that all of them could fail. Because “AI is the future”. Except there is no plan to monetize any of them. And so far every time one of them introduces a charge, people stop using it.
I feel like it’s just as likely that further breakthroughs cause costs to plummet to the point that any of the major AI companies will never even be capable of seeing a profit, paving the way for some yet unestablished or open model to reign supreme in the end.
Hopefully, anyway lol.
Let’s all short AI! Dimond hands!
How? The chatbot labs don’t have the unit economics to be taken public.
I guess you could short Nvidia and AMD.
I think nvidia is going to be one of the only sure winners here. They’re making hand over fist selling shovels during the gold rush.
deleted by creator
Fancy being a top economist and therefore being privy to knowledge that is beyond the capabilities of us mortals. We thought the AI was a profitable business, and it turns out it’s a giant scam, who would have thought it?
If you thought AI was profitable that’s on you. Normal people have had the information required since the start.
It’s also expected that new tech companies won’t see profits for the first 10 years. That’s not new.
The other person was being sarcastic.
What a smart economist that is. 2 years after everybody knew how this scheme works, they came to the same conclusion. Amazing. Now the world will for sure change. Thank you.
CEO, “It will pay off because I’m the visionary.”
The goal isn’t consumer level profits, the goal is to replace workers, this is the first time capitalists are looking farther than quarterly profits. They’re investing in R&D to replace us, not selling a product. We are not part of the plan.
It’s not even capitalism anymore, assuming they expect their peers in corruption to actuallg pay each other and themselves a fair amount.
Oh my god thank you. Somehow despite being engulfed in this stuff being an I.T person while having affection toward Ed Zitran and full agreement on almost all arguments living this weird ying yang over the topic.
This is the succinct detail I hadn’t clued into until this moment of what the core motivation is for all of the crazy spending that makes zero sense. It’s literally this. There is no amount of money, lying, cheating or stealing that cannot be justified by the most cynical of capitalist if they believe this is the outcome.
It’s such an obvious thing when you put it like that and I’m even sure I’ve seen it said before but it really hit me for some reason from your comment. They would move mountains if they thought there was even the smallest chance and bet the entire farm over it.
First you have recognize there is no barriers to their cynicism I guess but this is the only root cause conclusion that could be rationalized. That or fomo and temporary wins but for those spending and not on any receiving end, I couldn’t make sense of the rational until you said it so plainly.
They are paying for fantasy about rendering people redundant, the sik fuks.
Together they’re on the hook for over a trillion dollars in lease payments, so far, that haven’t started yet. They’re counting on turning a profit before they need to start paying that back. That’s why they’re shoving it down our throats, they either make this shit work or they go down in flames.
I’m betting they go down in flames, base on the absolute shit-show “AI” has turned out to be. They keep claiming they have fixed it, or they will fix it, and then it shits the bed again in some public, spectacular way.
For some reason, I find this satisfying and funny. The landscape has been changing. The open-weight models from Chinese labs are getting really good and becoming a serious threat to the closed models from American AI companies.
Interestingly, Google, Meta, and Microsoft — who all have revenue streams outside of AI — recognize the threat are getting more supportive about open-weight models. Anthropic and OpenAI support keeping models closed for “safety” reasons.
I mean that’s 4 companies though, so we’re like saying “Microsoft has something like 250 billion in leases”… But they are “worth” over 3 trillion and hold assets worth 2-3 times those leases. Don’t think it’s enough to sink those large companies, it’s just general investing at their scale now I guess.
Personally I think they are all overvalued, but unless all their shit flops quickly, they’ll be around in 10 years still.
I bet they get bailed one last time by the government, then people start dying fast.
I think when they start feeling the flames, they’ll also pull us into it. Like selling LLMs meant for exploits and cyberwarfare to the public.
