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"The Subprime AI Crisis" - Ed Zitron on the bubble's impending collapse (www.wheresyoured.at)

submitted 3 months ago by BlueMonday1984@awful.systems to c/techtakes@awful.systems

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None of what I write in this newsletter is about sowing doubt or "hating," but a sober evaluation of where we are today and where we may end up on the current path. I believe that the artificial intelligence boom — which would be better described as a generative AI boom — is (as I've said before) unsustainable, and will ultimately collapse. I also fear that said collapse could be ruinous to big tech, deeply damaging to the startup ecosystem, and will further sour public support for the tech industry.

Can't blame Zitron for being pretty downbeat in this - given the AI bubble's size and side-effects, its easy to see how its bursting can have some cataclysmic effects.

(Shameless self-promo: I ended up writing a bit about the potential aftermath as well)

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[–] s3p5r@lemm.ee 22 points 3 months ago

I don't toil in the mines of the big FAANG, but this tracks with what I've been seeing in my mine. I also predict it will end with lay-offs and companies collapsing.

Zitron thinks a lot about the biggest companies and how it will ultimately hurt them, which is reasonable. But, I think it ironically downplays the scale of the bubble, and in turn, the impacts of it bursting.

The expeditions into OpenAI's financials have been very educational. If I were an investigative reporter, my next move would be to look at the networks created by venture capitalists and what is happening inside the companies who share the same patrons as Open AI. I don't say that as someone who interacts with finances, just as someone who carefully watches organizational politics.