You Should Read This: The Hater’s Guide To The AI Bubble

*Yeah, we’re gonna spend some more time with Ed Zitron; it’s time to be alarmed.*

No one has been as vociferous, or as detailed, in addressing the generative AI bubble as Ed Zitron.

Though I would say Nikhil Suresh has been more amusing.

But Zitron is still engaging on it and he brings the receipts.

So when my RSS reader popped up this new post from Zitron yesterday, it definitely caught my attention: The Hater’s Guide To The AI Bubble.

You should read it, but give yourself a decent block of time for that because it is long and it is detailed. As Zitron says in the post header:

This newsletter is nearly 14,500 words. It’s long. Perhaps consider making a pot of coffee before you start reading.

He is not wrong about that.

He’s also not wrong about his central thesis: the generative AI bubble has put the tech industry into a very fragile state, and with it every piece of the economy that’s tied into the stock markets. And you should be alarmed about this.

Seriously: we are five months from the first contractual deadline for OpenAI (a non-profit company) to convert into a for-profit company and if it misses that deadline its finances will likely collapse. This conversion is something that is not-allowed by corporate law, since turning non-profit assets into for-profit ones violates the fundamental idea behind the actual existence of non-profit corporations. Though Zitron does kinda gloss over that aspect of the situation.

So betting that they’ll make the transition at all, much less in the next five months, is unwise.

To put it mildly.

And a significant chunk of the genAI financial bubble is built on OpenAI.

And almost all of the public perception of genAI is built on OpenAI.

If (when) OpenAI implodes, the shrapnel could very well collapse the genAI bubble, large swaths of the tech industry and a not-insignificant-percentage of the financial industries.

These companies are all interconnected, increasingly interdependent and fragile.

So it’d be something to be concerned about even before you start to consider the abysmal financial situation the genAI bubble is putting all its supporters in. Which Zitron lays out in detail.

And he doesn’t even address genAI’s two greatest faults: it’s products simply cannot be made reliable and they use ludicrous amounts of resources.

Especially electrical power. At a time when reducing power usage (especially from carbon-based sources) should kinda be our species’s highest priority.

So read The Hater’s Guide To The AI Bubble; it’s important.

But remember that its focus is only on the practical aspects of the situation, and by limiting its reach that way it actually manages to still be more generous to generative AI and its boosters than they deserve.