8/21/25

I read this yesterday.

The general notes I remember are:

Both big AI companies are burning money much faster than they are making it
All the other AI companies built on top are burning a ton of money and not making even notable money while burning it, which makes their astronomical valuations very questionable
AI companies are reporting their income in weird ways apparently
These companies are being valued at too large numbers to be acquired. No one can pay 300 billion for OpenAI. So the only other exit avenue is to go public. However, the author thinks that won’t work since they aren’t actually working businesses. They lose a fuck ton of money.
Data center companies are apparently not making much money off of all this? I’m not quite sure why that is! He had a lot of info about it, it just didn’t really stick for me.
AI companies “cannot” according to the author make hand over fist profits because they have exorbitant physical costs in land for data centers and burning through GPUs to do all their computation.
This all seems like a pyramid scheme + bubble
This bubble has been going on for 3 years now and resembles a lot of previous ones, like the Crypto hype phase.
Apparently, this year a large portion of GDP for the US is built on top of this bubble. When it crashes it is not going to be pretty for the economy and is going to probably be a pretty bad recession.

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