AI is too expensive
a day ago
- #Technology critique
- #Economic analysis
- #AI bubble
- The author offers a premium newsletter with in-depth analyses on AI companies and financial topics.
- AI is criticized as economically unviable for most parties except hardware companies like NVIDIA.
- Major hyperscalers (Microsoft, Amazon, Google) have invested heavily in AI but face massive revenue challenges to break even.
- Microsoft's significant capital expenditures include large sums dedicated to OpenAI, with AI revenues not covering costs.
- OpenAI and Anthropic are burning billions of dollars annually, with no clear path to profitability.
- Enterprise customers, such as Uber and ServiceNow, are exceeding AI token budgets quickly without clear ROI.
- Zillow is cited as an example of excessive AI spending, potentially harming profits and code quality.
- AI token budgets are often unmeasurable and unsustainable, driven by corporate pressure rather than value.
- The piece argues that AI benefits 'Business Idiots'—executives who favor AI without understanding costs or outcomes.
- Generative AI is portrayed as a grift that exploits managerial ignorance and wastes trillions of dollars.