Well, Karen Weaver and Elizabeth Warren (amongst other examples) were objectively incorrect in their predictions and warnings of an imminent crash and likely financial crisis due to sub-prime mortgages for years… Right up until they weren’t. Along the way they were branded doomers and “public relations hot air”.
Ed repeatedly says verbatim “I’m not a financial advisor” and that he “can’t predict the future” - that markets that should crash due to being fundamentally unprofitable can easily be propped up and strung along by intervention by government intervention, so timeline is impossible to guess.
South Korea’s stock market was in freefall a few weeks back… And then a few days back their government announced yet another massive investment in AI - now everyone gets an LLM account and access in SK, yay. OpenAI and others regularly get on their hands and knees to woo large government investment in the US. Did Zitron predict those? Yes. Noted in this article? No.
The money and resources poured into AI is still not predicted to turn a profit until 2030 directly from the mouths of the LLM business leads… They position the historically high and atypical investment demands as a ‘winner takes all’ first-past-the-post race that’ll pay off in the long run for brave investers - but there’s no real logical justification to believe that. That’s the problem. A new model trained on different data for specific contexts can function far better than a prior model, and users switch their models regularly depending on how well it’s performing for the task they need. That’s a hypercompetitive market, not a winner-takes-all akin to social media.
It sure doesn’t seem like there will be a ‘clear winner’ on paper so how to recoup those investors and government costs? It’s still, 4 years in, the underpants gnome plan and the LLM CEOs give a different answer to part 2 (how the profit arises) every time they’re asked - many of their past predictions have failed.
I find it weird that the skeptics that have invested only time and critical thought are deemed worthy of such a lengthy article, yet the author hasn’t bothered to take the same treatment (beyond a token mention in their opening and a couple handwaves) for the several industry giants currently causing a great many real world ills (environmental, social, psychological, political) that seem to have hoovered up around 1/3 of all investment capital worldwide on promises of riches beyond imagination and a future utopia (if you can afford it).
TLDR; its a dumb question.
Typical “centrist” playbook. This guy is an AI booster pretending to be on the fence with no vested interest.
I have no particular financial interest in AI companies. I own whatever the standard share of them is via boring index funds. I have some seed stage investments, but just due to the timing and what’s gotten big, that part of my portfolio is underweight on AI.
Oh just a few seed stage investments, I’m barely even a venture capitalist, bro. My portfolio is light on AI, bro. These people live in a world where they think we’re all seed-stage investors.
And I’m not even going to address the flaws in his arguments because as soon as he pulls up revenue numbers and completely fails to mention the circular investments that are goosing the numbers you know that this is a disingenuous piece.
But it’s often pretty hard to address that, because every article he writes is a 10k word gish gallop.
Yeah, that sounds familiar.
I’m not saying Zitron’s right but one easy way that his predictions could be wrong at this point but could emerge as correct in the future is basically the principle “the market can stay irrational longer than you can stay solvent.” In other words things could have been crazy 2 years ago but they maybe crazier now, and they may have yet more room to get astronomically crazy.
So the question us not if it is profitable (it isn’t) but when the money dries up
Yeah I think that’s the question. in short it’s fishing for a way to make it profitable, whole concept is when we pour enough money, servers, research etc… into it, eventually it will start making money faster than we put into it, and so far, that’s not been proven. Que old image of guys digging for diamonds, one walking away just before hitting the diamond jackpot, the other blindly charging towards it.
and of course just like reality, there’s no actual way to know if there’s even any diamonds… just that we haven’t found them yet.
They’d have to pull a rabbit out of a hat to make it work, and their investments are not what you’d need to do that. For a mere fraction of the cost of all these datacenter shaped money pits they could build world class research labs that would put the old bell labs to shame, but they…aren’t
they could build world class research labs that would put the old bell labs to shame
Knowing Bell Labs’ contributions… this is fucking radicalizing.
Think of what would happen if you could pay the world’s smartest people in all fields of study $1 million a year salary to work on AI and AI adjacent research? That’s a rounding error at this scale
And since the USA is at war with half the world, the Pentagon will ensure that it never dries up.
The problem with making doomer predictions is that eventually you either need to be right about doom, or keep moving the goalposts.
AI crash and burn economic apocalypse doomer posts going back two years have aged like milk. (Insert Caddyshack “Well? We’re waiting!” meme here)
I grew up in deep red conspiracy theory territory. I’m sorry to tell you that 90% of the time, Ed Zitron is functionally no different than l all the people on Art Bell in 1997 or 2003 predicting UFO disclosure and full civil war and giant earthquakes and economic melt down. They believed it themselves. They spoke with conviction. They said what people wanted to hear. And they said it all again the next year, and the next, and the next. The only people who did get it right were the ones that took a pretty chill, middle of the road “well, not really” perspective. Or who said it enough times that they happened to say it in early 2008 and timing was on their side one time.
What’s even worse is that Zitron gets insider info quite a lot. And yet can’t help but make overly dire predictions in spite of his genuine advantage!
He’s an Anti-AI preacher. That’s it, and anyone unwilling to see that doesn’t mind.
and its gonna get worse. AI tokens are getting cheaper and all valuations going to crash soon
