Like you, I'm sick to the back teeth of talking about AI. Like you, I keep getting dragged into AI discussions. Unlike you‡, I spent the summer writing a book about why I'm sick of writing about AI⹋, which Farrar, Straus and Giroux will publish in 2026.
‡probably
⹋"The Reverse Centaur's Guide to AI"
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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
pluralistic.net/2025/09/27/eco…
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Cory Doctorow
in reply to Cory Doctorow • • •Sensitive content
A week ago, I turned that book into a speech, which I delivered as the annual Nordlander Memorial Lecture at Cornell, where I'm an AD White Professor-at-Large. This was my first-ever speech about AI and I wasn't sure how it would go over, but thankfully, it went great and sparked a lively Q&A.
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Cory Doctorow
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One of those questions came from a young man who said something like "So, you're saying a third of the stock market is tied up in seven AI companies that have no way to become profitable and that this is a bubble that's going to burst and take the whole economy with it?"
I said, "Yes, that's right."
He said, "OK, but what can we do about that?"
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Cory Doctorow
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So I re-iterated the book's thesis: that the AI bubble is driven by monopolists who've conquered their markets and have no more growth potential, who are desperate to convince investors that they can continue to grow by moving into some other sector, e.g. "pivot to video," crypto, blockchain, NFTs, AI, and now "super-intelligence."
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Cory Doctorow
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Further: the topline growth that AI companies are selling comes from replacing most workers with AI, and re-tasking the surviving workers as AI babysitters ("humans in the loop"), which won't work. Finally: AI *cannot* do your job, but an AI salesman can *100%* convince your boss to fire you and replace you with an AI that *can't* do your job.
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Cory Doctorow
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When the bubble bursts, the money-hemorrhaging "foundation models" will be shut off and we'll lose the AI that can't do your job, *and* you will be long gone, retrained or retired or "discouraged" and out of the labor market, and *no one* will do your job. AI is the asbestos we are shoveling into the walls of our society and our descendants will be digging it out for generations:
pluralistic.net/2025/05/27/ran…
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Pluralistic: AI turns Amazon coders into Amazon warehouse workers (27 May 2025) – Pluralistic: Daily links from Cory Doctorow
pluralistic.netCory Doctorow
in reply to Cory Doctorow • • •Sensitive content
The only thing (I said) that we can do about this is to puncture the AI bubble *as soon as possible*, to halt this before it progresses any further and to head off the accumulation of social and economic debt. To do that, we have to take aim at the *material basis* for the AI bubble (creating a growth story by claiming that defective AI can do your job).
"OK," the young man said, "but what can we *do* about the crash?" He was clearly very worried.
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Cory Doctorow
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"I don't think there's anything we can do about that. I think it's already locked in. I mean, maybe if we had a different government, they'd fund a jobs guarantee to pull us out of it, but I don't think Trump'll do that, so --"
"But what can we *do?*"
We went through a few rounds of this, with this poor kid just repeating the same question in different tones of voice, like an acting coach demonstrating the five stages of grieving using nothing but inflection.
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Cory Doctorow
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It was an uncomfortable moment, and there was some decidedly nervous chuckling around the room as we pondered the coming AI (economic) apocalypse, and the fate of this kid graduating with mid-six-figure debts into an economy of ashes and rubble.
I firmly believe the (economic) AI apocalypse is coming. These companies are not profitable. They can't be profitable.
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Cory Doctorow
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They keep the lights on by soaking up hundreds of billions of dollars in other people's money and then lighting it on fire. Eventually those other people are going to want to see a return on their investment, and when they don't get it, they will halt the flow of billions of dollars. Anything that can't go on forever eventually stops.
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Cory Doctorow
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This isn't like the early days of the web, or Amazon, or any of those other big winners that lost money before becoming profitable. Those were all propositions with excellent "unit economics" - they got cheaper with every successive technological generation, and the more customers they added, the more profitable they became.
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Cory Doctorow
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AI companies have - in the memorable phraseology of Ed Zitron - "dogshit unit-economics." Each generation of AI has been vastly more expensive than the previous one, and each new AI customer makes the AI companies lose *more* money:
pluralistic.net/2025/06/30/acc…
This week, no less than the *Wall Street Journal* published a lengthy, well-reported story (by Eliot Brown and Robbie Whelan) on the catastrophic finances of AI companies:
wsj.com/tech/ai/ai-bubble-buil…
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Pluralistic: How much (little) are the AI companies making? (30 Jun 2025) – Pluralistic: Daily links from Cory Doctorow
pluralistic.netCory Doctorow
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The *WSJ* writers compare the AI bubble to other bubbles, like Worldcom's fraud-soaked fiber optic bonanza (which saw the company's CEO sent to prison, where he eventually died), and conclude that the AI bubble is *vastly* larger than any other bubble in recent history.
The data-center buildout has genuinely absurd finances - there are data-center companies that are collateralizing their loans by staking their giant Nvidia GPUs as collateral.
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Cory Doctorow
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This is wild: there's pretty much nothing (apart from fresh-caught fish) that loses its value faster than silicon chips. That goes *triple* for GPUs used in AI data-centers, where it's normal for tens of thousands of chips to burn out over a single, 54-day training run:
techblog.comsoc.org/2024/11/25…
Talk about sweating your assets!
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Superclusters of Nvidia GPU/AI chips combined with end-to-end network platforms to create next generation data centers – IEEE ComSoc Technology Blog
techblog.comsoc.orgCory Doctorow
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That barely scratches the surface of the funny accounting in the AI bubble. Microsoft "invests" in Openai by giving the company free access to its servers. Openai reports this as a ten billion dollar investment, then redeems these "tokens" at Microsoft's data-centers. Microsoft then books this as ten billion in revenue.
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Cory Doctorow
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That's par for the course in AI, where it's normal for Nvidia to "invest" tens of billions in a data-center company, which then spends that investment buying Nvidia chips. The the same chunk of money being energetically passed back and forth between these closely related companies, all of which claim it as investment, as an asset, or as revenue (or all three).
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Cory Doctorow
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The *Journal* quotes David Cahn, a VC from Sequoia, who says that for AI companies to become profitable, they would have to sell us *$800 billion* worth of services *over the life of today's data centers and GPUs*. Not only is that a very large number - it's also a very short time. AI bosses themselves will tell you that these data centers and GPUs will be obsolete practically from the moment they start operating.
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Cory Doctorow
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Mark Zuckerberg says he's prepared to waste "a couple hundred billion dollars" on misspent AI investments:
businessinsider.com/mark-zucke…
Bain & Co says that the only way to make today's AI investments profitable is for the sector to bring in *$2 trillion* by 2030 (the *Journal* notes that this is more than the combined revenue of Amazon, Google, Microsoft, Apple Nvidia and Meta):
https://www.bain.com/about/media-center/press-releases/20252/$2-trillion-in-new-revenue-needed-to-fund-ais-scaling-trend---bain--companys-6th-annual-global-technology-report/
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Why Zuckerberg says risking billions on AI is worth it
Lee Chong Ming (Business Insider)Cory Doctorow
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How much money is the AI industry making? Morgan Stanley says it's $45b/year. But that $45b is based on the AI industry's own exceedingly cooked books, where *annual* revenue is actually *annualized* revenue, an accounting scam whereby a company chooses its best single revenue month and multiplies it by 12, even if that month is a wild outlier:
wheresyoured.at/the-haters-gui…
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The Hater's Guide To The AI Bubble
Edward Zitron (Ed Zitron's Where's Your Ed At)Cory Doctorow
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Industry darlings like Coreweave (a middleman that rents out data-centers) are sitting on *massive* piles of debt, secured by short-term deals with tech companies that run out *long* before the debts can be repaid. If they can't find a bunch of new clients in a couple short years, they will default and collapse.
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Cory Doctorow
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The AI bubble has absorbed more of the country's wealth and represents more of its economy than historic nation-shattering bubbles, like the 19th century UK rail bubble. A much-discussed MIT paper found that 95% of companies that had tried AI had either nothing to show for it, or experienced a loss:
technologyreview.com/2019/01/2…
A less well-known U Chicago paper finds that AI has "no significant impact on workers’ earnings, recorded hours, or wages":
papers.ssrn.com/sol3/papers.cf…
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We analyzed 16,625 papers to figure out where AI is headed next
Karen Hao (MIT Technology Review)Cory Doctorow
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Anything that can't go on forever eventually stops. Trump might bail out the AI companies, but for how long? They are incinerating money faster than practically any other human endeavor in history, with precious little to show for it.
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Cory Doctorow
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During my stay at Cornell, one of the people responsible for the university's AI strategy asked me what I thought the university should be doing about AI. I told them that they should be planning to absorb the productive residue that will be left behind after the bubble bursts:
locusmag.com/feature/commentar…
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Cory Doctorow: What Kind of Bubble is AI?
Locus OnlineCory Doctorow
in reply to Cory Doctorow • • •Sensitive content
Plan for a future where you can buy GPUs for ten cents on the dollar, where there's a buyer's market for hiring skilled applied statisticians, and where there's a ton of extremely promising open source models that have barely been optimized and have *vast* potential for improvement.
There's plenty of useful things you can do with AI. But AI is (as Princeton's Arvind Narayanan and Sayash Kapoor, authors of *AI Snake Oil* put it), a *normal* technology:
knightcolumbia.org/content/ai-…
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AI as Normal Technology
Arvind Narayanan & Sayash Kapoor (Knight First Amendment Institute)Cory Doctorow
in reply to Cory Doctorow • • •Sensitive content
That doesn't mean "nothing to see here, move on." It means that AI isn't the bow-wave of "impending superintelligence." Nor is it going to deliver "humanlike intelligence."
It's a grab-bag of useful (sometimes very useful) tools that can sometimes make workers' lives better, when workers get to decide how and when they're used.
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Cory Doctorow
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The most important thing about AI isn't its technical capabilities or limitations. The most important thing is the investor story and the ensuing mania that has teed up an economical catastrophe that will harm hundreds of millions or even billions of people. AI isn't going to wake up, become superintelligent and turn you into paperclips - but rich people with AI investor psychosis are almost certainly going to make you much, much poorer.
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Cory Doctorow
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TechCrunch
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commons.wikimedia.orghuntingdon
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jokeyrhyme
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> Anything that can't go on forever eventually stops.
i wish this were true, but it seems we haven't yet seen the limit on how much money investors will pump into Uber
are LLM investors differently-smart or differently-patient compared to Uber investors? 🤷
narF 😵✌️
in reply to Cory Doctorow • • •Simon Carpentier
in reply to narF 😵✌️ • • •Emma-Martin 🇨🇦🤝🇵🇸🇺🇦
in reply to Simon Carpentier • • •@scarpentier @narF And from what I've read on the subject, it's not even *good* GPUs: LLMs mostly use FP16, so their hardware has crippled/limited FP64 (aka the really good stuff).
Basically e-waste when the bubble pops.
narF 😵✌️
in reply to Emma-Martin 🇨🇦🤝🇵🇸🇺🇦 • • •unlofl [Promoted Toot]
in reply to narF 😵✌️ • • •Pteryx the Puzzle Secretary
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A_Minion
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Captain Superlative
in reply to Cory Doctorow • • •Simon B
in reply to Cory Doctorow • • •Okuna
in reply to Cory Doctorow • • •thanks for this.
It reminded me of a proverb:
-A fool with a tool is still a fool.-
The new economy bubble burst as well and lots of companies from then are gone. But still something is left. And not a little bit.
I guess this will be the case here as well.
On the other hand, Google, apple, Meta have loads of cash. Companies like anthropic or openai or or or may be soon sucked up, maybe by MS, maybe by Apple etc.
What worries me most are two things:
1. We use AI and vast resources to create artificial cat videos, summarize phishing emails and many other things not adding real value to our lives.
2. I believe I read and heard, from smarter people, that the transformer model architecture is not sufficient. But we stopped researching for new solutions.
Cory Doctorow reshared this.
A_Minion
in reply to Cory Doctorow • • •Allan
in reply to Cory Doctorow • • •Cory Doctorow reshared this.
deepfryed
in reply to Cory Doctorow • • •Cory Doctorow reshared this.
Flipper 🐬
in reply to Cory Doctorow • • •I work in the front line trenches of this bubble and I think what you say is correct. I do think that this is the result of the need to burn off excess capital, shrink the market, and then give the system room to grow again.
We are in for a collapse that will hurt most of us but allow the biggest players to consolidate further. Tens of people will make out like bandits (and not in a good way) and tens of millions will suffer.
After all of it, there will be some really useful tools that can be used to make really useful things. But they will all be owned by a few.
I hope I'm wrong and AI just collapses back to what it used to be - fun and interesting.
Janik
in reply to Cory Doctorow • • •> AI is the asbestos we are shoveling into the walls of our society and our descendants will be digging it out for generations.
Absolutely!