Let AI Burn

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Let AI Burn

Ed Zitron<br>Jul 7, 2026<br>29 min read

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If you liked this piece, you should subscribe to my premium newsletter. It’s $70 a year, or $7 a month, and in return you get a weekly newsletter that’s usually anywhere from 5,000 to 18,000 words, including vast, detailed analyses of NVIDIA, Anthropic and OpenAI’s finances, and the AI bubble writ large (updated to version 3.0 a few weeks ago). My Hater's Guides To the SaaSpocalypse, Private Credit and Private Equity are essential to understanding our current financial system, and my guide to how OpenAI Kills Oracle pairs nicely with my Hater's Guide To Oracle.<br>This week, I published the Hater’s Guide to Softbank — a sordid tale of tech’s most degenerate gambler, who, thanks to a couple of early lucky wins, has managed to set the foundations for the AI bubble’s biggest (and possibly most gratifying) downfall. And, on Friday, I’m going to take a deep dive into the memory industry — and the reason why you can’t afford a new gaming PC.<br>Subscribing to premium is both great value and makes it possible to write these large, deeply-researched free pieces every week.<br>Soundtrack: Mastodon — Streambreather<br>No bailouts, no handouts, no special treatment, no tax breaks, no CHIPS act, and no sovereign wealth fund. It is time to tell the AI industry to go fuck itself, because it’s effectively done the same to the rest of society. This industry is unworthy — a sham conjured up by a tech industry that’s run out of ideas, a trillion-dollars’ worth of manufactured consent and entirely-avoidable financial crises — and should not be protected under any circumstance.<br>Every single time you hear somebody discuss “bailout” or “too big to fail” or “sovereign wealth funds,” know that this is the industry, on some level, attempting to create the air that it cannot die, when in fact every one of these companies is just as weak and brittle as any other startup.<br>I also think that the media — and the world at large — is too ready to accept the prospect of a bailout after watching those who drove the world into a ditch in 2008 escape blame, and I must be clear: the AI industry is very different to the financial industry. It is inessential to the economy, and its relevance is only as large as the hype campaign that sits behind it.<br>This is an industry of losers that has inflated only because of the joint manufactured consent of Silicon Valley, the mainstream media, and an enshittified stock market that rewards grifting and circular financing. OpenAI had $5.7 billion and Anthropic a little under $5 billion in the first quarter of this year — and those revenues mostly came from companies that were burning AI tokens at a horrendous rate because they’d just been forced to pay the actual cost of AI — and now everybody’s pulling back on that spend.<br>Generative AI will not bring us AGI, nor does it do much of what we associate with artificial intelligence. It is not autonomous. It is not “intelligent.” It does not have thoughts, or “knowledge,” and no matter how many layers of harnesses and scripts you put on top of it, it is still (per OpenAI) mathematically certain to hallucinate. I estimate that at least 70% of the entire AI industry’s revenues are made up of OpenAI and Anthropic’s compute spend, and as both companies are horrendously unprofitable, this means that the AI industry is, for the most part, venture capitalists funnelling money to hyperscalers so that they can funnel that money to NVIDIA or data center capex.<br>If this software were worthy, it would stand on its own two feet. It wouldn’t need circular financing and a cult of personality to prop it up, either. If it were truly special, there wouldn’t need to be an army of crazed acolytes that attack you for not pledging yourself to the graveyard smash. There has never been a tool or product in history sold with such hysteria and aggressive monocultural force that has ever turned out to be anything more than a grift. Some people have developed unhealthy relationships with large language models (LLMs) and the companies that make them, and that, not any certainty or proof of Artificial General Intelligence (AGI), is what motivates them.<br>This software is uniquely dark, both in what it unlocks in some people through its use and in the sense of the entities that sell it. Some people are in genuine awe of each of the rotation of clammy, soulless pod-people that saunter out of Anthropic every few weeks. Each one sounds a little weirder, more cultish, more disconnected from the real world. Silicon Valley may believe itself atheistic, but Anthropic has a worrying sense of fanaticism, both in the people that work there and its fanbase. Imagine the absolute worst fanbase of a video game possible, and then add layers of financialization, grifting and high school drama laced with pseudo-religious attachment. All for a fucking app!<br>Please, people. Nobody in the real...