What Next: TBD | Tech, power, and the future Is the A.I. Bubble Bursting? | 2025 in Review
Dec 26, 2025
In this insightful discussion, guest Ed Zitron, a newsletter author and podcaster, critiques the generative AI industry's economics. He argues that despite AI's hype, it struggles with profitability and is environmentally costly. Zitron identifies key players like OpenAI and raises concerns about their reliance on tech giants for funding. He shares insights from an MIT study showing low returns on AI investments and warns of potential consequences like Microsoft's absorption of OpenAI if the bubble bursts.
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AI Hype Outpaced Real Profits
- The AI boom has driven huge stock and infrastructure investment without clear profit signals.
- Ed Zitron argues the frenzy resembles past bubbles and lacks solid revenue fundamentals.
LLMs Are Costly and Unprofitable
- Large language models (LLMs) are economically strained and environmentally costly.
- Zitron says they require 'stealing from millions of people' and burn huge resources while lacking feasible business models.
Reassess AI Stock Assumptions
- Re-evaluate AI-driven stock valuations and avoid assuming perpetual growth.
- Look for companies with grounded fundamentals rather than hype-led projections, says Zitron.