Better Offline The AI Money Trap, Part One
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Aug 20, 2025 The discussion dives into the precarious state of the AI bubble, questioning its sustainability and potential fallout. It highlights the financial illusions surrounding AI startups, which are facing mounting challenges despite their rapid growth. Insights on specific tools like Clawed Code and Cursor reveal the industry’s instability and ethical concerns on wealth distribution. The critique extends to the current investment practices in AI, drawing parallels to historical economic crises and pondering the future of venture capital in this volatile landscape.
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AI Bubble Likely To Burst Badly
- Ed Zitron argues the AI bubble is structured to end badly and cause collateral damage to innovation.
- He compares it to 2008 bailouts but says AI lacks systemic importance to be rescued the same way.
Opaque Funding Raises Red Flags
- Zitron questions where massive funding for OpenAI is actually being spent and calls the valuations absurd.
- He highlights opaque fundraising and rumors of insider stock sales as warning signs.
ARR Leaks Distort Reality
- Zitron criticizes leaked "annualized revenue" figures from OpenAI and Anthropic as intentionally misleading.
- He warns these ARR leaks match fundraising timelines and distort real financial health.