Screaming in the Cloud Betting on AI: The Delusion Driving Big Tech
Jul 24, 2025
Ed Zitron, CEO of EZPR and tech newsletter writer, joins to dissect the fervor surrounding AI and its backers. They delve into the financial realities of AI companies, revealing a stark contrast to their soaring valuations. Discussion reveals skepticism about Microsoft's investments and the shaky ground of OpenAI's finances. Zitron critiques the AI hype and contrasts it with past tech bubbles, while humorously noting the absurdities in corporate cultures, like extravagant bonuses at Meta. Together, they explore if the AI rush is a genuine revolution or just a bubble waiting to burst.
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Episode notes
AI Firms Lack Profitability Path
- Many AI companies, including OpenAI, currently lack a clear path to profitability and often incur billions of dollars in losses.
- This financial instability raises serious questions about the sustainability of the AI boom and its business models.
iPhone's Clear Impact Anecdote
- Ed Zitron recalls how people immediately grasped the iPhone's value without complicated explanations.
- This contrasts with AI, which lacks obvious immediate value and straightforward adoption paths.
Hyperscalers Burn Billions in AI
- Major AI companies like Google and Meta heavily invest in AI despite likely losing billions, fueled by monopoly resources.
- Their aggressive spending sustains AI progress, yet underlying profitability remains elusive.
