The AI Bubble Everyone Wants To Pop
In this week's episode we take another look at the AI boom and contemplate how long big tech can get its bubble for nothing and clicks for free.
Welcome to the podcast Organized Money. You can listen to today’s episode on Apple on Spotify, or wherever you get your podcasts.
With its promise to displace jobs and disrupt daily life, AI and large language models have formed a unique market and social bubble: one that nearly everyone hates. Despite little revenue, billions of dollars are promised by hyperscalers like Google and Meta to help build out AI data centers in increasingly arcane financing schemes that are singularly propping up the otherwise meager economy.
Today on the show Matt and David host two guests: Advait Arun, Senior Associate for Capital Markets at the Center for Public Enterprise and author of a recent paper on data centers, Bubble or Nothing; and Sarah Meyers West, who is the co-executive director of the AI NOW Institute, to discuss the strange place we’ve found ourselves. We discuss the state of the AI economy, the complex ways these data centers are financed (including old favorites like the return of credit default swaps), how the bubble could pop, and what the consequences might be.
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Hey guys 👋.
Thanks again for your efforts.
In the “It’s worse than you know” Department, I’ll offer the following points.
We’ve known pretty much since Trump 2 was elected that NREL was going to be re-missioned away from renewables and energy efficiency to serve Trump’s Tech Bro overlords.
The renaming (complete restructuring) of the Department of Energy under the lickassery of Wright has recently been moved into more of a mask-off phase. The attached FAS analysis does a pretty good job of articulating “concerns”, though the establishment of an “Office of AI and Quantum” really defines the absurdity inherent in this rape and pillage of public resources.
I’m sure you guys are aware that “Quantum” has long been lying in wait as the follow on thing to point to once the AI / AGI from LLM scam falls apart. Fusion power is always the fallback “tomorrow” distraction (as best articulated in the musical “Annie”). Combining “AI” with “Quantum” just allows funding to be bounced around more easily between go-nowhere scams.
I was shocked that there was no announcement for a new DOE “Office of Cryptocurrency”. Maybe next week.
By establishing this current DOE infrastructure they’ve created a virtual superhighway to drain the system of funds. If you think the circular funding of AI players is grift playing out in plain view… wait till you see what having the DOE focus primarily upon keeping a bubble inflated does for a monumentally corrupt industry.
https://fas.org/publication/new-doe-re-organization-raises-uncertainty-for-american-science/
Just another log to throw on the fire.
All the best.