AI Had Better Work Out

Newsletter · Watch/Read · (gathered 2026-10-21)

• Ed Zitron argues that the AI bubble is an unprecedented, globally concentrated financial risk, worse than the Dot-Com era, built on unsustainable “perpetual, parabolic growth” expectations for AI revenues and capital expenditures.
• Despite massive investment, there’s an oversupply of GPUs, with companies like Amazon warehousing billions in NVIDIA chips they can’t install, suggesting “channel stuffing” by NVIDIA to artificially inflate demand.
• Gartner’s research indicates “AI revenue will be insufficient to support profitable returns on all planned AI capital expenditures” between 2027-2030, predicting more compute capacity than demand and the failure of 80% of “neoclouds.”
• The revenue growth of key AI labs like Anthropic and OpenAI is largely dependent on unprofitable AI startups burning venture capital at unsustainable rates, making the entire ecosystem fragile amidst declining VC fundraising and exits.
• Zitron warns that the market is sustained by “childish excitement” and “cultism and private equity excess,” but this fundamental disconnection from reality means the “AI thing” will not “work out,” leading to a severe financial crisis with no government bailout possible.