Is there an AI Bubble due to unrealistic expectations and mindless capital allocation?

[Anonymous]

AI industry appears to be in the bubble fueled by unrealistic expectations and potential misallocation of capital. Consequences for the economy and the tech sector is pretty huge given the massive valuation and record venture capital inflows. AI hype is largely disconnected from expected productivity gains and sustainable business success. With miniscule revenue, does anyone know where does Open AI get the funds for all these deals?

As influential figures claim early breakthroughs toward artificial general intelligence (AGI), yet concrete progress remains elusive. At this time, almost 95% of generative AI enterprise projects do not generate revenue, and many firms are forced to reverse costly layoffs. The scale of spending on AI infrastructure is heavily reliant on continuous inflows of capital. Many on TV now warn of growing risks as the AI bubble inflates and AI tools increase workloads rather than reduce them, such as programmers spending 19% more time due to AI errors and oversight needs. The bubble’s burst, when it comes, could inflict painful economic consequences, damaging retirement savings, shaking confidence across the world.

Any thoughts?

[Anonymous]

Anonymous wrote:AI industry appears to be in the bubble fueled by unrealistic expectations and potential misallocation of capital. Consequences for the economy and the tech sector is pretty huge given the massive valuation and record venture capital inflows. AI hype is largely disconnected from expected productivity gains and sustainable business success. With miniscule revenue, does anyone know where does Open AI get the funds for all these deals?

As influential figures claim early breakthroughs toward artificial general intelligence (AGI), yet concrete progress remains elusive. At this time, almost 95% of generative AI enterprise projects do not generate revenue, and many firms are forced to reverse costly layoffs. The scale of spending on AI infrastructure is heavily reliant on continuous inflows of capital. Many on TV now warn of growing risks as the AI bubble inflates and AI tools increase workloads rather than reduce them, such as programmers spending 19% more time due to AI errors and oversight needs. The bubble’s burst, when it comes, could inflict painful economic consequences, damaging retirement savings, shaking confidence across the world.

Any thoughts?

Is this Ed Zitron posting on DCUM?

https://www.wheresyoured.at/openai-onetrillion/

Anyone who tries to actually nail down details on spending and projections by OpenAI comes up with...not much. It's a ton of smoke and mirrors.

[Anonymous]

It's just lke the dot-com bubble of early 2000s, but won't be as bad this time, as not so many companies are that heavy into AI.

Typical of new technolgoies. They all fight to be market leader, and investors toss money at all of them hoping they have picked the winner.

We use AI in our company. Cost per AI "unit" is 1/30th of what it was a year ago, due to technologoy moving so far. Huge efficiency gains in the early days of technology, as is typical.

[Anonymous]

No.

[Anonymous]

Anonymous wrote:

Anonymous wrote:AI industry appears to be in the bubble fueled by unrealistic expectations and potential misallocation of capital. Consequences for the economy and the tech sector is pretty huge given the massive valuation and record venture capital inflows. AI hype is largely disconnected from expected productivity gains and sustainable business success. With miniscule revenue, does anyone know where does Open AI get the funds for all these deals?

As influential figures claim early breakthroughs toward artificial general intelligence (AGI), yet concrete progress remains elusive. At this time, almost 95% of generative AI enterprise projects do not generate revenue, and many firms are forced to reverse costly layoffs. The scale of spending on AI infrastructure is heavily reliant on continuous inflows of capital. Many on TV now warn of growing risks as the AI bubble inflates and AI tools increase workloads rather than reduce them, such as programmers spending 19% more time due to AI errors and oversight needs. The bubble’s burst, when it comes, could inflict painful economic consequences, damaging retirement savings, shaking confidence across the world.

Any thoughts?

Is this Ed Zitron posting on DCUM?

https://www.wheresyoured.at/openai-onetrillion/

Anyone who tries to actually nail down details on spending and projections by OpenAI comes up with...not much. It's a ton of smoke and mirrors.

'

OpenAI and all the compeitotrs are all losing money adn will for years. Investors don't care -- they want you to spend money to gain market share. Uber operated for about 15 years before it turned its first profit. They're now the market leader.

[Anonymous]

Anonymous wrote:It's just lke the dot-com bubble of early 2000s, but won't be as bad this time, as not so many companies are that heavy into AI.

Typical of new technolgoies. They all fight to be market leader, and investors toss money at all of them hoping they have picked the winner.

We use AI in our company. Cost per AI "unit" is 1/30th of what it was a year ago, due to technologoy moving so far. Huge efficiency gains in the early days of technology, as is typical.

Yeah but you aren't getting charged anywhere close to the actual cost of production, setting aside the societal costs from the ridiculous energy needs. The actual gains from using it have also been very hard to quantify or seem very minor. The error rate is just too high that you can't rely on it.

[Anonymous]

Yes, our tech sector is not capable of creating the type of AI they are claiming will eliminate all white collar jobs. Their AI tools will be too expensive to properly monetize while most people are able to get by using open source AI from China. You will start seeing cracks as more and more people/businesses make really bad decisions thinking AI can provide good advice on anything.

[Anonymous]

It is a bubble. Eventually people will figure out we do not have generalized AI. All we have that is new are large language models -- good for a few things, but not for everything, and overly hyped right now.

[Anonymous]

"Tokenized equity" is like the NFT of stocks I guess. Another bubble but one that didn't matter. This one will.

https://bsky.app/profile/caseynewton.bsky.social/post/3m2nf5oz4p224

[Anonymous]

This bubble is concentrated at the top stocks in tech which is driving the market high. Any reversal will cause cascading effect on others and will quickly drain the retirement accounts

[Anonymous]

Article about how Nvidia is paying other companies to buy its chips. Seems quite odd.

https://www.bloomberg.com/news/features/2025-10-07/openai-s-nvidia-amd-deals-boost-1-trillion-ai-boom-with-circular-deals?embedded-checkout=true

[Anonymous]

I don’t know…I’m still prepping for Y2K…

[Anonymous]

Yes. This is the stupidest crap.

[Anonymous]

As a dev, I love AI. It’s scaring millions of would be software engineers away from the industry. In a few years I hope it’ll lead to a massive supply crunch and I can bump up my total comp another few hundred k.

[Anonymous]

When AI investment fails they will fire you all to cut cost and try to recoup their investments. Either way you are f**d.