The AI industry does not deserve a bailout. OpenAI posted $5.7 billion in Q1 revenue and Anthropic posted just under $5 billion, but Ed Zitron argues those numbers are a mirage: at least 70% of the entire sector's revenues trace back to OpenAI and Anthropic's own compute spend, meaning venture capitalists are routing money through hyperscalers to NVIDIA and data center capex. OpenAI itself has acknowledged that hallucinations are mathematically inevitable, not an engineering problem to be solved. This is not a mature industry hitting a rough patch. It is a circular financing scheme dressed up as a technology revolution.
Microsoft, Google, Meta, and Amazon are committing over $765 billion in capital expenditure in 2026 and a projected $1 trillion in 2027, not because generative AI has demonstrated meaningful revenue potential, but because they have no other hypergrowth thesis. Zitron is explicit: generative AI is not autonomous, not intelligent in any functional sense, and does not produce knowledge. The hype is sustained by Silicon Valley consensus, a compliant financial press, and a stock market that rewards circular grifting over real returns. Companies that were burning AI tokens at scale in Q1 are already pulling back on that spend.
The piece is worth reading in full not for the conclusion but for the mechanics. Zitron maps exactly how the bailout narrative gets constructed, why the AI sector is structurally unlike the financial system that got rescued in 2008, and what the SoftBank connection reveals about who actually built the conditions for this collapse. A deep dive into the memory industry and GPU pricing is coming Friday. The Hater's Guide to SoftBank is already published. Read both.
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