Ed Zitron: The AI Bubble is Bleeding Cash, Here Are The Receipts
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Got a very special conversation. I am speaking to one of the most prolific skeptics about AI. I'm joined today by Ed Zitron, author of Where's Your Ed? At newsletter and the Better Offline podcast. Ed, welcome to Monetary Matters.
Thanks for having me.
Ed, how about you start off and lay out your view of artificial intelligence and what the return on investment is for the enormous sums that are currently being spent?
So trillion plus dollars in, the fact we're still debating the ROI kind of says everything. I think if this was a real industry with the kind of TAM that they've been selling us on for the past four years, we wouldn't have that debate. There wouldn't be one. The fact that we're having it, the fact that you have people to this day in the year of our Lord 2026 saying, well, AI is real. I've never heard something real where someone has had to insist upon that. Economically speaking, the vast majority of AI companies barely make more than $100,000,000 a year in revenue. Anthropic and OpenAI accoun
How much, by the way, has Uber or Amazon lost when they were losing tons of money and before they became the giant behemoths? And how does that compare to the, as you say, 21,000,000,000 that OpenAI lost last year?
Okay. So Uber, I believe, burned like $32,000,000,000 They're now kind of like messy, gap profitable. A lot of that was sales and marketing, and a lot of that was subsidizing rides. But the level of subsidies they did were just completely different. The Amazon Web Services example is the really egregious one. Between 2003 and 2017, I think it is normalized for inflation, Amazon Web Services was maybe $53.55000000000 total. And that's all of Amazon's CapEx, not just AWS. Just to give you some context, if OpenAI closes all the money they've been promised this year, they will have raised $122,000
I think you're exactly right. I mean, it was a senior executive, maybe co founder of Google, who said that they would rather go bankrupt than lose an AI. They're committed.
Yeah. And all of that, I think, comes from this theory called the Rockcom bubble, which is tech is out of ideas. When I say that, I don't mean they literally have none. I mean, they have no hyper growth ideas. They don't have a new AWS. They don't have a new iPhone or a new smartphone. They don't have an ex cloud computing. And AI was meant to be the panacea. It was meant to be AI models as in via the API were meant to be the thing that created the next generation of startups, that created the next generation of enterprise bolt ons so the software industry could grow. It was meant to be the fu
One cork claim that you said I just wanna revisit is that the losses experienced by the two largest labs, Anthropic and OpenAI right now, especially OpenAI, are unlike anything we've seen in history on an on an annualized basis. So as you said, if we can get into the the $21,000,000,000 in losses in 2025. And I'll also add something that leads to another core claim of yours, which is that it's no secret that Silicon Valley has funded startups that are initially unprofitable, but the reason that some of them work out and work out tremendously well is because they're software type businesses tha
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