What happens now if one of these companies implodes? does it pull everything with it?
The AI hype train was built on the premise that AI will progress linearly and eventually end up replacing a lot of well paid white collar work, but it failed to deliver on that promise by now, and progress has flatlined or sometimes even gone backwards (see GPT-5 vs 4o).
FAANG companies can only absorb these losses for so long before shareholders pull out.
Also never forget that in technology moreso than any other industry showing a loss while actually secretly making a profit is a high art form. There is a lot of land grabbing happening right now, but even so it would be a bit silly to take the profit/loss public figures at face value.
Numbers prove we aren't. Sales figures show very few customers are willing to pay $200 per month for the top AI chatbots, and even at $200/month, OpenAI is still taking a loss on that plan so they're still loosing money even with top dollar customers.
I think you're unaware just how unprofitable the big AI products are. This can only go on for so long. We're not in the ZIRP era anymore where SV VC funded unicorns can be unprofitable indefinitely and endlessly burn cash on the idea that when they'll eventually beat all competitors in the race to the bottom and become monopolies they can finally turn a profit by squeezing users with higher real-world price. That ship has sailed.
[1] https://www.axios.com/2025/08/15/sam-altman-gpt5-launch-chat...
Ermmm dude they are competing with Google. They have to keep reinvesting otherwise Google captures the users OAI currently has.
Free cash flows matter. Not accounting earnings. On a FCFF basis they largely in the red. Which means they have to keep raising money, at some point somebody will turn around and ask the difficult questions. This cannot go on forever.
And before someone mentions Amazon... Amazon raised enough money to sustain their reinvestment before they eventually got to the place where their EBIT(1-t) was greater than reinvestment.
This is not at all whats going on with OAI.
If you're gonna buy at face value whatever Scam Altman claims, then I have some Theranos shares you might be interested in.
Anyway, I'd just point out that users don't even need to depend on the bots for increase productivity, they just need to BELIEVE it increases their productivity. Exhibit A being the recent study which found that experienced programmers were actually less productive when they used an LLM, even though they self-reported productivity gains.
This may not be the first time the tech industry has tricked us into thinking it makes us more productive, when in reality it's just figuring out ways to consume more of our attention. In Deep Work, Cal Newport made the argument that interruptive "network tools" in general decrease focus and therefore productivity, while making you think that you're doing something valuable by staying constantly connected. There was a study on this one too. They looked at consultants who felt that replying as quickly as possible to their clients, even outside of work hours, was important to their job performance. But then when they took the interruptive technologies away, spent more time focusing on their real jobs, and replied to the clients less often, they started producing better work and client feedback scores actually went up.
Now personally I haven't stopped using an LLM when I code but I'm certainly thinking twice about how I use it these days. I actually have cut out most interruptive technology when I work, i.e. email notifications disabled, not keeping Slack open, phone on silent in a drawer, etc. and it has improved my focus and probably my work quality.
To save others a search, here is a blog post and the paper:
https://metr.org/blog/2025-07-10-early-2025-ai-experienced-o...
https://arxiv.org/abs/2507.09089
Thanks for mentioning it.
Correct, but said technology needs to be self sustaining commercially. The cost the white collar worker pays needs to be enough to cover the cost of running the AI + profit
It seems like we are a long way off that yet but maybe we expect an AI to solve that problem ala Kurzweil
This is comically premature.
When you follow the progress in the last 12 months, it really isn't. Big AI companies spent "hella' stacks" of cash, but delivered next to no progress.
Progress has flatlined. The "rocket to the moon" phase has already passed us by now.
They don’t make AI chips really, they make the best high-throughput, high-latency chips. When the AI bubble pops, there’ll be a next thing (unless we’re really screwed). They’ve got as good chance of owning that next thing as anybody else does. Even better odds if there are a bunch of unemployed CUDA programmers to work on it.
There will undoubtedly still be a market for Nvidia chips but it won’t be enough to keep things going as they are.
A new market opening up with the same demand as AI just at the point that AI pops would be a miracle. Something like being an unsecured bond holder in 2010.
And what is that post-AI bubble "next big thing" exactly?
If there were, you'd already see people putting their money towards it.