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This guy has zero zip nada null AI background. He is a videogame reviewer and PR guy. He is a pure influencer feeding on the AI backlash he helped to create. H

This guy has zero zip nada null AI background. He is a videogame reviewer and PR guy. He is a pure influencer feeding on the AI backlash he helped to create. He has been predicting a crash for how many years now? And while I can totally see Anthropic and OpenAI going through some things on the way to post-IPO FMV, those things do not include AI going away. It truly doesn't matter whether closed source Frontier lab models are spewing tokens or large foreign open weight models are doing it, the token factories will be just fine, and that's really all I care about. The question to me is why the media favors influencers like this over practitioners. And it's not like there aren't more balanced takes out there, here's just one... https://overweightskepticism.substack.com/p/ais-cash-cushion-runs-out-around https://overweightskepticism.substack.com/p/ais-cash-cushion...

joshcsimmons 2mo ago
Yes - correct. I have been saying this since this guy gained eminence.
tripleee 2mo ago
Is your ad hominem attack any better?
- semiquaver 2mo ago
  I don’t see how “This guy has no experience in the field he is actively commentating on. None of his predictions have come to pass.” is an ad hominem. The critiques are directly relevant to the subject matter.
  - parineum 2mo ago
    Would you expect someone in the AI industry to predict the collapse of the AI industry? I'm sure there weren't a ton of bankers predicting the mortgage collapse of 2008 but I, a young programmer of mortgage software could see something was weird (but didn't realize that it wasn't the norm).
    - francisofascii 2mo ago
      curious, what weird things did you see?
      - parineum 2mo ago
        It's nothing special that's not already pretty well known by now. It was seeing how popular loans that were some combination of zero documentation, baloon payments and jumbo loans. People were getting multi-million dollar loans with no documentation which had affordable introductory payment and then ballooned to many times the payment. I had no idea that wasn't normal but I was surprised when I learned that it was possible. I just lacked context and understanding of how the mortgage/banking industry really worked. Had I known as much as I do now after having been adulting for a while and become much more familiar with how banking really works, I could have seen that there was a massive pool of risk that was relying on the value of the housing market to not just keep increasing but increase at an incredible rate. All that it took was for the market to slow down just a little and then all those balloon payments would start defaulting because they couldn't be refinance again. I couldn't have predicted everything that happened or who exactly would be holding the bag but, with just a couple more pieces of knowledge, I could have easily seen it was unsustainable.
    - 4674745745 2mo ago
      [flagged]
      - dofm 2mo ago
        Fully possible to square those two things. Like, if you were young and you knew even trivial things about how much your parents or relatives earned, you might have thought “how can they afford this new house” but then see others getting new houses and assume that your own limited knowledge is at fault, when in fact the situation was a mix of irrational exuberance, ignorance, greed, head-in-the-sand avoidance, blind eyes turned to fraud, and absurd rates of commission and mis-selling, and your naïve common sense interpretation was correct. In retrospect it seems that one of the hallmarks of a property boom is people being persuaded they can afford mortgages they can't, or persuaded to round up, pad their application, and willing naïve people lining up to be sold stuff they can't afford, out of an urge to take advantage of what is being sold as a golden opportunity. In this bubble, one of the hallmarks is CEOs pressuring employees to use AI, urging suppliers to sell them AI solutions they can report to their investors, etc.; people are eager to buy things with fully unproven value out of an urge to take advantage of what is being sold as a golden opportunity.
- gyanchawdhary 2mo ago
  [dead]
senderista 2mo ago
Too bad that take is AI slop.
deleted 2mo ago
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dofm 2mo ago
Ed Zitron is enjoyably mouthy and rude about AI and AI people, but it’s a bit of a stretch to suggest that someone most people have never heard of helped create the AI backlash. He is just putting it into words. You know what created the AI backlash as well as anyone, and it is: AI and AI people. If e/acc voices were not so abrasively, obtrusively YOLO about their technology, if their entire take on what they earn millions to do was not so easily reduced to “yeah it sucks that your job will go away, learn AI I guess LOLz” then there would be far less to have a backlash against. Being lectured about the future by people who do not have a fucking business plan for how they will repay a trillion dollars and who might actually crash the economy does tend to grate on the nerves of the reality-based. Being told again and again that we will be ruled over by two firms that ultimately amount to the corporate equivalent of trust fund kids, that is annoying. If you want to convince people otherwise, find an analyst who is not churning out AI slop. As to the “predicting it for years” thing, the first correct-with-specifics predictions of the subprime crisis were published in 2004, by a pretty fringe outlet (karmabanque) and its author, Max Keiser. I remember not being shocked at all when it finally happened, or being shocked at LIBOR rigging. Because Max Keiser presented his reasoning on his crazy radio show, and told his listeners what signs to look out for. If someone is right for the right, well-informed reasons and presents that reasoning, it doesn’t always matter all that much if their background is unconventional. They tend to be dismissed, and they were back then. “People will always need houses” is what we were told, as if that was enough to ward off massive structural problems.
- supern0va 2mo ago
  > Ed Zitron is enjoyably mouthy and rude about AI and AI people Another read: Ed provides great content to help people afraid of AI self-soothe and pretend that it's not going anywhere.
  - dofm 2mo ago
    He doesn't pretend it's not going anywhere. He does think the market is going to crash. Like I say, I find his tone enjoyable, some of his predictions are interesting (and he has already been proved right on its risks to Oracle for example). I'm not interested in self-soothing and I am not afraid of AI. I am even a bit less bearish than Zitron. I am concerned about a world that is fucking stupid enough to fall for the elements of grift, but I am insulated enough from the consequences, for now, that it's not my primary concern.
GolfPopper 2mo ago
Yeah, it's not like there are AI-focused hedge funds crashing and burning right now.
- gizajob 2mo ago
  One, very over-leveraged and risk-thirsty speculative vehicle crashed and burned during its first market cycle of bullishness the first time there was a reasonable pullback. Hedge funds in general got a boost from this implosion.
- gizmodo59 2mo ago
  If your comment is referring to situational awareness, its due to 4x leverage. leverage is always risky. AI/semis are still doing extremely well (over last 2 years) despite the recent dip
  - tim333 2mo ago
    And run by a ~23 year old who I don't think had managed money before. It's easy to screw up leveraged trading irrespective of the virtues of AI. The fund is still well up because approximately 25% of the fund’s assets were invested in Anthropic, which has done well but is not very liquid yet.
- vonneumannstan 2mo ago
  Its up 80% on the year. How do your investments compare?
  - cmiles8 2mo ago
    This is the most misquoted bit in that whole fiasco. He apparently had to sell every liquid thing in the portfolio. What’s left is allegedly just some highly illiquid paper assets that they’ve also been trying to unload. The present value of those is iffy at best and may well also plummet before they can be cashed in. That “80%” can’t be realized right now in any traditional sense. No matter how you slice it the whole sequence of events last week was an unmitigated disaster. He’ll likely never manage other people’s money ever again.
cmiles8 2mo ago
1) Doesn’t make him wrong, and his thesis is looking more and more correct every day 2) The bullish AI side is full of grifters and folks that were block-chain and NFT “experts” before they became AI “experts.” 99% of the folks in AI know almost nothing about AI apart from thinking it’s cool and having played around with it a bit. The folks that correctly call BS on a thing tend to not be deep in the thing. Thats how they see things that are completely obvious to anyone but those so deep in they can’t see what’s right in front of them. That’s playing out big time right now with AI. The only folks that don’t see a massive AI bubble ready to burst right now are those that have drunk so much Kool-Aide that they long since stopped having any clarity in judgment. The implosion of “situational awareness” last week due to a complete lack of situational awareness that most Wall St pros called total amateur hour is a textbook case of this unfolding.
- dofm 2mo ago
  > The bullish AI side is full of grifters and folks that were block-chain and NFT “experts” before they became AI “experts.” At the beginning of this whole thing, when I still had an X account to log in with, I used to scroll back on an AI influencer's profile to see how many tweets I'd have to go past before I saw "ETH" or "NFT".
deleted 2mo ago
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ofjcihen 2mo ago
Your example article of a “more balanced take” actually supports what Zitron is saying. >They are two-party round-trips: a hyperscaler invests in an AI lab that is also its cloud customer, so the investment comes back as cloud revenue. They may not label as circular financing but this is still the exact same thing he’s bringing awareness to in his article.
tcp_handshaker 2mo ago
This is a non-argument and your comment is currently at top of this thread. You have not rebutted a single claim Zitron makes. You called him him an influencer, waved at "practitioners" and declared that token factories will be fine because that is your opinion. If his analysis is wrong, identify the error.
bluecalm 2mo ago
He doesn't need AI background to commentate on financials. Your post reads like a personal attack. His record talking about stock market doesn't matter either. There is about 0 information in anyone talking about what stock market is going to do. So his point is that big % of cloud revenue of Microsoft/Google/Amazon come from companies that: 1)are very unprofitable 2)need to raise staggering amount of capital to survive 3)are financed by their suppliers and that money is circling back to them Your counter-argument is this: >> It truly doesn't matter whether closed source Frontier lab models are spewing tokens or large foreign open weight models are doing it, the token factories will be just fine, and that's really all I care about. This might be true but there are 2 majors questions here. One is exposure to Anthropic/OpenAI. If they go bust/can't IPO at expected price it's a big loss hyperscalars will need to admit. The second question is how much of that cloud revenue comes from training. This part of the demand is going shrink or disappear in the bad scenario.
- tim333 2mo ago
  He doesn't have a finance background either and it's quite a job going through the 7482 words or whatever he's rattled off this week to analyse where he's gone wrong. His fundamental error I think, illustrated here https://www.youtube.com/watch?v=C0Gcx-6hJJw&t=196s https://www.youtube.com/watch?v=C0Gcx-6hJJw&t=196s is he thinks AI is just another tech product to hype rather than a comparable revolution to the industrial one.
  - surgical_fire 2mo ago
    This is the thing - I enjoy Zitron's work. His criticism to AI has two angles. The weak angle is on AI usability. I think he is wrong there; AI is clearly useful. Now, there is a discussion if it is multi-trillion dollar useful; I think it isn't, but it is useful nonetheless. Now, there is a strong angle, which is the economic viability of AI, and the gargantuan amount of money being burned in what is a very risky bet. There, his arguments have proven so far rock solid. The fact that you (as all his critics) chose to attack only the weak angle says something.
    - 2mo ago
deleted 2mo ago
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surgical_fire 2mo ago
> This guy has zero zip nada null AI background. He is a videogame reviewer and PR guy. He is a pure influencer feeding on the AI backlash he helped to create. And yet, his arguments on the economic viability of AI are rock solid. He has many haters, and I am still to see a good counter argument to the numbers he goes through. In fact, it is a shame that it falls to a "videogame reviewer and PR guy" with no tech or finance background to ask the questions that the press that reports on those companies should be asking.
keeda 2mo ago
Thanks, that is indeed a much better piece than most financial reporting on the AI industry. Like everyone goes on about "Circular investment! Bad!!" and many even interpret it as fraudulent accounting, but as this points out instead, it is a different, pretty valid, and perfectly legal strategy with significant but well-understood risks. I'll just pick a nit, on the topic of demand concentration, it cites that "MIT NANDA study / 95% AI pilots failed" number without considering the provenance (and, frankly, accuracy and relevance) of that number: https://archive.md/AvSYL https://archive.md/AvSYL
- LogicFailsMe 2mo ago
  Great article as well, but I'd even be happy with an initial 5% rate out of the gate given ~90% of startups fail. AI build out is a risk. Is anyone serious saying it isn't? It might blow up, certainly some egregiously overpriced endeavors will revert to mean, but risk taking is what businesses and investors do for a living. But for giggles, I threw Nvidia's latest 10Q into Sol 5.6 to analyze it as Patrick Boyle suggested that was the only way to understand the games they're playing. And its summary: "financial distress risk is very low; earnings-volatility risk is moderate to high. NVIDIA’s debt is trivial relative to earnings and liquidity. The main downside scenario is not creditors forcing distress—it is an AI-demand slowdown or regulatory shock colliding with enormous supply commitments, concentrated customers, and investment exposure. Even then, its margins, cash generation, net-cash position, and discretionary buybacks provide a substantial cushion." So broadly nothing I didn't more or less know already.

joshcsimmons 2mo ago

Yes - correct. I have been saying this since this guy gained eminence.

tripleee 2mo ago

Is your ad hominem attack any better?

semiquaver 2mo ago
I don’t see how “This guy has no experience in the field he is actively commentating on. None of his predictions have come to pass.” is an ad hominem. The critiques are directly relevant to the subject matter.
- parineum 2mo ago
  Would you expect someone in the AI industry to predict the collapse of the AI industry? I'm sure there weren't a ton of bankers predicting the mortgage collapse of 2008 but I, a young programmer of mortgage software could see something was weird (but didn't realize that it wasn't the norm).
  - francisofascii 2mo ago
    curious, what weird things did you see?
    - parineum 2mo ago
      It's nothing special that's not already pretty well known by now. It was seeing how popular loans that were some combination of zero documentation, baloon payments and jumbo loans. People were getting multi-million dollar loans with no documentation which had affordable introductory payment and then ballooned to many times the payment. I had no idea that wasn't normal but I was surprised when I learned that it was possible. I just lacked context and understanding of how the mortgage/banking industry really worked. Had I known as much as I do now after having been adulting for a while and become much more familiar with how banking really works, I could have seen that there was a massive pool of risk that was relying on the value of the housing market to not just keep increasing but increase at an incredible rate. All that it took was for the market to slow down just a little and then all those balloon payments would start defaulting because they couldn't be refinance again. I couldn't have predicted everything that happened or who exactly would be holding the bag but, with just a couple more pieces of knowledge, I could have easily seen it was unsustainable.
  - 4674745745 2mo ago
    [flagged]
    - dofm 2mo ago
      Fully possible to square those two things. Like, if you were young and you knew even trivial things about how much your parents or relatives earned, you might have thought “how can they afford this new house” but then see others getting new houses and assume that your own limited knowledge is at fault, when in fact the situation was a mix of irrational exuberance, ignorance, greed, head-in-the-sand avoidance, blind eyes turned to fraud, and absurd rates of commission and mis-selling, and your naïve common sense interpretation was correct. In retrospect it seems that one of the hallmarks of a property boom is people being persuaded they can afford mortgages they can't, or persuaded to round up, pad their application, and willing naïve people lining up to be sold stuff they can't afford, out of an urge to take advantage of what is being sold as a golden opportunity. In this bubble, one of the hallmarks is CEOs pressuring employees to use AI, urging suppliers to sell them AI solutions they can report to their investors, etc.; people are eager to buy things with fully unproven value out of an urge to take advantage of what is being sold as a golden opportunity.
gyanchawdhary 2mo ago
[dead]

senderista 2mo ago

Too bad that take is AI slop.

deleted 2mo ago

[deleted]

dofm 2mo ago

Ed Zitron is enjoyably mouthy and rude about AI and AI people, but it’s a bit of a stretch to suggest that someone most people have never heard of helped create the AI backlash. He is just putting it into words. You know what created the AI backlash as well as anyone, and it is: AI and AI people. If e/acc voices were not so abrasively, obtrusively YOLO about their technology, if their entire take on what they earn millions to do was not so easily reduced to “yeah it sucks that your job will go away, learn AI I guess LOLz” then there would be far less to have a backlash against. Being lectured about the future by people who do not have a fucking business plan for how they will repay a trillion dollars and who might actually crash the economy does tend to grate on the nerves of the reality-based. Being told again and again that we will be ruled over by two firms that ultimately amount to the corporate equivalent of trust fund kids, that is annoying. If you want to convince people otherwise, find an analyst who is not churning out AI slop. As to the “predicting it for years” thing, the first correct-with-specifics predictions of the subprime crisis were published in 2004, by a pretty fringe outlet (karmabanque) and its author, Max Keiser. I remember not being shocked at all when it finally happened, or being shocked at LIBOR rigging. Because Max Keiser presented his reasoning on his crazy radio show, and told his listeners what signs to look out for. If someone is right for the right, well-informed reasons and presents that reasoning, it doesn’t always matter all that much if their background is unconventional. They tend to be dismissed, and they were back then. “People will always need houses” is what we were told, as if that was enough to ward off massive structural problems.

supern0va 2mo ago
> Ed Zitron is enjoyably mouthy and rude about AI and AI people Another read: Ed provides great content to help people afraid of AI self-soothe and pretend that it's not going anywhere.
- dofm 2mo ago
  He doesn't pretend it's not going anywhere. He does think the market is going to crash. Like I say, I find his tone enjoyable, some of his predictions are interesting (and he has already been proved right on its risks to Oracle for example). I'm not interested in self-soothing and I am not afraid of AI. I am even a bit less bearish than Zitron. I am concerned about a world that is fucking stupid enough to fall for the elements of grift, but I am insulated enough from the consequences, for now, that it's not my primary concern.

GolfPopper 2mo ago

Yeah, it's not like there are AI-focused hedge funds crashing and burning right now.

gizajob 2mo ago
One, very over-leveraged and risk-thirsty speculative vehicle crashed and burned during its first market cycle of bullishness the first time there was a reasonable pullback. Hedge funds in general got a boost from this implosion.
gizmodo59 2mo ago
If your comment is referring to situational awareness, its due to 4x leverage. leverage is always risky. AI/semis are still doing extremely well (over last 2 years) despite the recent dip
- tim333 2mo ago
  And run by a ~23 year old who I don't think had managed money before. It's easy to screw up leveraged trading irrespective of the virtues of AI. The fund is still well up because approximately 25% of the fund’s assets were invested in Anthropic, which has done well but is not very liquid yet.
vonneumannstan 2mo ago
Its up 80% on the year. How do your investments compare?
- cmiles8 2mo ago
  This is the most misquoted bit in that whole fiasco. He apparently had to sell every liquid thing in the portfolio. What’s left is allegedly just some highly illiquid paper assets that they’ve also been trying to unload. The present value of those is iffy at best and may well also plummet before they can be cashed in. That “80%” can’t be realized right now in any traditional sense. No matter how you slice it the whole sequence of events last week was an unmitigated disaster. He’ll likely never manage other people’s money ever again.

cmiles8 2mo ago

1) Doesn’t make him wrong, and his thesis is looking more and more correct every day 2) The bullish AI side is full of grifters and folks that were block-chain and NFT “experts” before they became AI “experts.” 99% of the folks in AI know almost nothing about AI apart from thinking it’s cool and having played around with it a bit. The folks that correctly call BS on a thing tend to not be deep in the thing. Thats how they see things that are completely obvious to anyone but those so deep in they can’t see what’s right in front of them. That’s playing out big time right now with AI. The only folks that don’t see a massive AI bubble ready to burst right now are those that have drunk so much Kool-Aide that they long since stopped having any clarity in judgment. The implosion of “situational awareness” last week due to a complete lack of situational awareness that most Wall St pros called total amateur hour is a textbook case of this unfolding.

dofm 2mo ago
> The bullish AI side is full of grifters and folks that were block-chain and NFT “experts” before they became AI “experts.” At the beginning of this whole thing, when I still had an X account to log in with, I used to scroll back on an AI influencer's profile to see how many tweets I'd have to go past before I saw "ETH" or "NFT".

deleted 2mo ago

[deleted]

ofjcihen 2mo ago

Your example article of a “more balanced take” actually supports what Zitron is saying. >They are two-party round-trips: a hyperscaler invests in an AI lab that is also its cloud customer, so the investment comes back as cloud revenue. They may not label as circular financing but this is still the exact same thing he’s bringing awareness to in his article.

tcp_handshaker 2mo ago

This is a non-argument and your comment is currently at top of this thread. You have not rebutted a single claim Zitron makes. You called him him an influencer, waved at "practitioners" and declared that token factories will be fine because that is your opinion. If his analysis is wrong, identify the error.

bluecalm 2mo ago

He doesn't need AI background to commentate on financials. Your post reads like a personal attack. His record talking about stock market doesn't matter either. There is about 0 information in anyone talking about what stock market is going to do. So his point is that big % of cloud revenue of Microsoft/Google/Amazon come from companies that: 1)are very unprofitable 2)need to raise staggering amount of capital to survive 3)are financed by their suppliers and that money is circling back to them Your counter-argument is this: >> It truly doesn't matter whether closed source Frontier lab models are spewing tokens or large foreign open weight models are doing it, the token factories will be just fine, and that's really all I care about. This might be true but there are 2 majors questions here. One is exposure to Anthropic/OpenAI. If they go bust/can't IPO at expected price it's a big loss hyperscalars will need to admit. The second question is how much of that cloud revenue comes from training. This part of the demand is going shrink or disappear in the bad scenario.

tim333 2mo ago
He doesn't have a finance background either and it's quite a job going through the 7482 words or whatever he's rattled off this week to analyse where he's gone wrong. His fundamental error I think, illustrated here https://www.youtube.com/watch?v=C0Gcx-6hJJw&t=196s https://www.youtube.com/watch?v=C0Gcx-6hJJw&t=196s is he thinks AI is just another tech product to hype rather than a comparable revolution to the industrial one.
- surgical_fire 2mo ago
  This is the thing - I enjoy Zitron's work. His criticism to AI has two angles. The weak angle is on AI usability. I think he is wrong there; AI is clearly useful. Now, there is a discussion if it is multi-trillion dollar useful; I think it isn't, but it is useful nonetheless. Now, there is a strong angle, which is the economic viability of AI, and the gargantuan amount of money being burned in what is a very risky bet. There, his arguments have proven so far rock solid. The fact that you (as all his critics) chose to attack only the weak angle says something.
  - 2mo ago

deleted 2mo ago

[deleted]

surgical_fire 2mo ago

> This guy has zero zip nada null AI background. He is a videogame reviewer and PR guy. He is a pure influencer feeding on the AI backlash he helped to create. And yet, his arguments on the economic viability of AI are rock solid. He has many haters, and I am still to see a good counter argument to the numbers he goes through. In fact, it is a shame that it falls to a "videogame reviewer and PR guy" with no tech or finance background to ask the questions that the press that reports on those companies should be asking.

keeda 2mo ago

Thanks, that is indeed a much better piece than most financial reporting on the AI industry. Like everyone goes on about "Circular investment! Bad!!" and many even interpret it as fraudulent accounting, but as this points out instead, it is a different, pretty valid, and perfectly legal strategy with significant but well-understood risks. I'll just pick a nit, on the topic of demand concentration, it cites that "MIT NANDA study / 95% AI pilots failed" number without considering the provenance (and, frankly, accuracy and relevance) of that number: https://archive.md/AvSYL https://archive.md/AvSYL

LogicFailsMe 2mo ago
Great article as well, but I'd even be happy with an initial 5% rate out of the gate given ~90% of startups fail. AI build out is a risk. Is anyone serious saying it isn't? It might blow up, certainly some egregiously overpriced endeavors will revert to mean, but risk taking is what businesses and investors do for a living. But for giggles, I threw Nvidia's latest 10Q into Sol 5.6 to analyze it as Patrick Boyle suggested that was the only way to understand the games they're playing. And its summary: "financial distress risk is very low; earnings-volatility risk is moderate to high. NVIDIA’s debt is trivial relative to earnings and liquidity. The main downside scenario is not creditors forcing distress—it is an AI-demand slowdown or regulatory shock colliding with enormous supply commitments, concentrated customers, and investment exposure. Even then, its margins, cash generation, net-cash position, and discretionary buybacks provide a substantial cushion." So broadly nothing I didn't more or less know already.