Ed Zitron’s done an excellent deep dive on this stuff. Of all the companies investing in AI infrastructure, building AI models, and developing AI applications, exactly one has made a profit: Nvidia. Hundreds of billions of dollars are being spent by the big tech companies on GPUs which lose money once they’re plugged in because LLMs are extremely expensive. Capital expenditure on AI is pushing a trillion dollars, and the net revenue of the entire industry to this point is something like 10 billion.

Every one of the big tech companies are weighty members of the stock market, with Nvidia being the biggest of them. If any one of them slow down AI-related expenditures, Nvidia sells fewer GPUs and the entire stock market wobbles, driving down the valuation of the other big tech companies who are closely tied to Nvidia’s value, starting a downward spiral. Since execs are paid mostly in stocks, none of the C suites at any of these companies can retreat in any way without losing money personally. Investors, who are universally fucking morons, see this behavior as bullish and even harangue Apple for not going harder on LLMs, pushing the valuation of the tech giants up and up and up based on them blowing all their cash on data centers that only lose money.

So you end up with a situation where a few gargantuan companies are locked into spending more money every quarter on capital that only loses money, because if anyone blinks the stock market will crash, because the primary seven companies are 20%+ of the entire market.

Wasn’t it always?