Glimmer of Hope: More People Realise and Come to Accept "AI" is Just a Giant, Elaborate Ponzi/Pyramid Scheme That Will Leave Everyone Worse Off (Except the "Top of the Pyramid")
From 3 days ago:
- FTC Realises Microsoft Buying Fake 'Clients' to Fake "Revenue" (Microsoft 'Buying' Services and Products From Itself!)
- The Oracle Ponzi Scheme
- Oracle Fraud (or Defrauding Shareholders)
- NVidia is a Bubble
- Buying From Oneself is Not Business Success
- Definitely Not a Ponzi Scheme
Today in this forum, quoting Einhorn and some comments [1, 2]:
As always some of the comments are the best part (from the Yahoo link):Invex X
15 hours ago
The whole AI ecosystem is just an incestuous club and money scheme.
For example, OpenAI buys from Nvdia, Nvdia in turn sells to Microsoft, then Nvdia and Microsft dumps money in OpenAI, then Oracle borrows to buy from Nvdia and sells to Microsoft and dumps money also in OpenAI, and OpenAI is short almost $1 trillion to breakeven, whose main customers are students and adults under 30 with credit cards mounting debts that they can barely pay.
Nonetheless, OpenAI isn’t regulated by a single government agency worldwide, not even the SEC, it looks like a perfect crime, so to speak. I see a vicious circle of money changing hands where they pay themselves and pocket the change several times over, but no creation of real wealth whatsoever, but everybody is happy, stocks at all times high, and yet many see the punch bowl half full, I don’t even see it as half empty but an optical illusion.
This AI scheme has gained a life of its own and is too big to fail. Sadly taxpayers will have to bail it out when it starts melting, but before that we will see lots of write-offs, markets crashing, widows, orphans and maybe some people going to prison.
Bugs Bunny
6 hours ago
The problem with AI is that it may soon become cost prohibitive.
For example, Open AI is not profitable. It does not generate enough revenue to sustain itself, so it relies on major investments from venture capitalists and Microsoft. And those VC companies need a return on their investments to survive.
Open AI and other AI companies need lots of computer power and data because the current architectures used to create AI is flawed. And that need for computer power and data is their attempt to minimize the errors created by AI's flawed architectures.
Then companies who use AI do not really know how to implement the systems in order to get a return on their investments. Current AI is meant to make business processes more efficient, not to replace workers. And the cost to implement these AI systems will increase over time and there is no guarantee that these systems will lead to economic innovations.
Then companies like Oracle, need to build out data centers and electrical grids. And Oracle has to borrow money to fund this infrastructure build out.
So if Open AI can't deliver on AI systems that companies can implement efficiently, Open AI will lose revenue, then they can't pay Oracle for the data centers, and Oracle will take a financial hit, along with the VC companies that fund AI.
Moody's has already published a warning concerning Oracle's contracts and Open AI's ability to pay its obligations.
The AI financial ecosystem is fragile and it can collapse. Hence the bubble.
RogerRabbit
11 hours ago
true that. Not many agree that this entire AI is just big big giant scheme driven by only the few big players. Honestly AI do have some positive impact, but it is definitely way overhyped! Therefore many companies follow suit if companies that has nothing to do with AI loosely through the buzzword out there just to boost their stock price.
lilth
5 hours ago
100% a scheme that is going to end poorly. I don't think anyone is going to jail though. At least in the US, the DoJ hasn't prosecuted this level of white-collar crime since Enron as a matter of dept. policy, not lack of ability. And I don't see President Pardon-all-financial-crime being any more vigorous. Remember, only one low level Goldman-Sachs employee went to jail after 2008.
Jason
12 hours ago
Except now, there's far too much debt to bail anything out! That's why gold is going through the roof!
(this is all from the same conversation)
Billionaire David Einhorn Calls Current AI Spending ‘Extreme’
"Even if AI lives up to the hype and outperforms bullish expectations, Einhorn warned that the returns on these investments are still highly uncertain. As a result, he questioned whether spending billions or even trillions of dollars each year would actually be worth it.... "
"Einhorn said that while many of these projects will get built, investors may not see the profits they are hoping for. In addition, he’s concerned about the broader economy, especially the job market. “I’m a little bit more of the view that we’re heading into or have been in a recession,” he said, pointing out that job growth is weak, the average workweek is getting shorter, and productivity isn’t improving much."
When there are no effective regulators ("you're fired!") and the US President himself is part of the Ponzi scheme [1, 2] nobody will stop this. Heck, he illegally sacked a copyright chief for merely saying the truth about slop.
China and Russia can wait patiently for this bubble to pop. Then what? █