Four Horsemen of the AIpocalypse
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Ed Zitron argues the AI industry is in a dangerous bubble, presenting four major warning signs: Anthropic's chronic service outages and degraded model quality (Claude Opus 4.7 reportedly worse than 4.6), the revelation that Claude Mythos was held back due to capacity constraints rather than safety concerns, NVIDIA selling more GPUs than can physically be installed with only 15.2GW of data center capacity actually under construction through 2028, and AI inference costs spiraling out of control — with some companies spending up to 10% of headcount costs on LLM tokens. Microsoft is moving GitHub Copilot to token-based billing after costs nearly doubled week-over-week, and Anthropic has already shifted enterprise customers to per-token API rates. Zitron contends that AI revenues are massively overstated through fraudulent ARR accounting, that both Anthropic and OpenAI are burning billions while providing subsidized, unreliable services, and that the entire industry's survival depends on infinite venture capital rather than genuine economic value.
Table of contents
Anthropic’s Products Are Constantly Breaking Because It Doesn’t Have Enough Capacity, And Opus 4.7 Is Both Worse and Burns More TokensAI Compute Demand Is Being Inflated By Anthropic and OpenAI, With More Than 50% of AI Data Centers Under Construction Built For Two Companies, and Only 15.2GW of Capacity Under Construction Through The End of 2028NVIDIA Claims To Have $1 Trillion In Sales Visibility Through 2027, But Only $285 Billion GPUs Worth Of Data Centers Are Under Construction — NVIDIA Is Selling Years’ Worth of GPUs In Advance And Warehousing ThemAI Is Really Expensive, With Companies Spending As Much As 10% Of Headcount Cost On LLM Tokens, And May Reach 100% of Headcount Cost In The Next Few QuartersThe Subprime AI Crisis Continues, With Microsoft Starting Token-Based Billing For GitHub Copilot Later This Year, And Anthropic Already Moving Enterprise Customers To API RatesThis Is The Era of AI Hysteria11 Comments
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