Premium: AI Isn't Too Big To Fail

Ed Zitron argues that the AI industry is not 'too big to fail,' systematically dismantling common rationalizations used to justify the AI bubble. He draws detailed parallels to the subprime mortgage crisis, showing how AI startups are subsidized by VC funding in ways that make them structurally unviable without continuous capital infusion. Key data points include: only 5GW of AI data centers actually under construction worldwide, over $600M of OpenAI shares sitting unsold on secondary markets, and the Poolside-CoreWeave deal collapsing. He argues that unlike the 2008 financial crisis — which involved trillions in securitized instruments — AI's financial footprint is comparatively small, meaning its collapse would hurt markets but would not constitute a systemic economic risk. Companies like NVIDIA, OpenAI, and Anthropic are not load-bearing to the global economy the way mortgage-backed securities were.