The State of the AI Bubble with Ed Zitron

There are fresh signs that the AI bubble is wobbling. Again.

In recent weeks, a much-vaunted AI-focused hedge fund, Situational Awareness, run by Valley wunderkind Leopold Aschenbrenner lost $35 billion; nearly its entire fund. South Korea saw its largest-ever stock market collapse as investors pulled bets on AI chips and tech stocks. The circularity of the AI economy, with hyperscalers investing in AI labs and AI labs purchasing cloud compute from the hyperscalers and hyperscalers reporting big profits, is reaching new heights of precarity. Due to a fresh series of moratoria and political opposition, the future of the massive data center buildout has never looked more uncertain. The US markets have dipped then boomed, dipped then boomed.

Where does all of this leave us? Just about everybody—Sam Altman, the Financial Times, AI critics, your local barista—seems to agree that we’re still, somehow, improbably, in some kind of a bubble. But how big? How volatile? When will it burst? How? This week, I dive into all these questions with the infamous AI skeptic, analyst, and industry scapegoat Ed Zitron, author of the Where’s Your Ed At newsletter and CEO of EZPR.

Blood in the Machine Newsletter

Brian’s Bluesky

Ed Zitron’s articles discussed:

Let AI Burn

The AI Demand Bubble

The Subprime Data Center Crisis

@edzitron.com on Bluesky

Articles mentioned in this episode:

Data Center by Hovey Benjamin

Governor Abbott Directs Comprehensive Data Center Audit

The AI Slop Backlash Is Actually Having an Impact | WIRED

Snapchat joins other popular platforms in fight against 'AI slop'