Cross posted from https://sh.itjust.works/post/65157881
“If 70% of AI revenues are these two companies, there is no AI industry.”
Writer of Where’s Your Ed At and the host of the Better Offline podcast Ed Zitron joins The Tech Report’s Isaac Pound to talk about the state of the AI industry as it’s revealed that over two thirds of hyperscaler AI revenue is coming from two companies.
The DeepseekV4 architecture was the eye opener to me.
Qwen 3.8 27B too. Minimax M3…
They are sooo dirt cheap to run, and “good enough.” And they’ve barely picked low hanging fruit of inference optimization.
No matter how anyone feels about the utility of LLMs, one just can’t argue they’ll need all these datacenters, if you look at the architectural trends. It makes no sense.
So once the music stops… what happens?
Same thing as what happened after the dotcom bust.
WebVan was a very future thinking business, trying to get ahead of everyone by offering grocery ordering services.
But they did it during a time when no one trusted putting credit card info online… So they failed, and the bookstore Amazon.com replaced them 2 decades later when market trust proved people will pay for anything online.
But WebVan had billions in investment and opened warehouses and datacenters nationwide if I remember correctly. Their business went kaput overnight because they couldn’t afford to pay employees once investors stopped investing. And other people bought up their old stuff, probably at a huge discount.
Same shit will probably happen. OpenAI and Anthropic will be in debt and not able to go into deeper debt. Cashflow stops. They realize they have to pay back some people and go bankrupt, and they pay back their closest friends or shell businesses that are in their own name. “Oh no I owe myself rent” type of situations, shady shit where they take all the rest of the money and run.
Employees get walked out the door by security guards, and leave anything of value they can sell off like laptops. Datacenters get sold off to the highest bidder. People start doing other shit with it.
Those dotcom bust data centers ended up being the reason the internet boomed after too. They invested soooo much into internet infrastructure… and we eventually needed it. Amazon went from book store to anything store to internet backbone.
We’ll likely see companies like Amazon and apple and Nvidia eat up all this shit they invested in and take over and start doing more. Wouldn’t be surprised if Nvidia ends up running Nvidia web+ai services, but not below cost, and finding other use cases.
Right now no one trusts LLM like no one trusted paying for shit with their credit cards online. Eventually a balance will be found and market trust will adapt more. I doubt anyone will ever read slop books or buy slop movies, but the tech will improve and start to do shit we’re not thinking of right now. It will evolve, and consumer trust will too.
The market crashes. Grandpaw crashes and everyone dies. h0NoR tHy fAtHeR aNd m0ThEr!!! rEsPeCt y0uR eLdErs!!!