by Brian Shilhavy
Health Impact News
Today was another down day in Tech stocks, which brought out the AI Bubble doomsday scenarios that are more frequently being discussed in the Corporate Financial news networks.
Barbara Kollmeyer, writing for Market Watch [1], covered an opinion piece written by analyst Ed Zitron who stated that the Lehman Bros. moment of the AI bubble is coming, which will affect the entire stock market.
The Lehman Bros. moment of the AI bubble is coming, says this critic warning of fallout for tech stocks and the entire market
Ed Zitron sees a downfall driven by loss-making subscriptions and an insatiable need for cash
Excerpts:
Blowout results from chip giant Taiwan Semiconductor Manufacturing Co., or TSMC, seem to be doing little for sentiment on Thursday.
Worries about whether spending on artificial intelligence will pay off have been a downer for some stocks lately. Our call of the day from Ed Zitron, author of “The Hater’s Guide to the AI Bubble,” won’t help much.
In a 15,000-word Substack post on Wednesday, Zitron, the founder of a technology-focused public-relations firm, argues that the question is not if, but when, OpenAI will collapse.
“Its failure would be a watershed moment — the Lehman Brothers of the AI bubble, and an event that would define the end of one epoch, the start of another, and that would shake the afflicted out of that psychosis,” he writes.
A dogged AI critic, Zitron sees a “cultlike” derangement around what he sees as an AI bubble kept alive by OpenAI’s existence.
Back in early 2023, when Zitron said he started researching large language models, he called generative AI “the latest gold rush in technology.” He predicted two years ago that OpenAI’s Sora video generator was not viable — and it was canned this March.
His Substack post attacks OpenAI’s business model and its plan to “burn over $852 billion by the end of 2030,” along with the $50 billion or more in compute spending this year. The latter, he estimates, is “more than 50% of all global compute spend.”
As OpenAI and Anthropic raised $300 billion in the past few years, their infrastructure costs have been funded largely by hyperscalers, who have been creating an illusion that more companies will eat up compute like OpenAI, he wrote.
Oracle, he notes, is in particular danger from a prospective OpenAI collapse, as it could get stuck with “billions of wasted capex, and endless debt and leases.”
Zitron predicts that OpenAI’s collapse will only come after “AI data center debt and venture capital funding has been almost entirely exhausted,” as OpenAI has vast money needs.
“Based on my own reporting on its audited financials from 2024 and 2025, OpenAI will need to raise funding at least three more times in the next decade,” he says.
Its downfall will be driven by loss-making subscriptions, weak advertising revenue and massive costs for customers, Zitron says. That will curb compute demand, end free ChatGPT and make investors wary of any AI startup, not to mention seizing up related data-center debt.
Zitron doesn’t think Anthropic is safe, either, as it’s burning billions on training models, producing way too many Claude iterations and lacking focus.
An OpenAI collapse will lead to a “violent, punishing effect on the entire stock market,” he says.
The scale, he says, scares him “to the point I’m almost hoping I’m wrong.”
Full article [1].
The Wall Street Journal today published an “Exclusive” article titled The AI Backlash Has Tech Executives Fearing for Their Lives [2], which was picked up by many other media sources as well.
Since that is behind a paywall, here is an article discussing this published on Futurism [3].
Terrified Tech Execs Are Traveling With Armed Bodyguards as AI Backlash Grows
Excerpts:
Public backlash to AI is intensifying — and transforming into real-world attempts at physical violence. Industry leaders are fearing for their lives.
Leading AI companies and their top executives are beefing up security, the Wall Street Journal reports, as escalating anti-AI industry sentiment is culminating in threats and attempts of violence against the people and ventures building leading AI models. Some executives are even traveling with armed guards, while others have taken to keeping a lower public profile.
“Tech CEOs, a few years ago, definitely did not have security,” Dakota Dominguez, an executive at the Silicon Valley-based security firm JPT Security, told the WSJ.
“A lot of tech companies now are incorporating that into their budgets.”
Earlier this year, the AI industry was shaken when a 20-year-old anti-AI activist named Daniel Moreno-Gama, armed with a gun and a Molotov cocktail, unsuccessfully tried to firebomb the home of OpenAI CEO Sam Altman. No one was injured, but the high-profile incident followed a string of violent threats and at least one OpenAI lockdown.
OpenAI isn’t alone. Per the WSJ, around the time that Altman’s home was targeted, OpenAI rival Anthropic faced a close call when a man snuck into its headquarters behind an employee carrying an envelope with an executive’s name on it. The man reportedly then told a guard that the executive was “going to be killed.” The man was stopped before anyone got hurt.
All in all, it’s easy to see why tech leaders are budgeting for beefed up security.
Theodora Scarato, the Director of Wireless and EMF Program, was interviewed on Redacted about the health hazards these huge mega Data Centers are causing the the American public.
Related:
“Dirty” Electricity is a National Problem Affecting Everyone’s Health in the United States [4]
This article was written by Human Superior Intelligence (HSI)
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