--- title: Let AI Burn | daily.dev description: A forceful opinion piece arguing the AI industry is an unsustainable bubble built on circular financing, manufactured hype, and lack of real demand. The author... canonical: https://daily.dev/posts/let-ai-burn-lftzhaouk twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: Let AI Burn | daily.dev og:description: A forceful opinion piece arguing the AI industry is an unsustainable bubble built on circular financing, manufactured hype, and lack of real demand. The author... og:url: https://daily.dev/posts/let-ai-burn-lftzhaouk og:image: https://api.daily.dev/og/posts/LfTZHaOUK.png og:image:alt: Let AI Burn og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # Let AI Burn **[Where's Your Ed At](https://daily.dev/sources/wheresyoured)** · 39 min read · 52 upvotes · 11 comments ## Summary A forceful opinion piece arguing the AI industry is an unsustainable bubble built on circular financing, manufactured hype, and lack of real demand. The author contends that generative AI is fundamentally different from the Dot Com bubble — GPUs have no residual utility like fiber optic cable, LLM demand is largely artificial and subsidized, and OpenAI/Anthropic are burning hundreds of billions with no path to profitability. The piece dissects why an AI bailout is both politically impossible and economically unjustifiable, compares the situation unfavorably to the 2008 financial crisis, and calls on governments to let the AI industry fail without intervention when the bubble bursts. ## Full article daily.dev links to this article rather than hosting it. Read it at the original source: ## Questions this post answers ### How much revenue did OpenAI and Anthropic generate in the first quarter compared to their compute spending? OpenAI had about $5.7 billion and Anthropic a little under $5 billion in revenue in the first quarter, much of it coming from companies grifting and using circular financing arrangements. At least 70% of the entire AI industry's revenues are estimated to be made up of OpenAI and Anthropic's own compute spend, meaning venture capital largely funnels through hyperscalers to NVIDIA and data center capex rather than reflecting organic demand. _Anyone tracking AI market sustainability can follow this kind of financial breakdown on daily.dev._ ### Why isn't the AI GPU buildout comparable to the dot-com era fiber optic overbuild? Unlike dot-com fiber, which retained obvious long-term utility for internet access even after that bubble burst, GPUs are useful mainly for generative AI and have limited alternative uses. During the dot-com era only about 52% of US adults were online in 2000, so real latent demand existed; today AI is already ubiquitous and non-consensually embedded everywhere, yet actual paid demand remains weak, undermining the fiber-optic comparison. _Developers weighing AI infrastructure claims against historical tech bubbles can dig into comparisons like this on daily.dev._ ### How much has SoftBank exposed itself financially to OpenAI's survival? SoftBank has wagered its future on more than $40 billion in short-term loans tied to funding Sam Altman's OpenAI ventures, meaning if OpenAI cannot go public, SoftBank faces a legitimate liquidity crisis. This makes SoftBank the one company genuinely systemically dependent on OpenAI, unlike the broader tech industry which would only see impairments if the AI bubble bursts. _Those assessing AI-industry financial risk and company dependencies can follow deep dives like this on daily.dev._ ## Community discussion Top comments from developers on daily.dev. **@fabianletsch** · 17 upvotes > I think Ed has a point. I also think he does not understand the value AI provides. > > > There are many very useful applications of AI, even if the numbers don't add up. **@allinonetools** · 12 upvotes > I think the market will eventually separate useful AI products from the hype. That's when we'll see who has a real business. **@daverobertson** · 4 upvotes > Now thats what I call a good post... wow! **@shad001** · 4 upvotes > Yep, it's an epic circle jerk with no actual money changing hands, just announcements that company A is investing so many billion into company B and company B is investing back into company A via company C to try and make it a bit less obvious. > > > There is one area that AI will get used that many people seem to ignore. Mass surveillance at an unprecedented level of detail. Think the profile Google builds on you and then sells to all takers is creepy? Watch this space. **@konradpsiuk** · 4 upvotes > The AI is very useful, no doubt. The problem is that the current price is heavily skewed and it is not reflecting the actual cost. It looks to me like a vendor locking at the global scale: once the real price unveil, too many will be to deeply bogged into it to quit. This might wipe out majority of AI-based businesses that have very concentrated risk and significantly affect corporations that embed it AI into their procesess. ## Similar posts on daily.dev - [The OpenAI Bubble](https://daily.dev/posts/the-openai-bubble-dakwl1z1m) · Where's Your Ed At · 23 upvotes · 0 comments - [After the AI boom: what might we be left with?](https://daily.dev/posts/after-the-ai-boom-what-might-we-be-left-with--vuwigbelt) · Hacker News · 4 upvotes · 1 comments - [How Solid Is Ed Zitron’s ‘Case Against Generative AI’?](https://daily.dev/posts/how-solid-is-ed-zitron-s-case-against-generative-ai--dsjxwylzo) · The New Stack · 1 upvotes · 0 comments - [AI Bubble: I Hope It Pops](https://daily.dev/posts/ai-bubble-i-hope-it-pops-7iij2owz3) · SQL Authority · 0 upvotes · 0 comments --- Tags: [#ai](https://daily.dev/tags/ai), [#llm](https://daily.dev/tags/llm), [#openai](https://daily.dev/tags/openai), [#nvidia](https://daily.dev/tags/nvidia) [View this post on daily.dev](https://daily.dev/posts/let-ai-burn-lftzhaouk) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"Let AI Burn","url":"https://daily.dev/posts/let-ai-burn-lftzhaouk","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/let-ai-burn-lftzhaouk"},"datePublished":"2026-07-07T17:12:05.975Z","dateModified":"2026-09-13T19:14:07.906Z","description":"A forceful opinion piece arguing the AI industry is an unsustainable bubble built on circular financing, manufactured hype, and lack of real demand. The author...","image":"https://media.daily.dev/image/upload/f_auto,q_auto/v1/posts/574adc906abb37956ea31d3307bf03c0?_a=AQAEuop","thumbnailUrl":"https://media.daily.dev/image/upload/f_auto,q_auto/v1/posts/574adc906abb37956ea31d3307bf03c0?_a=AQAEuop","isAccessibleForFree":true,"articleSection":"Where's Your Ed At","inLanguage":"en","publisher":{"@type":"Organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180}},"author":{"@type":"Organization","name":"Where's Your Ed At","logo":"https://media.daily.dev/image/upload/s--_fiBlTSf--/f_auto/v1737645971/logos/wheresyoured","url":"https://daily.dev/sources/wheresyoured"},"commentCount":11,"discussionUrl":"https://daily.dev/posts/let-ai-burn-lftzhaouk","interactionStatistic":[{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":52},{"@type":"InteractionCounter","interactionType":{"@type":"CommentAction"},"userInteractionCount":11}],"keywords":"ai,llm,openai,nvidia","timeRequired":"PT39M"} {"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://daily.dev"},{"@type":"ListItem","position":2,"name":"Where's Your Ed At","item":"https://daily.dev/sources/wheresyoured"},{"@type":"ListItem","position":3,"name":"Let AI Burn"}]} {"@context":"https://schema.org","@type":"WebPage","@id":"https://daily.dev/posts/let-ai-burn-lftzhaouk","comment":[{"@type":"Comment","text":"I think Ed has a point. I also think he does not understand the value AI provides.\nThere are many very useful applications of AI, even if the numbers don’t add up.","datePublished":"2026-07-07T23:13:18.822Z","url":"https://daily.dev/posts/LfTZHaOUK#c-NzLgnBTOS","author":{"@type":"Person","name":"Fabian Letsch","url":"https://daily.dev/fabianletsch","image":"https://lh3.googleusercontent.com/a/ACg8ocKR6BVy_wn23EoOKq7-BlszlcXcLmASlnb7l-GtS-q1bePnkaJf=s96-c"},"interactionStatistic":{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":17}},{"@type":"Comment","text":"I think the market will eventually separate useful AI products from the hype. That’s when we’ll see who has a real business.","datePublished":"2026-07-08T03:13:59.250Z","url":"https://daily.dev/posts/LfTZHaOUK#c-QqDYhKhjK","author":{"@type":"Person","name":"AllInOneTools","url":"https://daily.dev/allinonetools","image":"https://media.daily.dev/image/upload/s--4ZT8QlF0--/f_auto/v1769790028/avatars/avatar_igzBsWloJeaegzm9bQltZ?_a=BAMAMiiu0"},"interactionStatistic":{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":12}},{"@type":"Comment","text":"Now thats what I call a good post… wow!","datePublished":"2026-07-08T09:58:37.258Z","url":"https://daily.dev/posts/LfTZHaOUK#c-gkFq9gyVv","author":{"@type":"Person","name":"Dave Robertson","url":"https://daily.dev/daverobertson","image":"https://lh3.googleusercontent.com/a/ACg8ocKKCgHj7aBI7pH2F3SMbZDNB7wbEgrXMvALOhjr1QxnzQcVQAmBlA=s96-c"},"interactionStatistic":{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":4}},{"@type":"Comment","text":"Yep, it’s an epic circle jerk with no actual money changing hands, just announcements that company A is investing so many billion into company B and company B is investing back into company A via company C to try and make it a bit less obvious.\nThere is one area that AI will get used that many people seem to ignore. Mass surveillance at an unprecedented level of detail. Think the profile Google builds on you and then sells to all takers is creepy? Watch this space.","datePublished":"2026-07-08T18:51:48.128Z","url":"https://daily.dev/posts/LfTZHaOUK#c-uwE0WUwdh","author":{"@type":"Person","name":"Shad","url":"https://daily.dev/shad001","image":"https://media.daily.dev/image/upload/s--O0TOmw4y--/f_auto/v1715772965/public/noProfile"},"interactionStatistic":{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":4}},{"@type":"Comment","text":"The AI is very useful, no doubt. The problem is that the current price is heavily skewed and it is not reflecting the actual cost. It looks to me like a vendor locking at the global scale: once the real price unveil, too many will be to deeply bogged into it to quit. This might wipe out majority of AI-based businesses that have very concentrated risk and significantly affect corporations that embed it AI into their procesess.","datePublished":"2026-07-08T06:39:08.934Z","url":"https://daily.dev/posts/LfTZHaOUK#c-40NTFqFB4","author":{"@type":"Person","name":"Konrad Psiuk","url":"https://daily.dev/konradpsiuk","image":"https://lh3.googleusercontent.com/a/ACg8ocJ9z01T4Ino9YImfvEBQ0EwhFOH_S0nzCyzURB5BI7Us4O2ng=s96-c"},"interactionStatistic":{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":4}}]} {"@context":"https://schema.org","@type":"FAQPage","@id":"https://daily.dev/posts/let-ai-burn-lftzhaouk#faq","mainEntity":[{"@type":"Question","name":"How much revenue did OpenAI and Anthropic generate in the first quarter compared to their compute spending?","acceptedAnswer":{"@type":"Answer","text":"OpenAI had about $5.7 billion and Anthropic a little under $5 billion in revenue in the first quarter, much of it coming from companies grifting and using circular financing arrangements. At least 70% of the entire AI industry's revenues are estimated to be made up of OpenAI and Anthropic's own compute spend, meaning venture capital largely funnels through hyperscalers to NVIDIA and data center capex rather than reflecting organic demand. Anyone tracking AI market sustainability can follow this kind of financial breakdown on daily.dev."}},{"@type":"Question","name":"Why isn't the AI GPU buildout comparable to the dot-com era fiber optic overbuild?","acceptedAnswer":{"@type":"Answer","text":"Unlike dot-com fiber, which retained obvious long-term utility for internet access even after that bubble burst, GPUs are useful mainly for generative AI and have limited alternative uses. During the dot-com era only about 52% of US adults were online in 2000, so real latent demand existed; today AI is already ubiquitous and non-consensually embedded everywhere, yet actual paid demand remains weak, undermining the fiber-optic comparison. Developers weighing AI infrastructure claims against historical tech bubbles can dig into comparisons like this on daily.dev."}},{"@type":"Question","name":"How much has SoftBank exposed itself financially to OpenAI's survival?","acceptedAnswer":{"@type":"Answer","text":"SoftBank has wagered its future on more than $40 billion in short-term loans tied to funding Sam Altman's OpenAI ventures, meaning if OpenAI cannot go public, SoftBank faces a legitimate liquidity crisis. This makes SoftBank the one company genuinely systemically dependent on OpenAI, unlike the broader tech industry which would only see impairments if the AI bubble bursts. Those assessing AI-industry financial risk and company dependencies can follow deep dives like this on daily.dev."}}]} ```