This is why AI is a bubble

[edhopper]

https://www.nytimes.com/2025/12/26/business/ai-debt-investors.html?unlocked_article_code=1._k8.L7i-.nSIxw0YwxpKU&smid=url-share

But the debt market is telling a different story, some investors say. New artificial intelligence companies looking to raise funds to supercharge their nascent businesses are being made to pay lofty interest rates on the money they borrow, indicative of investors’ skepticism when new, unproven A.I. businesses take on large debts.

It's not about AI being viable or it's continued use. No more than the Dot Com Bubble or the Housing Bubble meant there wasn't always going to be the Internet of a Housing market.
It's about the debt these companies take on without any profit or the chance of enough profit to pay the debt they accrue.
Billions are being poured into the AI infrastructure, and at some point the people holding the debt will want to be paid back. What's more, these data centers are mostly built and owned by different companies who then rent them to the AI companies. Rent is due every month, and they will eventually run out of the cash they got to start up to keep paying.
It's a text book bubble.

[ret5hd]

1. Why The Economics Of AI "Can't Be Made...

To Pencil Out” - featuring Cory Doctorow

makes a lot of good points, one for example:
the types of jobs AI can effectively replace are jobs where mistakes don’t matter, like AI porn, commercial art (ad copy) etc…and the payroll of those types of jobs is effectively zero when compared to the debt etc of AI companies.

[edhopper]

2. bookmarked

thanks