{"id":5751,"date":"2025-09-28T15:33:11","date_gmt":"2025-09-28T07:33:11","guid":{"rendered":"https:\/\/www.rzautoassembly.com\/?p=5751"},"modified":"2025-09-28T15:33:11","modified_gmt":"2025-09-28T07:33:11","slug":"the-ai-economic-apocalypse-the-bubble-will-burst-and-the-crisis-is-already-here","status":"publish","type":"post","link":"https:\/\/www.rzautoassembly.com\/tr\/the-ai-economic-apocalypse-the-bubble-will-burst-and-the-crisis-is-already-here\/","title":{"rendered":"The AI Economic Apocalypse: The Bubble Will Burst, and the Crisis Is Already Here"},"content":{"rendered":"
\"\"<\/a>
\u00a0Robotic Small Product Tray Loading System<\/figcaption><\/figure>\n

From Cornell Lecture to Urgent Reality:<\/span> <\/strong>The AI Bubble as Monopoly Giants\u2019 “Self-Rescue Deception”<\/p>\n

 <\/p>\n

A week ago, in my capacity as an AD White Professor-at-Large at Cornell University, I adapted the content of my new book into a speech on artificial intelligence (AI) for the university\u2019s annual Nordland Memorial Lecture\u2014this marked my first public remarks on AI. Initially, I was unsure how the audience would react; to my surprise, the speech was met with enthusiastic feedback, and the Q&A session cut straight to the core. A young man stood up, his voice brimming with unhidden anxiety: \u201cAre you saying that one-third of the market value in the stock market is tied up in seven AI companies that aren\u2019t profitable at all? Is this a bubble that could burst at any moment and drag down the entire economy?\u201d<\/p>\n

 <\/p>\n

I nodded. \u201cThat\u2019s exactly what I\u2019m saying.\u201d<\/span><\/strong><\/p>\n

 <\/p>\n

He pressed further: \u201cThen what can we do?\u201d<\/span><\/strong><\/p>\n

 <\/p>\n

I reiterated the core argument of my book: This AI bubble is a \u201cself-rescue game\u201d played by monopoly giants. These companies have long dominated existing markets, and their growth has stagnated\u2014yet they desperately fabricate new stories for investors, shifting from \u201cpivoting to video\u201d \u201ccryptocurrency\u201d \u201cblockchain\u201d \u201cNFTs\u201d to today\u2019s \u201csuperintelligence.\u201d All these tales are just attempts to prove they still have room to expand. Even more absurdly, their so-called \u201crevenue growth\u201d is essentially propped up by the lie of \u201creplacing workers with AI\u201d: They claim AI can take over most jobs, reducing the remaining workers to \u201cAI nannies\u201d (euphemistically called \u201chuman involvement\u201d), but this is fundamentally unworkable.<\/p>\n

 <\/p>\n

The real danger lies in this: AI can\u2019t replace your job, but an AI salesperson can 100% convince your boss to fire you and replace you with an AI that \u201cseems capable of doing your work.\u201d Take a mid-sized electronics factory in Ohio I visited last month: The owner was sold a Robotic Small Product Tray Loading System<\/span><\/u><\/a> by a top AI firm\u2014promised it could automatically identify 200+ types of tiny components (resistors, capacitors, microchips), adapt to 12 different tray sizes, and replace 6 manual loaders. The boss laid off his team, spent $1.2 million on the system, and within three months, the AI firm\u2019s cloud-based algorithm (which the robot relied on for component recognition) was shut down\u2014part of the company\u2019s \u201ccost-cutting\u201d as investor funds dried up. Suddenly, the \u201chigh-tech robot\u201d became a $1.2 million paperweight: It couldn\u2019t distinguish a resistor from a capacitor without the cloud, and the factory couldn\u2019t rehire the old team\u2014half had taken jobs in other states, the rest had retired early. When bubble bursts, those \u201cfoundation models\u201d will be shut down with a single click, you\u2019ll find: that \u201creplacement\u201d can\u2019t even do your AI is like asbestos we\u2019ve forced into the walls of society; future generations will spend enormous effort digging it out and cleaning up this mess.<\/p>\n

 <\/p>\n

The Myth of Sustainability<\/span><\/strong>: Terrible Unit Economics and the Financial Collapse of AI Ventures<\/p>\n

 <\/p>\n

I told him: \u201cThe only way is to burst the bubble as soon as possible\u2014before it swells beyond control. Aim at its root: those false growth stories that claim \u2018AI can replace jobs.\u2019\u201d<\/p>\n

 <\/p>\n

But the young man kept pressing<\/strong>: \u201cWhat if the bubble is already about to burst? What can we do to prepare for this \u2018economic crash\u2019?\u201d His voice tightened, and the entire audience could hear his panic.<\/p>\n

\"\"<\/a>
\u00a0Robotic Small Product Tray Loading System<\/figcaption><\/figure>\n

I could only tell the truth<\/span><\/strong>: \u201cMaybe there\u2019s nothing we can do. Chances are, it\u2019s already a done deal\u2026 \u201d<\/p>\n

 <\/p>\n

I have always believed this: The AI economic apocalypse is not a scare tactic\u2014it is a fact unfolding right now. These AI companies don\u2019t make money, and they never will. They survive by siphoning hundreds of billions of dollars from investors, then burning through that money nonstop\u2014building data centers, buying GPUs, training models\u2014without seeing a single cent of positive returns. Eventually, investors will wake up and realize they\u2019re getting nothing in return; when that happens, billions of dollars in investment will grind to a halt. Remember this: Whatever cannot go on forever, will eventually stop.<\/p>\n

 <\/p>\n

Don\u2019t compare this bubble to the early days of the internet or Amazon\u2019s \u201close money first, turn a profit later\u201d model. Those companies had solid \u201cunit economics\u201d: every round of technological iteration lowered costs, and more customers meant higher profits. But what about AI companies? In the words of journalist Ed Zitron, they have \u201cshit unit economics\u201d\u2014each generation of AI models is more expensive than the last, and every new customer adds to their losses.<\/p>\n

 <\/p>\n

A lengthy report in this week\u2019s Wall Street Journal (co-authored by Eliot Brown and Robbie Whelan) laid bare the financial disaster of AI companies in even greater detail. The report compares this bubble to the fiber optic boom triggered by the WorldCom fraud scandal\u2014back then, WorldCom\u2019s CEO ended up in prison until his death, but today\u2019s AI bubble is larger than any crisis in recent history.<\/p>\n

 <\/p>\n

Even more absurd is the financial logic behind data centers: Some companies are actually using their NVIDIA GPUs as collateral for loans. But everyone knows that nothing depreciates faster than silicon chips\u2014except maybe freshly caught fish. The depreciation rate of GPUs in AI data centers is even three times higher; it\u2019s common for tens of thousands of chips to burn out after just 54 days of model training. What\u2019s being burned here isn\u2019t just chips\u2014it\u2019s investors\u2019 money, and the future of the entire economy.<\/p>\n

 <\/p>\n

Inevitable Burst, Devastating Fallout, and the Tragedy of Powerlessness<\/span><\/strong><\/p>\n

 <\/p>\n

We went back and forth like this, with him repeating the same question in different tones, as if demonstrating every subtle emotion in the \u201cfive stages of grief.\u201d An awkward, tense murmur of laughter rippled through the room\u2014but no one was truly laughing. Everyone was thinking: The AI economic apocalypse he\u2019d described was imminent, and this young man, drowning in six figures of student debt and about to step into a collapsing economy, what would become of his future?<\/p>\n

 <\/p>\n

The AI economic apocalypse isn\u2019t a question of \u201cif\u201d it will come, but \u201cwhen.\u201d When the bubble bursts, AI companies that rely on burning money will collapse, stock markets dependent on AI hype will fluctuate wildly, and countless people like that young man at the lecture will be dragged into the quagmire of \u201cno jobs, but mountains of debt.\u201d We once had a chance to stop all this\u2014burst the bubble, stop telling the lie that \u201cAI replaces jobs\u201d\u2014but now the crisis is right in front of us, and it seems all we can do is face its arrival head-on.<\/p>\n

 <\/p>\n

Perhaps the saddest part is this: We know full well this is a disaster, yet we watch it approach step by step, powerless to stop it. Just like the young man\u2019s repeated question\u2014\u201cWhat can we do?\u201d\u2014the answer may have been clear from the start: We could have done so much, but we did nothing.<\/p>\n

 <\/p>\n

Custom Matching and Assembly Services<\/a><\/span><\/p>\n

Mechanical Assembly and Fastening<\/a><\/span><\/p>","protected":false},"excerpt":{"rendered":"

From Cornell Lecture to Urgent Reality: The AI Bubble as Monopoly Giants\u2019 “Self-Rescue Deception”   A week ago, in my capacity as an AD White Professor-at-Large at Cornell University, I adapted the content of my new book into a speech on artificial intelligence (AI) for the university\u2019s annual Nordland Memorial Lecture\u2014this marked my first public […]<\/p>","protected":false},"author":1,"featured_media":5752,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,124],"tags":[],"class_list":["post-5751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-technology"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/posts\/5751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/comments?post=5751"}],"version-history":[{"count":0,"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/posts\/5751\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/media\/5752"}],"wp:attachment":[{"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/media?parent=5751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/categories?post=5751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rzautoassembly.com\/tr\/wp-json\/wp\/v2\/tags?post=5751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}