None of what I write in this newsletter is about sowing doubt or “hating,” but a sober evaluation of where we are today and where we may end up on the current path. I believe that the artificial intelligence boom — which would be better described as a generative AI boom — is (as I’ve said before) unsustainable, and will ultimately collapse. I also fear that said collapse could be ruinous to big tech, deeply damaging to the startup ecosystem, and will further sour public support for the tech industry.
The reason I’m writing this today is that it feels like the tides are rapidly turning, and multiple pale horses of the AI apocalypse have emerged: “a big, stupid magic trick” in the form of OpenAI’s (rushed) launch of its “o1 (codenamed: strawberry”) model, rumored price increases for future OpenAI models (and elsewhere), layoffs at Scale AI, and leaders fleeing OpenAI. These are all signs that things are beginning to collapse.
As a result, I think it’s important to explain how precarious things are, and why we are in a trough of magical thinking. I want to express my concerns about the fragility of this movement and the obsessiveness and directionlessness that brought us here, and I want some of us to do better.
I also — and this, perhaps, is something I haven’t focused on as much as I should have — want to highlight the potential human cost of an AI bubble implosion. Whether Microsoft and Google (and the other big generative AI backers) slowly wind down their positions, or cannibalize their companies to keep OpenAI and Anthropic (as well as their own generative AI efforts) alive, I’m convinced that the end result will be the same. I fear tens of thousands of people will lose their jobs, and much of the tech industry will suffer as they realize that the only thing that can grow forever is cancer.
There won’t be much levity in this piece. I’m going to paint you a bleak picture — not just for the big AI players, but for tech more widely, and for the people who work at tech companies — and tell you why I think the conclusion to this sordid saga, as brutal and damaging as it will be, is coming sooner than you think.
Let’s begin.
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