> undeniable, massive productivity gains.

Take any stock index, remove AI stocks, what do you see? That's right! Nothing...

So where is all the productivity going? Where is the value? Where are the massive unemployment stats or the millions of new startups making big $$$?

He has also consistently demonstrated, at least to me, that he doesn't really understand how inference works from a technical perspective, which weakens much of his core thesis for why there should be a collapse.

I do value having some naysayers in the mix generally, because we do need balanced critique in what is otherwise a very frothy hype cycle. I just don't think he's making sound arguments, and that's even assuming you even agree with his premises in the first place.

My biggest gripe with his napkin math is that he treats inference gross margins as something novel that you can't compare to normal SaaS margins. He's right in part: the constant carousel of R&D costs from model training, related infrastructure buildout, and other adjacent costs required to stay competitive do change the analysis a bit.

But he takes this way too far when he says this is structurally different from normal SaaS margins. The business model definitely doesn't look like Dropbox, but it absolutely looks a lot like AWS, especially early AWS, CDNs, telecom, etc. I can speak to the telecom bit personally, since it's been over half of my professional career as an engineer and, in this specific case, also as a founder. You can have a brutally capital-intensive infra business where profitability depends on utilization, oversubscription, peak-capacity planning, segmentation, and recovering capex over time.

The math he presents gets even more questionable as we see explicit segmentation happening for cost-saving reasons. Many forward-thinking orgs are waking up to the fact that they don't need to use the best, most expensive model for every task. They can route easier tasks to cheaper models, use caching, batch non-urgent workloads, and reserve frontier models for the subset of work that actually needs frontier intelligence. That directly undermines his claim that providers always need to chase frontier intelligence in order to maintain current demand, utilization, and pricing curves.

Productivity is not value. It's quite possible for you to experience productivity improvements, and actual value to not be created. That is what I think the most robust data is showing.

https://unessays.substack.com/p/talk-is-cheap

>undeniable, massive productivity gains.

How can something so undeniable have zero scientific evidence? Are there any large peer reviewed or meta studies confirming your claim?

He’s been continuously predicting that the collapse was just around the corner, that progress was slowing, and that there was no market for inference, since 2024.

The fact he’s never reflected on the glaring failures in his analysis tells what we need to know about his intellectual integrity. There’s truth in some of his words about financial risk, but if you can’t acknowledge that there’s upside too, you can’t evaluate risk properly either.

I find it difficult to take him seriously.

I do not disagree with what you are saying, but I honestly still believe that most of the utility we experience are honestly gonna become very boring very soon that we can just run local... Even if it's a bit more slow who cares, can just run in background while you work on other stuff yourself, read up on things, review other work...

It's not that the utility of it put in question. What is however a giant question mark is how the heck any of the big AI companies are ever gonna get that ROI? Given how many of us are becoming more and more fine with local models that run just fine especially on a good enough computer which most developers have anyway...

He has recently made the very good point that actually, the FAANG companies are struggling to put any ROI numbers on that incredible ground-level utility.

Uber, for example, is so unclear there is any ROI, they are cutting their exposure pretty radically.

He points out that one single Anthropic customer — a payments provider — accidentally had to pay Anthropic $500M for one month of token spend.

That is half what Apple is reportedly paying Google for the supply side of their entire consumer AI strategy.

Even if we assume that everything you said holds true, how is that we as a crowd can make viable a service that eats some $300bn annually in infrastructure costs? Where would that money come from? Most tech companies these days are cutting their AI budgets because the per token pricing is killing them.

They are absolutely deniable. Huge swathes of people deny them.

> undeniable, massive productivity gains.

The jury is still out on that.

Agreed that he has an extreme POV (or more accurately that he trolls for views/subscriptions). But his central argument is valid: if AI underdelivers financially, this bubble will burst and this bubble is magnitudes larger than what we've seen before, so there could be very rough seas ahead.

The question is: what does "underdeliver" mean here? the pro-AI arguments I am seeing in this thread are equating mass adoption to agentic coding. Er, I dont know of any trillion dollar cap companies that sell dev tools. The point is Zitron doesn't have to be 100% right for his central prediction to come true.

I quite like my mechanical spider from Wild Wild West and the coffee it makes with a 50% success rate

Every day people here debate whether or not there are any actual productivity gains from LLM, and it's only in the limited context of software development. While I understand that this place obviously skews heavily towards the software industry, the notion that LLMs are anywhere near as useful in other industries is hubristic (at best).

> through undeniable, massive productivity gains.

And where are those? They seem particularly hard to actually observe and only appear in anecdotes.

> I'm trying to believe

For every exponential increase in compute capacity you see linear gains in output accuracy. This is a death spiral. Anyways, you see "massive productivity gains" so why is "belief" a function of your viewpoint?

I really like some good drama slop that reads like a thriller, it is entertaining. I don't take any of it THAT serious, but lately with the IPOs that are about to hit the indizes, he has gained a lot of attention. If you look around the internet, most people publish a negative angle on something and then extrapolate it into some grand conspiracy, which is really captivating. Its crazy when you enter some echo chamber you never engage with (movies, gaming, art/comics) and they have their own head cannon for why the world is bad and collapsing. It puts your echo chamber into perspective to see the same patterns of argumentation and presentation spin out in a different way

Yes. Zitron has been predicting and begging for collapse since 2024. It's not just his brand at this point. It's his entire identity. As such, he cannot back down, he cannot question himself, and he cannot accept any other viewpoint. And he will keep moving his goal posts until something happens that can make him go "aha! I told you guys!!"

This, combined with his extreme ignorance, makes him unreadable. The only reason people read his stuff is because it validates and confirms their own anti-AI beliefs. It's why every time he publishes an article, it reaches the front page in an hour or less.

> undeniable, massive productivity gains.

Just because you keep repeating something doesn't make it an undeniable truth.

> undeniable, massive productivity gains

How are they undeniable? They're very deniable. One example is the (seemingly) increasing maintenance costs for AI-generated code[1]. Another is the cost incurred by everybody reading AI slop instead of actual communication.

I don't have hard data as to whether these cancel out the benefits, but it's not as rosy as some seem to think.

[1] After years of people understanding that LOC is not only a poor productivity metric but also a negative indicator of code quality (shorter code for the same thing is better), we now have people touting how many LOC their LLM agent is generating. It's like everyone forgot what LOC actually represents and what it means for long term maintenance costs.

> Zitron is begging for a collapse at this point

No, he's not, he's making tons of money every month from his Substack subscriptions. In fact, the AI bubble popping would be the worse thing ever for him, he would be out of a job.

Just like the who have predicated the US dollar will collapse any-moment-now and which pushed gold for decades.

Funny how people always say "oh, you are an AI lab, of course you are going to hype AI", but never "oh, you make sooo much money from predicting the collapse of the AI bubble..."

[dead]

[dead]

[flagged]

[flagged]

[flagged]