LLMs are capable and able to produce value. There's no questioning that - anyone who says otherwise is in absolute denial.

The problem is.... the amount invested makes zero sense and the returns needed to justify the valuations of these firms won't come.

The players in the Tech industry in general have gotten way too ahead of themselves. When this all settles the big danger for MSFT, Google, Meta etc is that investors will trust them with the cash on the balance sheet less - demanding more cash return. Apple will come through this period very strong and end up looking like they played a genius move keeping out of it.

Endgame is IPOing those AI companies and getting them on indexes, forcing index funds to buy them, which seemed to be evergreen investment category, but I’m not so sure anymore..

Did somebody say crypto?

Great writeup. Only thing I din't see in here was an analysis of the impact of players like Talaas[1] and their stupid faster hardware LLMs.

I feel like it could be majorly disruptive, but idk if it's going to prolong the apocalypse or bring it about sooner -- or if it's a big nothing burger.

But the demo[2] is super cool.

[1]: https://taalas.com

[2]: https://chatjimmy.ai/

Every time these shops seem to be out of runway, they do another raise[1]. The investor class is far from running out of funds to support this adventure. They will run out of patience or find the shiny new thing before there's a liquidity crisis. I suspect a good portion of the cash pulled from private credit goes towards further funding of the AI trade.

[1] https://www.nytimes.com/2026/03/31/technology/openai-12-bill...

And this is all before the AI industry starts to feel the real impact of the ongoing oil (and helium) shock that Trump caused for no coherent reason.

Going to be an interesting next couple of years...

I would respect Ed (and Gary Marcus) more if they would concede the occasional point. But everything AI is always a hyperbolic and unqualified disaster. I suppose that's what the audience wants.

"every bit of AI demand ... that exists only exists due to subsidies"

Really? NOBODY would pay whatever the fully-loaded cost is? What about people running local models on their own GPUs? Are they being subsidized too?

> What use is Perplexity without an eternal subsidy? The value of having Aravind Srivinas sitting around your office all day? I’d rather start my car in the garage.

Lmao