Come on in, the water is mighty fine.

Ed Zitron Ponders why he is meant to be impressed.

Its long, but you could start with his financials summary in the last pages.

As I've explained, most AI revenues out of Google, Microsoft and Amazon come from two companies that lose billions of dollars a year, have no path to profitability, and are only able to keep paying these companies because the companies (and investors) keep feeding them money.

These relationships are utterly poisonous, and an intentional attempt to deceive investors and the general public.

None of this makes sense.

It hasn’t from the beginning. It’s the largest bubble in history, and has reached such an intellectual and financial scale that many have taken sides on it in a way that will be completely impossible to walk back if they’re wrong.

As things deteriorate, expect them to cling to their mythologies tighter and become more agitated.

And really, we’ve never seen anything like this in our lives.

You realize that Anthropic and OpenAI are insane, right? These companies have promised $718 billion to Microsoft, Google and Amazon, and cannot survive without venture capital funding, because their underlying businesses lose money on every transaction — and so help me fucking GOD if you say they’re “profitable on inference” without proof I will crush you into a cube like a car in a garbage dump!

Every single AI business you see is unprofitable, nor do any of them have a path to break-even, let alone sustainability. Nothing has changed about this story. And nobody has been able to explain the massive differences between my reporting on OpenAI’s revenues and their own leaked figures, other than to say “you must be wrong somehow,” as if that somehow invalidates “direct numbers from Azure billing.”

If you disagree with me, you really better hope I’m wrong, because I’ve got years of receipts and I can remember basically every article about AI revenues written since 2023 off the top of my head. Not a single one of my critics or any AI booster has put an iota of the same amount of effort into proving their case.

The hysteria and excess of this era has proven how many people can come to conclusions without making the effort to prove them. Disagree with me or not, I’ve done the work, and I see no proof that the other side has even started.

Big Tech’s AI Story Is Unimpressive, Centralized, Unprofitable and Boring — And The AI Demand Story Is A Lie

As The Information said, around 50% of all remaining performance obligations, as in all (NOT JUST AI) of the upcoming revenue for Microsoft, Meta and Amazon, is from either OpenAI or Anthropic.

Put another way, 50% of big tech’s upcoming revenues are dependent on two companies, neither of which can afford to pay them, meaning that 50% of Meta, Amazon and Google’s revenues will either come from their own venture investments or venture capital.

This is not what stable or diverse revenue looks like, and suggests my grander thesis about AI demand is true. Outside of OpenAI and Anthropic, there’s barely any actual demand for AI services or AI compute at the scale necessary to substantiate a trillion or more in capital expenditures.

Yet the most-disgraceful part is the sheer contempt that these companies have for investors, the media, and the general public. In a functioning regulatory environment — or a market run by people with object permanence — it would be impossible to add such large amounts to your RPO balance without active scrutiny and analyst markdowns based on the fact that Anthropic and OpenAI can literally not afford to pay these bills at this time.

Microsoft, Amazon and Google have scooted along for years on the idea that they’re diverse, well-positioned companies that can build massive AI revenue streams. In reality, they’re the paypigs for Anthropic and OpenAI, providing more than 70% of their compute as a means of artificially inflating their AI revenues, knowing that analysts and the media will nod and smile without a single thought.


In fact, fuck it, I’m ending this with a rant.

The story of massive AI demand is a lie — a trillion dollars annihilated to create the largest circle jerk of all time.

Venture capitalists and hyperscalers feed money to OpenAI and Anthropic, so that venture capitalists can feed money to startups to feed to Anthropic and OpenAI, so that Anthropic and OpenAI can feed that money back to hyperscalers, who then feed that money to NVIDIA and buy more GPUs.

While it might seem tempting to credit these men as geniuses for creating companies specifically to feed them revenue, but to keep up the kayfabe of “doing AI” to substantiate this buildout means that they’ve had to massively overcommit to the bit, even though the only two meaningful businesses in AI appear to be Anthropic and OpenAI, and that’s only because they’re effectively intellectual honeypots for the entire industry.

Outside of those two, the only other competitive AI businesses are those of Amazon, Microsoft and Google — two of which now have annualized AI revenues of around 6% of their capital expenditures so far.

Google’s AI business is so booming that it refuses to break it out, and while it nebulously claims “AI is creating growth,” it’s not really clear how, and it’s vague about it because analysts and the media are ready to swallow the narrative as long as number go up.

That’s why Google doesn’t break out the number, by the way! That’s why Sundar Pichai is able to bullshit his way through every earnings call, because the media and analysts are ready to fill in the gaps in the most preferential way possible.

Let’s look at this fucking chart again:

Unbe-fucking-lievable! Anthropic and OpenAI have now committed to over $718 billion of Microsoft, Amazon and Google’s revenues, despite the fact that neither of them can actually afford to pay for it. The market’s response? A slight (and short-lived) after-hours lift.

Dear members of the media: these companies are laughing at you. They know you are going to cover this in a way that makes them look good. They know you’re going to use this as proof that they’re “doing well in AI,” despite the fact that the majority of their future revenue is tied up in two oafish failsons, one of which (OpenAI) plans to burn $50 billion on compute in 2026 alone.

I realize that it’s a lot to ask people to think about things in negative terms, but things are getting a little ridiculous. These are loadbearing failsons with dysfunctional businesses! It’s very clear both of them are doing weird things with their annualized revenues, and even clearer that there’s no path to profitability!

Sadly, asking the media or analysts to act rationally or apply any real scrutiny is a joke, because  this is the AI bubble, where everybody is wrong because once everybody admits what’s actually happening they’re going to have to admit they’ve all sounded insane for years. $1.25 billion a month! Andy Jassy should be ashamed of himself!

And god, fuck Microsoft too.

I’m sorry, WOW, Satya! You managed to get up to twenty million paying Microsoft 365 Copilot subscriptions — $600 million a month in revenue, not profit! — and all it took was you investing $13 billion dollars in money to OpenAI, forcing Large Language Models into every one of your products in a way that borders on harassment and about $289 billion dollars in capex, as well as laying off thousands of people and savaging the Xbox brand.

OpenAI Gave The Tech Industry AI Psychosis, Convincing Everybody That A Dead-End Tech Was The Ultra-Panacea To The End of Hypergrowth

OpenAI is, in and of itself, a kind of psychosis generator.

It was the first thing in a long time that felt like a new thing since the iPhone for the people that entirely obsess over growth.

It was the panacea for the tech industry, creating a new way for Business Idiots to spend money on infrastructure, a new thing for consultants to scam people with, a new series of things to be an expert in, all wrapped up in something that could also be both a consumer product, an enterprise software product, and a new kind of API to attach to other enterprise software to.

In theory, OpenAI’s success would lift everything at once — hardware, software, and even adjacent fields, like services. It promised to both democratize access to creating software while also heavily reinforcing existing power structures to the point that every dollar inevitably ended up in the Magnificent Seven’s pocket. It only succeeded in the latter.

The problem is that the system needed to work one day. It needed to eventually make more money than it cost. Every single one of these companies is talking about AI non-stop, and not one of them can show a profit. The only thing they can do is tell lies of omission by saying “AI helped boost everything,” and when you ask for specifics, the results are either tepid or so secretive you’d think they’re hiding a dead body.

The only reason Google, Amazon and Microsoft are being tolerated at their current excess is because their non-AI segments continue to grow through endless price-increases and enshittification, and its external business units — by which I mean OpenAI and Anthropic — are yet to die.

Sorry, I just don’t know what Meta is doing. I don’t think Meta knows what Meta is doing...