Kenneth Glad
When a shiny new tool promises to change the world overnight, billions of dollars often follow. People rush to invest their savings, fearing they might miss out on the next boom. But sometimes, those golden promises hide a darker reality that experts are just beginning to uncover.
Technology writer Ed Zitron believes the generative artificial intelligence boom is a giant scam. For years, tech giants have deliberately misled the public about what these tools can actually achieve. That is the core of his urgent message.
During an appearance on the Diary of a CEO podcast, Zitron explained that companies heavily subsidize user fees. They do this to artificially inflate market demand. Instead of an autonomous genius, he sees highly expensive cloud software making basic factual errors.
The reality behind the curtain looks incredibly grim. Leading tech firms lose billions of dollars annually just to keep their fragile systems running. This rapid cash burn creates a precarious environment.
In practice, the technology struggles to perform basic web searches without generating false information. Zitron calls the current situation “the largest non-consensual push of technology in human history”. Companies force the software onto users whenever they open a text document.
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Burning through cash
The financial figures involved in this digital gold rush are staggering. Tech companies are currently pouring hundreds of billions into new data centers and specialized computer chips.
Zitron notes that one leading AI firm lost nearly $21 billion in a single year. Everyday consumers only pay a tiny fraction of the true operating cost. If normal people had to cover the actual price of generating a text, the system would collapse instantly.
Furthermore, the industry relies on circular financing. Big tech firms funnel billions of dollars into AI startups, which then spend that exact same money renting servers from their investors. This keeps the perceived market value artificially high.
The promised collapse
This unsustainable spending cycle cannot last forever. The venture capital money will dry up eventually, and Zitron predicts this failure could trigger a massive tech depression as early as in 2027.
Once the market realizes these platforms cannot grow forever, stock prices will plummet. Desperate investors who bought into the endless hype could see their retirement portfolios shrink drastically.
The modern tech industry has survived market bubbles before. This one, however, might leave a much deeper economic scar. For now, the corporate hype machine just keeps on spinning.
Source: Diary of a CEO – The man who calls BS on AI
