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"AI Is A Money Trap"
In the last week, we’ve had no less than three different pieces asking whether the massive proliferation of data centers is a massive bubble, and though they, at times, seem to take the default position of AI’s inevitable value, they’ve begun to sour on the idea that
The irony is that, despite being willing to kill these companies by fundamentally changing the terms upon which they access these models, Anthropic is also, in some way, dependent on Cursor, Replit, and other similar firms continuing to buy tokens at the same rate as before, as that consumption is baked into its ARR figures, as well as the forward-looking revenue projections. The Information says it’s raising $1 billion to “take on cloud giants” by “earning construction management fees and rent, and it can sell its stake in the project upon reaching certain completion milestones,” while also building its own AI compute, making the assumption that the demand is there outside of hyperscalers. Waffle on all you want about the so-called “agentic era” or “annualized revenues” that make you hot under the collar — I see no reason for celebration about an industry with no exit plans and needless capital expenditures that appear to be one of the few things keeping the American economy growing.
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