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Ed Zitron Profile picture
@edzitron
Jun 8 • 12 tweets • 8 min read • Read on X
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Free newsletter: The ROI debate has come at worst time for Anthropic and OpenAI - two companies that can’t afford to slow down thanks to their $1.1 trillion in compute commitments and a data center buildout that needs a trillion in annual revenue by 2030.
wheresyoured.at/ai-is-slowing-…
My appearance on Bloomberg last week ruffled some feathers because I don't have "skin in the game" (IE: money in the market). This is because AI boosters can't imagine somebody with a moral position on an industry run by grifters and sold with lies.
wheresyoured.at/ai-is-slowing-…Image
The AI industry is anxious because it knows it made too many egregious promises. There are 190GW+ in planned AI data centers, and to justify their existence, they'll need $2 trillion+ in AI compute revenue by 2030.

There's currently less than $100bn.

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Anthropic and OpenAI need to be making over $170 billion each in annual revenue by EOY 2029 to keep up with their $1.1 trillion in compute commitments.
As we speak, customers are already cutting their AI token spend thanks to a lack of measurable ROI.

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The current scale of the AI industry is less than 10% of where it needs to be by 2030 to substantiate both Anthropic and OpenAI's projected revenues and the 190GW+ of planned data center capacity. It cannot afford to slow down for even a single month.
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The shift to token-based billing, which just happened in Q1 2026, has given corporate America a bad case of sticker shock, and they’ve started to rein in their AI use. AI is slowing down at exactly the worst time for OpenAI and Anthropic's IPOs.

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The tech industry is meant to be a community of meritocracy and harsh rationality - yet they continue to coddle products with questionable ROI, ruinous costs and many data points that suggest LLMs create a lot of slop software that nobody uses.

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Both Claude Code and OpenClaw's televangelists are saying that their users must start using "loops" instead of "prompts" to burn more tokens. This is a transparent attempt to push users to spend more on tokens at a time when the companies are desperate.
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No matter how much you dress up whatever AI service has gaslit you into believing it’s sentient, generative AI is inherently limited, impossibly expensive and economically unviable. And it needs to be ten times larger than it is in less than four years.

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I’m going to leave you with a little tease. In the next few weeks, I’ll publish a newsletter that will reveal, with numbers that were never meant to be shown, something that very well may burst the AI bubble.
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The damning figures I received came from a source.

And if you have something to share, please contact me. I feel your pain and your anger, and I see how you have been mistreated. And I will protect your identity. My signal is ezitron.76.

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If you want to support my work, consider signing up for a subscription. For $7-a-month or $70 annually, you get weekly deep dives into the AI bubble that are anywhere from 10,000 to 20,000 words long, and helps support these free pieces too.

wheresyoured.at/ai-is-slowing-…

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More from @edzitron

Ed Zitron Profile picture
Jun 2
Free newsletter: The dawn of token-based billing has shown that generative AI doesn’t have a return on investment. It's too unpredictable, too unreliable, you can't easily measure the cost of tasks, and organizations are already pulling back.
wheresyoured.at/ai-doesnt-have…
Ever since the AI industry started its transition away from subscriptions to token-based billing, users have been hit with sticker shock. Once companies start paying the real cost of AI, they realize there's no measurable ROI to be found.

wheresyoured.at/ai-doesnt-have…Image
GitHub Copilot moved users to token-based billing on June 1 from a request-based system that allowed them to burn thousands of dollars for $39 a month.

Users are currently burning their entire monthly balance in a couple of prompts.

wheresyoured.at/ai-doesnt-have…Image
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Read 14 tweets
Ed Zitron Profile picture
May 15
Today’s premium newsletter is part 1 of my What If...We're In An AI Bubble? series, covering scenarios that could burst the bubble starting with token-based billing's destruction of most AI products, and the slow collapse of data center construction.
wheresyoured.at/premium-what-i…
I’ve spent hundreds of thousands of words in the last year talking about the very and scary signs that we are an AI bubble, and the exuberance fueling it. Today is the first time in a long time where I’ve discussed the potential consequences in depth.

wheresyoured.at/premium-what-i…Image
I feel like people are very cavalier when discussing the AI bubble, saying stuff like "we're in an OpenAI bubble," not realizing that the collapse of OpenAI would destroy AI investment, AI startups, and kill debt issuance for AI data centers.
wheresyoured.at/premium-what-i…Image
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Read 15 tweets
Ed Zitron Profile picture
Apr 28
Free newsletter: The economics of AI don't make sense. Monthly subscriptions to AI services are scams that represent a product that is impossible for OpenAI and Anthropic to provide long term, and AI data centers are an economic disaster at scale.
wheresyoured.at/ais-economics-…
Github Copilot, as I reported last week, is moving towards token-based billing, charging the actual cost of token burn — a move that alienated many of its users who built entire workflows around a request-based product that no longer exists.
wheresyoured.at/ais-economics-…Yesterday morning, GitHub Copilot users got confirmation of something I’d reported a week ago — that all GitHub Copilot plans would move to usage-based pricing on June 1, 2026. Instead of offering users a certain number of “requests,” Microsoft will now charge users based on the actual cost of the models they’re using, which it calls “...an important step toward a sustainable, reliable Copilot business and experience for all users.” Users instead get however much they spend on their GitHub Copilot subscription (EG: $19 of tokens a month on a $19-a-month plan). Translation: "we canno...
While Copilot might not be “...the same product it was a year ago,” very little has changed about the underlying economic mismatch: that Microsoft was allowing users to burn more than their subscription costs in tokens every single month for three years. Per the Wall Street Journal in October 2023: Individuals pay $10 a month for the AI assistant. In the first few months of this year, the company was losing on average more than $20 a month per user, according to a person familiar with the figures, who said some users were costing the company as much as $80 a month. Naturally, GitHub Copil...
This is the subprime AI crisis — and a crisis of deception. AI products tricked users by offering unsustainable monthly subscriptions built to separate the process of using AI from its real cost. Eventually everybody will go token-based.
wheresyoured.at/ais-economics-… And I called it two years ago in the Subprime AI Crisis: I hypothesize a kind of subprime AI crisis is brewing, where almost the entire tech industry has bought in on a technology sold at a vastly-discounted rate, heavily-centralized and subsidized by big tech. At some point, the incredible, toxic burn-rate of generative AI is going to catch up with them, which in turn will lead to price increases, or companies releasing new products and features with wildly onerous rates — like the egregious $2-a-conversation rate for Salesforce’s “Agentforce” product — that will make even stalwart enter...
And that day has finally arrived, because every single AI service you use subsidized compute, and every single service is losing money as a result: When you pay for access to an AI startup’s service — which, of course, includes OpenAI and Anthropic — you do so for a monthly fee, such as $20, $100 or $200-a-month in the case of Anthropic’s Claude, Perplexity’s $20 or $200-a-month plan, or OpenAI’s $8, $20, or $200-a-month subscriptions. In some enterprise use cases, you’re given “credits” for certain units of work, such as how Lovable allows users “100 monthly credits” in its $25-a-month su...
Read 13 tweets
Ed Zitron Profile picture
Apr 24
Premium Newsletter: OpenAI needs to raise or make $852 billion through 2030 to pay for its compute costs, and must pay $75bn a year for Oracle's 7.1GW of Stargate data centers, or Oracle will collapse, destroying its share price and Ellison's empire.
wheresyoured.at/how-openai-kil…
It’s been little over a year since Sam Altman, Masayoshi Son, and Larry Ellison stood shoulder-to-shoulder with Donald Trump to announce the "$500 billion" Stargate data center project. In truth, no entity was ever formed, and no money was invested.
wheresyoured.at/how-openai-kil…It was January 21, 2025. Per The Information, Larry Ellison, CEO of Oracle, had just flown to Washington DC from Florida, and had to borrow a coat “...so he wouldn’t freeze during an interview he did on the White House lawn, according to two people who were involved in the event.” He was there to announce a very big — some might even say huge — new project standing next to SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman. “Together, these world-leading technology giants are announcing the formation of Stargate, so put that name down in your books, because I think you’re gonna hear a lo...
After he was done, Ellison stepped to the podium. “The data centers are actually under construction, the first of them are under construction in Texas. Each building’s a half a million square feet, there are ten buildings currently being built, but that will expand to 20.” Following Ellison, SoftBank’s Masayoshi Son added that Stargate would “...immediately start deploying $100 billion dollars, with the goal of making $500 billion dollars within [the] next four years, within your town!” turning to Donald Trump with his hands extended. It was unclear what town he was referring to. Altman a...
The "$500 Billion" Stargate data center project is really a $340 billion, 7.1GW Oracle-and-debt-funded construction nightmare. Outside of Abilene - which existed before the announcement - these data centers are mostly scaffolding and steel beams.
wheresyoured.at/how-openai-kil… It’s been 15 months, and Stargate LLC has never been formed. SoftBank and OpenAI have contributed no capital to the project, other than SoftBank’s own acquisition of a former electric vehicle manufacturing plant in Lordstown, Ohio that it intends to turn into a data center parts manufacturing plant with Foxconn, which is best known for effectively abandoning a $10 billion factory in Wisconsin back in 2021. Oh, and Project Freebird, a SoftBank-built project that exists to funnel money to its subsidiary SB Energy, though I can’t imagine how SoftBank actually funds it. No government money wa...
Read 15 tweets
Ed Zitron Profile picture
Mar 9
$5 billion TO DATE? This heavily suggests that Anthropic? Over $10 billion in inference and training costs? This heavily suggests that almost every story about Anthropic’s revenue and costs they’ve leaked is wrong and that it’s been misleading the media.
Remember: reports said Anthropic made $4.5bn for all of 2025, and all of this guff about “$19bn in annualized revenue” no longer make sense, especially as that “exceeds $5 billion” line is from a lawsuit filed in *march*. This is a scandal! Image
The only thing that makes sense here is that Anthropic’s 2025 revenues were much lower than $4.5 billion. $5bn ALL TIME? Through march? Remember this is filed with a court. Suggests Anthropic is a much much smaller business than we believed
Read 5 tweets
Ed Zitron Profile picture
Jan 23
Premium: The AI Bubble is a time bomb, burdening hyperscalers with billions of new depreciation a quarter that will soon eat away profits, VCs with dead equity in fallen AI startups, and Oracle with hundreds of billions of unpayable leases.
wheresyoured.at/premium-timebo…
A year ago, I wrote that Coreweave was a timebomb — a rickety tower of debt and bad deals that was primed to blow.
I could have made that argument about hyperscalers, NVIDIA and OpenAI. Everybody is waiting for somebody else to make AI a success.

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The AI bubble is slowly turning cash-rich, margin-heavy hyperscalers into something far worse. Now these asset-light, high-margin software companies are becoming bloated, filled with tens of billions of dollars in GPUs and data centers.
wheresyoured.at/premium-timebo…Image
Read 15 tweets

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