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The AI boom has been sold to the public as the next great technological revolution.
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According to the techies building it, we’re all supposedly standing at the edge of this amazing new world where AI transforms business, boosts productivity, replaces tedious work, and creates mountains of new wealth.
So you buy it? Wall Street sure does.
And Silicon Valley definitely bought the story…
And now Microsoft, Google, Amazon, and the rest of the Big Tech fam are spending ungodly amounts of money building data centers, buying chips, expanding cloud capacity, and preparing for an AI future they say is knocking at the door.
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Okay… but what if the boom they keep talking about isn’t really coming from some giant, healthy “new” marketplace?
What if most of it’s coming from just two companies?
Sounds impossibly sinister, but that’s the dirty little secret tech expert Ed Zitron says is happening.
Here’s the breakdown of what Zitron says is going down:
OpenAI and Anthropic are reportedly becoming very important customers for the cloud divisions of Microsoft, Google, and Amazon. Those same Big Tech companies are also investing in them, building infrastructure for them, and helping bankroll the crazy costs required to keep all this running.
So, Big Tech pours money into AI companies, right? Then those AI companies use that money and infrastructure to buy enormous amounts of computing power from Big Tech.
Are you following?
Then Big Tech books the spending as this exploding cloud revenue and tells investors that “AI demand” is through the roof.
So, here’s the game: the money goes out one door, circles around the block, and comes back through another door, and everybody claps because “growth” looks fantastic on paper.
That’s why “money-laundering circle jerk” is such a perfect way to describe this scheme.
Of course, this isn’t actual criminal money laundering… this is more like a closed financial loop where the same small group of companies keeps funding, feeding, and validating each other while Wall Street treats the whole thing like proof of this thriving new economy.
And here’s the kicker: this entire setup depends on two companies that are burning through cash, losing billions, and needing a constant flow of money just to keep the lights on.
That’s not exactly the sturdy foundation investors were promised, is it?
This is also why the AI bubble is so dangerous for people who never asked to participate in it… meaning you.
Most Americans didn’t invest directly in OpenAI or Anthropic. They didn’t decide to spend hundreds of billions of dollars on data centers, chips, and power infrastructure.
Silicon Valley made those bets.
But as we recently explained, the consequences of those Silicon Valley bets are now woven into nearly every corner of the American economy.
Remember the dot-com disaster? That bubble had day traders, amateur stock pickers, and ordinary Americans throwing their savings at any company with “.com” attached to it. Then there was the housing bubble… that had people buying second and third properties with money they didn’t have because everyone was convinced that prices could only go up, up, up.
We all know how those bubbles popped… but the AI bubble is different.
This time around, most Americans aren’t pouring their life savings into private AI companies. They don’t own shares in OpenAI or Anthropic. And they sure as heck didn’t decide to spend hundreds of billions on data centers, computer chips, cloud services, and an endless tech arms race happening behind the scenes.
It was Silicon Valley who made all those bets.
But… it looks like the rest of the country will still be forced to cover their losses.
The stock market, retirement accounts, pension funds, access to credit, utility infrastructure, and even America’s economic growth are tied to the AI boom. That means regular Americans don’t have to buy a ticket to the AI casino to lose money when all the tables collapse.
Yes, the AI casino might be private, but the consequences will be very public.
The insanity is everywhere you look. AI-linked companies have added trillions of dollars in value, while many of the businesses getting all that money have no path to generate profits needed to justify it.
You can read the entire piece here:
Regular Americans never bought into the AI bubble. But they’ll pay for it when it bursts…
The problem isn’t just that OpenAI and Anthropic are losing tons of money. A lot of young companies lose money while they’re growing.
The problem is that Big Tech appears to be building a massive new economy around their future success before either company has proved they can succeed or even hold their own.
Zitron says Google, Amazon, and Microsoft are going in way too deep on OpenAI and Anthropic to make their cloud businesses look like they’re booming.
If you take those two customers away, suddenly the AI boom looks a whole lot smaller.
That means investors could be getting majorly screwed.
They could be buying into one super sketchy bet on two money-burning companies that need more money, more data centers, and more computing power every year just to keep the whole lumbering machine moving.
And now Zitron is asking what happens when the money stops…
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Keep in mind, this “machine” needs to grow at an almost unbelievable rate in order to survive.
OpenAI and Anthropic don’t just need to become profitable someday. They need to become profitable enough to justify the enormous industrial empire being built around them right now.
More users. More revenue. More investors. More chips. More data centers. More power. More, more, more. A hungry beast that’s never satisfied.
And if one of them stumbles, the whole house of cards could fall.
And that’s the real circle jerk… Big Tech funds the AI companies, the AI companies buy from Big Tech, Big Tech reports huge growth, and investors pour in even more money because they believe the reported growth proves the revolution is real.
Round and round it goes, circling and jerking, and making a mess that the American people might have to mop up.
The AI boom could still produce something extraordinary…
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But right now, it looks like Big Tech is passing billions around inside the same tiny club and making it seem like some unprecedented demand.