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Like many of you, I’m tired of hearing about AI. Every week it’s the same story — a new breakthrough, a new revolution, a new promise that “this time, it’s different.” But behind all the hype, something far more dangerous is brewing: an economic apocalypse powered by artificial intelligence mania.
And unlike the sci-fi nightmares of sentient robots taking over, this collapse will be entirely human-made.
🧠 The Bubble That Can’t Last
A third of the U.S. stock market today is tied up in just seven AI companies — firms that, by most reasonable measures, aren’t profitable and can’t become profitable. Their business models rely on convincing investors that the next big thing is just around the corner: crypto yesterday, NFTs last year, and AI today.
Cory Doctorow calls it the “growth story” scam. When monopolies have already conquered every corner of their markets, they need a new story to tell investors. So they reinvent themselves around the latest shiny buzzword — even when it’s built on sand.
🧩 How the Illusion Works
AI companies promise to replace human workers with “intelligent” systems and save billions. In practice, it doesn’t work. Instead, surviving workers become “AI babysitters,” monitoring unreliable models that still need human correction.
Worse, your job might not actually be replaced by AI — but an AI salesman could easily convince your boss that it should be. That’s how jobs disappear in this new economy: not through automation, but through hype.
And when the bubble bursts? The expensive, money-burning AI models will be shut off. The workers they replaced will already be gone. Society will be left with jobs undone, skills lost, and a lot of economic wreckage.
Doctorow compares it to asbestos: AI is the asbestos we’re stuffing into the walls of society. It looks like progress now, but future generations will be digging out the toxic remains for decades.
💸 Funny Money and Burning Silicon
Underneath the shiny surface of “AI innovation” lies some of the strangest accounting in modern capitalism.
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Microsoft “invests” $10 billion in OpenAI — by giving it free cloud access.
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OpenAI counts that as revenue.
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Microsoft then books the same money as income when OpenAI spends it.
That same billion-dollar bill is passed around between Big Tech companies again and again — each calling it “growth.”
Meanwhile, companies are taking loans against their Nvidia GPUs (which lose value faster than seafood) to fund new data centers. Those data centers burn through tens of thousands of GPUs in just a few weeks of training. This isn’t innovation; it’s financial self-immolation.
📉 Dog-Shit Unit Economics
Doctorow borrows a phrase from tech critic Ed Zitron: AI has dog-shit unit economics.
Every new generation of models costs more to train and serve. Every new customer increases the losses.
Compare that to Amazon or the early web — their costs fell as they scaled. AI’s costs rise exponentially.
To break even, Bain & Company estimates the sector needs to make $2 trillion by 2030 — more than the combined revenue of Amazon, Google, Microsoft, Apple, Nvidia, and Meta. Right now, it’s making a fraction of that.
Even if Trump or any future government props up these companies, they’re burning cash faster than any industry in modern history.
🌍 When It All Comes Down
When the bubble pops — and it will — Doctorow suggests we focus on the aftermath, not the crash.
The good news? There will be residue: cheap GPUs, open-source models, and a flood of newly available data infrastructure.
That’s when real innovation can happen — not driven by hype, but by curiosity and need. Universities, researchers, and smaller startups could thrive in this post-bubble world, buying equipment “for ten cents on the dollar.”
🪞 The Real AI Story
As Princeton researchers Arvind Narayanan and Sayash Kapoor put it, AI is a normal technology. It’s not magic. It’s not the dawn of a machine superintelligence. It’s a set of tools — sometimes very useful — that should serve humans, not replace them.
The real danger isn’t that AI will become conscious.
It’s that rich humans suffering from AI investor psychosis will destroy livelihoods and drain economies chasing the illusion that it might.
⚠️ In Short
AI won’t turn us into paper clips.
But it will make billions of us poorer if we don’t puncture the bubble before it bursts.
About the Author:
This essay is adapted from Cory Doctorow’s reading on The Real (Economic) AI Apocalypse, originally published on Pluralistic.net. Doctorow’s forthcoming book, The Reverse Centaur’s Guide to AI, will be released by Farrar, Straus and Giroux in 2026.
