
""Because everybody's acting like it's something it isn't," Zitron said. "They're acting like it's this panacea that will be the future of software growth, the future of hardware growth, the future of compute.""
"In one of his newsletters, Zitron describes the generative AI market as "a 50 billion dollar revenue industry masquerading as a one trillion-dollar one." He pointed to OpenAI's financial burn rate (losing an estimated 9.7 billion dollars in the first half of 2025 alone) as evidence that the economics don't work, coupled with a heavy dose of pessimism about AI in general."
""The models just do not have the efficacy," Zitron said during our conversation."
A live Ars Technica event experienced internet dropouts that required Lee Hutchinson to act as backup host. The conversation examined OpenAI's financial situation, lofty infrastructure promises, and the mismatch between AI capabilities and how AI is being sold. Per-user cost variability poses a critical subscription-model risk, with individual users potentially costing anywhere from $2 to $10,000 per month. The generative AI market was described as a $50 billion revenue industry masquerading as a $1 trillion one, and OpenAI reported an estimated $9.7 billion loss in the first half of 2025. Model efficacy currently appears insufficient to justify lofty growth expectations, yet hype continues to drive investment and rhetoric despite shaky economics.
Read at Ars Technica
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