Is the AI Conveyor Belt of Capital About to Stop?

[highplainsdem]

https://gizmodo.com/is-the-ai-conveyor-belt-of-capital-about-to-stop-2000671017

The American economy is little more than a big bet on AI. Morgan Stanley investor Ruchir Sharma recently noted that money poured into AI investments now accounts for about 40% of the United States’ GDP growth in 2025, and AI companies are responsible for 80% of growth in American stocks. So how bad is it that the most recent major deal among AI giants, agreements that have driven up stock prices dramatically, look like a snake eating its own tail?

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Round-tripping, generally speaking, refers to the unethical and typically illegal practice of making trades or transactions to artificially prop up a particular asset or company, making it look like it’s more valuable and in demand than it actually is. In this case, it would be tech companies that are trying to make it appear like they are more valuable than they actually are by announcing big deals with each other that move the stock price.

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Whether that is happening currently or not is kind of in the eye of the beholder. OpenAI has certainly shown advancements in its technology. The release of its Sora 2 video generation model has unleashed a fresh hell upon the world, used to generate significant amounts of copyright violations and misinformation. But the latest version of the company’s flagship model, GPT-5, underwhelmed and failed to live up to expectations when it was released in August.

Adoption rates of the technology are also a bit of a Rorschach test. The company boasts that 10% of the world is using ChatGPT, and nearly 80% of the business world says that it’s looking into how to utilize the technology. But the early adopters aren’t finding much utility. According to a survey from the Massachusetts Institute of Technology, 95% of companies that have tried to integrate generative AI tools into their operations have produced zero return on investment.

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Much more at the link. Can you say hype-created bubble? I knew you could.

But a lot of AI proponents are easily satisfied and distracted by being allowed to play with AI tools to create AI slop. Talk about a cheap magic trick. Abracadabra, you're smart! Abracadabra, you're creative! At least if you don't check for the errors, or think about the worldwide theft of intellectual property to train the AI. Which would bring the entire generative AI house of cards crashing down, if these companies had to pay for even a fraction of what they stole.

Abracadabra, your business is more successful! hasn't worked out quite as well. Pesky things, those facts that the LLMs behind genAI really have no true grasp of, no matter how much stolen intellectual property is added to them as the AI companies scrape the internet to death.

And we really haven't seen yet just how much of an even more addled mess the Trump regime will make of our government on generative AI, or how long it will take to fix that mess.

We have Sam Altman of OpenAI and the truly stupid adoption of ChatGPT (give it free to students who'll cheat with it but never notice the errors) to blame for much of the hype. But other AI bros and companies were quick to follow, aided by gullible users. Who may soon see their AI toys vanish or be priced out of their reach. They were bait, after all. Free or cheap bait to create addicts. Even lying Sam Altman admitted OpenAI was still losing money on subscriptions priced at hundreds of dollars.

But people not caught up in the insane charade don't deserve the harm that will result when.the bubble bursts, any more than they deserved the harm already done by AI companies and AI users.