100%. It’s impossible to time a crash, but I’m so ready for the circular investment house of cards to come falling down.

The longer this goes on, the more wasted “investment” there will be in the sunk costs of datacenters for demands that will never exist, and the worse the recovery will be.

I doubt we’ll see an 89% 1929-level drop in the markets, but 80% wouldn’t surprise me. It’s going to be very hard for a lot of people if market loses that severe materialize.

Exactly. And the few things GenAI does well aren’t that compute intensive and can run on local models.

LLMs are terrible at writing new text that matters, i.e. anything at all technical or important. But they’re good at reformatting content into properly structured English, editing text for grammar, and explaining everyday concepts. But they’re so good at those things, that a tiny model running on consumer hardware can do it.

So, I don’t understand how anyone can possibly expect LLMs to be a profitable business. Where are the moats?

In my experience, the trick to this is to get a list of changes to make yourself, rather than trusting the machine to actually get it right. (Unless you’re in a dev/test environment and don’t care much if it fucks it up.)

I’ve been thinking about this, and I think it’s likely mostly to do with cashflow. They won’t say that, of course, since implying any cashflow challenges is a massive red flag for analysts, but it’s the only thing that makes sense.

Basically:

1. Microslop is all-in on AI.
2. AI infrastructure is incredibly expensive to build, requiring intensive capital investment over years to build out capacity.
3. AI models are incredibly expensive to train.
4. Microslop’s gaming division also requires intensive capital over years to deliver games.
5. Microslop has finite cashflow available to reinvest in long-term bets.
6. Microslop has to choose where to allocate its capital investments, and gaming is less attractive to upper management than AI.

Because AI is the “it thing” right now, the reputational harm to Microslop for, well, being called Microslop because of their self-inflicted sloppening and the reputational harm from writing off all their investments in gaming is less than the perceived reputational harm they would face if they weren’t seen as being technology leaders in the AI space.

So, it all comes back to the AI bubble; investors are pumping up any company “doing AI”, so it’s become the target that Microslop cares about, and is redirecting all available cashflow in a mad gold rush to establish Copilot and their agentic OS, regardless of all consequences.

On the plus side, the world will be a better place with more investment in open software, so Microslop imploding will be fantastic… But that’s not going to do anything, at least not now, for the tens of thousands of laid off employees as they crash and burn.