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"Next Year's News This Week" The trillion-dollar promise II: Truth and Consequences By Evan Anderson _________ Why Read: The LLM boom always sounded irrational to anyone paying attention to the buildout statistics touted by its top spokespeople. The ubiquitous deployment of flawed LLMs was "projected" to cost trillions, and to achieve exactly what result was never quite clear. This week, we take a look at what we were told would happen, what actually happened, and what is likely to come. - era _________ I think we're in an LLM bubble, and I think the LLM bubble might be bursting next year [...]. But "LLM" is just a subset of AI when it comes to applying AI to biology, chemistry, image, audio, [and] video. I think we're at the beginning of it, and we'll see much more in the next few years[...]. - Clem Delangue, Co-Founder and CEO, Hugging Face, November 2025 No company is going to be immune, including us. If you overinvest, we'll have to work through that phase. - Google CEO Sundar Pichai on the AI Bubble, BBC (11/18/25)
Around this time last year, we published "SNS: The Trillion Dollar Promise: On Data Centers and Deception." The premise of that piece was simple: LLM CEOs were bouncing along the conference circuit raising money for data-center buildouts with the promise of a new era of AI, and their requests were ludicrous. This new age would cost us dearly, we were told, but for the ultimate tech package it was surely worth it. We needed to start spending those trillions. We noted that the sheer numbers for proposed data center buildouts lacked credulity at all, stating: They're so costly, in fact, that US$3 trillion is already lined up to be spent between now and 2030. The McKinsey report quoted above, focused on trends for use of compute, posits that $5.2 trillion will be needed to meet those needs. That is a lot of moolah. Such astronomical costs put this buildout on par with the greatest endeavors of human history. World War II is estimated to have cost the United States $340 billion in 1945 dollars - around $6 trillion in today's dollars. The absurdity of the situation has only grown. What started as a laughable claim has become something of a threat. Not only will these chatbots supposedly make everyone jobless, but we're now told on anear-weekly basis by LLM company executives that it is increasingly likely that they'll end humanity entirely. They are so dangerous, it is now said by those making them, that "we" may collectively have to slow down and start to take greater care. But still, please, trillions should be spent; thank you for your time. All this, and yet it is still quite unclear what, precisely, these things are worth to us. Trillions in spend so far has led us to a point where unhinged cybersecurity breaches, AI-generated slop-code failures, and massive environmental ramifications are running head-on into the dreamy (nightmarish?) future vision of Silicon Valley's LLM darlings. Something's gotta give. When we examine what's likely to break first in this unhinged business model, the financial cost is the most obvious place to start. There are two major ways that this is all getting paid for: massive debt, and circular financing. Let's start with debt. |
