an extended meditation on presence (we also have chickens)
(I'm not a financial professional; I'm just a girl who reads a lot. This is not financial advice; it's me saying what I see. I'm probably no more trustworthy than your weed-smoking friend who is full of "hot stock tips" yet somehow also always flat broke.)
For a while now, I've suspected generative AI stock is overvalued. The more I read and pay attention, however, the more I'm convinced that generative AI has the entire market overvalued - including the parts that aren't explicitly using generative AI.
There is absolutely no way generative AI is sustainable as a business. The fundamentals aren't there. The math does not math.
You can pull their (and other gen AI companies') financials from sec.gov yourself if you want, or if you want a ranty blog/podcast Cliffs Notes edition, Ed Zitron has you covered:
The bottom line is red. OpenAI lost billions last year AFTER REVENUES. They're on track to lose billions more this year. They only have one financial backer left willing to pour the missing billions into the venture (SoftBank), and that backer is *already* borrowing at least some of those billions on credit. Anthropic, Google, Microsoft, and Meta are also losing money - so much so that Microsoft actually announced significant cutbacks in its planned data center builds (while also somehow claiming it has the capacity to handle the explosive growth in Copilot use it claims is coming. Meanwhile I uninstall Copilot every time I am faced with the misfortune of having to boot my Windows 11 machine (because Pyware won't run on Linux) and I'm sure I'm not the only one...anyway moving on).
It's not just the actual AI companies, either. CoreWeave is massively overcommitted to hardware with no clear path to actually producing it. Nvidia is the only company involved in all this whose financials make a lick of sense at this point - and even then, it's only one lick, not enough to get to the center of the Tootsie Roll pop.
Yet their stock keeps going up. EVERYONE'S stock in this business keeps going up. It's built on a foundation made of debt, lies, and nonsense, but it's getting built!
The market, for reasons I absoultely do understand (greed and hype), not only rewards these hype men but punishes the companies whose financials are sound yet who aren't doing the hype dance.
In July, Amazon's share price slid because the company wasn't investing as much in AI as Wall Street wanted, per the Wall Street Journal:
WSJ: Amazon's Shares Fall Because Cloud Unit Growth Wasn't Enough for Wall Street (gift link)
(Aside: I happen to love the WSJ for its raw capitalist honesty. It's just rich people telling each other what they're doing. I don't like the world I see reflected in that, but I appreciate that it's just laid out - no gaslighting about "hard work" and "meritocracy" to keep us unwashed masses in our place, because us unwashed masses aren't the audience.)
This stock price drop occurred DESPITE the fact that Amazon's retail arm grew 11 percent in Q2 2025. ELEVEN. PERCENT. For a retailer that has already eaten a huge chunk of the retail share in the US, double-digit growth is impressive. A rational market would have rewarded that. A bubble market punished it - because it wasn't growth in the bubble hype darling.
It wasn't just Amazon, either; Apple's stock is lagging behind the other tech giants currently. It's not that Apple isn't pouring billions into generative AI; they're just pouring fewer billions and pouring more slowly, trying to maintain the balance between their AI spend and the "product differentiation" facade that is their purported commitment to privacy.
If the gen AI bubble was limited to gen AI companies, it'd still be a big deal. Tech companies are over-represented in the S&P 500; a significant downturn in their stock values will result in a signficant market drop, even if everyone else is left untouched.
But a lot of "everyone else" is choosing not to remain untouched.
LLMs and similar generative-AI tools don't do what they claim they can do. LLMs extrude factually false and emotionally manipulative text all the time, and they cannot actually be prevented from doing so. AI "art" and "video" are filling the Web with slop and causing more harm than good. "Vibe coding" has an uncanny knack for hiding fatal flaws in plain sight - things that few humans would insert into code and thus few humans go looking for, unless they intend to exploit them. These technologies cannot replace human writers, researchers, programmers, and artists, full stop.
(Aside: When Sam Altman claimed that GPT-5 is like talking to someone with a PhD, I said "So it cries when you ask it how the writing is going?" This man doesn't spend a lot of time around actual PhDs.)
But they don't have to. Because they're not being sold to writers, researchers, programmers, and artists. They're being imposed on these groups by Business Idiots (perfect term, Ed, thanks) - managers who failed their way to their current position and who only hear "we don't have to pay people anymore!"
The market for generative AI isn't ordinary people and never will be. It's capitalists. It's every business that wants to save money - excuse me, "increase shareholder value" - by cutting its workforce.
But generative AI can't do what it's being "hired" to do. These companies are gaining a quick buck as market darlings by positioning themselves as "AI-first," to the detriment of their long-term growth. They're on the bubble as well.
"But not all companies are going AI-first," absolutely no one is saying right now. "What about the ones that aren't?"
My comrade, they too are on the bubble.
Not-hiring is becoming a way of life among major companies. It's been a thing for decades, sure. But it's no longer a business response to changing markets. Now, businesses increasingly see running "lean" as a good business decision - a right and natural thing to do, no matter how strong the numbers are:
WSJ: CEOs are Shrinking Their Workforces - And They Couldn't Be Prouder (gift article)
"No wage only spend" has been a trend and a dream for capitalists for...ever. Yet even the Wall Street Journal admits the current trend is a new take on this old vision. Companies now get rewarded in the market for *not* hiring - often on the assumption that they are successfully using "AI agents" to replace humans.
Even if you're not deploying AI in your company, if you aren't hiring right now, you're benefiting from the assumption that you must be successfully using this shit technology. Which is another bubble.
I don't know enough about economics to know if environmental externalities "count" as bubble fodder. But the massive amounts of electricity and water that generative AI use are utterly disproportionate to its "value." And we, not the AI companies, are paying for it:
Naked Capitalism: Consumers Are Footing the Bill for AI's Insatiable Appetite for Energy
We are pouring actual, tangible, useful resources into a text grinder and pretending its outputs are useful. That has to cost us in the future. And I don't mean financially; I mean as a species.
My sibling in primal screaming, I do not know. I am still in the market, despite strongly suspecting that (nearly) every single stock is overvalued. I remain unconvinced that real estate isn't on a bubble, either.
It could just be my "graduated into a giant economic recession" PTSD talking, but I don't think it is. I can do math. I know how to run a successful business (I've built a few). There's no there there. And when it breaks, it won't break even.
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