The headlines focusing on AI layoffs are still mostly missing this, too.
The real reason for layoffs in tech are from a quiet recession that’s hidden by circular AI cashflows, correcting for inflated staff count from COVID overenthusiasm, or to free cashflow for throwing more money into the AI pit. (Or all three, of course).
AI doesn’t reduce headcount; it just slightly increases the efficiency of skilled workers to do simple, mundane tasks—and even that requires careful oversight or it’ll inevitably fuck it up.
But skilled workers are quick at mundane tasks… it’s just boring. So it’s not really generating much value, even in the best case.
And the sloppening is showing us all the downsides.
The house of cards is going to come tumbling down soon, and it’s going to be a lot worse than the 1999 dot com crash. I heard that OpenAI needs to pay big bills for datacenter expansion in the fall with money they don’t have—I don’t have the source for it, but, if true, that could be the domino that triggers the crash. Circular cashflows between highly leveraged companies makes the entire chain as fragile as the weakest link.
An 80% market correction wouldn’t be outside of historical norms. Hold onto your hat on the way down!
The headlines focusing on AI layoffs are still mostly missing this, too.
The real reason for layoffs in tech are from a quiet recession that’s hidden by circular AI cashflows, correcting for inflated staff count from COVID overenthusiasm, or to free cashflow for throwing more money into the AI pit. (Or all three, of course).
AI doesn’t reduce headcount; it just slightly increases the efficiency of skilled workers to do simple, mundane tasks—and even that requires careful oversight or it’ll inevitably fuck it up.
But skilled workers are quick at mundane tasks… it’s just boring. So it’s not really generating much value, even in the best case.
And the sloppening is showing us all the downsides.
The house of cards is going to come tumbling down soon, and it’s going to be a lot worse than the 1999 dot com crash. I heard that OpenAI needs to pay big bills for datacenter expansion in the fall with money they don’t have—I don’t have the source for it, but, if true, that could be the domino that triggers the crash. Circular cashflows between highly leveraged companies makes the entire chain as fragile as the weakest link.
An 80% market correction wouldn’t be outside of historical norms. Hold onto your hat on the way down!