(2025-11-14) Zitron The Hater's Guide To The AI Bubble vol-2

Ed Zitron: The Hater's Guide To The AI Bubble Vol. 2. As I reported earlier in the week, OpenAI spent $12.4 billion on inference between 2024 and September 2025

the gap between reported figures and what the documents I’ve seen said is dramatic. Despite reports that OpenAI made, in the first half of 2025, $4.3 billion in revenue on $2.5 billion of “cost of revenue,” what I’ve seen shows that OpenAI spent $5.022 billion on inference

I can find no explanation for the gaps.

I also can’t find an explanation for why Sam Altman said that OpenAI was “profitable on inference” in August 2025, nor how OpenAI will hit “$20 billion in annualized revenue” by end of 2025, nor how OpenAI will do “well more” than $13 billion this year.

Anthropic just received near-identical articles about its costs from both The Information and The Wall Street Journal, with The Information saying that Anthropic “projected a positive free cash flow as soon as 2027,” and the Wall Street Journal saying that Anthropic “anticipates breaking even by 2028,”

Both pieces focus on free cash flow, both pieces focus on revenue, and both pieces say that OpenAI is spending way more than Anthropic, and that Anthropic is on the path to profitability.

The Information also includes a graph involving Anthropic’s current and projected gross margins, with the company somehow hitting 75% gross margins by 2028.
How does any of this happen? Nobody seems to know!

In fact, Anthropic’s gross margin appears to be a moving target. In July 2025, The Information was told by sources that “Anthropic recently told investors its gross profit margin from selling its AI models and Claude chatbot directly to customers was roughly 60% and is moving toward 70%,” only to publish a few months later (in their November piece) that Anthropic’s 2025 gross margin would be…47%

the gulf between “38%” and “negative 109%” gross margins is pretty fucking large,

it appears that much of the AI bubble is inflated on vibes, and I’m a little worried that the media is being too helpful. These companies are yet to prove themselves in any tangible way

I am frustrated.

When all of this collapses there will, I guarantee, be multiple startups that have outright lied to the media, and done so, in some cases, in ways that are equal parts obvious and brazen

So I’m going to do my best to write about every single major AI company in one go

And honestly, I think we’re approaching the end. The Information recently published one of the grimmest quotes I’ve seen in the bubble so far:
Some researchers are trying to take advantage of high investor interest in AI. They have told some investors that growing concerns regarding the costs and benefits of AI have prompted them to raise a lot of money now rather than wait and risk a shift in the capital markets, according to people who talked with them.

How can you not be a hater at this point? This industry is loathsome, its products ranging useless to niche at best, its costs unsustainable, and its futures full of fire and brimstone.

(Details are Premium.)