posted in Technology

Top economist warns that the AI math doesn’t make sense: 'Profits are currently being funded by investors rather than earned from customers'

fortune.com/2026/08/10/torsten-slok-ai-profit-margins-capex-oracle/
Larry EllisonFortuneTop economist warns that the AI math doesn’t make sense: 'Profits are currently being funded by investors rather than earned from customers' | FortuneThe AI boom has turned the standard profit margin model on its head, according to Apollo Chief Economist Torsten Slok—and it’s making the industry’s growth unsustainable.

Replying to @⁨Abyssian@lemmy.world⁩

We can’t believe what it does not, or six agos what it does then. The shit is moving faster then literally anyone really seems to understand.

The avg person that makes fun of ai, seems to still think they have the same problems they had 2-3 years. Because the cheap free models they have access to are extremely out of date, or very limited.

The actual real deal big boy models are so far beyond what your avg even extremely technical user understands. Unless you are actively watching following and using the models you just flat out have no clue just how fast this shit is sprinting.

It’s got plenty of problems and the growth is not across every aspect of it equally. So it’s really easy to point and laugh at a particular point it’s struggling with while it skips ahead in other regards.

It’s wild. The progress is just as unsustainable as the profits are bad. As long as that progress keeps sprinting the bad profits flat out don’t matter.

IT WILL hit critical mass to replace your avg idiot long before the profit problem really hits at this rate.

The bigger problem is that even if it replaces people that profit problem doesn’t go away. So it will just hit AFTER people are replaced. And that’s a even worse outcome then replacing people.

We NEED the bubble to pop before that point and the industry recalibrates to a sustainable model.

Else we will have mass job loss promptly followed by a massive bubble popping and economy collapse AND companies flopping and job opportunity losses as places closing shop so there won’t even be jobs to back to.

It could get REALLY fucking bad.

Replying to @⁨Holytimes@sh.itjust.works⁩

The actual real deal big boy models are so far beyond what your avg even extremely technical user understands. Unless you are actively watching following and using the models you just flat out have no clue just how fast this shit is sprinting.

You evidently do not understand the technology. LLMs inherently cannot reach AGI or anything resembling a thought process. And they scale poorly. Tons of compute are thrown at it to make the illusion marginally better. None of the inherent problems have been solved.

You could just as well burn money in front of a photorealistic painting in the hope it turns alive. No matter the amount of money you burn, it never will. Same with LLMs.

en

Replying to @⁨_cnt0@sh.itjust.works⁩

I don’t think the person you’re responding to is making any claims about AGI. But the fact is, the models are far, far more capable then they were even 3 years ago. I think that has more to do with the harnesses we have now that it does with the models. The models are a bit better (and way bigger) but the harness is where the capability comes from. Software dev has changed significantly in most places because the fact is, this shit is useful for those tasks. People, appropriately or not, are trying to apply that to every office job basically.

I don’t think that’s gonna pan out for anthropic or open AI financially, especially in the long term. But there has been a lot of progress in capability in the last 2-3 years. I think they’re right that if the timing works out badly, many employers could overcommit to AI and then collapse before they can correct once the bubble pops.