by Dan Burns

Jun 25, 2026, 6:30 AM

It’s less about when the AI bubble will collapse than how it will happen

I think the AI collapse will be more a somewhat variable but on the whole relatively steady leak than a bubble popping. Or somewhere in between. The big players can afford to lose a lot of money without their current core businesses that actually make money (though much of it’s grift) being at risk. But the following is certainly a real possibility.

“The bubble doesn’t want cheap useful things,” (Cory) Doctorow said. “It wants expensive ‘disruptive’ things: big foundational models that lose billions of dollars every year. When the AI investment mania halts, most of the models are going to disappear, because it just won’t be economical to keep the data centers running. The collapse of the AI bubble is going to be ugly. Seven AI companies currently account for more than a third of the stock market, and they endlessly pass around the same $100 billion IOU. AI is the asbestos in the walls of our technological society, stuffed with wild abandon by a finance sector and tech monopolists run amok. We will be excavating it for a generation or more.”
(Ars Technica)

This is the best recent explanation I’ve seen of what Doctorow means by “$100 billion IOU.” That number might be considerably underestimating the reality. Incidentally, the SpaceX IPO looks to me like a textbook pump-and-dump, though I’m sure there’s a plan afoot to try to disguise that.

An equally relevant matter:

Companies spent the last decade stockpiling data in the cloud, betting that more information would eventually yield better decisions. Then ChatGPT arrived, and executives assumed they could feed all that stored data into a large language model and watch insights appear. (Sachin) Dharmapurikar calls this the “ChatGPT curse.”

…The results have been bad. According to McKinsey’s 2025 Global AI Survey, which included about 2,000 participants across 105 countries, 88% of organizations now use AI in at least one business function, but just 39% report any enterprise-level EBIT impact. A RAND Corporation study found that more than 80% of AI projects fail, roughly twice the failure rate of IT projects that do not involve AI.
(Quartz)

Meanwhile:

Half of adult Americans use AI chatbots, with a quarter using them daily, according to new polling from Pew Research released (June 17). That’s up from 33% of Americans who used AI chatbots in the summer of 2024. But a small minority, 16%, believe AI will have a positive impact on society.
(Gizmodo)

At least in the matter of public opinion AI skeptics are winning.