this post was submitted on 01 Aug 2025
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Like I said, Ed Zitron is a good source. His newsletter Where’s Your Ed At? is pretty thorough, and his podcast Better Offline is more of the same, but in pod format. He writes angry (which may or may not appeal) but he brings receipts and does a lot of breaking down specific arguments around the tech industry, and more recently AI specifically.
On the specific point of the AI industry needing to be bigger than smartphones and cloud combined (I think it might have been smartphones and SaaS combined, but the point is that it’s ludicrous) it’s a pretty straightforward matter of the amount of capital invested. Hundreds of billions of dollars are going into AI. For those investments to pay off, the AI industry needs to be making hundreds of billions in revenues. The smartphone industry is ~$800B in revenues last I checked. The AI industry is ~$35B with massive losses, and those revenue numbers are very suspect because of all the inside baseball nonsense between all the big tech companies.
They’re talking about investment in AI tooling a trillion dollars before the end of the decade. That simply requires that the AI industry be worth quite a bit more than that by the time the money gets spent. The specific numbers are less relevant than the fact that the broad numbers aren’t close to making sense.
Yes, that makes sense, thank you.