“Circular” Financing in AI & Big Tech

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We know about the old-school “Old Boys’ Club,” but that club is largely now the Big Tech Boys’ Club. Tech nerds created products that scaled super fast with relatively minimal capital expenditures and became billionaires. Once you have a billion dollars, you have to be really dumb and bad with money (like Donald Trump) to lose money. There are so many ways financial, political, and economic systems are rigged to help rich people get richer — and you have enough money to hire the best people, right? So, the Big Tech billionaires bought more and more, everything promising close to their field of vision. The corporate behemoths they created started to swallow up cash like — well, I can’t even think of a half-decent comparison.

At some point, though, we’ve got our phones, we’ve got out email addresses, we’ve got our social media accounts, and we’ve gotten wise to clicking on ads. How do these companies find a way to keep growing at a breakneck pace? Virtual reality and the Metaverse bombed. Who wants that? Google Glass? Who cares? A voyage to Mars? Running years behind schedule.

Ah, what about AI? That sounds cool! Artificial intelligence — to solve ALL the problems. An “age of abundance” is coming — don’t mind the climate disasters that crush our cropland, destroy our homes and cities, and cause mass famine, flooding, and fatigue. Finally, Big Tech had something really revolutionary to do again and the investment world had something other than Bitcoin (fake, toy currency for boy-men that no one ever actually uses) and NFTs (hello, goodbye) to pour trillions of dollars into.

AI has scaled up, backed by truly unbelievable amounts of money, and now you find it being talked about in every field every day. Some Big Tech companies build the hardware (which needs more power than most countries in the world) and others expand the software. In the video below, which I won’t summarize because it’s really better to just watch it, Ed Zitron and the hosts discuss “AI circular financing.” However, it’s not really circular financing. Money pours into this circle from outside, from the finance and investment community. Then the money circles around and around. But a key point is that money does pour in, and not from normal mass-market revenue streams. It pours in from Big Money trying to find the next Big Thing to make a fortune on. Now, if that funding never actually brings a good ROI and money gets burned up — almost literally in the pollution furnaces powering AI data centers — then there’s a problem…. Listen to cousin Ed and the gang talk about this for a few minutes in the video below. I’m going to move on to writing the second part of this two-part series, primarily because I think it’s a really big second point that is getting very little attention. Frankly, I think it’s the most important part, and it’s sort of funny that it’s getting ignored so much by the Big Money community since it’s a serious basic of their whole world.