The AI Demand Bubble

The article argues that reported AI revenue growth at major cloud providers (Amazon, Google, Microsoft) is largely illusory, driven primarily by unprofitable AI labs like OpenAI and Anthropic that are themselves funded by these same hyperscalers in a circular financing arrangement. The author contends that companies are artificially inflating revenues through price increases and forced AI features rather than demonstrating genuine AI profitability, and that the sustainability of this ecosystem depends entirely on continued massive capital injections into companies that cannot operate independently.