Copyright Naked Capitalism
Yves here. Normally I do not take the liberty of reproducing posts of other writers in full. However, top AI expert Gary Marcus has issued a call to action which I trust he wants to be circulated as widely as possible. Marcus has been warning that AI companies, who have no hope of ever achieving an adequate return on their massive investments, will soon do the obvious, which is to see a massive taxpayer rescue based on their presumed-obvious too-big-to-fail status. Keep in mind that Marcus has been early and accurate in depicting the failure of large language models like OpenAI’s ChatGPT to live up to their promises, and has also debunked the idea that they could ever achieve true artificial general intelligence. More recently, he provided a series of sightings of how uptake and use of generative AI were slackening and even falling. This is consistent with various reports of AI not delivering in corporate settings, where its big applications were set to occur. For instance, a MIT study ascertained that 95% of corporate pilots of generative AI had failed. Similarly, Rand has determined that as many as 80% of AI implementations fail, twice the level of other software projects, and TechRepublic put the kaput rate at 85%. Not only is the idea of rescuing super wealthy tech bros and their enablers in the venture capital community deeply offensive, it is even more so given the continuing Trump moves to immiserate ordinary citizens as part of Trump’s plan to roll the US back to 1890-level living standards. Among the many examples are DOGE rampaging through programs that help ordinary citizens and small businesses, such as weather alerts and extensive USDA programs to assist farmers in improving efficiency, to damage done by Trump tariffs to both to enterprises and to consumers increasingly bearing their cost. The shutdown, by halting current pay of many Federal workers and reducing SNAP benefits, makes the spectacle of largesse to the rich even more insulting. So please call your Congressional representatives and circulate this post widely and urge others to make calls and send e-mails. The “youthquake” of the Mamdani win in New York and Republican repudiation in other key races shows voters are refusing to eat Trump’s dog food. These results should put fear in the hearts of Republican incumbents and any Trump-appeasing Democrats. That means stern words from voters, that backing an AI rescue is a fast path to a political graveyard, have good odds of getting a hearing. By Gary Marcus, professor emeritus of psychology and neural science at New York University. Originally published at his website A few days ago, Sam Altman got seriously pissed off when Brad Gerstner had the temerity to ask how OpenAI was going to pay the $1.4 trillion in obligations he was taking on, given a mere $13 billion in revenue. In a long, but mostly empty answer Altman pointed to revenue that hasn’t been reported and that maybe doesn’t exist, attacked the questioner, and promised that future revenue would be awsome First of all. We’re doing well more revenue than that. Second of all, Brad, if you want to sell your shares, I’ll find you a buyer. I just, enough. I think there’s a lot of people who would love to buy OpenAI shares. I think people who talk with a lot of breathless concern about our compute stuff or whatever, that would be thrilled to buy shares. So I think we could sell your shares or anybody else’s to some of the people who are making the most noise on Twitter about this very quickly. We do plan for revenue to grow steeply. Revenue is growing steeply. We are taking a forward bet that it’s going to continue to grow and that not only will ChatGPT keep growing, but we will be able to become one of the important AI clouds, that our consumer device business will be a significant and important thing, that AI that can automate science will create huge value. .. we carefully plan. We understand where the technology, where the capability is going to grow and how the products we can build around that and the revenue we can generate. We might screw it up. This is the bet that we’re making and we’re taking a risk along with that. A certain risk is if we don’t have the compute, we will not be able to generate the revenue or make the models at this kind of scale.” What Altman couldn’t say then was that he has a plan, to reduce the cost of his borrowing … by having the American taxpayer (indirectly) foot the bill. The cat came out of the bag today, at a Wall Street Journal conference, from the mouth of OpenAI’s CFO, who seemed to be test-piloting the notion: In justifying what would like be among the biggest (indirect) government subsidies in history, Friar said, “AI is almost a national strategic asset. We really need to thoughtful when we think about competition with, for example, China.” (NVidia seems intent on making exactly the same play. ) Remember this tweet? To the letter, almost 10 months to the day, exactly that game is now on. And I already hear rumors that the government is likely go along. Which means you, the taxpayer, will be footing the bill. Disgusting. Tell your congress person — today — that you don’t want your taxes used to bail out overhyping and economically shaky AI companies that spend far more than they earn. Workers, already feeling the knife from layoffs, should not be footing the bill. Get ahead of this before the too-big-to-fail bullshit becomes too-late-to-stop.
