Why You Should Read: This essay by tech commentator Ed Zitron reacts to a recent Goldman Sachs report, which judged generative AI as “too much spend, too little benefit.” Goldman says AI’s costs are far out of proportion to the benefits is will ever produce. And if it can’t make money, what is the point? Key Points: The longer a technology needs to make money, the more money it needs to make. Generative AI is not moving fast enough to produce tangible benefits for its enormous costs. Generative AI output simply responds to requests. There is no actual “knowledge” or “intelligence” in the process. Achieving a linear performance improvement requires exponentially more data, which doesn’t exist in sufficient quantities. Labor savings willl be minimal because creative work is always, on some level, derived from each human’s unique experiences. Replacing low-wage jobs with tremendously costly technology is the polar opposite of prior technology transitions. AI development is also requiring replacement of the power US grid, which will be even more costly and time-consuming. Bottom Line: Zitron concludes, “Generative AI is not the future, but a regurgitation of the past, a useful-yet-not-groundbreaking way to quickly generate ‘new’ data from old that costs far too much to make the compute and energy demands worth it.” He sees no path to profitability and expects the craze to collapse when its funders realize how little their money is buying.

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