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Posted on 05/27/2026 5:38:33 AM PDT by millenial4freedom
Artificial intelligence revolution is meant to bring unprecedented efficiency and boundless productivity for the tech landscape by cutting the costs.
But the promise of revolution is currently hitting a stark fiscal reality marked by unexpected AI-related costs, leading to the burning of budget tech companies designed for 2026 year.
Of all the companies, Uber and Microsoft are grappling with AI budget overruns. For instance, Microsoft recently has decided to rescind its internal Claude code license along with its Experiences and Devices division ending access by June 30, 2026.
The decision to cancel the pilot has been taken only after 6 months since it launched in December 2025 due to unsustainable token-based billing consumption as reported by Fortune.
The announcement comes after the AI costs went beyond company’s expectations. The engineers are advised to use GitHub Copilot CLI instead of Claude.
(Excerpt) Read more at thenews.com.pk ...
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Does Python have a compiler?
1Q26 = "We used our annual AI budget in two months."
Face it AI despite some business and technical missteps is here to stay. Its retrival and analyzing of pertinent information and implementations will only get better and faster in the future. The silicon chip has changed the world and the changes will only accelerate. Embrace it or go the way of the Dutch textile workers in the 19th century who tried to preserve their jobs by throwing their sabots (wooden shoes) into the weaving machinery.
Similar to the impact Excel Spreadsheets had when they came into the office.
My advisor believes this is due for a washout. I do too. Just about all involved are building and planning as if they will contronl near 100% of the market space and we know that can’t happen. Somebody will be right. In addition to Microsoft and Uber I see that Frodo’s Farcebook has retreated some finding the cost of entry excessive and choosing to be like a fast follower.
One week, not long ago, I spent time doing some research on the subject of AI, not exhaustive but what I believe is adequate. I searched in vain for any business plan by the providers. Instead of modeling the business plan I used the best projection of cost and revenue I could find and built a simple economic model. The most glowing forecasts resulted in economic failure. One would be better off putting his money in just about any simple index fund.
I also found one podcast interviewing a Sillycone Valley capitalist. His conclusion is similar to my own.
Some of the other factors I see that are not in favor of the AI hype: Equipment being installed now will be obsolete in 5 years or less. Newer more power efficient equipment is needed. Not all the facilities are needed, if it continues more will be done with less. The fees necessary for profit are probably unaffordable at the consumer level.
Not all my AI experiences are bad. It is a good tool to cut to the chase on certain questions but is not always to be trusted. It gets things downright wrong and I know this because of my considerable background in my field of engineering, mechanics and agriculture.
AI does not think, it harvests and assimilates and compiles and reports what seems to be consensus. AI is a very poor customer service agent and problem solver. It only “knows” what is programmed in response to a very specific set of canned questionss. I spent more than three hours just yesterday trying to find the answer to odd messages from PayPal. AI just kept circling back to the same useless responses. I finally got a human on the line who tells me that PayPal’s internal system is generating some alarming messages to users saying a new account has been created in my name and to call a bevy of numbers to complete set-up. Alarming. I have frozen my account pending just canceling it. My AI experiences in lieu of human interaction, even difficult human interaction with someone in India, have been very unsatisfactory. I expect this will persist, nobody will admit a mistake and instead will continue to insist it is growing pains that will get better. I doubt it.
The money in AI is in the parts and service suppliers. I have seen the same thing in oilfield booms when the only parties that made real money are the parts and service suppliers and the producers who survived the last collapse being present to reap a windfall.
Strangely enough, back in the .com boom I bought some of the eventual winners. It was hard or impossible to tell who they were going to be when the shake-out started. I owned things like Broadcom, Micron and AMD and don’t now and have not for ages. Their time has come again for now and the gain is more than impressive, I’d call it improbable. Huge risk takers are sometimes rewarded I’m just not one of them any longer. These winners are hardly easily identified on anything like fundamentals and instead it more luck in the picking or following the heard using the bigger fool tactic.
Just my thoughts of course.
GingerLynnsOralAdventures.com
It’s not about the models, it’s about the hardware.
I think Apple will be the ones that will be the big winner as eventually they will figure out how to get the powerful LLM Models to run on MacBooks and even iPhones.
The Data Centers will become homeless shelters.
ChristyCanyonPornHotspot.com
I have no doubt AI is here to stay but the question is which players will be left after the bubble? Which ones will be pets.com 2.0?
That’s the risk to the markets right now. A lot of money is being poured into AI stock but for now the P/E ratio doesn’t justify it.
Strangely enough, I agree. My vision is that an established outlet like Apple or even Google, that already have a customer base will be the ultimate winners. Apple on its own platforms and Google on its own system.
Getting LLM to run on a local platform is not going to happen though without a massive leap forward in storage. It will be done in a cloud base of some kind similar to a library with the work done at the platform level?
Either by technology transformation leading to downsizing or by some other means this crazed rush to build data centers will result in over building.
How dare we, mere mortals, even pretend to question the moguls of innovation?
Do you think Musk might be in a rush to IPO to monetize while the game is still hot? Inquiring minds would like to know.
That was the big lesson in the 1849-1850 Gold Rush in California. Some things never change.
There's a good one-hour lecture that Stanford Graduate School of Business posted by Professor Charles ("Chad") Jones: A.I. and Our Economic Future. He takes a long view (50 - 100 years) about how AI and Robotics could evolve. Fascinating thinking.
Here is a link to his research paper that developed the ideas in his talk: AI and Our Economic Future
Actually running an LLM locally is easy. You’re just limiting the data set. Which is part of the point of running locally. You only want it to “learn” from the data you provide it instead of all the randomness of the internet.
And there are different LLMs that cater to solving certain problems.
History may not repeat but it often rhymes very well.
In building the Transcontinental Railroad one of the group that came out very well was the Ames Brothers who made shovels and picks. When the route to the West fell on hard times the Ames brothers ponied up the financing to finish.
I do not think the reference you cite is the fellow who did the podcast that I am talking about. I’ll have to look for it but I posted it here earlier this year. It too was an interesting interview.
I really do not doubt that AI will eventually do some drudgery heavy lifting for us but I also think it will take some time to develop. We could be wrong but his current push is greed driven, what is not?, to not be left out of what so many think is the best thing since sliced bread.
Is it any wonder with all the inflation and stacking of money to one side of the ledger that the few have so much money to venture? What else would they do with it? Payne said the other day that the top 0.0001% have grown their wealth by 3,000% in just the last few years. I believe such imbalance has the makings of a depression but what the hell do I know?
But will AI change who reaps the rewards? The extreme purple line posits that all the wealth created eventually flows to capital.
AI is going to see a shake out in the IT sector where rapid advancement of technology is displacing workers but is only one small segment
I predict that there are going to be some spectacular coding disasters are AI coding gets ahead of it’s skis and produces synthetic code that nobody really has a clue how it works
AI driven code is written in way that is easy for an AI to understand but the AI approach is not always easy for human coders to grasp. Due to competitive pressure AI assisted coding is giving ways to AI designed and written code
AI written code is another issue. I have heard AI CAN write some good code....but when it is ordered to write complex code and then coders carefully examine the code it has written, it is found to include some code that is pure garbage and which makes it not work as intended......ie to have some serious bugs in the code.
it is found to include some code that is pure garbage and which makes it not work as intended......ie to have some serious bugs in the code.
That can easily be mitigated. I have a standard skeleton I always start with, so the rules and standards are pretty much already there, plus you add skills that make clear the coding standards, and rigorously document the versions of the packages you are using.
Exactly. At some point something has to give. The population, as it is, is not sustainable. This is the purely economic consideration and says nothing of man’s purpose and fulfillment. Without fulfillment you end up with legions of ghetto apes and rats. Maybe the Malthusians thought the same thing and look where we are now?
In the oil industry rig floor automation was supposed to increase safety and reduce manpower. So far, in 20 years or so since significant implementation it has done little of one and none of the other. One of my predictions for AI is that it will take more knowledgeable manpower than available to sort out the mess it will create. There is considerable bias in that outlook I admit. I have never wanted either the easy route in life or to be taken care of ever.
Logan’s Run or Time Machine?
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