AI's Affordability Crisis

A year ago in The Back Of The AI Envelope I pointed out that the AI platforms were running the drug-dealer's algorithm, "the first one's free". By massively subsidizing the use of their products, they were generating overwhelming demand for them. They used this demand to justify massive investments, in the hope that, by the time they had to show a return on these invetment, the users would be so addicted that they would pay the vastly higher prices needed to generate a return.

David Cahn, Sept '23

I have to confess that I was late to the party. The earliest skepticism I've been able to find was from Sequoia Capital's David Cahn in September 2023, entitled AI’s $200B Question. Only nine months later Cahn re-ran the same analysis in AI’s $600B Question. His estimate of the revenue gap had tripled. Cahn wasn't alone. Independent journalists such as Ed Zitron were flagging this problem long before I was.

I started to write this post a couple of months ago when the maiinstream business press began to notice companies complaining about the cost of the tokens their employees were burning. Since then the trickle has turned into a flood, which made finishing the post hard. Below the fold I throw up my hands and dump out a small sample from the flood.

Chatbots vs. Ozone

Source

Back in February I posted The Kessler Syndrome, which also included a brief section mentioning the impacts of the proposed megaconstellations on the environment, specifically global warming from CO2 and black carbon, and depletion of the ozone layer. Three months earlier Anton Petrov had examined the last of these in Risk of Ozone Layer Destruction from Internet Satellite Swarms and Rocket Fuel. He has now followed up with SpaceX Is Conducting a Giant Chemical Experiment on Our Atmosphere Without Realizing. Below the fold I survey the papers Petrov cited and a few others.

Library of Congress Storage Architecture Meeting 2026

Once again I attended most of the library of Congress' Designing Storage Architectures workshop remotely. I apologize for the delay in posting this; domestic duties have kept me very busy recently. Below the fold notes on the talks that caught my attention, based on my now somewhat memory and the slide decks for the talks from the Library of Congress website.

AI's PR Problem

J.P. Morgan hits photographer with cane

This is just a brief post to explain to my old boss, Eric Schmidt, why he and his ilk are getting booed at college commencements, and why laws against data centers are getting passed. The explanation is below the fold.

Wrench Attacks

XKCD #538

A year ago I wrote The Risks Of HODL-ing sparked by Mitch Moxley's They Stole a Quarter-Billion in Crypto and Got Caught Within a Month. Moxley recounts the kidnapping of Veer Chetal's parents to persuade him to hand over his share of the loot:

the Lamborghini was suddenly rammed from behind by a white Honda Civic. At the same time, a white Ram ProMaster work van cut in front, trapping the Chetals. According to a criminal complaint filed after the incident, a group of six men dressed in black and wearing masks emerged from their vehicles and forced the Chetals from their car, dragging them toward the van’s open side door.

Below the fold I look at Bloomberg updates from last week on why the crypto-bros are having to spend vast sums on defending against the threat of HODL-ing.

Talk for Stanford's EE 292J

Via John Markoff, I was invited to a conversation with Jonathan Dotan and the students of his EE292J course entitled Designing for Authenticity. Below the fold are my brief introductory remarks, and some notes for the discussion.

Flooded Zones Part 2

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This is the promised follow-on to Flooded Zones Part 1, which discussed the Distributed Denial of Service (DDoS) attack being mounted by AI against the scholarly publication system. By reducing the cost of generating and submitting a paper or a review, AI has caused a massive increase in the quantity and a significant decrease in the quality of submissions to a system that was already vastly overloaded.

Below the fold I look at AI-enabled DDoS attacks against two other even more important areas; software security and political discourse (as shown in the overview image).