Oct 16, 2026 · 28 min · 7 segments
Intel and Broadcom CEO's Warn AI is Running Out of Capital - AI Data Centers are a Failed Business
And so the issue that's going on right now is all of these AI companies have these glorious plans for trillions and trillions and trillions of dollars of build-out.
Uh, but the debt markets, right, the people that essentially loan money, uh, they're, they're getting a little skittish on loaning money.
The equity markets, when you buy stocks from companies, uh, those people are also starting to get skittish.
Uh, the private investors, again, when companies are still private, they're getting skittish.
And, uh, and, and weirdly enough, right, we keep hearing about ARR, or annualized revenue, or annual recurring revenue.
You know how those...
You know how those numbers are really, really, really big? Like, oh, my golly, look, look at the re- how fast the revenue is growing.
You notice how they never, never talk about profit? [laughs] Or, like, real profit.
Like, An- Anthro- Anthropic comes out with these weird profit-esque numbers, not real profits.
Like, they're...
And the problem that they're running into, right, is they're running out of money that they can beg from people, and their products actually are not that profitable.
Probably not profitable at all.
And so they are running out of money to do these absolutely insane build-outs.
And, uh, yeah, it's...
This article just gets so stupid at the end.
It's like when you get to the...
And I really want you to think about this for a second, right? We hear about this demand all the time, right? AI is compute-constrained, right? The only thing stopping, you know, more artificial intelligence is literally more hardware resources.
But when you start looking at what these AI companies are providing, a tremendous amount of the services that they're providing, that are burning tokens, burning cycles on their hardware resources, are literally free.
Are literally free.
Free users.
On top of that, even, even when they have the people pay money, uh, for, for the tokens that they consume, uh, it appears even then they're losing money.
And so the issue that's going on right now is all of these AI companies have these glorious plans for trillions and trillions and trillions of dollars of build-out.
Uh, but the debt markets, right, the people that essentially loan money, uh, they're, they're getting a little skittish on loaning money.
The equity markets, when you buy stocks from companies, uh, those people are also starting to get skittish.
Uh, the private investors, again, when companies are still private, they're getting skittish.
And, uh, and, and weirdly enough, right, we keep hearing about ARR, or annualized revenue, or annual recurring revenue.
You know how those...
You know how those numbers are really, really, really big? Like, oh, my golly, look, look at the re- how fast the revenue is growing.
You notice how they never, never talk about profit? [laughs] Or, like, real profit.
Like, An- Anthro- Anthropic comes out with these weird profit-esque numbers, not real profits.
Like, they're...
And the problem that they're running into, right, is they're running out of money that they can beg from people, and their products actually are not that profitable.
Probably not profitable at all.
And so they are running out of money to do these absolutely insane build-outs.
And, uh, yeah, it's...
This article just gets so stupid at the end.
It's like when you get to the...
And I really want you to think about this for a second, right? We hear about this demand all the time, right? AI is compute-constrained, right? The only thing stopping, you know, more artificial intelligence is literally more hardware resources.
But when you start looking at what these AI companies are providing, a tremendous amount of the services that they're providing, that are burning tokens, burning cycles on their hardware resources, are literally free.
Are literally free.
Free users.
On top of that, even, even when they have the people pay money, uh, for, for the tokens that they consume, uh, it appears even then they're losing money.
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