Son of a Bichon (Humility and Gratitude + TRT)@BichonRedux
The AI bubble will collapse. Here’s the cascade and what survives. (Claude wrote this for me based on my thoughts)
OpenAI burns $9B cash on $13B revenue. Their own projections show $143B in cumulative losses before profitability. They’re selling dollars for 70 cents at scale. The more they sell, the more they lose.
The collapse sequence is simple: frontier labs fail → GPU cloud middlemen (who borrowed billions at peak prices) get crushed → hyperscalers cut capex → NVIDIA cycles down. Each step accelerates the next.
The people who lived through 2001 see it. But being early is indistinguishable from being wrong — for years. The last skeptic will capitulate right before the crash. That’s how every bubble ends.
Here’s what’s different: the technology is real. Fiber was real in 2000 too. It just needed a decade of bankruptcies before the economics worked.
So what survives?
Local models. Delivered by Apple.
Their playbook never changes — let the industry burn capital on half-baked implementations, then arrive late with something so integrated it makes everything before it look like a prototype. The entire AI industry is currently doing Apple’s R&D for them. At $143B in projected losses. With no compensation.
The M5 already runs 70B parameter models locally. DeepSeek V4 dropped this week — open source, near-frontier performance, no NVIDIA hardware required. The gap between local and cloud closes from both directions simultaneously.
The killer move: your iPhone tunnels home to your Mac over an encrypted connection. Your Mac becomes your personal AI server. Your data never touches a corporate server. Ever.
Apple doesn’t compete with OpenAI. They make them irrelevant.
Jensen knows this. He just can’t say it.
