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Companies rushed in on AI. Now some are pulling back
(www.theguardian.com)
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this post was submitted on 16 Oct 2026
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Are we finally hitting the trough of disillusionment with AI?
That would be amazing!
Character.ai filing for bankruptcy after adopting it so quick and feeding it to a loyal customer base is probably a sign the bubble is bursting.
Literally, they were one of the biggest and most successful AI resellers and they couldn't stay afloat. Successful as in "people used their product a ton for free" though I think.
these companies get so much funding from investors they forget they have to make money and not just spend it on giving people free AI products.
Don't kid yourself. I have a background in both statistical learning and programming, but because I'm not a fucking moron I've considered the entire AI boom a mass mental illness of idiocy and incompetence... but this will play out just like outsourcing.
Outsourcing was initially sold as THE solution and performed by the vast majority of business and political leadership — who are incompetent morons seeking nothing but quarterly KPI/cost improvements — which resulted in massive failures, bankrupcies, onshoring etc etc... But was ultimately refined and mastered to the point where most jobs could be offshored again.
Remember; Detroit manufacturing never recovered. 99% of manufacturing offshoring was ultimately successful on a multi-decade timeline. 15 years ago I worked in a business park that employed over 10k people for a single corporation. My role there was specifically onshored from a failed offshoring. Today, all of those "service-based" jobs have now been automated or offshored, and the business park is a ghost town that will most likely be demolished and replaced with a data center.
AI will fail short term due to the gross incompetence of political and business leadership, but most human jobs will be automated away over the next 2-3 decades regardless. They only have to be cheaper than humans. They do not have to be "better". Tge fact that this will destroy capitalism and revert to fuedalism is irrelevent. Once we wire these models into robots and have them learning through interaction with the real world (which is cataclysmically psychotic), the automation of all human labor could take place within a single decade.
Don't worry, though. We fundamentally can not control AI, so even if the fascists use it to mass murder billions, the most likely scenario is that they all die at the hands of their creation in the VERY near future.
The real problem for the large scale implementation of LLMs is: Even at the current, heavily subsidized pricing they do cost more than an average worker for low-impact tasks while having a worse failure rate. And while an LLM might cost a bit less in comparison to workers for high-impact tasks requiring specific education (which will not be true if AI corpos want to become cashflow positive), in this area you cannot accept hallucinations and misinformation at all because of the damage caused.
Outsourcing works because the jobs that were outsourced cost less, while still having a "human" error rate and type of failure (blatantly lying is a rare thing. They might sometimes get things wrong, but they are not actively misinforming). But here all bets are off - you can't trust these things to handle things on their own, you always need someone to watch over them (and qualified to identify mistakes to boot!), which drives cost even more.
Imho I think I'm seeing that control might matter more than costs or even profits. Like trials for decades have shown that things like 4 day work weeks and UBI actually increase every metric companies are said to care about.