Pundit ClaimsAI claims by Gary Marcus and Ed Zitron, with the evidence

Ed Zitron Where's Your Ed At Published

Credit Crunch

We recorded 38 claims from this post. 24 were checked against evidence. 14 can’t be checked. 21 more are held. Read the post at its source.

Claims from this post (38)

In the order they appear in the post. Each quotation is the speaker’s words in this post. A label such as “Supported” or “Can’t be checked” is the claim’s current assessment; its page has the evidence and the reasons.

  1. Assessment: Can’t be checkedSaid

    “It’s time to talk about why that’s very, very unlikely.”

    What we tested: It is very unlikely that OpenAI and Anthropic will go public, grow forever, raise whatever debt they need, and that every data center investment works out fine.

  2. Assessment: UnresolvedSaid

    “While it’s had some effect, it isn’t the big reason that the ten-year is selling off.”

    What we tested: Data center debt issuance has had some effect but is not the main reason ten-year Treasuries are selling off.

  3. Assessment: UnresolvedSaid

    “As I discussed last week, Oracle’s $18 billion September bond sale would have (yes, the number has gone up) over $7 billion in added interest over the course of the bonds due to both the sell-off of Oracle’s debt and the overall Treasuries market.”

    What we tested: Oracle's $18 billion September bond sale would now carry over $7 billion in added interest due to its debt sell-off and the Treasuries market.

  4. Assessment: UnresolvedSaid

    “And so, while I’m not going to repeat everything I went over last week, the point I’m making is that anyone raising any AI-related debt is going to get shafted by both overall Treasury prices, sentiment around AI in general, and their own specific financial situation.”

    What we tested: Anyone raising AI-related debt will face punitive costs from Treasury prices, AI sentiment and their own financial situation.

  5. Assessment: UnresolvedSaid

    “This may seem like the cheat code to get around all these horrifying rates, except CoreWeave, per analysts at UBS, needs to raise $102 billion in debt through 2030, which means it will have to keep raising on its own two feet.”

    What we tested: Because CoreWeave needs to raise $102 billion in debt through 2030 (per UBS analysts), it will have to keep raising debt on its own two feet.

  6. Assessment: UnresolvedSaid

    “Data center debt is now pricing based on increasingly-sour sentiment driven by power delays, local pushback and a general anxiety that maybe these debts won’t actually get paid.”

    What we tested: Data center debt is now pricing based on increasingly sour sentiment, driven by power delays, local pushback and a general anxiety that maybe these debts won't actually get paid.

  7. Assessment: UnresolvedSaid

    “This means that any “virgin” projects — those that aren’t directly backstopped or co-signed by hyperscalers — are guaranteed to hit egregiously-high, 9% to 14% rates, which makes (as I discussed a few weeks ago in my two-part debt series) it near-impossible to make the already-questionable economics of running a data center work.”

    What we tested: AI data center projects not backstopped by hyperscalers will face 9-14% rates, making data center economics near-impossible to work.

  8. Assessment: UnresolvedSaid

    “This all makes pontifications that data center spending will increase to $32 trillion by 2050 equal parts stupid and wasteful, on top of the overall problem that there isn’t even enough demand right now for hyperscalers to break even on their 2026 and 2027 capex plans.”

    What we tested: There is not currently enough AI demand for hyperscalers to break even on their 2026 and 2027 capex plans.

  9. Assessment: Can’t be checkedSaid

    “This all makes pontifications that data center spending will increase to $32 trillion by 2050 equal parts stupid and wasteful, on top of the overall problem that there isn’t even enough demand right now for hyperscalers to break even on their 2026 and 2027 capex plans.”

    What we tested: Pontifications that data center spending will increase to $32 trillion by 2050 are equal parts stupid and wasteful.

  10. Assessment: UnresolvedSaid

    “Once a public company, Anthropic will no longer be able to raise venture capital at its current scale (over $95 billion in 2026) alone, and if it intends to raise even half that much on a yearly basis, it will become one of the largest issuers of junk-grade debt in history.”

    What we tested: Once public, Anthropic will no longer be able to raise venture capital alone at its current scale (over $95 billion in 2026), and if it intends to raise even half that much yearly, it will become one of the largest issuers of junk-grade debt in history.

  11. Assessment: UnresolvedSaid

    “In both AI labs’ cases, they are most-decidedly going to be priced like junk, even if the malignant scumbags are able to con ratings agencies into giving them investment-grade ratings, because while the bond markets listen to credit ratings, they price based on what the actual company looks like, guaranteeing Oracle-esque 8% minimum yields on whatever they issue.”

    What we tested: Any debt OpenAI and Anthropic issue will be priced like junk with yields of at least 8%, even if they get investment-grade ratings.

  12. Assessment: UnresolvedSaid

    “Yet things get a little messier when you factor in non-cancelable contracts, which total $413 billion in Anthropic’s case across the next seven to ten years, guaranteeing financial strain at a time when future cashflows are far from guaranteed.”

    What we tested: Anthropic's $413 billion in non-cancelable contracts over seven to ten years guarantee financial strain while its future cashflows are uncertain.

  13. Assessment: UnresolvedSaid

    “Anthropic’s vulgar “Earnings Before Training, Interest and Taxes” measurement does not matter when the entire calculation is made on cashflows, and any attempts to act otherwise are either ignorant or deceptive.”

    What we tested: Anthropic's 'Earnings Before Training, Interest and Taxes' metric does not matter to debt investors, who judge on cashflows.

  14. Assessment: Can’t be checkedSaid

    “In any case, if either gets an investment-grade rating, it’s likely that a hyperscaler has stepped up and guaranteed some or all of the debt, but in doing so, they’d likely sacrifice part of their own credit rating in the process.”

    What we tested: If OpenAI or Anthropic gets an investment-grade rating, a hyperscaler has likely guaranteed the debt and would likely sacrifice part of its own credit rating.

  15. Assessment: Can’t be checkedSaid

    “I’ll add that if this happens, it will be a catastrophic failure of regulation and ratings agencies at a level unseen in the equities markets.”

    What we tested: If OpenAI or Anthropic get an investment-grade rating, it will be a catastrophic failure of regulation and ratings agencies at a level unseen in the equities markets.

  16. Assessment: UnresolvedSaid

    “As you can see, debt alone isn’t getting these companies $50 billion a year outside of a rating that’s near-impossible outside of ratings agencies defaulting on their jobs.”

    What we tested: Assuming a $2 trillion valuation and a $50 billion yearly need, debt alone will not get OpenAI and Anthropic $50 billion a year unless they get a rating that is near-impossible without ratings agencies defaulting on their jobs.

  17. Assessment: Can’t be checkedSaid

    “It’s hard to gauge this based on the unknowns of its trading volume, but if I had to guess, there’s maybe $20 billion in annual share sales it could do.”

    What we tested: At a $2 trillion valuation with a roughly 5% float, Anthropic could maybe do about $20 billion in annual share sales, as a tentative guess given unknown trading volume.

  18. Assessment: Can’t be checkedSaid

    “In other words, stop making these comparisons, they are not accurate.”

    What we tested: People should stop comparing OpenAI and Anthropic to Amazon and Uber at their IPOs, because those comparisons are not accurate.

  19. Assessment: Can’t be checkedSaid

    “Anthropic and OpenAI Should Not Be Allowed To Go Public, and Allowing Them To Do So Actively Harms Investors”

    What we tested: OpenAI and Anthropic should not be allowed to go public because doing so harms investors.

  20. Assessment: UnresolvedSaid

    “They are unprofitable, unsustainable, and the only conditions under which they could raise significant debt would involve catastrophic failures of regulatory and ratings bodies.”

    What we tested: OpenAI and Anthropic are unprofitable and unsustainable, and could raise significant debt only through catastrophic failures of regulators and ratings agencies.

  21. Assessment: Can’t be checkedSaid

    “I’ll add that the only thing worse than allowing them to go public will be to allow them to raise debt at anything other than the junkiest levels that the market has to offer.”

    What we tested: OpenAI and Anthropic should not be allowed to raise debt at anything but the junkiest levels.

  22. Assessment: UnresolvedSaid

    “Analyst expectations have OpenAI and Anthropic contributing at least $444 billion in revenue across hyperscalers in the next three years, and if this revenue fails to arrive — either through insolvency or renegotiation of terms — every connected hyperscaler will see massive revenue misses.”

    What we tested: If the $444 billion OpenAI and Anthropic are expected to pay hyperscalers over three years fails to arrive, every connected hyperscaler will miss revenue massively.

  23. Assessment: UnresolvedSaid

    “Chairman and founder Larry Ellison just added another $9.2 billion in stock-backed personal loans to his already-large pile, bringing it (by my count) to around $30 billion, and the margin calls will start somewhere around $60 a share for a stock that pumps and dumps based on any OpenAI news, meaning that anything along the lines of “OpenAI can’t pay Oracle” is guaranteed to start a spiral.”

    What we tested: Any news that OpenAI can't pay Oracle is guaranteed to start a spiral in Oracle stock, given Larry Ellison's ~$30 billion in stock-backed loans with margin calls near $60 a share.

  24. Assessment: UnresolvedSaid

    “Every one of the “Stargate” data centers is heavily behind schedule, and Stargate Abilene — which Oracle claims is “75% delivered” — has no more than half of its capacity installed, not that anyone bothers to check these things or investigate the claims of anyone connected to the AI bubble.”

    What we tested: Every Stargate data center is heavily behind schedule, and Stargate Abilene has no more than half its capacity installed despite Oracle's '75% delivered' claim.

  25. Assessment: UnresolvedSaid

    “As I’ve discussed previously, 50% to 60% of NVIDIA’s revenues are coming from hyperscalers that are actively participating in the AI boom, and without that boom (and the debt necessary to keep buying chips), nobody else is buying them at anything close to today’s scale.”

    What we tested: 50-60% of NVIDIA's revenue comes from hyperscalers in the AI boom, and without that boom nobody else will buy its chips at anything near today's scale.

  26. Assessment: Can’t be checkedSaid

    “OpenAI and Anthropic represent 80%+ of all compute demand, and their customers — unprofitable venture-backed AI startups — make up 80% of their enterprise revenues, which means they’re likely to die before OpenAI and Anthropic.”

    What we tested: OpenAI and Anthropic account for 80%+ of compute demand, and their startup customers (80% of enterprise revenue) are likely to die before them.

  27. Assessment: UnresolvedSaid

    “I’ve looked everywhere and I’ve found at the very, very best $22 billion of non-OpenAI/Anthropic compute purchases!”

    What we tested: Despite looking everywhere, Zitron has found at the very best $22 billion of compute purchases by buyers other than OpenAI and Anthropic.

  28. Assessment: Can’t be checkedSaid

    “This means that it’s unlikely that we’ll have a “booming open source AI market” in the end, and at best we’ll have some sort of handicapped Google monstrosity, though even that seems less likely based on the fallout I fear.”

    What we tested: Once the AI bubble bursts, a booming open-source AI market is unlikely; at best there will be some sort of handicapped Google monstrosity, though even that seems less likely given the fallout he fears.

  29. Assessment: Can’t be checkedSaid

    “With most of the demand for AI driven by endless media and peer pressure, once the AI bubble bursts, the “demand” for AI services will be entirely driven by utility…and considering most services lose money even during the hype cycle, it’s hard to see what post-bubble economy even exists.”

    What we tested: Most AI demand is driven by hype; once the bubble bursts, demand will depend only on utility and little post-bubble AI economy may exist.

  30. Assessment: UnresolvedSaid

    “With hundreds of billions of dollars in non-cancellable commitments, neither of these companies can “cut their costs.””

    What we tested: Because of hundreds of billions of dollars in non-cancellable commitments, neither OpenAI nor Anthropic can "cut their costs."

  31. Assessment: UnresolvedSaid

    “There are no other AI companies that are growing anywhere near as fast or have customer bases that come close to Anthropic and OpenAI, and those customers are mostly other AI startups.”

    What we tested: No other AI companies are growing anywhere near as fast as Anthropic and OpenAI or have customer bases that come close to theirs, and those customers are mostly other AI startups.

  32. Assessment: Can’t be checkedSaid

    “Even if you think AI is the most wonderful, beautiful software tool ever imagined, there is no rational basis under which you can look at the current economic picture and say that everything will be fine.”

    What we tested: There is no rational basis for believing the AI industry's economics will turn out fine.

  33. Assessment: UnresolvedSaid

    “It involves CoreWeave, IREN, Nebius, and every other neocloud running out of money, fucking over investors in both their stock and debt some time in the next few years, with the underlying collateral made up of otherwise-useless data center construction and GPUs that will, at that point, be in a supply glut rivaling the Atari video game burial.”

    What we tested: In the future he describes (most data center debt unpaid, OpenAI and Anthropic failing their obligations, AI GPU sales halting), CoreWeave, IREN, Nebius and every other neocloud will run out of money some time in the next few years, screwing over investors in both their stock and debt, with collateral of otherwise-useless data center construction and GPUs in a massive supply glut.

  34. Assessment: UnresolvedSaid

    “The future I am talking about — one where most data center debt goes unpaid, where OpenAI and Anthropic fail to meet their obligations, and when AI GPU sales grind to a halt — involves Google, Microsoft and Amazon having catastrophic misses on their earnings expectations, and their future revenue growth stories collapsing, along with NVIDIA’s revenues dropping as much as 90% once the debt-backed AI capex boom ends.”

    What we tested: In a future where most data center debt goes unpaid, OpenAI and Anthropic fail to meet their obligations, and AI GPU sales grind to a halt, Google, Microsoft and Amazon will have catastrophic earnings misses and collapsing revenue growth stories, and NVIDIA's revenues will drop by as much as 90% once the debt-backed AI capex boom ends.

  35. Assessment: UnresolvedSaid

    “Hyperscalers have no other hypergrowth ideas left — no new Google Search, Microsoft 365, or Facebook — to sell investors, and in pursuit of AI have become the most asset-burdened companies on the Fortune 500, rivaling ExxonMobil, Berkshire Hathaway and Chevron, except instead of oil and diverse stocks they have GPUs that only retain value during a hype cycle.”

    What we tested: Hyperscalers have no other hypergrowth ideas left to sell investors, and in pursuit of AI they have become the most asset-burdened companies on the Fortune 500, rivaling ExxonMobil, Berkshire Hathaway and Chevron, with GPUs that only retain value during a hype cycle.

  36. Assessment: Can’t be checkedSaid

    “I’m not sure venture capital — or anyone covering venture capital — has actually conceptualized how significant the losses may be, because I can see a world where virtually every AI investment goes to zero at a time when venture capital is facing an historic losing streak.”

    What we tested: Virtually every AI venture investment could go to zero.

  37. Assessment: UnresolvedSaid

    “And there really is no hope for the $800 billion or so invested in AI startups in the last four years, as AI acquisitions are thin thanks to their high costs, miserable revenues and utter lack of intellectual property.”

    What we tested: The roughly $800 billion invested in AI startups over the past four years has no real hope of being recovered.

  38. Assessment: Can’t be checkedSaid

    “The fact we can’t cleanly answer this question as hundreds of billions of dollars get sunk into AI data centers may be the most glaring miss in the history of finance.”

    What we tested: The fact that we can't cleanly answer who will pay for AI services, as hundreds of billions of dollars are sunk into AI data centers, may be the most glaring miss in the history of finance.

Held from this post (21)

These records did not pass every check, so nothing about them is published. Held is not a finding.