We are buying something that clones itself

Reddit r/ArtificialInteligence News
ai-bubble ai-startups commoditization china-ai market-analysis capital-efficiency deepseek

Summary

The article argues that the AI startup wave is unsustainable because intelligence is an infinitely replicable commodity with zero marginal cost, and most AI companies will collapse by 2029, leaving only a few giants owning the physical layer like energy and chips.

We are buying something that can clone itself. Every week another hundred AI startups launch. More players, more products, more pitch decks. But the underlying asset, intelligence as a digital commodity, has zero marginal cost of reproduction. You cannot build durable value on something infinitely replicable. That's not pessimism. That's just logic. The capital architecture holding this up is circular. The big players are essentially recycling money between each other CapEx to infrastructure, infrastructure invests in labs, labs spend back on compute. It manufactures the appearance of revenue without external demand. It's not commerce. It's accounting. Then China arrives. State subsidized. Priced to penetrate, not to profit. The moment cheap sovereign AI floods the market, the entire valuation structure has nowhere to hide. What survives: three or four giants who own the physical layer. Energy, data centers, chips. Everything above that collapses. 99% of AI companies don't exist by 2029. The ones left will own everything. DeepSeek was the first tremor. We haven't felt the quake yet.
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