{"id":721395,"date":"2026-06-07T17:02:24","date_gmt":"2026-06-07T17:02:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/721395\/"},"modified":"2026-06-07T17:02:24","modified_gmt":"2026-06-07T17:02:24","slug":"ais-black-friday-by-gary-marcus","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/721395\/","title":{"rendered":"AI\u2019s Black Friday – by Gary Marcus"},"content":{"rendered":"

\"\"<\/a>The GenAI industry may be in worse shape than people realize. Posted Thursday night<\/a>, before all the news that was reported below. <\/p>\n

I doubt Friday was as bad as it will get, so the title of this essay (\u201cAI\u2019s Black Friday\u201d) is a bit tongue in cheek. But Friday was bad; across the tech industry something on the order of half a trillion dollars of market value disappeared overnight. <\/p>\n

The Dow was down, but only 1.35%. Chip companies (NVidia, Broadcom, Micron) GPU leasers (CoreWeave and Nebius) and some other major AI related companies (Oracle, Microsoft, Meta, etc) all took larger hits:<\/p>\n

\"\"<\/a><\/p>\n

The S. Korean market, heavy on semiconductors, was also down.<\/p>\n

\"X<\/p>\n

Global Markets Investor@GlobalMktObserv<\/p>\n

\ud83d\udea8South Korea’s AI-driven stock market bubble is showing its first serious CRACKS:<\/p>\n

The KOSPI plunged -5.5% on Friday, with Samsung Electronics falling -6.4% and SK Hynix collapsing -9.9%, as the global AI selloff triggered by Broadcom’s disappointing earnings forecast spread <\/p>\n

<\/p>\n

7:53 AM \u00b7 Jun 5, 2026 \u00b7 21.3K Views<\/p>\n

11 Replies \u00b7 73 Reposts \u00b7 256 Likes<\/p>\n

<\/a><\/p>\n

And that wasn\u2019t even the worst of it. Maybe this revelation was:<\/p>\n

\"X<\/p>\n

Edward Dowd@DowdEdward<\/p>\n

Wow\u2026this is a tell people. There is no path to profitability. <\/p>\n

They need to socialize losses.<\/p>\n

\"X<\/p>\n

CNBC Tech @CNBCtech<\/p>\n

Trump administration, OpenAI discussing possible government stake in the AI startup https:\/\/t.co\/NrptJTDAWY<\/p>\n

6:11 PM \u00b7 Jun 5, 2026 \u00b7 447K Views<\/p>\n

219 Replies \u00b7 1.68K Reposts \u00b7 7.69K Likes<\/p>\n

<\/a><\/p>\n

Remember this tweet?<\/p>\n

\"X<\/p>\n

Gary Marcus@GaryMarcus<\/p>\n

The countdown until we are told that LLMs are \u201ctoo big to fail\u201d starts now.<\/p>\n

\u201cWe can\u2019t afford to lose to China\u201d, they will say, accepting their multibillion dollar bailouts.<\/p>\n

8:14 PM \u00b7 Jan 6, 2025 \u00b7 470K Views<\/p>\n

41 Replies \u00b7 225 Reposts \u00b7 1.74K Likes<\/p>\n

<\/a><\/p>\n

The game is on. \u201cInvestment\u201d is just another word for bailout.<\/p>\n

\u00a7<\/p>\n

I had this<\/a> to say about that:<\/p>\n

\"\"<\/a><\/p>\n

In short, it stinks.<\/p>\n

\"X<\/p>\n

Garry Kasparov@Kasparov63<\/p>\n

Smells like corruption and socialism, the hallmarks of the Trump administration.<\/p>\n

\"X<\/p>\n

Gary Marcus @GaryMarcus<\/p>\n

smells like bailout. smells like garbage. \ud83e\udd2e<\/p>\n

3:53 PM \u00b7 Jun 6, 2026 \u00b7 2.48K Views<\/p>\n

7 Reposts \u00b7 38 Likes<\/p>\n

<\/a><\/p>\n

Bailing out OpenAI is crony socialism and corruption (remember those $25M donations from Greg Brockman and his wife?), preventing capitalism from taking its natural course.<\/p>\n

\u00a7 <\/p>\n

But it\u2019s not just OpenAI:<\/p>\n

\"X<\/p>\n

The Washington Post@washingtonpost<\/p>\n

President Trump said he is considering taking a government stake in leading artificial intelligence companies.<\/p>\n

Industry leaders will soon gather at the White House to discuss the idea, the president said. <\/p>\n

wapo.st<\/p>\n

Trump says he\u2019s considering government stake in top AI companies<\/p>\n

<\/p>\n

10:15 PM \u00b7 Jun 5, 2026 \u00b7 82.4K Views<\/p>\n

110 Replies \u00b7 91 Reposts \u00b7 176 Likes<\/p>\n

<\/a><\/p>\n

As an important aside that is more about geopolitics than economics per se, the ramifications of this may be huge. As I noted on X<\/a>, nobody is going to trust an American AI company that is partly owned by the US Government. Just the way the US doesn\u2019t trust Huawei, Europe and Asia are not going to trust companies like OpenAI and maybe even Google. The new cold war will be about AI. (And Google might perhaps be wise not to accept Trump\u2019s proffered investment, given how much of their income is global; OpenAI may be so desperate they have no choice.)<\/p>\n

\u00a7<\/p>\n

But back to economics. Who can forget the hapless Meta, which may ultimately win the prize for most money burned vs least results?<\/p>\n

\"\"<\/a><\/p>\n

\u00a7<\/p>\n

Meanwhile, it also came out yesterday that Musk is leasing another 110,000 GPUs to Google, on top of the 220,000 it is leasing to Anthropic. <\/p>\n

\"X<\/p>\n

Sawyer Merritt@SawyerMerritt<\/p>\n

SpaceX has just announced that they have entered into a $920 million per month agreement with Google to provide compute capacity, according to a new filing.<\/p>\n

“On June 5, 2026, we entered into a Cloud Service Agreement with Google with respect to access to compute capacity. The <\/p>\n

<\/p>\n

6:58 PM \u00b7 Jun 5, 2026 \u00b7 1.71M Views<\/p>\n

377 Replies \u00b7 870 Reposts \u00b7 7.74K Likes<\/p>\n

<\/a><\/p>\n

Last year, people had to steal GPU\u2019s from armored trucks.This year, SpaceX\u2019s AI division is leasing GPUs left, right, and center, because they can\u2019t figure out what to do with them.<\/p>\n

If scale was \u201call you need\u201d, or if AGI was actually nigh, Elon would be hoarding LLMs, not leasing them. <\/p>\n

Some people might ask whether Elon is making money on the deal (I don\u2019t know), but the real question is why he is leasing the very chips that he hoarded last year in the first place.<\/p>\n

\"X<\/p>\n

Gary Marcus@GaryMarcus<\/p>\n

Elon, last year: Grok 5 has a 10% chance of becoming world\u2019s first AGI.<\/p>\n

Elon, this year: Never mind, we\u2019re gonna be like CoreWeave, but bigger.<\/p>\n

\"X<\/p>\n

Elon Musk @elonmusk<\/p>\n

My estimate of the probability of Grok 5 achieving AGI is now at 10% and rising<\/p>\n

1:05 AM \u00b7 Jun 6, 2026 \u00b7 1.87K Views<\/p>\n

3 Replies \u00b7 4 Reposts \u00b7 17 Likes<\/p>\n

<\/a><\/p>\n

Whether SpaceX is making money on the deals with Google and Anthropic or losing money, they are waving the towel on winning the frontier model race\u2014 by arming their competitors rather than themselves.<\/p>\n

\u00a7<\/p>\n

Also, per a friend who read a draft of this, \u201cIf Space X is leasing capacity back to Google and Anthropic, this is now servers and chips those guys do not need to buy themselves. Elon clearly bought a lot of hardware he did not have demand for. He is probably not the only one that bought substantial capacity long before there was demand or a use case for it.\u201d<\/p>\n

None of that is particularly great for Nvidia, CoreWeave, Oracle, Nebius, Micron, and a variety of other hardware and semiconductor providers<\/p>\n

And my friend adds, \u201cThen of course the fact that even Google and Meta, who are [historically] very cash flow positive companies, need to sell equity to continue to fund their AI investments. Just shows you this whole thing is a black hole.\u201d<\/p>\n

\u00a7<\/p>\n

Share<\/a><\/p>\n

I\u2019ll leave you with these predictions, written a few days ago<\/a>, before the shit started hitting the fan:<\/p>\n

\"\"<\/a>In #1, I should have stressed reliability, too, because that too is lacking in LLMs, and a key part of why RoI has been limited.. Future architectures, perhaps quite different, must find a way to remedy that. <\/p>\n

I have no idea whether Monday\u2019s market will continue the downward trends we saw Friday. But it should. <\/p>\n

Coming soon: more on why AI has had less impact on real-world productivity so far than many people had anticipated. <\/p>\n","protected":false},"excerpt":{"rendered":"The GenAI industry may be in worse shape than people realize. Posted Thursday night, before all the news…\n","protected":false},"author":2,"featured_media":721396,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":["post-721395","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-au","tag-australia","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/721395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=721395"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/721395\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/721396"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=721395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=721395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=721395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}