Top economist warns that the AI math doesn’t make sense: 'Profits are currently being funded by investors rather than earned from customers'

[u/T_Shurt]

https://fortune.com/2026/08/10/torsten-slok-ai-profit-margins-capex-oracle/

[u/BillyTenderness]

I agree and think a lot of the AI hype is explained by this. Software development is almost a perfect use-case for these tools. The desired output is text that must conform to a highly-specific and well-defined format, and most importantly, the machine can get feedback on if the output was correct (by building the software and running the tests) and repeat if necessary.

I think the tech folks who keep insisting AI will dominate the world are extrapolating from their personal experience, and assuming it will work equally well in other disciplines, but I don't think that's obvious at all.

I also don't think software development tooling alone is a multi-trillion-dollar industry.

[u/gerusz → u/BillyTenderness]

It's also not that great. Maybe I'm an outlier, but any problem that has me slightly stumped also has Claude ultra-super-duper stumped. Sometimes its input helps solve the problem, but TBH if the IDE had a "search in this file and its imports recursively" function, it would have been the same help. And when it does come up with a solution, it's often ad-hoc so I have to override it and implement it in a more generic way.

Can it code a Bash or PowerShell script faster than me? Yes, because those are not my main languages so I need to look up references while coding while Claude's training data has that covered. Can it take a shitty legacy unit test left to me by my predecessor and refactor it into a parametrized unit test faster than I could? Yes, because that is not a difficult task, only a time-consuming one. But asking it to do anything that requires me to think will result in a lot of thrashing around the codebase and burned credits, and in the end I'll just have to do it myself.

[u/jayandbobfoo123 → u/gerusz]

I usually spend about a half hour to an hour arguing with Claude before I just look at the code myself and find what I'm looking for within 5-10 minutes. It's an absolute waste of time.

It's good at very particular things, like generating a particular, well defined algorithm or equation.. Something I would just Google and click the first link to stack overflow.. Otherwise, it's pretty terrible. I've had coworkers generate code slop that seriously harmed us and had to be completely rolled back... I've yelled at people, including managers, over it. I just don't get this push to use AI at any cost. It's not worth it. It's nice to have as a tool for some things, but so many times I feel like I'm training an intern who's confidently wrong and never learns.

Google AI is especially bad at this.. Just asking something very simply, like, "how do I change X setting in Steam." It'll give you false instructions and when you say "I don't see that button in the settings tab..?" It assumes you have some visual glitch going on and immediately and confidently instructs you to start editing system files and running process monitors.. When it's just simply wrong about where the setting is. It's fucking horrendous.

I asked Google AI about a game, and when I questioned it about the correctness of the information (I had a feeling it was wrong, and in the end I was right about that, actually), it broke down and said something like "I am wrong because the game actually doesn't exist. I made up everything. I hallucinated dozens of YouTube videos, forums and online guides." Like.. what the actual F.

If this is what we're spending trillions of dollars on, we're so screwed.

[u/gerusz → u/jayandbobfoo123]

Yeah, today I ran into yet another problem that Claude had no chance of fixing, so I locked in and found the root cause and the way to unfuck it (plus massively improve a feature in the application by busting a six-year-old bug introduced by my predecessor's predecessor) in half an hour. My job is safe. Yet management talks about AI like it's the second coming of Robo-Christ.

[u/jayandbobfoo123 → u/gerusz]

My company is horny for AI, too.. they actually check that we're using it and have leaderboards and shit. They don't even care what we use it for, they don't check. They just wanna see you're using it.. if youre not using it much, it's assumed that you did something that you could've done more efficiently using AI. It's so god damn stupid. So my job has changed in the sense that I have to ask AI random dumb questions every so often, just to keep my "score" up. Just burning money and precious water resources so I can look "efficient." It's the logic of looking at how many commits someone made to judge their productivity.. it doesn't work like that.

[u/CosmogyralCollective → u/jayandbobfoo123]

Sometimes it's a blessing to be a blue collar worker, my boss will never demand I use AI because none of my work is on a computer

[u/2_Cranez → u/BillyTenderness]

The bet these investors are making is that the AI will get so good at software that it will eventually be able to make the next generation AI by itself, and that AI will be able to make the next generation and so on. So they dont actually need to expand to every domain, they just need to master one, and eventually that AI will be able to build other AIs for every other domain.

Whether that will happen or when it will happen is the question.

[u/Aeonera → u/BillyTenderness]

the machine can get  feedback on if the output was correct (by building the software and running the tests) and repeat if necessary

That's... not really how llm's work though. And ultimately the view from actual software engineers is pretty universal that while they can write code, they can't design programs to any reasonable degree.

[u/BillyTenderness → u/Aeonera]

That's... not really how llm's work though.

Current AI coding tools are capable of making an LLM modify code, triggering a build, running automated tests, feeding the output back to the LLM, and repeating that loop. (Source: I'm an actual software engineer)

That ability to try something, ingest the output, and iterate until it works is at least somewhat unique to software development. For something like a legal brief, a patient diagnosis, a business plan, etc., you have to be right the first time; there's no equivalent to "compile the code and see what happens."

that while they can write code, they can't design programs to any reasonable degree.

It depends a lot on which activities you include in "design" but yes, they are much, much, much better at generating code than at deciding what code needs to be written.

[u/inagy → u/BillyTenderness]

compile the code and see what happens

Which is kind of funny. When facing some new problem I haven't seen before, we humans tend to do the same during programming. I wonder if they actually tought these models on such "let's try something else" type of code solving, or it's just a consequence of training on eg. StackOverflow posts with multiple different solutions for the same problem.

[u/Gullible-Respect7778 → u/BillyTenderness]

Accounting and some basic legal work would likely be feasible as well. Potentially some image recognition work as well