Eli the Computer Guy questions the trillion-dollar valuation of AI companies because if input tokens cost 40 cents per million, the required revenue generation to justify such a valuation is immense.

A simple AI chat typically costs a few hundred tokens.

The CEO of Anthropic stated that if the company's revenue is not $1 trillion or even $800 billion, it could go bankrupt due to compute costs.

Eli the Computer Guy believes the AI industry is currently in a bubble, characterized by increasingly strange business plans for AI companies.

To justify their current valuations, AI companies in the US need either a trillion dollars in incremental revenue from new products or massive labor market destruction to create cost savings for clients within the next 5 years.

Eli the Computer Guy compares the current AI situation to a Ponzi scheme, where the deeper one gets into the financial fraud, the harder it becomes to exit without making victims whole.