Apple Will 'Watch Everything Burn' When the AI Bubble Bursts
macrumors.com
July 27, 2026
9 min read
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59/100
Summary
Memory prices have doubled, leading to increased costs for Macs and iPads, with iPhones expected to follow. Ed Zitron argues that the investments driving these costs will not yield sufficient returns, suggesting potential negative consequences for Apple when the AI bubble bursts.
Key Takeaways
- Large Language Models (LLMs) incur costs that contradict traditional software selling models, as users are charged per million tokens regardless of the quality of responses received.
- AI companies often offer monthly subscriptions with vague rate limits, leading to situations where users can incur costs far exceeding their subscription fees.
- Most AI startups are unprofitable because users are unwilling to pay the actual costs associated with AI services, resulting in a reliance on vague revenue metrics.
- Building AI data centers is extremely expensive and time-consuming, with limited customer demand outside of major players like Anthropic and OpenAI, both of which are financially struggling.
Community Sentiment
Positives
- The future of AI lies in on-device models that could rival today's frontier models, opening up new applications while cutting costs — it’s a game changer for accessibility.
- Apple's strategy to focus on edge silicon for AI is smart, leveraging their strengths and ensuring they stay relevant in a market without intense competition.
- With other companies drowning in debt, Apple seems poised to emerge stronger from the AI bubble, ready to capitalize on a market that may implode.
Concerns
- Many believe the AI bubble is bound to burst, prompting fears that the industry's current valuations are unsustainable and overly inflated.
- Critics argue that Apple’s late entry into the AI space indicates poor decision-making, suggesting they’ve mishandled opportunities and may struggle to keep up.
- Skeptics warn that while Apple may be sitting on solid cash flow now, their lack of aggressive AI investment could leave them vulnerable to competitors betting on more advanced systems.
