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# AI: Failing While Booming
- URL: https://www.authoritativestanding.com/ai-failing-while-booming/
- Published: 2026-09-11T06:00:44.000Z
- Updated: 2026-09-12T08:56:00.000Z
- Description: Nobody stopped liking tulips. They just stopped paying a house for one.
- Author: Tom Voorneveld
- Tags: AI at Work, Strategic Positioning, #linkedin-personal, #x-campaign-1-launch, #x-campaign-urgency, Career Pivot

```linkedin
In February 1637 the Dutch tulip bulb market crashed. The tulip had not changed, it was still beautiful, but buyers decided that for the price of a house, they would rather have the house.

I keep thinking about that "bubble of the bulbs" when I think about the current AI market. Yes, AI is attractive but, and this matters, not at what it currently costs to generate. So,  OpenAI and Anthropic have no choice and are charging us a fraction of that cost. And that is why AI increasingly runs on debt secured against hardware that depreciates faster than their loans amortize.

Now ask yourself: if you had to pay what a token actually costs rather than the subsidized price, would you still use it the way you do now?

Here is the part that matters for you: so much of the restructuring that is happening in organizations is being justified by promises about what AI will do. However, so often, these promises will keep costing more than they deliver and will prove to be economically unfeasible.

Now suppose the justification stops working, then be certain that what is left, is what people know about you. That is your Standing.

```

## Tulip Mania

The most infamous market crash of all time seems to be the collapse of the Dutch tulip market in the 1630s. First, the tulip colors and varieties were in huge demand. The price of bulbs reached astronomic heights. People speculated their total savings and traders started to sell the bulbs even before they were harvested. 

Suddenly, in February 1637 buyers disappeared. Why? Not because tulips were no longer beautiful. No, buyers decided that for the price of a house they preferred the house instead of one single bulb.

**The standard bubble pattern:**

1. something ordinary becomes fashionable →
2. prices rise →
3. people buy because prices are rising →
4. speculation feeds on itself →
5. confidence breaks →
6. prices collapse.

## AI Mania

The tulip mania explains exactly why the AI bubble *will* burst. Yes, just like tulips, AI is here to stay and LLMs will still be beautiful. But one can wonder, are LLMs attractive at the price they *actually* cost to run? The monthly losses of OpenAI, Anthropic, SpaceX-AI are astronomical. Google and Microsoft are frantically keeping their AI-business ROI secret. Here's the kicker: their build-out increasingly runs on debt secured against hardware that depreciates faster than the loans amortize. 

### Raise Prices?

They wish they could raise prices of tokens to increase their value, but they cannot: much cheaper open-source models from mainly China are undercutting them on price. But demand will keep rising, surely? Just ask yourself: if you would really need to pay the *actual* needed price per token, not the subsidized price you pay now, would you still use AI in the same way?

Let's face it, at current CapEx, the AI business will keep losing billions and billions of dollars yearly. It will make a market crash close to certain when investors will move to other ways to invest.

## Your Standing: the Good News

> The people who spend this period of doubt by rebuilding their own standing are the ones still holding something when the story changes.

The surprising news is that the restructuring happening in your organization, or in the job market right now, might be justified by *promises that are already outdated*. When that justification stops working, what is left is what people know about you. This is Your Standing. Nurture it.