Economics viewpoint We could all slip up on Al's financial slop

The US dictionary Merriam-Webster's word of the year for 2025 was "slop": "digital content of low quality produced, usually in quantity, by means of artificial intelligence".

- Heather Stewart

The choice suggests that, while AI is being widely embraced, not least by corporate bosses keen to cut payroll costs, its downsides are also becoming obvious.

In 2026, a reckoning for AI represents a growing economic risk. Ed Zitron, the foul-mouthed figurehead of AI scepticism, argues pretty convincingly that, as things stand, the "unit economics" of the industry - the cost of servicing the requests of a single customer against the price firms can charge them - just don't add up. In typically colourful language, he calls them "dogshit".

Revenues from AI are rising rapidly as more paying clients sign up, but so far not by enough to cover the wild levels of investment: $400bn (£297bn) in 2025, with much more forecast this year.

Another vehement sceptic, Cory Doctorow, argues: "These companies are not profitable. They can't be profitable. They keep the lights on by soaking up hundreds of billions of dollars in other people's money and then lighting it on fire."

It is not new for frontier businesses to lose money, often for years. Moving into profitability tends to happen as costs fall. But each iteration of large language models (LLMs) has tended to be more costly in data, energy and highly paid tech experts' time.