← Back to Library

The AI bubble isn't like the internet bubble

Cory Doctorow delivers a blistering correction to the prevailing narrative that artificial intelligence is simply the next inevitable wave of productivity, arguing instead that we are witnessing a top-down imposition of a technology that actively loses money with every use. While the tech press obsesses over capability benchmarks, Doctorow exposes a fundamental economic inversion: unlike the early web, which workers clamored to adopt to get their jobs done, AI is being forced upon a resistant workforce by executives desperate to justify massive capital expenditures. This is not a story of innovation; it is a story of coercion, surveillance, and a bubble built on "dogshit unit economics."

The Brokered Peace of the Early Web

Doctorow anchors his argument in a historical comparison that many in the tech industry have conveniently forgotten. He points to Lotus Notes, the clunky precursor to modern office suites, not as a triumph of user experience, but as a "brokered peace" between IT managers and the workers they tried to control. "No one had to force-feed the web to workers," Doctorow writes, highlighting the organic demand that drove the internet's adoption. Workers historically "smuggled" tools like Hotmail or Visicalc into the enterprise because they needed to bypass arbitrary restrictions to get their work done.

The AI bubble isn't like the internet bubble

The author reframes the conflict not as a security failure, but as a clash between rigid policy and the reality of labor. He notes that IT departments were asked to do the impossible: enable workers to be effective while simultaneously preventing them from taking any action that could harm the business. "The only way to eliminate the possibility that a worker will take an action that harms the business is to gag that worker and lock them in a dungeon," Doctorow observes. This stark imagery underscores the futility of trying to micromanage human ingenuity. The early web succeeded because it aligned with the worker's desire for agency, whereas the current AI push aligns only with the executive's desire for control.

Workers need flexibility and freedom to achieve business goals, and that flexibility and freedom means that those workers might (deliberately or accidentally) thwart the business's goals.

This historical lens is crucial because it reveals that the current resistance to AI is not "technophobia," as some executives claim, but a rational response to a tool that offers no immediate utility to the user. Critics might argue that some workers do adopt AI voluntarily to automate dull tasks, and Doctorow concedes this point, noting that some see value in offloading "bullshit jobs." However, he quickly pivots to the broader trend: "Virtually every major company now has a program to force workers into using AI." The distinction is vital; voluntary adoption signals a useful tool, while forced adoption signals a political mandate.

The Economics of Coercion

The most damning part of Doctorow's analysis lies in the financial reality of the AI boom. He dismantles the comparison between the dot-com bubble and the current AI frenzy by focusing on unit economics. In the early days of the web, "every new web user brought the web closer to profitability." In contrast, Doctorow cites Ed Zitron's assessment that AI has "dogshit unit economics," where "every new AI user makes AI less profitable."

This economic inversion explains the behavior of the executive branch and corporate leadership. Because the technology is a money-losing endeavor, management must compel usage to generate the data and activity required to sustain the valuation of these companies. "AI is the money-losingest endeavor in human history," Doctorow states, a claim that reframes the entire industry's aggressive marketing as a desperate attempt to hide a loss-leader strategy. The pressure is no longer on the technology to prove its worth to the worker; it is on the worker to prove their worth to the technology.

It's impossible to overstate how important Lotus Notes and similar products were, because workers demanded the right to use the web on their work computers, and they made those demands so forcefully that managers had to completely re-do their IT policies.

Doctorow connects this to the concept of "work-to-rule," a form of labor action where employees follow every rule to the letter, grinding operations to a halt. He warns that if workers are denied agency and forced to use tools they don't trust, they may resort to similar tactics, treating AI mandates as "damage and route around them." The irony is palpable: the administration and corporate boards are trying to solve a productivity problem by introducing a tool that requires surveillance to enforce, potentially triggering the very inefficiencies they seek to eliminate.

The author also touches on the generational divide, noting that while young people were once the vanguard of web adoption, they now "hate AI." This reversal is telling. It suggests that the technology is not solving a problem for the next generation of workers, but is instead being imposed as a mechanism of surveillance and throughput maximization. "Labor-led automation produces improvements in quality, while capital-driven automation increases throughput (often at the expense of quality)," Doctorow writes. This distinction separates tools that empower workers from tools that merely extract more labor for less pay.

The Unnecessariat and the Future of Work

Doctorow concludes by warning of the rise of the "unnecessariat," a class of workers who are becoming superfluous not because they lack skill, but because the technology is being used to replace them rather than assist them. He distinguishes between "centaurs" (workers assisted by technology) and "reverse-centaurs" (workers recruited to serve as peripherals for machines). The current push for AI, he argues, is creating the latter.

What the technology does is nowhere near as important as who the tech does it for and who the tech does it to.

This framing shifts the debate from technical capability to power dynamics. The article suggests that the AI bubble is not a market correction waiting to happen, but a structural failure of the technology's alignment with human needs. While some may argue that AI will eventually become profitable and useful, Doctorow's evidence suggests that the current model is fundamentally broken. The reliance on forced adoption and surveillance indicates a lack of organic value, a sign that the bubble is not just inflated, but hollow.

Bottom Line

Doctorow's argument is a necessary corrective to the hype, successfully demonstrating that the AI boom is driven by capital's need to justify losses rather than labor's need for better tools. The strongest part of his case is the historical contrast with the early web, which proves that truly transformative technology is adopted from the bottom up, not forced from the top down. However, the piece's biggest vulnerability is its reliance on the assumption that management will not eventually find a way to make the economics work, even if it means further eroding worker autonomy. The reader should watch for the inevitable clash between these forced AI mandates and the growing resistance of a workforce that sees the technology as a threat rather than a tool.

Deep Dives

Explore these related deep dives:

  • The Age of Surveillance Capitalism Amazon · Better World Books by Shoshana Zuboff

    How tech companies turned human experience into raw material for prediction and control.

  • Work-to-rule

    This labor tactic illustrates the passive resistance workers employ when forced to use inefficient, IT-mandated tools, contrasting with the active 'shadow IT' workarounds described in the text.

  • Bring your own device

    This policy shift represents the corporate institutionalization of the very 'smuggling' of personal tools that the article describes as a historical friction point between IT managers and workers.

Sources

The AI bubble isn't like the internet bubble

by Cory Doctorow · Pluralistic · Read full article

Today's links.

The AI bubble isn't like the internet bubble: No one had to force-feed the web to workers. Hey look at this: Delights to delectate. Object permanence: Website graveyard; Anti-librarian witch-hunt; Denmark v Marmite; The unnecessariat. Upcoming appearances: London, Kansas City, LA, Menlo Park, Toronto, NYC, Edinburgh. Recent appearances: Where I've been. Latest books: You keep readin' em, I'll keep writin' 'em. Upcoming books: Like I said, I'll keep writin' 'em. Colophon: All the rest.

The AI bubble isn't like the internet bubble (permalink).

One of the surprise breakout software products of the early web was Lotus Notes, a kind of primitive precursor to all-in-one office productivity suites like GDocs, Office365, etc. It was so important that its creator, Ray Ozzie, was promoted to Microsoft's Chief Software Architect, succeeding Bill Gates himself:

https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wharton-podcast/the-man-who-would-change-microsoft-ray-ozzies-vision-for-connected-software/

People who remember Notes tend to deride it for its clunky user interface and demi-functional administrative tools. But what made Notes so central to Microsoft wasn't its polish – it was the fact that Notes represented a brokered peace between IT managers, who wanted mainframe-like control over everything their users could do with business equipment, and the users themselves – workers who kept smuggling internet-based tools into the enterprise network on the very sensible grounds that they had a job to do, and these were the best tools to do it.

The arrival of internet-based tools – especially ones that ran in browsers – represented a major challenge to IT departments, who had been long accustomed to dictating terms to their users. If the IT manager and the compliance department decided that the best way to manage disclosure and leak risks was to block all email attachments for outside users, then that was that: no one could send those attachments.

But after the internet arrived on the corporate desktop, employees who needed to get documents to supply chain partners and customers could treat these IT policies as damage and route around them. Just fire up your Hotmail or Yahoo mail window, or hop on MSN Messenger or ICQ or AIM, or drop the file on an anonymous FTP server and send the link to your counterparty. Job done!

IT managers hated this, and to be fair to them, they weren't (always) wrong. These outside tools came from a variety of untrustworthy sources, including malicious sites that pushed virus-infected versions to their users. Also, by evading firewall ...