Believe us: last week our favourite AI system made two dreadful errors. It blithely assured us that the actor Robert Shaw (he of A Man for All Seasons and Battle of Britain) was the father of actor Martin Shaw (he of The Professionals and Judge John Deed). He wasn’t. It also credited the song Manhattan to Irving Berlin. Wrong again: the writers were Richard Rogers and Lorenz Hart. Minor peccadillos you might think: and it apologised afterwards in a slightly brash thanks, I’ll-do-better-next-time sort of way. But we are not assuaged: Read this from the excellent Heather Stewart of the Guardian from her piece The cost of AI slop could cause a rethink that shakes the global economy in 2026: [1]
Police officers in Heber City, Utah, learned to manually check the work of a transcription tool they were using to draft write-ups from bodycam footage after it mistakenly claimed an officer had turned into a frog. Disney’s The Princess and the Frog was playing in the background.
Even for big fans of AI, and we count ourselves among its biggest, there are worries about its accuracy. And these could have consequences for us all. Heather calls two hostile witnesses: Ed Zitron and Cory Doctorow, whose views of AI are considerably more jaundiced than our own. The essence of their arguments is that the companies involved are not profitable. The cost of their operations far exceeds current and future revenue streams. That there is too much borrowing and too much leverage about. Fans of that excellent book 1929 by Andrew Sorkin[2] will recognise eerie echoes of the world of the 1920s when radio was the new technology, sparking a colossal boom in stock valuations and hyper-over-borrowed leverages. We all know how that ended. And the reast of Heather’s article descants on the similar medium term risks to us all from this bubble of our own times; and the consequences these may entail.
So will the bubble burst, shattering our comfortable lifestyles and throwing us back to begging buddies for a dime? John Plender for the FT mounts an admirable summary of the situation in this article for the Financial Times. [3] Like the sagacious thinker he is, he examines the evidence cautiously, and advises of probabilities and possibilities, avoiding definite predictions. You may need to overcome the paywall: but our reading of it suggests that if interest rates start to rise . get worried. We are LSS do not offer financial advice, nor economic predictions. But we have read our History and our Economics. And discovered that everyone who says “it’s different this time” is nearly always wrong.
[1]https://www.theguardian.com/business/2026/jan/04/ai-reality-growing-economic-risk-2026
[2]Sorkin, Andrew Ross. 1929: Inside the Greatest Crash in Wall Street History—and How It Shattered a Nation.
[3]https://www.ft.com/content/7987310a-5c90-4976-b730-3559502006e2?shareType=nongift
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