Kingdom Report

www.kingdomvision.co.za

Week of 25 October 2025

 

The Coming AI Bust : A Kingdom Analysis

Here is my reality check on the AI industry.  But let me start with the good news of what it means for the Kingdom of God.

I think there are enormous benefits for all mankind and especially the Kingdom of God in the current exciting exponential developments of Artificial Intelligence.  Let me list several which I want to spend more time on in future blogs. But to summarize...

1) Because I believe we are in a multigenerational growth of the Kingdom of God I look to what we leave and transfer to the next generation.  I believe the wealth of the unrighteous are layed up for God's people.  The greatest wealth that the unrighteous can transfer to the Kingdom is the immense store of incredibly valuable knowledge of centuries of discoveries, science, music, art.  This enormous quantity of information is too large to pass on in stack of books.  All this knowledge is being stored away in digital data banks and AI is making it very cheap and easy for us access. 

2) The ability of AI in the education industry to help our students with individual tutoring is going to be very exiting especially as we have great need for trained teachers in the maths and science topics

3) AI is going to be a valued tool for us in translating and propogating the message of the gospel to all people in all languages.  I look forward to our creative artists to using AI in creating stories, parables, music, art that promotes our Christian culture.

It also means that any small country like South Africa with a decent sized data centre can store all that knowledge even if the rest of the world falls apart.

But then there are all the many ways that sinners and their oppressive economic and political systems find new ways to use technology to destroy lives and nations....

Enter AI to make things worse. Probably a lot worse. We have failed to learn the chief lesson of the computer age, which is that the virtual is not an acceptable substitute for the authentic. So, we plunge deeper into realms of the un-real and the inauthentic. This turns into a quest to get something-for-nothing, and the unfortunate result of that old dodge is that you will end up with nothing, and that is exactly why we are at such a hazardous pass in the human project.

AI does its thing by rapidly combing through the Internet to evaluate and seize information that you request. Increasingly, AI colonizes the Internet with second-hand, third-hand, and so forth AI-generated information. Increasingly being called "AI slop". The more information slop A-I deposits on the Web, and the more it trains itself on recursive feedbacks of its own garbage, the more distorted the output gets. As that occurs, AI becomes increasingly abstracted from Reality, which is exactly what happens when a person goes insane. So, expect an exponential rise in incorrect content that would, in theory, become a pretty serious problem when you ask AI to run things like systems we depend on, the electric grid, the banking system, warfare. . .

Last April, conservative activist Robby Starbuck sued Facebook when its chatbot reported out falsely that he had been on-the-scene for the Jan 6, 2021 US Capitol protest (he was in Tennessee that day). Facebook’s parent company, Meta, settled the case with Starbuck in August, 2025, for undisclosed terms and the company apologized publicly.

Two days ago, Mr. Starbuck sued Google for defamation (with malice and negligence) when it’s Bard AI output alleged that he was a “child rapist,” a “serial sexual abuser,” that he abused and stalked his ex-wife (Starbuck states in his lawsuit that he has no ex-wife). It accused him further of fraud, embezzlement, drug charges, stalking business partners, and being a “shooter” or “person of interest” in a 1991 murder case (Starbuck was two years old at the time), of appearing in Jeffrey Epstein’s flight logs (untrue), working as a porn actor, and voicing support for the Ku Klux Klan.

The AI cited non-existent news articles from outlets such as Newsweek, The New York Post, Rolling Stone, Mediaite, The Daily Beast, and Salon, along with fake URLs and headlines (e.g., “Robby Starbuck Responds to Murder Accusations”). Starbuck demonstrated this in a podcast episode on October 22–23, 2025, where he queried the AI live.

The Google spokesman attributed the issues to its AI “hallucinating” — which tells you that the recursive feedback of garbage content in AI is already well-advanced. Prepare for ever more interesting mischief, while you watch the index of tech stocks go up in smoke.

So as that process runs, and probably before it gets very far, AI looks like it will wreck the financial system, which, in turn, would crater the economy of everyday life — the ability of people to earn a living, buy stuff, support children, get food, . Trillions of dollars are being invested in AI now and lately it is mainly what drives the capital markets. So far, alas, return on that investment is scant — actually, negative. The situation might never improve, and as the recognition hits, look out below. The only question is whether that happens before the central banks destroy the world’s currencies with money-printing.

Astronomical and Unsustainable Costs:

The expenses to build and operate advanced AI are enormous. Training a single frontier model can cost billions, but the real, ongoing cost is inference (running the AI for users). This requires vast fleets of expensive GPUs. Sceptics point out that many top AI companies, like OpenAI and Anthropic, are losing billions of dollars, selling their services at a significant loss just to cover these operational (cloud) costs.

The primary way to make money so far is through subscriptions (like ChatGPT Plus) or API access. The argument is that these revenue streams are nowhere near large enough to justify the trillions in capital expenditure. One financial analysis noted that the AI industry might need over $1 trillion in revenue just to break even on the capital spent in 2024 and 2025, a figure far beyond any realistic projection.

While many companies are experimenting with AI, studies show a failure to translate this into tangible profit. Reports from firms like McKinsey and Gartner have found that the vast majority of companies (as high as 80-95%) are seeing zero tangible return or impact on revenue from their generative AI investments. This suggests the technology is a "solution in search of a problem" rather than a revolutionary profit-driver.

A major red flag for bubble-watchers is the "circular" nature of AI investments. This is where a company (like Microsoft or Amazon) invests billions in an AI startup (like OpenAI or Anthropic), which then uses that same money to buy cloud services from its investor. This creates the illusion of massive revenue growth for the cloud provider and "perceived demand" for the AI startup, but no new, external money is actually being made. This is a classic "vendor financing" tactic seen at the peak of the dot-com bubble.

AI is Causing an Electricity Crisis

The argument here is that AI development has created a sudden, massive, and unprecedented demand for power that our existing grid cannot handle, with the costs being passed directly to consumers.

 AI data centers are "energy hogs," consuming 10 to 50 times more power per square foot than traditional data centers. The US electrical grid, which has seen flat growth for two decades, is now facing projections that AI-driven data centers could consume 10-12% of all U.S. electricity by 2028, up from just 4% in 2023.  This surge in demand is already hitting consumers.

This scramble for power is forcing utilities to delay the retirement of coal plants and build new gas "peaker" plants (which are expensive to run) to meet the demand, further increasing costs and grid instability.

 Stock Market is Overvalued and Headed for a Fall

 The stock market's high value is based almost entirely on the promise of AI profits, but the reality of its costs (both financial and electrical) makes those promises undeliverable. The entire stock market rally has not been broad. It has been driven by a tiny handful of "AI stocks" (like Nvidia, Microsoft, Amazon, and Google). For instance, Nvidia alone was responsible for roughly a quarter of the S&P 500's entire gains in the first half of 2025. This makes the entire market incredibly fragile and dependent on the success of one single theme.

As companies are forced to dramatically raise prices for AI services to try and cover costs, demand will collapse. When investors realize the "trillion-dollar" profits they paid for are not coming, they will sell. Because the entire market is propped up by these few stocks, their collapse will trigger a market-wide crash, just as the "dot-com" stocks did in 2000.

And then there is China.....

After America has spent trillions in investments on "Foundation Models" of LLM's and data  centres all running on rising costs of electricity....in comes China who has the cheapest electricity costs in the industrialized world and undercuts all the pricing of American AI behemoths.

China is not concentrating on AGI (Artificial General Intelligence) but on Artificial Narrow Intelligence as in practical applications in industry, medicine, education, engineering and science.  With tested verified data sets on which to run AI and avoid hallucinations and fake outputs.

And most of it will be free....just to destroy another western industry with low prices and better results.

And when all the rubble of failed trillion dollar investments and collapsing economies start to clear...teh Church of Jesus Christ will still be there to use what is left for advancing the Kingdom agenda.

Occupy the AI space until He comes!

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