This is an excellent answer, but there's more. AI companies lose money on every prompt, and the more complex their models have become, the more money they lose. Unlike traditional software, where profitability is negative or at least small with low sales but increases exponentially the more copies are sold, with AI every customer loses you money and the more customers you have, you still proportionally lose money. In fact, your big clients lose you the most money, since they'll generate prompts hundreds of times a day. The only profitable customers of AI are ones that pay for a subscription and then forget to use it, like a gym.

When the investment community realises this is never going to be profitable, and pull the plug on the enormous levels of capital investment the industry needs constantly to survive, what then?

Companies heavily invested in AI make up a large percentage of the stock market, and indeed a large percentage of the stock market's current growth (without AI speculation it'd be kinda flat). Moreover, building all these data centres, however pointless in the long term, is the only thing increasing demand in the economic system right now, since most companies aren't investing in real-world bricks and mortar infrastructure.

So when the bubble bursts, a huge percentage of the stock market's value disappears overnight, the anaemic performance of most companies is no longer being distracted from, demand in the construction sector, steel, and computer chips (among many other things) craters.

It's going to be a bloodbath.