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**SEPTEMBER 5, 2025**

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Last month, OpenAI debuted its latest flagship AI model, GPT-5, the startup’s self-proclaimed “whale” of a model. Hyped by CEO Sam Altman for years as something close to artificial general intelligence (AGI), the release of GPT-5 was a dud, panned by the tech industry and users alike. The ripple effect of GPT-5’s flop touches more than the venture capital industry, which has plowed more than $350 billion into AI startups: Big Tech companies have poured close to a trillion dollars into AI data centers to support the AGI build-out, and Wall Street has pumped the valuations of Nvidia, Tesla, and the Big Tech companies to valuations and growth not seen since the dot-com bubble on the promise of AGI. At a time when the water seems to be rushing out of the economy everywhere else, with rising inflation, weakening labor markets, and a frozen housing market, the question facing not just the AI industry but the US economy is [link removed]: When the AGI bubble pops, can the contagion be contained this time?

**–Bryan McMahon, freelance journalist and policy analyst**

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What If There’s No AGI? [link removed]

Last month, the tech world turned with rapt attention to one man, OpenAI CEO Sam Altman, for the launch of the company’s new AI model, GPT-5. The atmosphere resembled the scientists waiting to see the first atomic bomb test at Los Alamos. GPT-5 was supposed to be another great leap forward toward the promised godlike telos of artificial general intelligence (AGI), a machine smarter than any human and possibly smarter than the sum of human civilization itself.

But the release of GPT-5 was a dud. Despite being relentlessly hyped for years, the most significant part of the announcement was the release of a model router that dynamically selects the correct “level” of computation power spent toward answering questions. OpenAI pitched the router as a tool for faster, cheaper answers for simple queries. But as writer Ed Zitron detailed [link removed] on his Substack, this adds little value for the customer, while limiting most access to the best models, thereby lowering OpenAI’s cloud bill. To paraphrase Peter Thiel, we wanted AGI and all we got was a model router.

The AGI dream was pushed heavily by Altman, who wrote [link removed] in one blog post in early 2025 that “we know how to build AGI as we have traditionally understood it,” and in another [link removed] that the Singularity, a moment of apocalyptic transformation in which superintelligent machines would surpass humans, had already started, albeit in a “gentle” way. Yet online observers dubbed GPT-5’s release “Gary Marcus Day,” in honor of Dr. Gary Marcus, an eminent AI scientist who has been writing about the structural limitations and fallibility of AGI since his 2001 book **The Algebraic Mind** [link removed].

Weeks after the release, Altman said [link removed] that the GPT-5 rollout was poorly done and that many users were initially disappointed. He assured us the next model, GPT-6, would

**really** be the one. He plans [link removed] to spend trillions on data centers and warned that “overexcited” investors—but definitely not him—risked inflating an AI bubble, likening the current situation to the dot-com crash.

If the AGI dream is over or even delayed, the investor nightmare is just beginning. The fallout from AGI hucksters like Altman won’t just devastate Silicon Valley and the tech sector. The U.S. economy is dangerously dependent on Big Tech and has priced its investments on the promise of AGI. What happens, not just to the Valley but to the global economy, if there is no AGI coming?

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