What is the 4th phase of "Enshittification"? via Ed Zitron
"Enshittification" 4th phase. Context = Lifecycle of Digital Platforms.
PS:
Die ersten 3 Phasen wurden von Cory Doctorow im 2022 erfunden.
"It explains why services like Google, Amazon, and Facebook, which once seemed miraculous and customer-centric, now feel cluttered, expensive, and frustrating."
Good to Business Customers (advertisers, marketplace sellers, or publishers)
đź’ˇ4. Good To Executives + Insiders
they are cannibalizing shareholders themselves via financial engineering and hype cycles.
the 4th phase is about manufacturing value through financial smoke and mirrors
via Ed Zitron https://www.wheresyoured.at/the-enshittifinancial-crisis/
The "Chain of Pain" (The 4th Stage Collapse)
Zitron argues that this cycle is a "subprime AI crisis" because the underlying assets (GPUs and LLMs) don't currently generate enough "real-world" revenue to pay back the $100B+ in debt being amassed.
Stage 4 Enshittification: Management teams are now "cannibalizing shareholders" by spending billions on this loop to keep stock prices high, even if the AI products themselves are losing money.
The "Off-Balance Sheet" Trick: Much like Enron, companies are using complex financial structures to hide how much they are actually spending on AI, making the business look healthier to investors than it actually is.
The "Circular" Revenue: When Microsoft "invests" in OpenAI, and OpenAI spends that money on Microsoft Azure, it looks like Microsoft's "AI Revenue" is growing. In reality, Microsoft is essentially paying itself to create the appearance of growth.
If you are an investor or a user, Zitron’s chart suggests that the AI Hype Cycle is currently a closed loop. The moment a major link (like a "Shadow Bank" or a Hyperscaler's quarterly growth) falters, the "Chain of Pain" snaps, potentially leading to a massive market correction.