Cargo Culture

2026-06-23 · Source: Ed Zitron's Where's Your Ed At · Field: Finance & Economics — Capital Markets & Investment Management, Economic Analysis & Policy · Depth: Intermediate, extended

Summary

Ed Zitron's "Cargo Culture" argues that the modern tech industry, particularly the AI sector, is trapped in a "cargo cult" mentality, driven by a severe lack of original ideas and venture capital's shift from genuine innovation to mimicking past successes. The article highlights the industry's push for "loops" (LLMs prompting LLMs) to increase token burn, with Boris Cherny's team reportedly spending \$130,000 monthly on tokens. Zitron points to products like Snapchat Specs (\$2195 AR glasses) as evidence of a disconnect from user needs. He details the "Rot-Com Bubble," noting a 2% decline in SaaS industry revenue in 2025 and that 70% of startup exits (2022-2024) resulted in losses for investors. OpenAI and Anthropic, having raised nearly \$300 billion, are projected to burn tens of billions in 2026, operating as hyperscaler-equivalents with infrastructure paid by others. Zitron challenges the industry's reliance on symbolic growth and subsidized access, demanding tangible proof of AI's economic viability.

Key takeaway

For investors and executives evaluating AI initiatives, recognize that current industry trends often prioritize symbolic growth over economic fundamentals. Your due diligence should rigorously scrutinize actual costs, revenue models, and tangible utility, rather than accepting projections based on historical analogies or "founder mode" narratives. Demand concrete, present-tense proof of ROI and avoid ventures reliant on perpetual subsidies or unproven future profitability.

Key insights

The tech industry's "cargo cult" approach to AI, driven by a lack of new ideas and VC funding patterns, creates unsustainable, symbolically-driven growth.

Principles

• Mimicking past successes without understanding underlying conditions leads to failure.
• Hyper-monetization and growth-at-all-costs degrade user experience.
• Symbolic capital often overshadows tangible value.

In practice

• Question AI claims lacking present-tense proof or economic viability.
• Scrutinize financial reporting for hidden costs and manipulated metrics.
• Avoid investing based solely on symbolic similarities to past successes.

Topics

• AI Bubble
• Venture Capital
• SaaS Industry
• Cargo Cult Mentality
• Economic Viability
• Tech Innovation

Best for: CTO, VP of Engineering/Data, Director of AI/ML, Investor, Consultant, Executive

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Editorial summary, takeaway, and curation by AIssential. Original article published by Ed Zitron's Where's Your Ed At.