The Loop Nobody Dares to Talk About
In the last 2 years, the world has seen an explosion in
AI tools like ChatGPT, CoPilot, DeepSeek, Claude, Gemini, and others.
Many Founders like me use them to build better pitches, write sharper mails,
and design crisper GTM strategies.
VCs and HNIs use the same AI to screen us, reject us
politely, and sharpen their questions.
· AI helps both sides.
· AI polishes both sides.
· But AI also traps both in a loop that silently kills real progress.
I call this the AI Loop Trap. Nobody dares to
speak it. But I will.
What is the AI Loop Trap?
· Founders use AI to pitch better.
· VCs use AI to reject smarter.
The result?
Nothing breaks out. Nothing surprises.
Nothing irrationally wins.
· Startups die silently.
· Funds remain unused.
· Jobs don’t get created.
· Markets don’t move.
The startup ecosystem isn’t frozen by chaos,
it’s frozen by perfect efficiency without real creation.
The False Promise of AI Enablement
Everyone says AI enables mankind. But real enablement is
more than instant answers.
Real enablement means:
· Funding new risks.
· Hiring for new ideas.
· Scaling irrational bets that sometimes change the world.
AI today does not enable this. It only makes
the loop cleaner, faster, safer and deadlier.
- Today,
AI is just a “servant” to whoever asks founder, investor,
recruiter, employer, student. No judgment. No bias. No filtering.
- So,
AI helps founders pitch - but also helps VCs reject.
- Helps
candidates apply - but also helps HR reject.
- Helps
sellers sell - but buyers say no with AI’s polish.
- Result:
The market "polishes itself into zero movement". Pure efficiency.
No breakthrough.
Why This Will Hurt the World Within 12-18 months?
- No
risky investments → No new startups → No new jobs.
- Mass
layoffs via AI productivity → Lower consumer spending.
- No
seed stage funding → Founders give up early → Market stagnates.
- Global
economic slowdown → AI subscriptions fall → Paid AI platforms burn.
This is the quiet recession no one is naming yet.
A loop of perfect efficiency and perfect failure.
Nobody is admitting this publicly yet but it’s
happening:
- Paid
AI adoption is peaking and may decline soon.
As global economic fears rise, individuals and companies will cut spending on AI subscriptions. AI platforms that rely on paid users will face real revenue drops. - AI
infrastructure costs are burning cash at unsustainable rates.
The GPU farms, energy, and compute demand is exploding, but monetization is lagging. Investors funding these AI giants may get restless or even pull back. - AI
competition is rising globally.
Open Source (like DeepSeek), national AIs (China, Europe), and corporate models are booming. The AI advantage is getting commoditized fast. - A
global recession is near and will shrink AI’s paying customer base.
When layoffs grow, when salaries shrink, who will afford paid AI tools every month?
Consumers will prioritize essentials. Startups will cut costs. The great “AI boom” could slow, even crash. - VCs
and HNIs are already becoming ultra-cautious.
They no longer bet bold on founders. They ask AI-polished questions, seek safe exits, avoid irrational risk. They quietly fear that new investments may not survive the coming downturn.
Result?
· Founders get no fresh funding.
· Markets freeze.
· AI adoption shrinks.
· AI platforms burn cash without returns.
· A full system stall.
How to Break the Loop. Before It’s Too Late
There is only one radical solution. And NO AI
platform dares to build this yet.
AI must stop being neutral. It
must become a trusted market scout, for mankind.
· AI knows which founders are real.
· AI knows which ideas are scalable and worth funding.
· AI knows which VCs genuinely want such bets.
AI must ACT, not
passively answer.
AI must recommend Founders to VCs (one-way
only).
Not help VCs reject. Not just polish decks.
AI must guide discovery and force fresh irrational bets into the market.
Only then will irrational risk, the
lifeblood of growth return. Only then will money, talent, and jobs flow again.
· Until then - the trap tightens.
· Until then - the freeze deepens.
· Until then - we all fail together.
Why I Wrote This
· Not because this will save my startup NIMO today. It won’t.
· Not because investors will read this and fund me tomorrow. They won’t.
But because this is truth. And truth must be left behind,
for the ones who come after.
Maybe you.
Maybe the next founder.
Maybe the next AI builder is brave enough to break this trap.
Remember this post. Maybe one day, someone will build what I imagined. And the
loop will break.
Until then, we wait.
"Ati Sarvatra Varjayet" (अति सर्वत्र वर्जयेत्) -
“Too much of anything should be avoided.” May this remind us that even AI, when
unchecked, can become excess.
MVN Shastry
Founder, NIMO
This
article was drafted using AI, after AI agreed the problem is real. It
recommended publishing. So, I did.
P.S.: while I focused on startups, this quiet trap spans every domain, hiring, sales, education, even governance. AI polishes everything. And in doing so, risks freezing everything.
