Better Offline - I'm Mad As Hell, And I'm Not Gonna Take It Anymore

Episode Date: May 2, 2025

In this episode, Ed Zitron walks you through all the signs that the bubble is bursting, and how hysterical boosters continue to desperately keep it from doing so. YOU CAN NOW BUY BETTER OFFLINE MERCH! Go to https://cottonbureau.com/people/better-offline and use code FREE99 for free shipping on orders of $99 or more.You can also order a limited-edition Better Offline hat until 5/22/25! https://cottonbureau.com/p/CAGDW8/hat/better-offline-hat#/28510205/hat-unisex-dad-hat-black-100percent-cotton-adjustable --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/  Discord: chat.wheresyoured.at Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/edzitron.com https://www.threads.net/@edzitronSee omnystudio.com/listener for privacy information.

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Where does your group perform? We do some retirement homes. Those people are starving for banter. Listen to humor me with Robert Smigel and friends on the Iheart radio app, Apple Podcasts, or wherever you get your podcasts. The story I've told myself can then shape my behavior, and that can lead me to sabotage the possibility of connection.

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Listen to Help from a Hypocrite Wednesdays on the Iheart radio app, Apple Podcasts, or wherever you get your podcasts. Also, media. I'm mad as hell, and I'm not going to take it anymore. It's awesome.

Welcome to Bearer Offline. I'm your host Ed Zittron. Now, this is the second part of a two-part series about how OpenAI's stupid bloody growth myth has conned the entire media ecosystem, forcing people who really should know better to repeat absolutely insane things as though they're actually perfectly reasonable. Now, if you haven't already listened to the last episode and come back, just go. Just go. I don't, I'll need you to listen to it. Otherwise, let's talk about why this bubble actually inflated. And I realized I did a monologue about this, but it's so, obvious that I needed to do a longer episode. But let's start simple. The term artificial intelligence is bastardized to the point it effectively means nothing and everything at the same time. When people hear AI, they think of an autonomous intelligence that can do things for them, and generally if AI can do things for you, like generate an image or a text from a simple prompt. As a result,

it's easy to manipulate people who don't know much about tech or even try it in the first place into believing that this will naturally progress from It can create a bunch of texts for me that I have to write for my job just by me typing in a prompt to it can do my job for me just by typing in a prompt. Basically everything you've read about the future of AI extrapolates generative AI's ability to sort of generate something a human would make and turns into a it can do whatever a human can do

or because some tech in the past has sometimes been bad at the beginning and linearly improved as time drags on. This illogical thinking underpins that. the entire Generative AI boom because we found out exactly how many people do not know what the fuck they're talking about and are willing to believe the last semi-intelligent person that they talked to. Generative AI is kind of a remarkable car, a just good enough version of human expression to get it past the gatekeepers in finance and the media, knowing that neither will apply a second gear of critical thinking beyond, I guess we're doing AI now. The expectation that

generative AI will transform into this much more powerful version requires you to first ignore its existing limitations, believing it to be more capable than it is, and also ignore the fact that these models have yet to show meaningful improvement over the past few years, unless you're looking at course of the benchmarks that they are built specifically to pass. They still hallucinate. They're still ungodly expensive to run. They're still unreliable, and they still don't really do that much. We're still, chat GPT's growth has galvanized these people into believing that this is a legitimate, meaningful movement, rather than the most successful public relation campaign of all time. Think of it like this. And some of you really don't like this argument. Something couldn't be this

big just because of the media. It really could. If almost every single media outlet talked about one thing, this thing being generic of AI, and that one thing was available from one company, Open AI, wouldn't it look exactly how things look today? You've got Open AI with hundreds of millions of monthly active users and then a bunch of other companies, including big tech firms with multi-trillion dollar market caps, with somewhere between 10 and 69 million monthly active users, and I don't count Gemini because they're cheating. You can't slap it on Google Assistant. That's unfair.

What we're seeing here is one company taking most of the users and money available and doing so because the media fucking helped them. People aren't amazed by ChatGPT. They're curious. They're curious about why the media won't shut up about it. And we have to realize and recognize and accept that part of the reason this bubble was inflated was the failure of Google search.

Everyone I talk to that uses ChatGPT regularly uses it as either a way to generate shitty limericks or as a replacement for Google search, a product that Google has deliberately made worse as a means of increasing profits. Listen to our award-winning episode, The Man That Destroyed Google Search. I'm going to say that forever. And by the way, that's absolutely what you should listen to. It's Webby award-winning, the best business episode. We won it, folks.

Anyway, I hate to say this. I really don't like saying this. I don't like to give it to them. But chat GPT, if I'm honest, is better at processing search strings than Google Search, which is not so much a sign that chat GPT is good at something as it is that Google has stopped innovating in any meaningful way. Over time, Google Search should have become something that was able to interpret searches into kind of like a perfect result,

which would require the company to improve how it processes your requests. It should be how Google used to feel, magical. Instead, Google Search has become dramatically worse, mostly because the company's incentives changed from help people find something on the web to funnel as much traffic and show as many ad impressions as possible on Google.com. It does little annoying things like ignoring random words in the search string, even though those words were there for a reason. And Google doesn't know better than you what you want. Ideally, though, they should when it comes to a search product.

That's ideally what you get someone to search something for you. You want them to bring back the best thing. And by this point, Google search should have been far more magical, more capable of taking a dimwitted question and turning it into a great answer with said answer being a result from the internet, right? Note that nothing I'm saying here is actually about generating a result. It's about processing a user's query and presenting an answer, the very foundation of computing and the thing that Google at one point was the best in the world at doing. Thanks to Propagore Raghavan, the former head of ads that led a coup to become the head of search, Google has pulled away from being the meaningful source of information on the internet.

It really is actually quite sad when you think about it. And I'd argue that ChatGPT filled the void left by Google Search by doing the thing that people wanted Google Search to do. Answer a question, even if the user isn't really sure how to ask it. Google Search has become clunky and messy, putting the burden of using the service on the user rather than helping fill the gap between a query and an answer in any meaningful way. Google's AI summaries don't even try to do what ChatGPT does.

They just generate summaries based on search results and say, uh, mate, is this what you want? I don't fucking know. I only mate, I only make like $10 billion a quarter. Give me a fucking break. But one note on Google's AI, summaries, they're designed to answer a question rather than provide a right answer. There's a distinction that needs to be made here because it speaks to the underlying utility of search

itself. One good illustration came earlier this week when someone noticed that you could ask Google to explain the meaning of a completely made-up phrase, and it would dutifully obey you. Two dry frogs in a situation, Google said, referred to a group of people in an awkward or difficult social situation. Not every insect has a mortgage, Google claimed, is a humorous way of explaining that not everything is as it seems. But my favorite is... Sorry, I haven't read this back since I wrote a big winky on the skillet bowl. It's apparently a slang term that refers to a piece of bread with an egg in the middle. Very funny, sure, but is it useful? No.

And it's also really cool that this company just makes billions of dollars off of this. With all its data and all its talent, Google has put out the laziest version of an LLM. On top of its questionably functional search product as a means of impressing shareholders, and I'd like to say the results speak for themselves. Now, I must be clear none of this is to say that chat GPT is good. Like, it really isn't. It's just better at understanding a user's request than Google search. Yes, I fundamentally believe, by the way, that 500 million people a week could be using chat GPT as some sort of search replacement.

And no, no, I do not believe that's a functional business model, in part because if it was chat GPT, open AI, they'd have a functional business. And to be clear, that's a load bearing kit. because I know that 500 million people aren't using chat GPT as a search replacement. It's hypothetical. We actually don't know, and we cannot trust what comes out of them, not that they share. It's not just that OpenAI is a shambles of a company. It appears that Google's ability to turn search into such a big business was because it held a monopoly on search, search advertising, and pretty much the entire online ads industry.

And if it was a truly competitive market and Google wasn't allowed to be vertically integrated with the entire digital advertising apparatus of the web, it would likely be making more much less revenue per user. And that's bad if your Google replacement costs many, many, many, many more times more money than Google to run. As an aside, by the way, if you're wondering, no, Open AI cannot just create a Google search competitor. Search GPT will be a significantly more expensive product to run at Google's scale than chat GPT, both infrastructurally and the cost of revenue itself, with Open AI being forced to create this massive advertising arm that does not exist. And by the way, another great critique I get is like, Open AI can just

hire a bunch of ads people? Why do you think there hasn't been another competitor to search? You realize that there are lots of other companies with lots of other money that could just do this, and indeed they've tried. Why do you think that hasn't worked? Is it because of the monopoly? It's because of the monopoly. Look, people love the chat GPD interface. It's the box where you can type in one thing, get another thing out, because it resembles how everybody has always wanted Google search to work. Does it work well? Who knows? But people feel like they're getting more out of him. Another podcast from some SNL late night comedy

guide, not quite. Unhumor me with Robert Smygel and friends. Me and hilarious guests from Jim Gaffigan to Bob Odenkirk to David Letterman help make you funnier. This week, my guest, SNL's Mikey Day and head writer Streeter Seidel help an a cappella band with their

between songs banter. There's the worst singer in the group. The worst? Yeah. Me. Is there anything to the idea that because you're from Harvard, uh, you only got in the Because your parents made a huge donation. The group. The yard birds, right?

That's the name. The Harvard Yardt Yardt. They're open. Do you have a name suggestion? We're open. Since you guys are middle aged. One erection. Listen to humor me with Robert Smigel and Friends on the I-Heart Radio app,

Apple Podcasts, or wherever you get your podcast. Humor me. I need some jokes to make me seem funny. Run a business and not thinking about podcasting, think again. More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora. And as the number one podcaster, IHearts twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only IHeart can extend your message to audiences across broadcast radio.

Think podcasting can help your business. Think IHart. Streaming, radio, and podcasting. Call 844-E-Hart to get started. That's 844-844-IHart. I heart. What would you eat if you had to start over? Real simple, poor man's, poor woman's food.

Black beans, chicken, rice, plantains. Yeah. That's poor people's food, man. But being Nigerian, that's, come on, a go-to. On the podcast eating while broke, I sit down with celebrities, entrepreneurs, and creators as they revisit the meals they once relied on in the moments that shaped their journey, named Best Food Podcast at the 2006 I-Heart Podcasts.

Awards. This show is all about real conversations on money, growth, and what it really takes to make it. It was times where me and Lexa definitely get into it, because we're not making any money. Like, I need to start making money. Like, why are we doing this? But I don't know. I think we just always knew that we had something really good. And eventually people were going to catch on. And so we just thugged it out. The full season is available to binge. Right now. Listen to Eating While Broke from the Black Effect Podcast Network on the IHeart Radio app Apple Podcasts or wherever you get your podcast. It's your responsibility to not just seek help, but to identify that you need help.

This is Mental Health Awareness Month. Tune in to the podcast, Just Healed with Dr. Jay, and take real steps toward healing, growth, and becoming your best self. When you hear the word healing, what does that mean for you? What came right back to mine are the three P's that I live by, I'll go through the process of healing so that patience, that perseverance and that prayer, equals healing to me. From understanding your mental health to doing the work,

we break down practical tools, real conversations, and the mindset shifts you need to move forward and thrive. You matter too. Your mental health is your responsibility, not your wife, not your partner, not your children, not the church, not the pastor, not the council. It's your responsibility. It's time to stop putting your healing on hold

and start doing something about it. Listen to Just Here with Dr. Jade on the iHeart radio app, podcast or wherever you get your podcast. But before I go any further, I'd like to talk to you about AGI, artificial general intelligence. Artificial bloody general intelligence, the conscious computer that does not exist and is entirely fictional. And this two-part of the way has been a break from my usual onerous, tortured, punished, and analysis. And it's because I needed to have a little fun. I think you've kind of heard that in the episode. I'm like a little flexible. I'm all like limber and excited. And it also comes from a place of frustration. None of this AI stuff has ever

felt substantive or real because the actual things that you can do with generative AI never seem to come closer to the things that people like Sam Altman and Wario Amaday seem to be promising, nor do they come close to the bullshit like people Casey Newton and Kevin Roos are peddling. None of this ever resembled artificial general intelligence. And if I'm honest, very little of it seems to even suggest it's a functional industry. And when cynical plants like Kevin Roos of the Times bumble around asking theoretical questions such as, do you think that there's a 50% chance or higher, that AGI defined us an AI system that outperforms human experts

at virtually all cognitive tasks will be built before 2030? I think when we're reading people saying that, and that was Kevin Ruse at like some little AI panel thing surrounded but just like venture capitalists and the senior officials of Anthropic, when you've got like the lead columnist of the Times saying this, we should all be terrified, we should be terrified, but not of AGI,

but that the lead tech colonists at the New York Times appears to have an undiagnosed concussion. Rousse's logic, as with Casey Newton's, is based on the idea that he's talked to a bunch of people that say, yeah, yeah, mate, AGI is right around the corner, rather than any kind of like tangible proof or evidence, just line going up. Do you see it, the line's going up?

Which line is it? Get out of my house. Look, I will say, I've been a little mean on Kevin Ruse. I've been saying that he's written the worst shit about artificial intelligence, that he is a credulous buffoon or at worse, a cynical plan, that Kevin Ruse at the New York Times is regularly pushing things like NFTs and crypto, and getting basic things wrong, like the helium piece in which helium lied about their customers.

I've said that Kevin Ruse regularly says things that don't make any sense, and he has indeed written the worst tech criticism out there, criticism being the wrong word, tech analysis out there. and I want to just say that I've been wrong. I've been wrong the entire time. What I should have said is that he's written the worst stuff yet. And I should have said that because he's recently published

one of the dumbest fucking things I've read in my life and I can't wait to tell you about it. His most egregious example of credulousness came in late April when he published this thinly veiled puff piece about what to do if AI models become conscious in the future. Now this piece,

this piece is possibly the dumbest tech piece I've read in my life. I really mean this. I've read some dog shit. I've gone on telegram groups for the smallest ICOs you've seen in your life. I'm doing the Rucker Howard speech from a Blade Runner right now. The things I've seen with your eyes, different speech, I realize this piece from the New York Times is called if AI systems become conscious, should they have rights?

And the subhead is, as artificial intelligence systems become smarter, one AI company is trying to figure out what to do if they become conscious. I'm going to give you exactly one guess what company he's talking about. And here's a clue. It's the company Casey Newton's boyfriend works out. That's right, is Anthropic. Kevin Ruse interviewed two people, both employed by Anthropic, with one holding the genuinely hilarious job description of AI welfare researcher,

who said nakedly insane things like there's only a small chance, maybe 15% or so, that Claude or another AI system is conscious. And it seems that if you find yourself in a situation of bringing some new class of being into existence, dot, dot, dot, dot, then it seems quite prudent to at least be asking, questions about whether that system might have its own kinds of experiences. Well, I'm experiencing brain damage reading this article out. And what makes this article so appalling is that Ruse acknowledges that this shit is seen by most level-headed people as utterly fantastical. He describes the concept of AI consciousness as a taboo subject and that many critics will see this as crazy talk,

but doesn't bother to speak to any actual critics. He does, however, speculate on the motives of said critics, saying that they might object to an AI company's studying consciousness in the first place, because it might create incentives to train their systems to act more sentient than they actually are. Yeah, Kevin, wouldn't it be really bad if a generative AI company deliberately did something to convince someone that their systems were sentient? You know, someone really credulous who would accept whatever narrative said AI company was pushing, such as that they created a special job just in case AI was sentient. Genuine question, Kevin. When you walk past the mirror, do you start barking at it because you see another guy?

Anyway, nothing about anything that OpenAI or Anthropic is building or shipping suggests that we are anywhere near any kind of autonomous computing. They've used the concept of AI safety and now AI welfare as a marketing term to convince people that they're expensive, wasteful software will somehow become conscious because they're having discussions about what to do if it does so. And anyone, literally any report are accepting this at face value is doing their readers a disservice and embarrassing themselves in the process. If AI safety advocates cared about, I don't know, safety or AI, they'd have cared about the environmental impact, or the fact that these models train using stolen material, or the fact that these models don't really deliver on their promises. And if they did, it would shock the labor market. And it would hurt millions, if not billions of people. And we don't have anywhere near the social safety network to support the ones we have right now, let alone in this completely fictional future. These companies do not care about your safety, and they don't have any way to get to AGI. They're full of shoo. And it's time to stop being honest that you don't have any proof that they do anything that they say they will. Also, by the way, I think the bubble might actually be bursting. Yeah, remember in August of last year, I was talking about the pale horses of the AI apocalypse?

Well, one of the major warning signs that the bubble was bursting was big tech firms would be reducing their capital expenditures. And this is a call I've made quite a few times. And there was one in alarming clarity from April 4th, 2024. And I'm going to quote myself here. Well, I hope I'm... Nope, that's the wrong voice. While I hope I'm wrong, the calamity I fear is one where the massive overinvestment in data centers is met with a lack of meaningful growth or profit, leading to the markets turning on the major cloud players that stake their future on unproven generative AI.

If businesses don't adopt AI at scale, not experimentally, but at the core of their operations, the revenue is simply not there to sustain the hype, and once the market turns, it will turn hard, demanding efficiency and cutbacks that will lead to tens of thousands of job cuts. Well, we're about to find out if I'm right. On April 21st, Yahoo Finance report that analyst Josh Beck said that Amazon's generative AI revenue for Amazon Web Services would be $5 billion. $5 billion this year. A remarkably small sum that is not profit, by the way. And also a drop in the bucket compared to Amazon's projected $105 billion in capital expenditures in 2025.

It's $78.2 billion in expenditures in 2024, or it's $48.4 billion in 2023. And is that really fucking it? Are you fucking kidding me? Are you fucking kidding me? I have had Jack holes for years telling me this was the next big money driver. $5 billion? Five billion goddamn dog. Are you fucking kidding?

You'd make more money auctioning dogs. This is a disgrace. And if you're wondering, yes, all of this is for AI. All of that CAPEX. From the Yahoo finance article, The Wonderful Laura Bratton, wrote, well, this is a quote, by the way, from the article. CEO Andy Jassy said in February that the vast majority of it's, this year's $100 billion in capital investments from the tech giant,

or go towards building out artificial intelligence capacity for its cloud segment Amazon Web Services, AWS. Well, shit, I bet investors are going to love this. Better save some money, Andy. What's that? What's that, Andy? What? What? Oh, you're saving money already. How? Oh, shit. Oh. Uh-oh. A report from Wells Fargo analysts published at the end of April called Data Centers, AWS goes on pause, says that Amazon has paused the portion of its leasing discussions on the co-location side. And while it's not clear the magnitude of the pause, the positioning is similar to what analysts have heard recently from Microsoft, that they are digesting aggressive recent lease-up deals pulling back from a pipeline of LOIs or SQs. Now, some asshole is going to say LOWIs and SQs aren't a big deal, but they are.

They are. Go listen to the Power Cut episodes. Go listen. Go back and listen to them right now. Get off my... How'd you get in my house? Anyway, digesting in this case refers to when hyperscalers sit with the current capacity for a minute. And Wells Fargo adds that these periods typically lost... 16 to 12 months, though they can be much shorter. It's not obvious how much capacity Amazon is walking away from, but they're walking away from capacity. It's happening. Another podcast from some SNL, late-night comedy guide, not quite. Unhumor me with Robert Smygel and friends,

me and hilarious guests from Jim Gaffigan to Bob Odenkirk, to David Letterman, help make you funnier. This week, my guest, SNL's Mikey Day and headwriter, Streeter Seidel, help an Acapella band with their between songs banter. There's the worst singer in the group. The worst? Yeah. Me.

Is there anything to the idea that because you're from Harvard, you only got in because your parents made a huge donation. The group. The yard birds, right? That's the name. The Harvard yard, but they're open to change. Do you have a name suggestion? We're open.

Since you guys are middle aged. One erection. Listen to humor me with Robert Smigel and Friends on the I-Heart Radio app, Apple Podcasts, or wherever. you get your podcast. Humor me. I need some jokes to make me seem funny. Run a business and not thinking about podcasting, think again.

More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora. And as the number one podcaster, IHearts twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only IHeart can extend your message to audiences across broadcast radio. Think podcasting can help your business. Think IHeart, streaming, radio, and podcasting. Let us show you at iHeartadvertising.com. That's iHeartadvertising.com.

What would you eat if you had to start over? Real simple, poor man's, poor woman's food. Black beans, chicken, rice, plantains. That's all. That's poor people's food, man. But being Nigerian, that's, come on, a go-to. On the podcast eating while broke, I sit down with celebrities, entrepreneurs, and creators as they revisit.

the meals they once relied on and the moments that shaped their journey. Named Best Food Podcasts at the 2006 IHeart Podcast Awards. This show is all about real conversations on money, growth, and what it really takes to make it. It was times where me and Lex were like definitely getting into it because we're not making any money. Like I need to start making money. Like why are we doing this? But I don't know.

I think we just always knew that we had something really good and eventually people were going to catch on. And so we just thugged it out. The full season is available to binge right now. Listen to Eating While Broke from the Black Effect Podcast Network on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. It's your responsibility to not just seek help, but to identify that you need help. This is Mental Health Awareness Month. Tune in to the podcast, Just Healed with Dr. Jay, and take real steps toward healing, growth, and becoming your best self.

When you hear the word healing, what does that mean for you? What came right back to mine are the three P's that I live by. I'll go through the process of healing so that patience, that perseverance, and that prayer equals healing to me. From understanding your mental health to doing the work, we break down practical tools, real conversations, and the mindset shifts you need to move forward and thrive. You matter too. Your mental health is your responsibility, not your wife, not your partner, not your children,

not the church, not the pastor, not the council. Is your responsibility? It's time to stop putting your healing on hold and start doing something about it. Listen to Just Here With Dr. Jay on the iHeart Radio app, Apple Podcasts, or wherever you get your podcast. But what if it wasn't just Amazon?

Another report from a friend of the podcast read people I email occasionally asking for a PDF. Of course, referring to analyst TD Coe and put out a report last week that while titled in a way that suggested there wasn't a pullback at all, actually said that there was. It was called like hyperscalated demand is up. Let's take a look at one damning quote.

Relative to the hyperscaler demand backtrough at PCC, which is a conference, hyperscaler demand has moderated a bit, driven by the Microsoft pullback and to a lesser extent Amazon discussed later, particularly in Europe, there has been a broader moderation in the urgency and speed with which the hypers are looking to take down capacity, and the number of large deals,

i.e. 400 megawatt deals in the market appears to have moderated. In plain English, this means demand has come down. There's less urgency to build stuff, and the market is also slowing down. Cohen also added that he observed a moderation in the exuberance around the outlook for hyperscale at demand, which characterized the market this time last year. Brother, my brother in Christ, isn't this meant to be the next big thing? We need more exuberance, not less.

Worse still, a Microsoft appears to have pulled back even further with T.D. Cohen noting that there has been a slow down in demand, and that it saw very little third-party leasing from Microsoft this quarter, and most damningly in our boat, and I really want you to like take this, let it ring through you. These deals in totality suggest that Microsoft's run rate demand has decelerated materially. For those of you wondering, it means that they're not getting any fucking revenue demand for generative AI. Well, at least matter and Oracle aren't slowing down, right? Well, T.D. Cohen also reported that it received reverse inquiries from industry participants around a potential slowdown and demand from Oracle leading to the analyst to ask around and find that there had been a near-together. term slowdown in decision-making emit organizational changes at Oracle, that it adds that this

might not mean this is changing its needs or the speed at which it secures capacity. And if you're wondering what else this could mean, you were correct in doing so, because slowing down traditionally refers to a change in speed. Yeah. Even the analysts are kind of like trying to dance around this. It's kind of sad. T.D. Cohen also adds that meta has continued demand, which means that they're buying more stuff, albeit with less volume of megawok signings quarter over quarter, then adding that

Meta's data center activity is historically being characterized by short periods of strong activity followed by digestion. In essence, Meta is signing less megawatts of compute and has in the past followed these kind of aggressive buildouts with fewer buildouts. It doesn't sound good, does it? It doesn't sound like we're cooking. And now we're going to get to, and the whole thing's been kind of defensive. I don't care. I mean, I've yet to receive an email that meaningfully changes my opinion on any of this stuff, but a little bit of defensiveness in this. It's not because I feel self-conscious, it's because I'm tired of hearing the same fucking questions. But I'll ask you if you're a critic or a hater, or one of the many people who would like to see be punished, put me on the cross,

set me on fire. It's what you would love, wouldn't it? But you'd love it if I was dead. Putting that joke aside, I will ask my haters a question. If I'm wrong, how exactly am I wrong? I don't know, man. All this seems, all this stuff sure seems like the hyperscalers are reducing the capital expenditures at a time when tariffs and economic uncertainty are making investors far more critical of revenues. It sure seems that nobody outside of Open AI is making any real revenue on Generative AI, and they're certainly not making a profit. It also seems at this point it's pretty obvious that Generative AI isn't going to do much more than it does today. If Amazon is only making $5 billion in revenue from the literally only shiny new thing it has

sold on the world's premier cloud platform at a time when businesses are hungry and desperate to integrate AI, then there's little chance this suddenly turns into a remarkable revenue driver. Amazon made $187.79 billion in their last quarterly earnings, and if only $5 billion of that is coming from AI at the height of the bubble, it heavily suggests that there may not actually be that much money to make, either because it's too expensive to run these services, or because, well, these services don't have the kind of addressable market that AWS generally has. Microsoft has reported that it was making a paltry $13 billion a year in annualized revenue, so the equivalent of $3.25 billion a quarter, selling generative AI services and model access.

The information reported that Salesforce's agent force bullshit isn't even going to boost sales growth in 2025, in part because it's pitching it as a digital labor that can essentially replace humans for tasks, and it turns out that it doesn't do that very well at all, cost $2 a conversation, and requires paying Salesforce to use its data cloud product. What, if anything, suggest that I'm wrong here? The things have worked out in the past with things like the internet and smartphones and that surely that's going to happen with Generative AI and by extension OpenAI, that companies like Uber lost money and eventually worked out.

And I've actually written a thing I'll link to about that. You can get it in the episode notes. Is it that Open AI is growing fast and that somehow discounts the fact that it burns billions of dollars and does not appear to have any path to profitability? Do you think that agents will suddenly start working and everything will be fine? It's a fucking joke. I'm tired of it. I'm really, I'm just...

I've tried to be like intellectual, I've tried to explain it nicely, and I'll probably still continue, but I'm just kind of fucking tired of it. I'm not going to stop doing this, by the way. If anything, I'm more galvanized by my rage. My aura ring is going to claim I did a workout these episodes. It's great. I'm burning calories in real time. But large language models and their associate,

businesses, in my opinion, are a $50 billion industry masquerading as a trillion dollar solution for a tech industry that's lost the fucking plot. Silicon Valley is dominated by management consultants that no longer know what innovation looks like, and they've been tricked by Sam Altman, who's kind of a savvy con artist that took advantage of their desperation for growth. Generative AI is the perfect nihilistic form of tech bubbles, a way for people to spend a lot of money on power on cloud compute because they don't have anything else to do. Large language models are boring, unprofitable cloud, software stretched to the limits, both ethically and technologically speaking, as a means of kind of keeping techs collapsing growth era going. An open AI's non-profit mission has been

fatted up to make foie gras for SaaS companies to upsell their clients and cloud compute companies to sell GPUs at an hourly rate. The rot economy has consumed the tech industry. Every American tech firm has been corrupted by the growth at all-cost mindset, and thus they no longer know how to make sustainable businesses that solve real problems, largely because the people that run the them haven't experienced them for decades. As a result, none of them were ready for when Sam Altman tricked them into believing he was their savior. Generative AI isn't about helping you or me to do things or even about replacing workers. It's about making new SKUs, new monthly subscription costs for consumers and enterprises, new ways to convince people to pay more for the

things they already have, used in slightly different ways that oftentimes end up being worse. Only an industry out of options would choose this bubble, and the punishment for them doing so will be grim. I don't know if you think I'm right or not. I don't know if you think I'm insane for the way I communicate about this industry. Even if you think I am, think long and hard about why it is you disagree with me and the consequences of me being wrong or right. There's nothing else left after generative AI. There are no hypergrowth markets left in tech. SaaS companies are out of things to upsell. Google, Microsoft, Amazon, and Meta do not have any other ways to continue showing growth. And when the market works that out, there will be hell to pay.

Hell that will reverberate through the valuations of, at the very least, every public software company, and many of the hardware wants to. I have no idea how this ends, and I can't see how any of it works out well for anyone. In any case, I'll be here to tell you whether it does or not, and I must say, I love doing the show so much, and thank you for humoring me when I experience brain madness every week. I'm not going to stop. I really enjoyed doing this, and the emails I got around the webby were, genuinely wonderful. The people on the Reddit, people over email messages, just, you're all so wonderful. I'm going to keep doing this. I mean, I'm contractually agreed to as well, but I love doing this and I genuinely feel very lucky to be able to. Thank you for listening to Better Offline.

The editor and composer of the Better Offline theme song is Matt Rosowski. You can check out more of his music and audio projects at Mattisowski.com. M-A-T-T-O-S-K-I.com. You can email me at easy at betteroffline.com or visit betteroffline.com to find more podcast links and of course my newsletter. I also really recommend you go to chat. Where's Your Ed?com to visit the discord and go to our slash Better Offline to check out our Reddit. Thank you so much for listening. Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedia.com or check us out on the IHeartRadio app, Apple Podcasts, or wherever you get your podcast.

Another podcast from some SNL late-night comedy guy, not quite. Unhumor me with Robert Smygel and Friends. Me and hilarious guests from Bob Odenkirk to David Letterman help make you funnier. This week, my guest, SNL's Mikey Day and head writer, Streeter Seidel, help an a cappella band with their between songs banter. Where does your group perform? We do some retirement homes. Those people are starving for banter.

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