Better Offline - Monologue: AI Can't Afford To Slow Down

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Starting point is 00:00:19 Joy is essential and it's also elusive. But now, there's a new and exciting way to start your journey toward a more joyful existence. Joy 101. It's a new podcast hosted by me, Hoda Kotby. If you're craving inspiration to maximize your joy, tune into these candid, uplifting, and moving on-air chats. Open your free IHeart Radio app. Search Joy 101 and listen now.

Starting point is 00:00:45 Joy 101 with Hoda Kotby is presented by CVS. Hey, this is Chuck from Stuff You Should Know, and we're submitting our most sciencey episodes for your peer review with our new Stuff You Should Know Doing Science Playlist. Out now. You want to know about Occam's razor? Simplest explanation is usually the right one?

Starting point is 00:01:04 We got you covered. Wondered what chaos theory is ever since the first time you saw Jurassic Park. Well, come on down. So distill a nice pot of tea, everybody, turn down the gas on your Bunsen burner, and slip into your most comfortable lab coat and listen to the stuff you should know doing science playlist on the IHeart Radio app,

Starting point is 00:01:20 Apple Podcasts, or wherever you get your podcasts. June is Black Music Month, and on the Drink Chams podcast, we're speaking with the hottest names in the culture, like Sway Lee. Do you realize how legendary you are? I appreciate that. I'd be seeing it, but I'm like, man,

Starting point is 00:01:36 I still got, like, so much more to do. Like, Prince, he dropped, like, 30 albums. We dropped, like, five right now. Like, that's the rate we gotta be going. Yeah, that's a good attitude. No matter the era, Drink Chams brings you the biggest names and the most unfiltered conversations.

Starting point is 00:01:50 Listen to Drink Chams from the Black Effect Podcast Network on the I-Heart Radio app, Apple Podcasts, or wherever you get your podcast. Quarzone Media. Greetings and salutations. I am Ed Zitrom and this is Better Offline and your Better Offline monologue. Better Offline. Been a funny week for me.

Starting point is 00:02:18 Went on Bloomberg did an interview cleanly covering the highlights of my AI bubble thesis. Didn't say fuck shit or bugger even once. A bunch of people loved it and now everybody is for some reason mysteriously talking about the lack of return of investment on AI. That's because everything I said has come true. Back in September 2024, I talked about the subprime AI crisis and said that when companies adopting LLM-based services were forced to pay the actual real cost of tokens, they'd start to freak the fuck out. Now, Clammy, Alclamtha, Clammy Sam Altman himself, has added an unfortunate comment in the mix.

Starting point is 00:02:53 Purpose, this insider, Ormond said at a recent event that R.O.I. had now become a meme, quoting somebody saying, my company spent my entire 2026 budget in Q1, can you make this more efficient? Adding that the company was, I know Open AI in this case, I mean, was exploring other ways to deliver more value for less spend. I love how casual, he says this too, just like, yeah, you know, just people are blowing their entire yearly budgets in a few months, but it's fine. He also said that at the beginning of 2026, the issue with spend never came up, and people

Starting point is 00:03:23 were totally happy with the amount they were spending. But now AI costs were, and I quote, a huge issue. Well, that's probably because Open. AI and Anthropic move their enterprise customers from heavily subsidized monthly subscriptions to token-based billing in Q1, 2026. Hmm. I wonder if it's that. It could be, I guess it could be that.

Starting point is 00:03:44 But put differently, nobody actually paid what AI actually really cost, and now they're having to, and they're screaming like they stepped on a mousetrap like Tom and Jerry. They're freaking the fuck out. Journalists are freaking out, too. Everyone's writing pieces that discuss the debate around the return on investment on AI, as if it's a normal and sane thing. that we're four years in and still debating whether there's ROI debating, whether this is all actually worth it. Did anybody fucking check? No. And I must be clear that these companies cannot

Starting point is 00:04:13 under any circumstances slowed down. Both OpenAI and Anthropic have sold investors on a vision that both of them will make around $200 billion in annual revenue each by the end of the decade. Those data centers are being built under the belief that they, and probably multiple other Anthropic and Open AI-sized companies will, A, exist, and B, have the money, and C, be able to spend that money on compute. And both of them have made a combined $1.1 trillion in compute commitments across Google, Microsoft, Amazon, Oracle, Corweave, Cerebrus, and even fucking SpaceX. Both companies lose billions and billions of dollars. I'd probably say like tens of billions of dollars if I really had to guess. Their only hope is to keep growing to such an astonishing

Starting point is 00:04:58 level that midwit investors in the recently lead poisoned keep feeding them cash under the auspices of some sort of theoretical profitability. The only way to keep that con going is to keep on growing, and it's become very obvious that both companies are bonking their heads against the ceiling of their customer spend. To make matters worse, earlier in the week Sam Orton talked to CNBC's David Faber on the subject. When asked about these spending problems, he said that he assumed that the industry will figure that out pretty quickly. Samuel, Credenza, Methuselah Fomelda Hyde Altman. You just raised $120 billion

Starting point is 00:05:33 fucking dollars. You are the AI industry. You are the one that's meant to work this out. That's your job. You can't be four years into this no IT loads refused cash dump and still shrugging your shoulders like the Kevin James meme and saying, I'm just a little guy.

Starting point is 00:05:48 I can't do everything. I'm a birthday boy. I'm a little birthday boy. Give me $100 billion because it's my birthday. You cannot do that, Sam, Altman. You can't do that. That's crazy. easy man? And it's very clear the Open AI is, to quote, drill, cooked on the pit Memphis style. The Q1-2026 non-gap operating margin was negative 122%. They lose billions and billions and billions of dollars a year, and Chad GPT's growth is stalled at around 905 million weekly active users.

Starting point is 00:06:18 We are approaching the end of this farce, and these companies cannot afford to slow down a little, even a little, not a touch. And as Goldman Sachs's Jim Covello said in a recent podcast, and I love this quote because Jim is very smart and he's been ahead of this, but it's so simple. At some point, you've got to make money as you make investments in a business so you can generate returns. People are just quoting that like, damn, brother. Shit, why don't I think of that?

Starting point is 00:06:46 Hey, you invest money in it. I thought you just invested money in businesses because it felt good, because it made you you feel good inside. It made you feel warm and fuzzy. I didn't know. What do you mean? A return on investment? What you mean? She's talking about I put money in this for a reason. You're crazy. Jim Cabello, you're so crazy. But four years in, companies are spending more than ever on a product without a clear return on investment. It's obvious at this point. However many use cases, the mildly mold, poisoned people in AI dancing around about, no one can seem to actually like, say what it means. Or, wow.

Starting point is 00:07:22 it matters or indeed, even if all of these people claim that writing all their code with AI, what that actually changes. Doesn't make the software better. Doesn't, oh, I'm so close to Tucker Carlson-voice those. Doesn't make the software better. Doesn't seem to make anything better. It just seems to make our apps worse. But folks, we're reaching the end of this era.

Starting point is 00:07:42 And I'm currently working on a massive story, bigger than both of my huge exclusives from last year, and one you will not want to miss. I am really excited about this. Technically there's two, but I know one's going to come in. One's pretty big. One's ginormous. But before then, I'm taking a week off. I'm getting my wisdom teeth out. I do need a break. So I'm going to rest up. You should rest up too. And keep on laughing at these oaths, earning billions of dollars on software that doesn't have a return on investment. Zitron out. Joy is essential and it's also elusive. But now, there's a new and exciting way to start your journey toward a more joyful

Starting point is 00:08:28 existence, Joy 101. It's a new podcast hosted by me, Hoda Kotby. If you're craving inspiration to maximize your joy, tune into these candid, uplifting, and moving on-air chats. Open your free iHeart radio app. Search Joy 101 and listen now. Joy 101 with Hoda Kotby is presented by CVS. Hey, this is Chuck from Stuff You Should Know, and we're submitting our most sciencey episodes for your peer review with our new stuff you should know. doing science playlist. Out now. You want to know about Occam's razor? Simplest explanation is usually the right one? We got you covered. Wondered what chaos theory is ever since the first time you saw Jurassic

Starting point is 00:09:08 Park. Well, come on down. So distill a nice pot of tea, everybody, turn down the gas on your Bunsen burner, and slip into your most comfortable lab coat and listen to the stuff you should know doing science playlist on the IHeart radio app, Apple Podcasts, or wherever you get your podcasts. Here's something that should not be as complicated as it is, getting a racist statue removed. And here's something that should be a whole lot easier than it is, getting a new one put up in its place. I'm Akela Hughes, and Rebel Spirit season two is about both of those things. As I was watching these statues come down, I was thinking about what it meant that I grew up in a majority black city in which there were more

Starting point is 00:09:46 homages to enslavers than there were to enslave people. Listen to Rebel Spirit season two on the Iheart radio app, Apple Podcasts, or wherever you get your podcasts. June is Black Music Month, And on the Drink Chams podcast, we're speaking with the hottest names in the culture, like Sway Lee. Do you realize how legendary you are? I appreciate that. I'd be seeing it, but I'm like, man, I still got like so much more to do. Like Prince, he dropped like 30 albums. We dropped like five right now.

Starting point is 00:10:12 Like, that's the rate we got to be going. Yeah, that's a good attitude. No matter the era, Drink Chams brings you the biggest names and the most unfiltered conversations. Listen to Drink Chams from the Black Effect Podcast Network on the IHeart Radio app, Apple Podcasts, or wherever you get. your podcast. This is an I-Heart podcast. Guaranteed human.

Better Offline - Monologue: AI Can't Afford To Slow Down

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