Better Offline - Monologue: ChatGPT's Growth Is Collapsing In Europe

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Starting point is 00:00:20 AllZone Media. Hello and welcome to this week's Better Offline monologue. I'm your host, Ed Zittron. And sorry that there hasn't been a monologue for a few. weeks. These massive episodes I've been putting together took up my time in a way that made them a little impractical. And as far as the show goes, I know it's been very AI focused. I can't even say AI right sometimes. But anyway, this is likely going to continue for a while, because as you can tell from the news, crazy shit keeps happening every day. Every day Sam Altman tells somebody he's going to give them a

Starting point is 00:01:00 billion dollars. It's all so silly. And I do feel like it's not being covered very thoroughly. So I'm doing my best to do so. Nevertheless, I promise I'm going to find a way to bring in more non-AI stuff. I'm not really sure how it's going to make it in there. I'll do my best. And I'm already working on CES 2026, which I think is going to be probably the best tech podcast thing ever. Got some incredible guests, Chloe Radcliffe, of course, Edward Onguoso Jr., David Roth. And yeah, those guests I can't quite talk about yet, but they're going to make you really happy. And it's going to be about more than just AI. That being said, next week's episode is likely to be AI. focused, as I've had a lot of people request they do an episode that's a simplified guide to the

Starting point is 00:01:41 AI bubble, something that they can share with people that aren't sticking their head in the technological or financial septic tank every day. And look, I think you're going to love it. You can please listen to it anyway. I need the downloads. But in all seriousness, I think it's going to be something, and I've been working on it for a few days now, that's quite short and sharp, but we'll speak to people who are not technical or financial at all. I think it'll be great. And if not, show's free. You'll enjoy it. But I also do just want to say, I really appreciate how many of you listen every week. I really appreciate your patience with the AI stuff.

Starting point is 00:02:14 You seem to all really enjoy it, but I do love to hear from you whenever I can. So reach out. Please don't be too mean, though. I do have a heart. But yes, this week's monologue is somewhat of a big story. So two days ago, Fortune published a story saying that, according to dates from Deutsche Bank, which is a very, very large bank, that Open AI subscription growth in Europe has stalled and is, and I quote, flatlining in the major European markets over the past four months.

Starting point is 00:02:40 To quote Fortune, the data was drawn from transactions processed by third-party financial institutions, really nailed that word, in the UK, Germany, France, Italy and Spain, representing 15% of chat GPT users. And if you're wondering, the top software markets in the world are US, China, Germany, UK, France and Italy, and then there's Canada and some others. To be clear, this specifically refers to people paying for chat GPT subscriptions, the $20 a month one most likely. And in a graph I'll link to in the show notes, you really should look at it.

Starting point is 00:03:10 Open AI subscription growth in Europe has been pretty rocky from the beginning, dropping from 10% in June, 2023 to below 0% in August 2020, meaning growth had declined, only to recover slightly, well, pretty well, I guess, the 20% in December 20203, then drop again to below 0% in February 2024. Otherwise, Open AI barely scraped 10% growth outside of some spikes in September 2024 around the launch of their reasoning models, which got them to about 15%, the launch of their useless agent operator in January 2025, which got them somehow to around 18%. And then the launch of 04 Image Generation in March 2025, which by the way was the Studio Ghibli wank. And that got them back to

Starting point is 00:03:50 how many 10% though? I realized that was a lot of numbers. And like I said, the chart is in the episode notes, I swear. But in June 2025, OpenAI faced negative growth of subscribers in Europe, barely recovering to 2 to 3% in July 2025, and then back to 0% in August 2025, which looks like there may be a mild recovery coming to around 3% in September. Now, while I'm not quite declaring victory or blasting not like us, I am having trouble finding a way around how bad this is. I can find no example of a successful software revolution that started with high growth and tumbled into the abyss in Europe.

Starting point is 00:04:26 It didn't happen with Facebook, and it certainly didn't happen in Uber's case, even though European governments actively tried to reject it, and some of them still are. It didn't happen with the smartphone or cloud computing, or really any other software revolution or device. They would start from kind of nowhere and then grow, and then there'd be wobbles, but they'd keep growing steadily. This is a steady decline. And to be clear, this is nothing to do with Europe's general data protection regulations of the GDPR. Robert Evans once taught me to spell everything out. I've independently confirmed with European chat GPT users that the product is basically identical over there. Europe,

Starting point is 00:05:00 just happens to be rejecting JetGPT. They don't want to pay for it. And as you'll see when you look at the graph, the boosts that OpenAI gets from throwing out new products, they're becoming less pronounced each time. Other than operator, that one kind of surprised me, but even then, 18% growth. And I think it's month over month. If it's year over year, it wouldn't be year over year. It's month over month. Now, the GDPR, by the way, will make it difficult for Open AI to launch advertising, which I will add will not be the saving grace for this company because Google and Meta's massive advertising revenues come from decades of data and expertise in forcing them down customer's throats, as well as having a very compelling product and thousands of salespeople. And also in Google's

Starting point is 00:05:39 case, thousands of miles of underground cable and under the sea cable, I believe, as well. People that are easily scared at suggesting that OpenAI's data on users is rich because they feed so much into it. This point makes the assumption that this data is useful and that Open AI can actually do anything with it, despite having absolutely no expertise in selling ads. As a reminder, perplexity, the AI search engine you'd think would be the perfect place for ads. They made 20 grand. $20,000 selling ads in 2024. That's bullocks. It's terrible. You'd make more selling dogs. Anyone watch the day today? Might be auctioning dogs.

Starting point is 00:06:14 Anyway, my rambling aside, it's very easy to get scared of this company and just think, oh, they have a lot of money and users, even though they lose billions. They'll just put ads in. and that will fix everything, I must caution you to immediately be a doomer there. I see no real evidence that they're going to find another business line, in mostly evidence by the fact they've never been able to find one. And while this isn't declarative proof that this company is circling the drain, I don't know how else to look at it as anything other than their growth story in Europe is dying. And they're building a goddamn data center in England, I think, with N-scale,

Starting point is 00:06:47 the company that's never built an AI data center in their life. To be fair, that's also the case with Crusoe. In fact, all of OpenAI's partners I pretty much never built a data center of any kind other than crypto ones, which are completely different. Also, no one's built a gigawatt data center. Ah, that's going to be a future episode. Forgive me.

Starting point is 00:07:03 I want to educate you on data centers one day, but every time I start thinking about them, my brain starts playing that music from Kill Bill when she looks, anyone she's mad at. Someone's going to email me and say, was it Perry Mason? Christ, the great thing about these monologues is I could just talk about whatever I want to.

Starting point is 00:07:19 They say I should do this, which is what I'm going to do. But in reality, back to the thing we're talking about. It really is hard to read this as anything other than air escaping the bubble. It's being pissed, I swear to God. And perhaps it's the era of smiles beginning. A specter is haunting Silicon Valley, the face of the smiling man. And I hope you'll join me every week to find out how this shit bursts or, I don't know,

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Better Offline - Monologue: ChatGPT's Growth Is Collapsing In Europe

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