Better Offline - Monologue: OpenAI and NVIDIA's Deal Is BS

Episode Date: September 26, 2025

In this week’s Better Offline monologue, Ed Zitron walks you through NVIDIA and OpenAI’s nonsense deal, and how OpenAI now needs $600 billion in the next four years to survive.OpenAI and NVIDIA Announce Strategic Partnership to Deploy 10 Gigawatts of NVIDIA Systemshttps://nvidianews.nvidia.com/news/openai-and-nvidia-announce-strategic-partnership-to-deploy-10gw-of-nvidia-systems New York Times - OpenAI to Join Tech Giants in Building 5 New Data Centers in U.S.https://archive.is/vUf0t The Information - In OpenAI Megadeal, Nvidia Discusses a New Business Model: Chip Leasinghttps://www.theinformation.com/articles/openai-megadeal-nvidia-discusses-new-business-model-chip-leasing?rc=kz8jh3 See omnystudio.com/listener for privacy information.

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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. you funnier. This week, my guest, S&L's Mikey Day and headwriter, 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. Listen to humor me with Robert Smigel and friends on the I-Heart Radio app, Apple Podcasts, or wherever you get your podcasts. Life is full of hurdles, so how do you keep going? On Hurtle with Emily Abadi, we're talking with

the most inspiring women in sports and wellness from professional athletes, coaches, and Olympic champions about the challenges that shape them and the mindset that keeps them moving forward. At our level, at this scale, being able to fail in front of the entire world. Like, I can do anything. I can do anything. Listen to Hurtle with Emily Abadi

on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHeart Women's Sports. 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.

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. It's time to stop putting your healing on hold and start doing something about it. Listen to Just Heal with Dr. Jay on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. Hello, and welcome to this week's better offline monologue. I'm your host at Zittron, as I wrote while drafting this, I'm Yao's house, a line I'm leaving in as I'm being accountable to you, the customer. Anyway, you've heard about the NVIDIA-deal by now, that NVIDIA will, and I put this in air quotes, invest $100 billion in Open AI. And I want to start out by being explicit that NVIDIA is not wired Open AI a single goddamn dollar. All right.

So the deal is that NVIDIA is investing $10 billion up front, according to CNBC, despite the fact that the day before, it said that they would, be investing $10 billion with the first gig, but anyway, they're investing $10 billion in a month, allegedly. And I quote here, once the deal is finalized, which means in simpler terms that nothing's actually been signed, Nvidia will then invest $10 billion in tranches for each gigawatt of capacity that Open AI builds. That's right. That's right, everyone. Most of this funding is gated behind OpenAI, a company that burns billions of dollars, building huge amounts of data centers, something they have never done. And that also costs billions of dollars. And just as an aside, Open AI really has built nothing themselves. Everyone else is building it for them. These fucking Silicon

Silicon Valley libertarians, they love themselves in welfare, don't they? Anyway, how does Open AI afford to build these data centers? I don't know. Nobody else seems to know. Where are they being built? Who knows? It's unclear. Has the land been purchased? Also unclear. There's some sort of crap announcement about, Oh, Stargate, we've got a list of different fucking new places. And I had someone on the Reddit suggest I was wrong. I just want to be clear, of the list of the five new Stargate locations, one of them is in Shackleford, Texas, which was already chosen to be one of Oracle's data centers. This was already announced.

They're re-announcing stuff. As a PR professional, when you're re-announcing shit, it's because you run out of stuff to announce that's real. But look, let's be explicit about one thing. Data centers take a long, long time to build. Right now, Crusoe is building a data center in Abilene, Texas, made up of eight buildings, which will amount to about 1.2 gigawatts of compute capacity. This is the one for Oracle and Open AI. And at the current rate of development, it's taken about two and a half years per gigawatt.

Look, I realize it's easy to get drowned in big numbers and ridiculous promises and media headlines where the writers don't seem to bother to learn even the simplest fucking things. But data centers are expensive and take forever, and this entire plan hinges upon Open AI building data centers. In fact, look, I've seen lots of people suggest that the $10 billion that Open AI is getting from Nvidia will let them build data centers. And again, can somebody please actually learn the basics here? The Abilene Data Center venture required Crusoe, Blue Owl and primary digital infrastructure to raise $15 billion in debt just for the data center itself, the construction, the people, the water, the power and all that good stuff, with Oracle footing the bill for the

hundreds of thousands of GPUs to go inside at a price of, I think, about $24 billion, it works out to. By my calculations, OpenAI will need $125 billion just to build the data centers to get the funding from Nvidia, which will require another $200 billion in GPUs, by the way. The information also reports that Invidia is going to be potentially leasing GPUs to Open AI, setting up a special purpose entity to buy the GPUs from themselves that they would then lease to OpenAI. I've really hesitated to bring up any Enron comparisons. I've kind of flirted with one with call weave and them. That's straight Enron shit.

Like, man, they haven't conferred they're going to do it. It's an information report. I'll put a link in there. You'll complain that you have to pay for it. I recommend the information. I just, every day, every day these new pieces of news where everyone kind of like trumpets them, like Jesus just woke up from behind that big fucking rock.

when in fact, I think something far worse is happening, but I really want to break something down for you, and you'll likely hear this again in the future episode. I want to get into the actual economics here. Crusoe's 1.2 gigawatts of compute for OpenAI is a $15 billion joint venture, which means a gigawatt of compute runs about $12.5 billion. Abilene's eight buildings are meant to hold about 50,000 NvidiaGB 200 GPUs and their associated networking infrastructure. So let's say a gigawatt is about 303,33 Blackwell GPUs, yeah. This math is a little bit funky due to Invidia promising to install their new Rubin GPUs in these theoretical data centers.

But I really do think that they require about just a little under $200 billion worth of GPUs. And this is on top of the $400 billion that OpenAI has promised to spend with Oracle over the next five years, when Open AI had already leaked that they'd be burning $150 billion over the next four years, this math does not make any sense. It's complete nonsense. For Open AI to survive, they're going to need around $600 billion in the next five years. It's ridiculous, astonishing and insulting to the general public that the media keeps acting as if these deals are signed or promoted in good faith,

and I'm shocked that more people aren't doing the very simple maths. That, and I've seen a disgraceful amount of people talking about Open AI's revenue, projections, which involve them making $100 billion in 2020A and $145 billion in 20209, and that's revenue not profit. They're losing tens of billions of dollars, both those years, and they're acting as if these are serious, meaningful statements rather than egregious lies from a gaggle of charlatans. It's a fucking joke. It's sickening. Oh, by the way, Open AI is projected to make 13 billion this year. From my calculations, they made about 6.26 billion. It's wank, and that's the technical term. They use it, their financial analysts put it, when you pay JP Morgan to see their private

shit. It's all, yeah, this is all wank. This is wank. Okay, I'll keep going. Now, for the next three-part episode I'm going to put out next week, I've done a lot of digging into how much actual money exists to invest in general, and we're genuinely running up against the limits of private and public capital. By my calculations, there's only about $477 billion of available capital across the top 10 private equity funds, and I'm deadly serious, I will be publishing the links, and maybe $164 billion of US venture capital left, and maybe, let's call out another 150 billy in other funds sloshing around. Are we really going to carve out half to two-thirds of available global capital for one fucking company that burns a billion fucking dollars every two fucking

seconds? I know it's slower than that, shut up. I'm just, I'm a little bit ornery. I'm not going to lie. You can hear it in my voice and I'm even more ornery than ever. More ornery than ornery, as Rob Zombie once sung. I'm just pissed off because when you look at these numbers, they do not make sense. There's no parallel in history for any company or any industry that's ever spent this much money. There's never been one company that has been the focus like this. And honestly, I've never seen a company less deserving of any investment than Open AI. They burn billions of dollars, their product is questionably useful, it's incredibly commoditized, they have yet to create anything really exciting or new since, and if I'm being kind reasoning,

but let's be honest, GPT40, they are washed, and yet everybody's sitting around them clapping like they're a gifted child, an insult to children and startup founders, and that really is something that pisses me off as well, because AI took 33% of US venture capital last year, and I think they're probably taking more this year. And what's insane is nothing has been proven. None of these companies are profit generating. None of these products are popular. Every single day it feels like a study comes out saying,

yeah, no one really likes this stuff. No one wants to pay for it. And by my calculations, I think the whole industry's revenue have included core weave and all those shits. Maybe $55 billion in 2025. That's on 400 billion plus CAPEX. Is anyone having fun? Does this feel like the future?

Or does this feel like the future of how we're going to blow hundreds of billions of dollars on nothing? And the longer it takes for people to walk away from Open AI, and the longer it takes for this company to die, the more damage that's going to be caused. Because right now, Invidia is putting everything on Open AI. If we had functioning regulatory boards, we'd actually have something done about this. But instead, what's going to happen is they're going to inflate this bubble just a little further, and then when it bursts it's going to fuck retail investors.

A ton of venture capitalists too. A ton of private equity people as well, which will be kind of funny. But the financial apocalypse will hit everyone. And it will be grisly. But I'll be here to talk about it. I'm having the time of my life doing this show. Next week's three part is completely insane. I wrote it in kind of a two-day, 15,000 word.

Kind of like ejection, I was going to say. I was going to say another word which wouldn't have sounded quite as good. but nevertheless, that's the fun ranty part of these monologues. But I'm really excited for you to hear it because I've pulled together a lot of numbers that show how farcical this industry has become. And I think as the bubble approaches its eventual burst, a lot of you are going to feel really good about how right you are.

Maybe some of you still disagree with me, and I will work to compel you. And even if I don't, I hope you have a good time listening. Got great episodes coming up in the future as well. I'm going to be going to see Stephen Burke of Gamers Nexus do a long interview with him, some fun Radio Better Offline, and then I'm already working on some big guests. It's going to be a really fun few months.

I don't know for anyone else, but I'm definitely enjoying doing this podcast. Thank you as ever for listening. 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. Listen to humor me with Robert Smigel and friends on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts.

Life is full of hurdles. So how do you keep going? On Hurtle with Emily Abadi, we're talking with the most inspiring women in sports and wellness from professional athletes, coaches, and Olympic champions about the challenges that shape them and the mindset that keeps them moving forward. At our level, at this scale, being able to fail in front of the entire world. Like, I can do anything. I can do anything.

Listen to Hurtle with Emily Abadi on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHart Women's Sports. 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. J. And take real steps toward healing, growth, and becoming your best self. 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. It's time to stop putting your healing on hold and start doing something about it. Listen to Jess Hill with Dr. Jay on the iHeartRadio app, Apple Podcasts, or wherever you get your podcast. On the Ceno Show podcast, each episode invites you into a raw, unfiltered conversations about recovery, resilience, and redemption.

On a recent episode, I sit down with actor, cultural icon, Danny Trail, talk about addiction, transformation and the power of second chances. The entire season two is now available to Bench, featuring powerful conversation with the guests like Tiffany Addish, Johnny Knoxville, and more. I'm an alcoholic. And without this group, I'm going to die.

Listen to the Cino show on the IHart Radio app, Apple Podcasts, or wherever you get your podcast. This is an IHart podcast. Guaranteed human.