Better Offline - Monologue: Tokenpocalypse Now
Episode Date: June 26, 2026In this week's Better Offline monologue, Ed Zitron runs you through how organizations are freaking out after having to pay the real cost of AI tokens, and how the surge of competitive open weight mode...ls could lead to the post-bubble locally-run future of LLMs. Save $10 off a year of my premium newsletter: https://edzitronswheresyouredatghostio.outpost.pub/public/promo-subscription/gzqwkv54e1 - I’d be so grateful! 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. Buy our new “FUCK DATA CENTERS” shirts today! --- 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/@edzitron Email Me: ez@betteroffline.comSee omnystudio.com/listener for privacy information.
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Hello and welcome to the second of this week's
Better Offline Monologues.
I'm your host.
Zitron.
It's been a funny few weeks watching the little spurts of air coming out of the AI bubble.
It's unclear when it will burst, what will burst it.
But really, even what's going on half the time, they just all seem to be running around
like a billion Mr. Beans.
But I get the sense that everything will accelerate dramatically based on one or two big
events, things that just knock the confidence of everyone.
Maybe it's an AI company dying or a funding ground not coming together, or maybe it's a
hyperscalor cut in capex. Goldman Sachs analyst Rich Puritowski said last week that he believed that
everybody was spending simply to remain competitive. Fucking love that, don't you? And added that the
first hyperscaler to signal that it can slow the pace of spending would likely see its share
price rewarded. If I had to bet, I think it's between Meta and Microsoft, the latter of which
has made numerous noises about using cheaper AI models like Deepseek and its co-pilot co-work product.
Yeah, and also I should add the, Satchinadella keeps doing interviews.
where he's like, yeah, no one company should have all that power. We shouldn't rely on one lab,
one lab being able to be shut down at any time as bad. It's really funny watching this guy change
his tune, considering how a year and a half ago, a year ago, he was rock hard for open AI and
six months after that rock harder for Anthropic. It's almost as if he's just doing random shit
based on what he thinks might work. You know, like a fucking cargo cult. Anyway, as I've mentioned
over the last few months, both Anthropic and Open AI both started to charge their enterprise customers,
companies with over 150 users, for the actual cost of their AI tokens spend as of the middle of
Q1, 2026. To explain, when you use a regular chat GPT or Claude account, you burn tokens, each one about
three quarters of a word, up to a five-hour or weekly limit, depending on what kind of model you're
using. So with Anthropic on their clause subscription, Opus 4.8 and Fable when it was around, had a specific
limit to themselves. But anyway, just the more powerful the model, powerful being meshed by the
companies, of course, the more it burns and the less you can use it. On a regular subscription,
you're able to burn, and I am not kidding, $8,000 worth of tokens a month on Claude and $14,000
a month on OpenAI's chat GPT codex subscription, all for $200 a month. Pretty good deal, right?
You know? It's like the discount prices sketch from Tim and Eric that I reference every so often
and just to see if anyone emails me.
And so, yeah, after years of being able to burn thousands of dollars of tokens for $200 a month,
enterprises are suddenly having to pay the actual costs.
The result is multiple companies capping their workers' token spend.
As I've reported, both T-Mobile and Brex have done so, and others have reported that Uber,
META, Walmart, Coinbase, and Cisco have all done so.
Meta notably had a token maxing leaderboard.
Very funny, again, just changing direction based on random signals.
None of these people have a plan. None of them. None of these companies have a plan. Nobody integrating AI has a plan. If they did, they would have been like, yeah, let's make sure we know how much this is going to cost, or let's make sure we know whether this is good or not, whether we can measure the R.O.Y, or you know, anything that would suggest anyone knew what the hell they're doing. But they don't. And 404 media reports that management consultancy firm and evil corporation accenture, which is an insane way of saying that,
that I'm just going to keep, has seen what it calls soaring token spend based on leaked audio
recordings, with much of that token spend being driven by non-engineers doing things like
converting PDFs into presentation slides. I love this shit. This is the easiest stuff in the world
made slightly easier, but probably worse, costing way more. You could definitely hire an
extra, but you could just hire a contractor to do this. You could hire a bloke at 45 bucks an hour
to do that for you. Maybe the happiest man alive. Probably cost you less thought.
too, and I...
God, this stuff is exhausting.
You ever sit and wonder
what you could do with the rest of that money?
I could have, I don't know,
like millions of dollars a month,
I could have like a week's worth of Diet Coke.
Anyway, it turns out that telling your workers
that AI can do basically anything
and to use it as much as possible
starts costing you a lot of money
when you actually pay what it costs.
As I've said before,
we're barely three months into enterprises
paying the actual cost of AI,
and they're already screeching
like they're being pecked to death by birds.
And that joke is a courtesy of Casey Kigawa, who said that to me about a year ago when we talked
about the amount of money that Anthropic was allowing people to burn on Claude's
subscriptions.
Meanwhile, the threat of open source models appears to be getting more serious.
I've heard from numerous sources that Chinese AI Lab Zipu's GLM 5.2 coding model is competitive
with Anthropics Opus 4.8 at somewhere between a quarter and a sixth of the price, but that
seems to vary based on the cost of the task.
As far as whether GLM 5.2 is actually competitive goes, it appears that the hype is somewhat real, but it's kind of, you kind of had to check your sourcing.
Open source AI coding company Klein ran benchmarks on an actual bug from its repo and found that while GLM used twice as many tokens to fix it, it also did so at a cheaper cost, 41 cents versus Opus 4.8's 81 cents.
Opus was quicker, taking 1.6 minutes versus GLM's 4.7 minutes.
But one thing that stood out was that GLM, to quote Klein, cleaned up dead code and verified the build compiled before completing, something that Opus, the more expensive frontier model run by the company that loses billions of dollars, apparently didn't bother to do.
It's just one bug, but GLM 5.2 seems to score well on many of the major benchmarks.
Coming third on Cybersecurity firm Semgreep's cyber benchmarks, with the top two being Semgrap's own harness, so their own thing that they put on top of the models running Opus 4.8 and GPT 5.5.
followed by GLM 5.2, which is interesting. It's very interesting. If I was glamy Sam,
when I'd be looking at this and getting a little worried, I'd genuinely be looking at them and even
saying, oh, why don't I train my own? But, you know, that might actually be a bad idea,
even though it's fully possible, because GLM 5.2 is a true open weights model, and it's released under
something called the unrestricted MIT license, which means you can, anyone, by the way,
company, a regular person, whomever, can self-host and fine-tune it or use it in any way they wish.
And yeah, I mean, in theory, any company that wants to use LLMs could either run their own version of it locally,
or be on a rig that costs tens of thousands of dollars, or pay an inference provider like BaseTen to spin up and train
their own version.
Now, I must be clear that there's not a ton of evidence that running GLM 5.2 is profitable
for the inference provider.
In fact, there's really not, and I genuinely have looked.
nor do we have any significant signs that customers are moving away en masse from Open AI in Anthropics models.
People generally like name brands and they, even though Anthropic shit is constantly broken, go look at their stability page.
Stability page?
Uptime page?
I don't know what you call that.
Email me if you know what they call that.
Or I could just look after this.
I could keep going though.
Nevertheless, people want name brands.
People like paying for a company that ostensibly works on this and keeps it updated.
How true is that?
Who knows?
I don't think people are buying LLMs because.
of particularly sensible reasons anyway.
But what might change things would be Microsoft, Amazon or Google, offering GLM 5.2 via their foundry,
bedrock or vertex AI platforms.
And even then, it's hard to sell if customers are excited about AI or just paying OpenAI
and Anthropic to use Buzzy models.
Really isn't clear, we should know by now.
All that being said, now does feel like the perfect time for a shift towards open source models,
if only because everyone is crapping themselves about costs.
Everyone is really freaking out
and I think that this is going to be the time
when we start separating the wheat from the chaff
the people that actually like this stuff
versus the people who just feel good
because they're doing AI
and they don't know what else to do with their time
and they like forcing people to use it.
I'll get to who actually does in the minute.
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OpenRouters ranking show a dramatic move away from Frontier Labs.
The top 10 most popular models are all open source, save for Opus 4.7 at 6, Opus 4.8 at 8, and Sonnet 4.6 at 10,
as well as a mysterious new model called Al Alpha, which is currently free to use, which is probably why it's trending.
To be clear, Anthropics models still dominate the top models by task across the board, and that's based on the spend on the task.
I hate to give him any credit, though. I really don't like doing this, but Scott Galloway recently made the point that China could thrive by AI dumping high-quality open source models into the ecosystem as a means of destabilizing the major model providers.
And I hate to say that's what's happening.
like a fucking broken clock, I guess.
Zipu and Minimax are both partially government funded by the Chinese government, and also both
woefully unprofitable, but neither do so at the scale of Anthropica or Open AI, and while
both do the K-Fabe discussion of AGI and autonomous compute and all that bullshit, they seem
far more focused on creating open-weight models to compete with them.
And just for the differentiation here, open source means you can share some of our open weights
means you actually can dittle with the model itself.
That's a flattening, someone's going to email, they're going to be mad at me,
I don't care. Sorry, like, it gets the point across, all right? Just right on the subreddit if you're mad.
Anyway, in truth, I think the future of LLMs will end up being locally run models and expensive specialist hardware.
The underlying economics of cloud-based GPU compute do not make sense for anybody.
You need to make sure the GPUs are saturated. You have to buy in advance.
Otherwise, you just won't be able to get the capacity.
And if you have less people than you expect, you will lose money for sure.
and if you have more people than you expect, you have to get more compute, which means you'll also lose money.
So as long as you can Goldilocks this bullshit, maybe you'll eke out the world's worst gross margins in history,
or you'll just lose money, which is what everyone's doing.
But I think there may be a point at which Zipu, Minimax, or even American model developers,
start focusing more on services-driven custom deployments and become boring, ugly, license-driven monstrosities like Oracle.
And that's the thing.
I've talked to quite a few people recently, and they are all saying the same thing.
Even Nvidia is moving into this realm, and they're selling these giant 100 grand machines.
I think that's kind of interesting.
And like I said, that GPU compute, it requires a certain critical mass of customer demand
that I don't believe will exist once the cargo culture of the AI bubble passes,
because GPU commitments are done a few years in advance,
and any drop or lull kills the margins of even a cheap to run model.
Remember, base 10 just they're an inference provider.
They just raise one and a half billion dollars.
They're not profitable.
I mean, Zipu isn't profitable.
And they do the same thing Open AI does with their stuff where they say,
oh yeah, yeah, our cost of revenue, it's lower than our revenue.
However, when you add the sales in marketing, it's actually unprofitable as well.
Oh, also we lose hundreds of millions of dollars because of training.
Other than that, we're super profitable.
Yeah, it's a really fucking stupid industry.
And look, even if GLM 5.2 can do things at half the cost of Opus 4.8,
that's still half of what, in some cases, is hundreds of thousands or millions of dollars a month.
I've heard tell from multiple sources that that hardware demand is growing
and that customers at big companies are starting to look into those high-end hardware solutions.
And I think that that is the only future for this stuff.
And I think it would reduce the cost significantly for the end user.
Probably keep this shit off the internet, or at least massively marginalize the damage that LLM-based code can do by focusing on people that actually give enough of a shit to buy the actual machines.
And I don't know, I feel like an actual serious fiscal commitment makes companies take things a little bit more seriously, unless, of course, you're Microsoft, Google and Amazon and Meta buying GPUs at which case who gives a shit.
But I mean, if this takes off, it is, it's curtains for zero.
It's a bad time for Open AI and Anthropic unless they too start doing these hardware-driven things.
This is just a guess.
This is just a guess they would ever think about that.
But I think it's possible.
I think it's really the only economically viable end for this,
unless there are just going to be companies that lose billions of dollars a year for no apparent reason.
I just don't think that's going to happen.
It's not enough money to do it.
And God damn, please go and listen to the Open AI will not get bailed out.
AI is not too big to fail
podcast they did. I'm tired
of getting... Please don't...
Please stop emailing me.
I love hearing from you. I really, I would love to hear from you all more.
Other than the people who email me, saying,
I think the GPUs are all for surveillance.
I think it's all that.
I think it's a big government...
That's called Oracle.
Oracle's first client was the CIA.
Oracle has a giant government GPU array.
They have several of them.
Jesus Christ, that's already happening.
And they're not doing surveillance on that.
They did that with Maven.
They did it with the Promise software.
Jesus fucking Christ.
Sorry, I understand that I sound agitated here.
It's just that if the only choice you can make when looking at something is to say, well, bad thing will definitely happen, that's not actually an intellectual pursuit.
It's just crapping yourself.
It's just saying, well, everything's bad, so everything stays bad.
I actually want to bring you a message of hope.
I don't think these companies get bail down.
I don't think they get anything.
I think that they get allowed to die.
I think partner assets might be scooped up by Amazon, Google and Microsoft.
I think the government might take a chunk out of them.
Perhaps they get some sort of bridge financing,
but I actually don't know if the government would even extend that,
because AI is very unpopular with regular people.
Regular people do not like this, and they hate data centers,
and they have intelligently connected data centers to these horrible AI companies.
And so in the end, I'll tell you.
you, please stop emailing me the surveillance thing. It's not true. You're wrong. You sound
like someone that wants to be paranoid but doesn't want to do the reading well enough to be
paranoid. If you want to be paranoid, go read the Pramus Software, go look at Oracle. Like,
go look at the actual history of these companies if you want to be freaked out by something.
But in truth, the AI industry is just a directionless egregore of capital. It bumbles about
and is only kept alive by a belief system that's mostly growth focused and doesn't really
understand how to run a business anymore or even build innovation or technology.
And it's blatantly obvious that LLMs are, at best, a classic risk versus reward software tool
from the real sickos that know what they're getting into.
But the problem is it's been sold as this mass market panacea for basically any problem.
And I'll say that my thesis remains undeterred.
I believe a great deal of AI usage is cargo culture, driven by executives that don't do any work,
and people that feel pressured into adopting AI by their peers of the media.
Or, of course, people that spend 12 to 18 hours a day on Twitter who just follow the algorithm.
I call it the Dunce's Casino, because you just crank the thing and a bunch of insane people come out.
And all of these people come out and they're like, if you don't use agents, you're going to die.
They're going to kill your wife.
They're going to eat your dog.
If you don't use loops, Boris Churny's going to blow up your house.
Twitter is driving people insane using AI, but not because of grok or anything,
but because it just fire hoses, nutters into your feed,
who will constantly make you feel terrible for not picking up the next big AI thing.
It's this insane.
I keep saying cargo coal, because that's what it is.
It's people just going around being like, yeah, you know, this is the big thing now.
We all like that, right?
We love it.
We love it.
It's good.
If we all follow this, the great prophecy will come true,
and everyone will make money somewhere, somehow, I think.
It's a sickness.
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Joy 101 with Hoda Kotbe is presented by CVS.
My first guest is Harris Holtin, Shakira, Luke and Yerrin, Samira and Gracie.
I'm so excited for it. On the bouncy bed. You have surprises. Many surprises. Welcome to Sweet 305
where the group chat comes to life. What a B. It's like. It's like a form of
Like, hello, my God, oh my
my friend, oh, my brother.
What are my...
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It's a genuine sickness. So I went a little tuck across in there. What's going on? Why are we
using LLMs? What are they going to do to us? What are they going to do to your family?
But anyway, back to the podcast, back to the monologue. I apologize for ad-libbing.
I must be clear as well, I do love hearing from you because I keep getting emails from people
that actually use AI. And I got one just before I started recording this from a bloke who said,
And I quote, he's used it to deliver good work and seen it tried to submit absolute cramp.
And that really is the AI industry.
Hey, you know, sometime it works and when it does, it's all right.
And when it doesn't, it's dog shit.
Yay.
Great.
I'm so glad we sunk a trillion plus dollars into this.
Look, these are specialist tools that are being forced to solve generalist problems.
And they're probabilistic models that fail to do deterministic things.
and they're really just an eternal financial black hole for anyone trying to scale them into a Google search or a meta-sized business.
And it's never going to work like that.
Just before this as well, I saw that Broadcom and OpenAI announced their jalapino chip,
this giant dinner place-sized motherfucker dinner place, dinner plate, I'm not fixing that.
And it's funny because everyone's doing the cargo cult shit around it.
They're all like, oh, well, it's going to bring down inference costs.
did that, that would fix everything. If Halapino fixes everything, then everything will work out.
There's no proof that that's the case. Actually, here is a thing. If you want, if you want to, like,
here's a specific request. If you have an information subscription. At some point in the last year,
I know there was an information story that suggested that Broadcom's Open AI chip would have modest gains.
If you bring that to me, I will fuck it. I will, Venmo you $5. If you can bring me that story.
Seriously, I need that story because I'm pretty sure that if Broadcom's chip was going to change everything for OpenAI, OpenAI would sink every fucking dollar they had into it. Open AI would dispense with Nvidia. Instead, it's like, oh yeah, we're getting Microsoft to pay for some of it and it'll be there in 2027 maybe. Oh no. Sounds like something you pre-ordered on Kickstarter and you got it and it kind of sucks. It turns out the video was AI generated, which I did just say,
see with this thing where someone had done a Kickstarter where it's a yeah you can build things using
real principles and you pour your own cement but it's really small and the whole thing is AI generated
fucking hell this industry really is miserable isn't it all the people you every other era
other than of course crypto in the metaverse when something cool happened even in the augmented
reality era there were still people doing goofy funny shit there were still people doing really
interesting things with computer vision there were people doing really interesting things with computer vision there were people
interesting things with depth sensing. The fact you can measure stuff on your iPhone and
pretty sure you can do on Android too is because of depth sensing cameras and augmented reality.
It's cool. The snap spectacles are embarrassing and if you get them, I assume that people
will just come and beat you up. I mean, it triggers a deep bully instinct, I think,
in 90% of human beings. You look like Roy Orbison, but so much worse and so much less talent.
And hell no, this whole era pisses me off.
That's the long and sure of it.
I think you've probably got that by this point.
I don't apologize that I've been a little all over the place of this monologue, but it has been a long few months.
I've still got plenty of energy, but this has definitely been a tough few.
But it's hard to tell what happens next.
I know it's hard.
I know you ask me when it will burst.
I truly don't know.
But I'm going to do my best every week to inform you, keep you up to date, and to try and explain what the fuck is going on.
because quite frankly, I don't think most people have any idea.
And I think that that's actually the story of the moment.
Because when you look around the tech industry right now, does this strike you as an industry
full of leaders or followers?
Meta is apparently working on a polymarket competitor.
After releasing some new $300 fucking glasses that only perverts were wear, what Microsoft a year ago was saying,
open source was bad, now it's good, six months ago, Anthropic was good, now Mustafa Suleiman says
they're too expensive and they're going to stop working with them. This is an industry full of people
working things out as they go along, except the difference between you and them is that they have
billions of dollars. Billions and dollars, billions and dollars, I'm keeping it. Billions of dollars
and also all the talent and all the resources and all the ability to raise debt. They could do
anything and they choose to do this. Remember that. Even when this era ends, remember that this is
what they chose to do. This is the intentional choice of Google, Microsoft, Meta, and Amazon.
They could have done anything else, anything. And there are real problems they could solve.
There are problems they could solve with their own fucking problems that they've caused with
their apps. They could make Facebook better or Instagram better,
except doing so would lower their revenue. I don't know, Microsoft could redesign the office suite to
work, to actually work, to, they could make Microsoft Teams stable. Google Search could work again.
Again, it would lower the growth. It would make the growth go down. And I think by the time these
fuck nuts realize that they have a real problem, they'll realize that they've pissed away the only
opportunity they really had to change direction. Because had they started this era and just been like,
we're out of hype of growth ideas. Now, they probably wouldn't say it in those examples.
words, they could have said this is the era of experimentation, this is finding our new business
lines, the next Google search and announced it like some World's Fair bullshit. I don't know,
maybe the markets wouldn't have been quite as happy, but they'd be happier that they're going
to be at the end of this era. And I think in the end, it's frustrating to watch because
logic and reason have gone out the window, but gravity exists, and this era will come to an end.
And next week we've got an awesome interview, something that's not about it.
AI for once, with two writers from the Wall Street Journal about the greasy, nasty, freaky world
of polymarkets influencer marketing, involving all sorts of weird shit like ads that include
fake bets on fake polymarket websites. Genuinely weird shit. And that'll be coming up next Wednesday.
I enjoy hearing from you. Please email me. Easy at betoroffline.com. Jesus Christ, I messed up my own
email. It's been a long few weeks, folks, but I'm loving hearing from you.
Please email me. Please jump on the subreddit. I love to hear from you. I love feedback. I love feedback that's reasonable. If you send me a typo correction, I'm only going to get mad. But I do love hearing from you, even the typo correctors, even the pedants. I love having the feedback. And I love you all. I love you all. I enjoy hearing from you. I enjoy being here and speaking to you. And I'll speak to you next week. 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 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.
Listen to Joy 101 on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts.
Joy 101 with Hoda Kotby is presented.
by CBS.
My first guest is
Terrence Hilton, Shakira,
Luke and Yerrin.
You have surprises?
Many surprises.
Welcome to the Sweet 305 podcast
where the group check comes to life.
What a!
You're the only person I know
that loves a yellow starburst.
It's lemonade.
This is Sweet 305.
Here, oversharing is encouraged.
Listen to Sweet 305 with Lele Pons
on the Iheart Radio app,
Apple Podcast, or wherever you get your podcast.
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.
That's the rate we got to be going.
Yep, 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 Michael Rappaport, and my podcast, the I Am Rappaport Stereo podcast,
is unlike anyone you've ever heard.
If you're looking for strong opinions about sports, entertainment, politics, pop culture,
and whatever else catches my attention, then subscribe now.
This kid Jafar Jackson should absolutely positively get nominated for his portrayal as Michael Jackson.
Listen to I Am Rap Report on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast.
This is an IHeart podcast.
Guaranteed human.
