Better Offline - Part Three: NVIDIA Isn't Enron - So What Is It?

Episode Date: December 19, 2025

In part three of this week's three-part NVIDIA series, Ed Zitron walks you through why there are millions of Blackwell GPUs sitting in warehouses, and why AI’s lack of any profits makes NVIDIA’s future entirely dependent on endless debt and venture capital. This series took a lot of work, so if you want to support me, why not subscribe to my premium newsletter? Get $10 off a year’s subscription today: https://edzitronswheresyouredatghostio.outpost.pub/public/promo-subscription/p94my1c5ya 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. --- 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: [e-mail] omnystudio.com/listener for privacy information.

This is an IHeart podcast. Guaranteed Human. Run a business and not thinking about podcasting. Think again. More Americans listen to podcasts than adds supported streaming music from Spotify and Pandora. And as the number one podcaster, IHearts twice as large as the next two combined.

Learn how podcasting can help your business. Call 844-844-I-Hart. 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 IHeart Women's Sports. A win is a win. A win is a win. I don't care what I'm saying. Yep, that's me. Clifford Taylor the 4th. You might have seen the skits, my basketball and college football journey, or my career in sports media. Well, now I'm bringing all of that excitement to my brand new podcast, The Clifford Show.

This is a place for raw, unfills of conversations with athletes, creators, and voices that not only deserve to be heard, but celebrated. So let's get to it. Listen to The Clifford Show on the IHeart Radio app, Apple Podcast, or wherever you get your podcast. And for more behind the scenes, follow at Clifford and at TikTok Podcast Network on TikTok. Hi, I'm Ed Zittron, and welcome back to Better Offline. And this is our third and final part of our Better Offline Nvidia special, where we're talking about, well, the shakiness behind its growth and how the company, despite being on incredibly infirm ground, is definitely not Enron or Nortel or WorldCom or Lucent, or any other dot-com bubble era firm that imploded under its own way and, well, quite dodgy accounting. The thing is, even if Enron is nothing like them, there's still quite a few causes for concern, and that's largely driven from the fact that Nvidia makes the majority of its money

selling GPUs to a handful of customers. And so, well, some of those also look to be on some of their own incredibly shaky ground. And yeah, I'm talking about Oracle. Now, Nvidia's health, saying nothing of its growth, isn't just tied to these customers. It's also tied to whether these customers can actually turn a profit from their Kappex spending, And even that's not even certain. So due to the fact that so much money has been piled into building AI infrastructure and big tech has promised to spend hundreds of billions of dollars more in the next year, big tech has found itself in a bit of a hole. How big of a hole? Well, by the end of the year, Microsoft, Amazon, Google, and Meta will have spent over $400 billion in capital expenditures, much of it focused on building AI infrastructure on top of $228.4 billion in Cappex in 2024, and around $148 billion in capital expenditures in 2023, for a total of $776 billion in the space of three years. And they expect to spend more than $400 billion more in 2026. Every time I read these numbers, I feel a little crazy.

As a result, based on my own analysis, big tech needs to make $2 trillion in brand new, brand-spanking new revenue, specifically from AI by 2030. or all of this was effectively for nothing. Now, I go into detail about this in the premium newsletter I did on October 31st, but I'm going to give you a short explanation here. First, though, we have to talk about depreciation, and because I'm lazy, I'm going to quote myself in that newsletter, I just mentioned a couple of seconds ago.

Ahem. So when Microsoft buys, say, $100 million worth of GPUs, it immediately comes out of its capital expenditures, which is when a company uses money to invest in either buying or upgrading something. It then adds to its property, plants and equipment assets, PPE for short, although some companies list this on their annual and quarterly financials as property and equipment. PPE sits on the balance sheet. It's an asset, as it's stuff for the company that it owns or is leased. GPUs depreciate, meaning they lose value over time, and this depreciation is represented on a balance sheet and the income statement. Essentially, the goal is to represent the value of an asset that a company has on the income statement. And we see, how much the assets have declined during the reporting period, whether that be a year or a quarter or something else, whereas the balance sheet shows the cumulative depreciation of every asset currently

in play. Depreciation does two things, and I know this sounds like a lot, but I'll break it down for you. First, it allows a company to accurately, to an extent, represent the value of things it owns over their useful life. Secondly, it allows a company to deduct the value of an asset across said useful life, right up until its eventual removal, versus having to take a big hit up front. The way this depreciation is actually calculated can vary. There are several different methods available, with some allowing for greater deductions at the start of the term, which is useful for those items that will experience the biggest drop in value right after buying them and their initial use. An example you're probably familiar with is a new car which loses a significant chunk of its value

at the moment it's driven off a dealership law. Depreciation has become a big, ugly problem with GPUs, specifically because of that useful life, defined either as how long the thing is able to be run before it dies, or how long before it becomes obsolete. And nobody seems to be able to come up with a consensus about how long this should be. In Microsoft's case, depreciation for its servers is spread over six years, a convenient change it made in August 22, a few months before the launch of ChatGBT, GBT, and before it bought a bunch of GPUs. This means that Microsoft can spread the cost of tens of thousands of A100 GPUs bought in 2020 or the 450,000 H100 GPUs it born in 2024 across six years, regardless of whether those other

years they'll be generating revenue or actually functioning. Call we, for what it's worth, says the same thing, but largely because it's betting that it'll still be able to find users for older silicon after its initial contracts of companies like OpenAI expire. The problem is, is that AI GPUs are fairly new concepts, and thus all of this is pretty much untested ground. Whereas we know how long say a truck or a piece of heavy machinery can last and how long it can deliver value to an organisation, we don't know the same thing about the kind of data center GPUs that hyperscalers are spending tens of billions of dollars on each year. Any kind of depreciation schedule is based on at best assumptions and at worst hope. Now, this is important. The concept of an AI data center

is super new. We maybe saw the first ones in 2019 question. Like it's kind of hard to say, but even at the scale we're seeing today, a gigawatt data center pretty much brand new, maybe a couple years old. I don't even think they've even built any, but we'll get to that in a bit. There are a lot of assumptions at play. There's the assumption that the cards won't degrade with heavy usage, or the assumption that future generations of GPUs won't be so powerful and impressive that they'll render the previous ones more obsolete than expected, kind of like how the first jet-powered planes of the 1950s did to those manufactured just a decade prior. The assumption that there will be, in fact, a market for older cards and that there'll be a way to lease them profitably.

What if those assumptions are, I don't know, wrong? What if that hope is ultimately irrational? So there's a quote from the Centre for Information Technology Policy framing this problem well that I'll link to in the notes. Here is the puzzle. The chips at the heart of the infrastructure build out have a useful lifespan of one to three years due to rapid technological obsolescence and physical wear, but companies depreciate them over five or six years. In other words, they spread out the cost of their massive capital expenditures over a longer period than the facts warrant, what the economist has referred to as the $4 trillion accounting puzzle at the heart of the AI cloud. This is why Michael Bury brought it up recently, because spreading out these costs allows big tech to make their net income, i.e. their profits, look better.

In simple terms, by spreading out the costs over six years rather than three, hyperscalers are able to reduce the line item that eats into their earnings, which makes their companies look better to the markets. So why does this create an artificial time limit? Well, let's start with a horrible fact. It takes 2.5 years of construction time in about $50 billion per gigawatt of data center capacity. No matter when the GPUs for a gigawatt data center are bought, one way or another, these GPUs are depreciating in value, either through death or reduced efficacy through wear and tear,

or becoming obsolete, which is very likely as Nvidia is committed to releasing a new GPU every single year. newer generation GPUs like Nvidia's Blackwell and Vera Rubin require entirely new data center architecture, meaning that one has to either build a brand new data center or retrofit an old one. Essentially, we have facilities that are being built around a GPU design or product that may change in a year or two. Now, I hear that the Oberon racks that they use for the Blackwells will be used with some Vera Rubin, but even then there's going to be an even bigger, more huger Vera Rubin that comes that might even, that I read somewhere that there might even be like kilowatt level ones, just in like 100 kilowatt ones that this company's insane. Nevertheless, at some point, Wall Street is going to need to see

some sort of return on this investment, and right now that return is negative dollars. I break it down on my October 31st premium piece, but for your sake, I'll just say it. I estimate the big tech needs to make $2 for every dollar of CAPEX they've spent, and this revenue must be new, brand new, as this CAPEX is only for AI. This CAPEX is useless for, or everything else. It does not help it. And no, it doesn't help that they bolted copilot onto fucking everything. That is not working. And in fact, the Australian Competition Commission is suing them. Maybe I mentioned that later, but whatever. Meta, Amazon, Google and Microsoft are already years and hundreds of billions of dollars in and are yet to see a dollar of profit,

creating a $1.21 trillion dollar hole just to justify the expenses, so around $605 billion of CAPEX all told at the time I calculated it. Much of this CAPEX has been committed or spent before they've even turned on a single goddamn GPU. You might argue that there's a scenario here where, say, an A100 GPU is useful past the three or six year shelf life. Even if that were the case, the average rental price of an A100 is 99 cents an hour. This is a four or five-year-old GPU. A customers are paying for it like they would a five-year-old piece of hardware. The same fate awaits the H-100, which was released in 2022, but still sold in great volume through 2024, and I hear the H-200 of the same generation is still selling to this day.

Every year, Nvidia releases a new GPU, lowering the value of all the other GPUs in the process, making it harder to fill in the holes created by all the other GPUs is capex and costs. This whole time, nobody appears to have found a way to make a profit, meaning that the hole created by these GPUs remains unfilled, all while big tech firms buy more GPUs creating more holes to fill. So now that you know this, there's a fairly, obvious question to ask. Why in the hell are they still buying GPUs?

Also, where the fuck are these GPUs going? Another podcast from some SNL, late-night comedy guy, 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. The worst singer in the group. 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 yard birds, right? That's the name. The Harvard 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. Huber 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 ads 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. Life throws hurdles big and small.

The question is, how do you conquer them? On Hurtle with Emily Abadi, we sit down with the most inspiring women in sports and wellness, professional athletes, coaches, and Olympic champions to talk about the challenges that shaped them and the mindset that keeps them going. From the WNBA standout Kate Martin

and rising hockey star Layla Edwards. If a boy can do it, I don't see why a girl can't. Like, I've never understood that. Like, it didn't make sense in my brain. It's hard to be in spaces that no one looks like you, but don't ever feel like you don't belong. Don't let that be the reason you don't do it.

An Olympic champs Gabby Thomas and Katie Ladeke. The ability to show a gold medal to someone and have their face light up and smile, that means the world to me. And that's what motivates me to win more gold medals. At our level, at this scale, like, being able to fail in front of the entire world. Like, I can do anything. I can do anything.

Because resilience isn't just about winning. It's about showing up, even when it's hard. 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. Imagine an Olympics where doping is not only legal but encouraged. It's the enhanced games. Some call it grotesque. Others say it's unleashing human potential.

Either way, the podcast's superhuman documented it all, embedded in the games and with the athletes for a full year. Within probably 10 days, I'd put on 10 pounds. I was having trouble stopping the muscle growth. Listen to Superhuman on the IHard Radio app, Apple Podcasts, or wherever you get your podcasts. So a few weeks ago, I wrote a piece, a premium one called The Haters Guide to Nvidia, and I asked a basic question in there. Where have all the GPUs that Nvidia is sold actually gone?

In particular, the 6 million Blackwell GPUs that Jensen Huang keeps banging on about. Now, there's little evidence that these are being used in the volume which they're sold, suggesting that they're either languishing in the supply chain or being warehoused by hypers or even invidia themselves. Now there's the argument that this could be, and this is wanky invidion bullshit, this could actually be two GPUs per GPU sold because there's two chips on each GPU. Even if that was the case, 3 million GPUs, Blackwell specifically, the brand new ones, they're not in service.

Now, while I'm not going to go and copy-paste an entire premium piece into this script, I am, however, going to go into detail about what I found. And the truth is, I can only really see, and this includes looking over like bunches of data center maps, reading hundreds of press releases, documents, earning statements. I've only been able to find maybe a couple hundred thousand Blackwell GPUs in existence, maybe half a million to 750,000 if you include the stuff that hasn't even been built yet. But let's go into it. So Stargate Abilene, allegedly 400,000 Blackwell GPUs are going there. Now, Oracle CEO, co-CEO, I should say, Clay McGuhrick, that's probably not how you say that.

He claimed very recently there were 96,000 of them installed. So not great. There's theoretically in 131,000 Blackwell GPU cluster owned by Oracle that they announced in March 2025. So that should be online, never. 5,000 Blackwell GPUs at the University of Texas Austin, which sound, like they're online. More than 1,500 in a Lambda data center in Columbus, Ohio. Those are online. The Department of Energy is still in development 100,000 GPU supercluster, as well as 10,000 Nvidia Blackwell GPUs that are expected to be available in 2026 in its Equinox cluster. Really can't establish how many of those are actually in operation. 50,000 of these Blackwell

GPUs going into the still-un-Must-un-Clossus 2 supercluster, Corby's largest GB-200 Blackwell cluster of 2,496 Blackwell GPUs, tens of thousands of them deployed globally by Microsoft, including 4600 Blackwell Ultra GPUs, and 260,000 of them, these Blackwell GPUs going into five AI data centers for the South Korean government. And yeah, I just want to be clear that that is also fairly recently announced, so probably not even built, let alone powered on. I'm going to be honest, I'm genuinely unable to find one million Blackwell GPU. is like in existence. Now, some of you might say, oh, there's a bunch of secret ones. There's a bunch of them. They don't announce every single one. Here's the thing. Three million of these fucking things have

allegedly been shipped. I can't find a million of them. And considering everybody always talks about their GPU purchases, I'm kind of shocked I can. Now, I do not know where these six million Blackwell GPUs have gone, but they certainly haven't gone into data centers that are powered and turned on. In fact, power has become one of the biggest issues of building these things. In the fact, it's really difficult and maybe impossible to get the amount of power these things need to the goddamn data centers. In really simple terms, there isn't enough power or built data centers for those Blackwell GPUs to run, in part because the data centers aren't built and in part because there isn't enough power for the ones that are. Microsoft CEO Satchinadella recently said in a podcast that his

company, and I quote, didn't have the warm shells to plug into, meaning buildings with sufficient power, and heavily suggested that Microsoft may actually have a bunch of chips sitting in inventory that they couldn't plug in. Now, just to give you an estimate here, even if we say 3 million GPUs, even if we're going with the moon math of Vindvidia, if we're going into the make-believe world, the twisted mind of Jensen Huang, that's still 3 million GPUs. We're looking at still like 5 or 6 gigawatts of capacity. It's not been built. I don't even think 2 gigawatts of data center capacity have been built. And I swear to fucking God, if one of you emails me and said, America's built on 20 gigawatts or something, power can get built. Power can get built. You can build power. Getting it to the data center and actually powering the data center correctly, as in things turn on, everything works, nothing overloads, nothing blacks out, and the power is consistently done. It takes, well, it's just months of surveys and scientific stuff, and then years to just get it done. Stargate Abilene only has 200 megawatts. They're going to need overwolds. 1.4 gigawatts just to turn the fucking thing on. I'm so tired of these goddamn GPUs. But with all this

said, why, pray tell is Jensen Huang of Nvidia saying that he has 20 million Blackwell and Vera Ruben GPUs ordered through the end of 2026? Where are they fucking going, Jensen? Now, I think that number also includes the 6 million. And also, just to be clear, I know a lot of you aren't technical, which is awesome. I love, no tech, I want you all to know about this. You need to know that this is par for course with Nvidia. Invita loves schmushing accountancy things together and coming up with random numbers. Credit the case could go, our friend of the show, for telling me the story, but during the early 2020s, during the big crypto rush, Nvidia classified gaming GPUs that were sold to Bitcoin miners as gaming revenue, they got dinged by the SEC. It wasn't fraud, but just so you know,

Nvidia will move shit around. And I truly do not know where these GPUs are. I do not know even why anyone is still buying GPUs. Now, AI Bulls will tell you that there's this insatiable demand for AI, and these massive amounts of orders are proof of something or rather, and you know what, I'll give them that. It's proof that people are buying a lot of GPUs. I just don't know why. Nobody has made a profit from AI, and those making revenue aren't really making that much. Let me give you an example. My reporting on Open AI from November 12th suggests that the company only made $4.329 billion in revenue for the end of September, extrapolated from the 20% revenue share that Microsoft receives in the company.

And now, some people who write really shit our substags, have argued with the figures, claiming that they're either delayed or are not inclusive of the revenue that OpenAI is paid from Microsoft as part of Bing's AI integration and sales of OpenAI's models through Microsoft Azure. So I want to be clear of two things, to someone deeply bitter person. This is a cruel accounting, meaning that these numbers,

numbers are revenue booked in the quarter I reported them. Any comments about quarter-long delays or naive approaches, and you know who I'm fucking talking about if you're listening, are incorrect. And a Robozo. Also, Microsoft's revenue share payments to Open AI are kind of pathetic, totaling based on documents reviewed by this newsletter, publication, whatever you call me, media entity, floating blob in the podcast verse, $69.1 million in the year, Q3, 2025. And by the way, the actual number for that three-month period, including all royalties, is about $4.527 billion of revenue. I just want to be clear about something with OpenAI. I'm not saying they're misrepresenting their numbers to anyone.

I hope that Open AI is being honest with their revenues. But if it comes out, I'm right. If it comes out that it turns out that they've been telling investors completely different numbers, I'm going to be absolutely fucking insufferable. I'm going to bring in, I'm going to be playing Tommy Trump here, a walk around cheering. That's you're going to get five minutes of monologue about that. Also in the same period, OpenAI spent $8.67 billion on inference, which is the process in which an LLM creates its output. This is the biggest company in the generative AI space, with 800 million weekly active

users and the mandate of heaven in the eyes of the media. Anthropic, its largest competitor, alleges it will make $833 million in revenue in December 2025, and based on my estimates, will end up having about $4.5 to $5 billion of revenue by the end of the end of the year. Based on my report from October, Anthropics spent $2.66 billion on Amazon Web Services through the end of September, meaning that it, based on my own analysis of reported revenues, spent 104% of its revenue up to that point, just on AWS, likely spent as much on Google Cloud. Now, the reason I'm bringing up these numbers is these are the champions, the champions of the AI boom. Yet their revenues kind of fucking stink. Wow. Even if OpenAI made third,

billion dollars this year, even if Anthropic made $5 billion. Okay, wow, so that's not even $20 billion. That's like $19 billion less than Microsoft spent on GPUs and other CAPEX in the last quarter. That's dog shit. I'm sorry. I'm just tired of, I am tired of humoring this. I'm sure all of you are too. I find it loathsome that we have to pretend these people are gifted somehow. They have shit-ass businesses that burn billions of dollars. what another thing I'm tired about is everybody telling this story about Anthropic being more efficient and only burning $2.8 billion this year. Now, one has to ask a question about why this company that's allegedly reducing costs had to raise $13 billion in September 2025 after raising $3.5 billion in March 2025 after raising $4 billion in November 2024. Am I really meant to

read stories about anthropic heat in breaking? even in 2028 with a straight face, especially as other stories say there'll be cash flow positive as soon as 2027. This company's as big a pile of shit as OpenAI. Open AI raised $18.3 billion this year. That's less than $2 billion more than Anthropic, who makes a bunch less revenue. A company from defending Open AI. But these companies are the two largest ones in the generative AI space, and by extension, the two largest consumers of GPU compute. Both companies burn billions of dollars and require an infinite amount of venture capital to keep them alive at a time when the Saudi public investment fund is struggling and the US venture capital system is set to run out of cash in the next year and a half. The two largest sources of actual revenue for selling AI compute are subsidized by venture capital and debt.

What happens if these sources dry up? They're not paying out of cash flow. And in all seriousness, who else is buying AI compute? What are they doing with it? Hyper-scalers, other than Microsoft, which chose to stop reporting its AI revenue back in January, when it claimed it made about a billion dollars a month in revenue, don't disclose anything about the AI revenue, which in turn means that we have no real idea of how much real, actual money,

is coming to justify these GPUs. CoreWe've made $1.36 billion in revenue and lost $110 million doing so in the last quarter, and if that's indicative of the kind of actual real demand for AI compute, I think it's time to start panicking about whether all of this, was for nothing. Corweave has a backlog of over $50 billion in compute, and $22 billion of that is Open AI, a company that earns billions of dollars a year and lives on venture subsidies. $14 billion of that is meta, which is yet to work out how to make any kind of real money from generative AI. And no, it's generative AI ads are not the future. 404 Media, I love you, but that story was bunk.

And the rest of it is likely a mixture of Microsoft and Nvidia, which agreed to buy $6.3 billion of any unused compute from Corave through 2032. I should also be clear. I do pay and subscribe to 404. I love it. Just the AI ad story was wank. I love you. I love you Joe. I love the publication. Sorry, I also forgot Google, by the way, which is renting capacity from Corweave to rent to Open AI, and I'm not shitting you. Oh, fuck. Sorry, I also forgot to mention that Corwee's backlog problem stems from data center construction delays. That and Corweave has $14 billion in debt, mostly from buying GPUs, which it was able to raise by using GPUs as collateral, and then it had contracts. some customers willing to pay for it, such as Nvidia, who is also selling it the GPUs. I also left something out of this script, which is that just the last week, Corweve just raised another $2 billion of debt. When this all ends, I am going to be a little insufferable. But let's just be abundantly clear. CallWeave has bought all those GPUs to rent OpenAI, Microsoft for OpenAI, Meta, Google, for OpenAI, and Nvidia, which is the company that benefits from CoreWave's

continuum ability to buy GPUs. Otherwise, where's the fucking business exactly? Who are the customers? Who are the people renting the GPUs? And what is the purpose for which they're being rented? How much money is renting those GPUs? Can you tell me? Can anyone tell me? Can anyone tell me anything? You can sit and wank and waffle on about the supposed glorious AI revolution all you want. But where's the goddamn money? And why exactly are we still buying GPUs? What are they doing? To whom are they being rented? what purpose? And why isn't it creating the kind of revenue that's actually worth sharing or products that are actually worth using? Is it because the products suck? Is it because the revenue sucks? Is it because it's unprofitable to make the revenue? And why, at this point in history, do we not know?

Hundreds of billions of dollars that have made Nvidia the biggest company on the stock market, and we still do not know why people buy these fucking things, nor do we know what they fucking cost? Imagine if we sold cars and we didn't have a miles per gallon rating. I'm serious. That's effectively where we are. Oh, God. Another podcast from some SNL late-night comedy guy, 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 Acapella band with their between songs banter. 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 yard birds, right? That's the name. The Harvard Yard. 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 ads 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 podcast.

Casting. Call 844-844-Eyheart to get started. That's 844-8-44-Eyheart. Life throws hurdles big and small. The question is, how do you conquer them? On hurdle with Emily Abadi, we sit down with the most inspiring women in sports and wellness, professional athletes, coaches, and Olympic champions, to talk about the challenges that shaped them and the mindset that keeps them going. From the WNBA standout Kate Martin and rising hockey star Layla Edwards. If a boy can do it, I don't see why a girl can't. Like, I've never understood that. Like, it didn't make sense in my brain. It's hard to be in spaces that no one looks like you,

but don't ever feel like you don't belong. Don't let that be the reason you don't do it. An Olympic champs Gabby Thomas and Katie Ladecki. The ability to show a gold medal to someone and have their face light up and smile, that means the world to me. And that's what motivates me to win more gold medals. At our level, at this scale, like being able to fail in front of the entire world.

Like, I can do anything. I can do anything. Because resilience isn't just about winning. It's about showing up, even when it's hard. 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. Imagine an Olympics where doping is not only legal but encouraged. It's the enhanced games.

Some call it grotesque. Others say it's unleashing human potential. Either way, the podcast's superhuman documented it all, embedded in the game. games and with the athletes for a full year. Within probably 10 days, I'd put on 10 pounds. I was having trouble stopping the muscle growth. Listen to Superhuman on the IHard Radio app, Apple Podcasts, or wherever you get your podcasts. Invita is currently making hundreds of billions of dollars in revenue, selling GPUs to companies that either plug them in and start losing money, or I assume put them in a warehouse for safekeeping. And those companies increasingly are racking up mountains of debt to do so,

and billions more in long-term lease payments. And this brings me to my core anxiety. Why exactly are companies pre-ordering GPUs? What benefit is there in doing so? Blackwell does not appear to be more efficient in a way that actually makes anybody a profit, and we're potentially years from seeing these GPUs in operation in data centers at the scale. They're being shipped. So why is anyone buying more? I just want to be really specific about something, because I don't feel like I can nailed this down. Two and a half years, $50 billion per gigawatt of data centers. You may be thinking, well, Blackwell, you'll just just shove them in the old data centers, right? No, they use these Oberon racks, specific new racks. They take a bunch more power and they need a bunch of liquid cooling. You can't just retrofit easily. You have to bulldoze shit and rebuild. Well, remove all the housing and then add HVX stuff. It's very expensive and takes a long time. And look, I just don't know what's happening with these GPUs and I'm a little bit concerned. And I doubt these are new customers. They're likely hyperscalalalers. neoclouds like Corweave and resellers like Dell and Super Micro, who also both sell to Corwave,

because the only companies that can actually afford to buy GPUs are those with massive amounts of cash or debt, to the point that even Google, Amazon, Meta and Oracle are taken on massive amounts of new debt, all without a plan to make a profit. Oracle is looking potentially at $56 billion of debt. It's completely bonkers. Nvidia's largest customers are increasingly unable to afford its GPUs, which appear to be increasing in price with every subsequent generation. Nvidia's GPUs are so expensive that the only way you can buy them is by already having billions of dollars or being able to raise billions of dollars, which means in a very real sense, that Nvidia is dependent not on its customers, but on its customers' credit ratings and financial backers and the larger private credit institutions, which I'm eventually going to have to do a newsletter on

and a podcast dunkers. Honestly, every time I'll read about the private credit situation would blow out again. I begin hearing the Bui-Buh, bit from Kill Bill. It's not good. And to make matters worse, the key reason that one would buy a GPU is to either run AI services using it or rent it to somebody else to run AI services. And the two largest parties spending money on these services are OpenAI and Anthropic, both of whom lose billions of dollars and thus are, much like the people buying the GPUs, dependent on venture capital and debt. Now remember, Open AI and Anthropic both have lines of credit. Four billion dollars for OpenAI and two and a half Billy for Anthropos. In simple terms, Nvidia's customers rely on debt to buy its GPUs, and Nvidia's customers' customers rely on debt to pay to rent them. Yeah, it's not great. Yet it actually gets worse from there. Who, after all, are the biggest customers paying the company's renting GPUs to sell their AI bottles? That's right, AI startups, all of which are deeply unprofitable.

Cursar, Anthropics' largest customer and now its biggest competitor in the AI coding sphere, raised $2.3 billion in November after raising $900 million in June. But Plex, they one of the most popular, and I put that in air quotes, raised $200 million in September after raising $100 million in July, after seeming to fail to raise half a billion dollars in May, after raising $500 million in December 2024. Cognition raised $400 million in September after raising $300 million in March, and Cohere raised $100 million in September a month after it raised $500 million.

None of these companies are profitable. not even close. I read a story a newcomer by Tom Dutant that said the cursor sends 100% of its revenue to Anthropic to pay for its models. Very cool. So I really want to lay this out for you because it's very bad when you think about it. So venture capital is feeding money to startups. They fund the startups, AI startups, and then they pay either or both Open AI or Anthropic to use their models. Now Open AI and Anthropic need to serve those models, right? So they then raise venture capital or debt to pay hypers or neoclouds to rent invidia GPUs. At that point, hypers and neoclots then use either debt or existing cash flow in the case of hypers, though

not for long, to buy more Nvidia GPUs. Only one company appears to make profit here and it's Nvidia. Well, Nvidia and its resellers like Dell and Super Micro, which buy Nvidia GPUs, put them in servers and sell them to neoclodes like Lambda or CoreWave. At some point, link in this debt-backed chain breaks because very little cash flow exists to prop it up. At some point, venture capitalists will be forced to stop funneling money into unprofitable, unsustainable AI companies, which will make those companies unable to funnel money into the pockets of Anthropic and Open AI who rent the GPUs will then not be able to funnel money into the pockets of those buying GPUs, which will make it harder for those companies to justify buying GPUs.

At that point, some of this comes to Invidia, and Nvidia doesn't make so much money. And if I'm honest, none of Nvidia's success really makes any sense. Who's buying so many GPUs and where are they going? Why are Nvidia's inventories increasing? Is it really just pre-buying parts for future orders? Why are their accounts receivable climbing? And how much product is Nvidia shipping before it gets paid?

While these are both explainable as this is a big company and this is how companies do business. And that's true. Why do receivables not seem to be coming down? And how long, realistically, can the largest company on the stock market continue to grow revenues selling assets that only seem to lose its customers' money and don't seem to even be in use for years? I worry about it in video, not because I think there's a massive scandal, but because so much rides on its success, and its success rides on the back of dwindling amounts of venture capital and dare, because nobody is actually making money to pay for these GPUs, let alone running them. In fact, I'm not even saying, Nvidia goes tits up, I want to be clear about that. I think they

may even have another good quarter or two in them. It really just comes down to how long people are willing to be stupid and how long Jensen Wong is able to call up Satchin Adela and Co at three in the morning and say, buy one billion dollars of GPUs, you pig, Fendom style, baby. But really, I think much of the U.S. stock market's growth is held up by how long everybody is willing to be gaslit by Jensen Huang into believing that they need more GPUs. At this point, it's barely about AI anymore, as AI revenue, real cash made from selling services run on those GPUs doesn't even cover the costs, let alone create the cash flow necessary to buy more $70,000 GPUs thousands at a time. It's not like any actual innovation or progress is driving this bullshit. In any case, the markets

crave a healthy invidia. As so many hundreds of billions of dollars of invidia's stock sits in the hands of retail investors and people's 401ks and its endless growth has helped paper over the pallid growth of the US stock market and, by extension, the decay of the tech industry's ability to innovate. Once this pops and it will pop because there's simply not enough money to do this forever, there must be a referendum on those that chose to ignore the naked instability of this era and the endless lies that inflated the AI bubble. I will be walking around with a game. I will be walking around with a I am going to be taking heads. I am fucking sick of this era and what I'm most sick of is that so few people are still to this day willing to admit how bad this is. And I know in the next few months we're going to get articles from major media outlets that say how could we have seen this coming. And like I said in the previous episode, they could have fucking looked. All of them could have looked and they could have looked a year ago. The incredible support I get from all of you truly makes this show a joy to make, even though I've done way too many retakes on this and apologies to Matt Ossalski for the noises I made.

But I think in the next few months we're all going to be validated. It's going to be the great vindication. But until then, everybody is betting billions on the idea that Wiley Coyote won't look down. He's going to have to at some point, won't he? Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Mattersowski. 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 E-Z at Better Offline.com or visit Better Offline.com to find more podcast links and, of course, my newsletter. I also really recommend you go to chat. Where's Your Ed dot at to visit the Discord and go to R-S-Better-O-Line 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 you. Check us out on the IHeart Radio 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. 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 or wherever you get your podcasts.

Presented by Capital One, founding partner of I Heart Women's Sports. A win is a win. A win is a win. I don't care what I'm saying. Yep, that's me, Cliver Taylor the 4th. You might have seen the skits, my basketball and college football journey, or my career in sports media. Well, now I'm bringing all of that excitement to my brand new podcast, the Clifers Show.

This is a place for raw, unfilled conversations with athletes, creators, and voices that not only deserve to be heard, but celebrated. So let's get to it. Listen to the Clifford show on the I Heart Radio app, Apple Podcasts, or wherever you get your podcast. And for more behind the scenes, follow at Clifford and at TikTok Podcast Network on TikTok. I'm Michelle McPhee,

and I've been unraveling the strangest criminal alliance I've ever reported on, a Mormon polygamist and an Armenian businessman. Multi-million dollar house, Ferraris and Lamborghinis, private jets, a billion dollar fraud. But how long can this alliance last? Tell me what you know.

Is somebody coming after me? Listen to Kingdom of Fraud on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. This is an IHeart podcast. Guaranteed human.