Better Offline - The AI Industry Is Losing

Episode Date: May 27, 2026

In this week's Better Offline, Ed Zitron runs you through how Uber’s COO said the quiet part out loud - that AI’s outputs and efficacy do not match up with its ruinous costs - and how despite its bluster, the AI industry’s grift is failing.Free newsletter tie-in: https://www.wheresyoured.at/the-revenge-of-the-business-idiot/ Please subscribe to my premium newsletter - save $10 off a year of my premium newsletter: https://edzitronswheresyouredatghostio.outpost.pub/public/promo-subscription/gzqwkv54e1  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.

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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. Like, that's the rate we gotta be going. Yeah, that's a good attitude.

No matter the era, Drink Chams brings you the biggest names and the most unfiltered conversations. Listen to Drink Chams from the Black Effect Podcast Network on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. AllZone Media Hello and welcome to Better Offline.

I'm your host, Ed Zittron, and I am not a car. Yesterday, Business Insider report that Uber C.O. Andrew McDonald had said, and I quote, that its AI costs were becoming harder to justify and that the link was not there between spedding money on AI tokens and creating more useful features. Yeah, just going to throw a boss, we'll throw a hoop real quick. After three long years of hammering it home, I have finally been proven right.

AI's outputs and efficacy do not match up with its ruinous costs. When organizations have to pay the actual token costs of AI versus using subsidized subscriptions, they're forced to measure the actual return on investment from AI and are immediately balking at the results. They're squealing for mercy. They're saying, honey, I can't afford it. Now, to give you some context, Anthropic only moved organizations to token-based billing sometime in Q1, 2026. This is at most four months of having to pay the true costs of their AI

token burn, and they're already squealing, they're already begging for mercy, they're already saying, sir, no more tokens. AI has a revenue ceiling and an economic mismatch with its customer base. It's time to accept it. Every time you've heard somebody say that AI is real, it's here, and it's transformative, you've heard from somebody paying a monthly subscription to a service that allows its customers to burn anywhere from $3 to $13 worth of tokens for every dollar of their subscription. Even GitHub Copilot, which paid the model providers directly, was letting people burn on a $39 a month subscription $1,300 to $6,000 in a month. Every effervescent booster and captured business idiot editor crowing about the power of AI has done

so without ever really facing its real costs, or I think even using it very much. However useful LLMs may seem to them is a facade for a product that costs far too much money for outputs that may or may not actually result in something functional or helpful. When you're not paying for tokens, these mistakes are easy to ignore. These subscriptions mask the ugly truth of AI, that you're paying on a per million token basis regardless of whether you get what you want, or even if the model makes mistakes or creates more problems that you then have to spend more tokens to fix. It's a scam, it's a con, it never may do. sense. An Uber's COO has given everybody permission to talk about the inherent economic mismatch of AI and also revealed that AI companies like Anthropic and Open AI have a ceiling far below that

which they need to justify their valuations. These companies need to be making $200 billion a year by 2030 or they cannot keep up with their own costs. Now Anthropics' rapid revenue growth is the result of companies spending millions or tens or even hundreds of millions of dollars on its tokens. For its revenue story to make sense, this revenue would have to be stable, replicable and sustainable. Instead, it appears that organizations have been burning tokens without any real understanding of why, other than that they need to do AI and LLM coding is the future, and all of their other dickhead business idiot friends are saying, oh, I've got, I'm letting everyone spend $10 million a month on this shit because I have a fucking piece of

rebar in my skull. For this to make sense, the majority of organizations would have to sustain and grow, a massive spend on AI tokens from Anthropic and OpenAI. Instead, it appears that this token burn was inherently experimental and entirely disconnected from messy things like, I don't know, return on investment. Uber already noted back in April that it blew through its annual token budget in a few months, and that conversation, reported by Laura Bratton of the information for end of the show, clearly led to an internal back and forth that will end in it cutting its spend on AI models. I've now spoken to three different large organizations that are all echoing similar anxieties about the ROI of AI. Nobody can actually tell why they're spending this much

money. Things aren't getting shipped fast, that software isn't better, and the only people that seem excited about it are business idiots disconnected from production, and even they are becoming cost-conscious when faced with millions of dollars of token bills. Anthropical Open AI cannot afford for things to slow down, as they've both signed up to over a trillion dollars of compute commitments across Google, Microsoft, Amazon, CallWeave, Oracle and Cerebrus. Just to be clear as well, OpenAI has to be making $284 billion by 2030, and they need to be profitable at that point, too. Otherwise, Oracle cannot afford its own bills. This is not hyperbole. This is quoting back OpenAI's own projected revenues from their investor decks.

But in reality, it appears there's a limit to which organizations can be abused and manipulated into believing that the future is here, and that limit is when they pay millions of dollars a month for something that doesn't appear to have a measurable return on investment. My friends, the business idiots are losing, because they never had a plan to begin with. As I've said before, AI is only as real as its subsidies. ChatGPT is only free to hundreds of billions of people because OpenAI is able to raise hundreds of billions of dollars, have Microsoft and Google and Amazon and Corwee build their own infrastructure, and basically do everything for them. Much like Anthropic is only able to

subsidize its subscribers anywhere from $8 to $13.5 for every dollar of revenue because of the endless venture welfare they receive and from hyperscalers too. The underlying economics suggest that no subscription-based AI service, let alone a free one, makes any kind of financial sense. And the only reason that everybody has had such unrestrained access to AI is because the media and the markets approved it, and the people with the money are deluded and disconnected from the process of value creation on almost every imaginable level. Any statements around Anthropic actually being profitable on inference are products of fantasy and magical thinking. There's still copium for people that would rather delude themselves into believing that any of this ever made sense than face reality or do basic mathematics. Again, the assumption is that companies would never just burn a lot of money.

But that too is catering to the greater myth of executive competence, something that nobody who spends any amount of time around managers or CEOs would ever believe. GitHub co-pilot let people burn thousands of dollars on a $39 a month subscription as a means of expressing growth. I absolutely 100% believe that both OpenAI and Anthropic are doing exactly the same thing, and that neither of them has some magical way of making inference cheap enough to justify letting people burn thousands of dollars in 100 or $200 or $200 a month. month subscription. The whole profitable on inference thing is a fucking myth. And to give them the benefit of the doubt is to empower them to continue raising money by conning their investors and the general public and to continue perpetuating an era of software that runs contrary to what makes technology good. Their goal is simple. To ram as much of this through to as many people as possible to get them to

spend as much money as possible until they work out a way to make open AI or anthropic or these endless data centers into something approaching a real business. One of the greatest mistakes we can make in our lives is to assume that the rich and powerful have any idea what the future holds or that they have any grand plan or strategy. It's very likely that Dario Amadei and Sam Hortman's plan is to keep burning money until somebody works out for them how to stop burning money. And in the interim, their plan is to get as many users as they can to keep raising money. That's it. That's the entire plan. There is no secret thing. not building AGI, they don't know how to do that, AGI doesn't exist, they don't have secretly

super profitable inference. If they did, they would only sell model access, that's all they would do and it would be profitable, right? They don't have that, they don't have a plan. There is no secret model behind the scenes. Even mythos is a fucking myth. I've been over that before, I'll put a link in the notes. And similarly, Microsoft, Google, Meta, and Amazon's plan is to keep building data centers and the hope they'll have a reason to use them by the time they're actually finished. There is no other plan. They do not have a secret invention coming. They do not have AGI in a box in their office. They do not have anything. And the reason they're spending so much money and shoving AI into everything you use is because they have no fucking clue what to do. This is why

Wario Amadeh makes wild claims about AI replacing 50% of all white-collar workers. Or Microsoft AI CEO Mustafa Suleiman claims all-white-collar labor will be automated in 18 months. Because the products themselves the actual products aren't impressive enough to win you over or to justify the hundreds of billions of dollars being sunk into AI. They say these things to make you think that they have a scary or powerful technology behind the scenes when they do not. And yes, God yes, does that include fucking mythos? I'm so tired of seeing news stories about how banks are meeting up to talk about the scary monster, the scary Dracula of mythos. They should have called it Dracula. Why pretend to take this shit seriously? And this forceful, harassment-grade incursion of AI services into

our daily lives is not a sign of its power, but a gesture of the lack of confidence and fear in the hearts of its progenitors. Good shit sells by telling you why it's good. Dodgy shit sells by tricking and scaring you and taking advantage of business idiots who think that using an LLM to type emails and spending 12 hours a day on Twitter constitutes work. I believe that the vast majority of these data centers go on use and or unfinished, and that most AI startups will die once the venture capital subsidies dry up. I believe that neither open AI nor Anthropic have a future, and that their revenues are only made possible through venture subsidies for startups using their models, and the experimental revenue of business idiots that don't really know why they're doing AI in the first

place. AI demand remains a result of societal psychosis and a weakness in those who are meant to scrutinize the untrustworthy. Its unraveling will be frank. as impossible to see coming, because nobody in power bothered to fucking look. Five months, Toronto, Pride is an opportunity for you to create your own space, to celebrate your existence. IHeartRadio is proud to be an official sponsor of Pride Toronto Festival, and we won't stop. Celebrate Pride. Turn up the love and listen to IHeart Pride Canada, your 24-7 radio stream and the only

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Hey, I'm Hoda Kotby, host of the podcast, Joy 101 with Hoda Kotby. Together, we're going to have meaningful conversations with the world's most fascinating people, like when actress Olivia Munn shared how she overcame fierce health challenges. I've gone through breast cancer and then helped my mother through breast cancer, and that was more difficult. There's a lot of people who understand postpartner depression. I was not prepared for postpartumings. Listen to Joy 101 with Hoda Kotby on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts.

A decade ago, the ethanol kingpin of Iowa became the king of corn in Brazil. So we met with a lot of larger farmers, went from Bahia to Tokitines to Madagroso. And he brought a team of executives. They were going to help the country get in on a gold rush. Carbon and its derivatives are going to be really the next great commodity that the globe's going to trade. But back home in Iowa, trouble was brewing. If you live in Iowa, your land, your water, and your voice could all be at risk thanks to a man

named Bruce Rastetter. Now, people are questioning if his climate solutions have anything to do with climate at all. You got to give Bruce and the guys credit. They're Republicans. They don't give a shit about it. It's now. On this season of drilled, Carbon Cowboys, the story of how the ethanol kingpin of Iowa became the king of corn in Brazil and what it tells us about the limits of the limits of the world.

of technology and markets to solve the climate crisis. Listen on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. And look, I've seen some of you on the Reddit, I've had some emails from you. You're scared. I get it. It's easy to feel hopeless. We're at a point where the greed and the shamelessness and the stupidity is at its fever pitch. We've reached a time, too, when the mask has started to slip. And the C-suite imbecile class is unabashed about its loathing of people, as was the case when the CEO of a UK bank, Bill Winters, talked about how those at risk of losing

their jobs to AI are lower value human capital. At the same event where he said that the company would likely share nearly 8,000 roles in the coming years due to AI. Winters would later apologize for his choice of words, although to be clear he was being absolutely honest when he made the remarks. That's what he believes. That's what gets him up in the morning. That's what gets him hard. Bill Winters loves him.

Now, it must be clear for legal reasons. That was a joke. I don't know about Bill Winters' erection. I won't guess it any further. Anyway, moving on, though. Everything feels rough because the AI industry is equal parts desperate and overconfident. AI executives believe that they can cram through enough promises of money into the system that the system would rather cannibalize itself and admit it made a mistake. Sundar Pishai, Andy Jassy, Larry Ellison, Elon Musk, Mark Zuckerberg and Sachinadella will gladly annihilate hundreds of billions of dollars to avoid facing the inevitable. But once they do,

it'll be gruesome. At the same time, the things that they need to happen, actual profitability, actual returns on investment, actual tangible proof that this is a real thing, rather than something they all have to actively conspire to keep alive, well, they're not happening. Each week we hear about new AI mega projects that will dominate our countryside with blinding lights, endless noise, and fume belching gas turbines at such a scale that it feels, impossible it could ever stop. The system is absolutely going to try and exhaust itself to keep it going. The government bought $9 billion of Blackwell GPUs, which may seem like it's too big to fail, but what it actually is is just a way to keep Nvidia's plates spinning for another quarter.

$9 billion isn't going to be enough. In truth, the amount of money that Nvidia needs to keep this going is so extreme that it is now a test of how long the debt markets and the hyperscalers can keep sustaining the situation, the hype and the industry itself. A trillion dollars in annual revenue is necessary by the end of 2028 for Nvidia, which would require over 30 gigawatts of actual operational data center capacity to be built by then at a time when only 5 gigawatts at most appears to be under construction. Under construction could mean anything from actual building happening to a scaffolding yard. Nevertheless, even the sweatiest least trustworthy boosters have begun to sneak in statements about how we're probably not in a bubble. Yeah, it's a bubble, but it's a good bubble.

Jeff Bezos, when asked about the AI bubble, said that you shouldn't worry about it, which, well, Jeff, that doesn't really help anyone, Jeff. I mean, you probably don't need to worry about it, you rich twat. Anyway, none of this is to say that the mood is good. The vibes are disastrous. Everybody's exhausted. Those who love AI vibrate with a strange soullessness, constantly talking about the incredible power of AI without ever showing what it did or perhaps what all that supposed saved time got them. What are you doing with the spare time? I don't see any chuckle fucks providing anything useful to the word. I don't see you living lives of leisure. I just see you posting online. I can do that without the power of AI because I have a

working brain. What's your fucking excuse? Good Lord. One thing I'll add though that adds to the malaise is that everyone I talk to to a lot of people at hyperskerskers, they're all fucking miserable. It's terrible there. The business idiots are running the show, and they're both saying spend more money on AI, but also don't spend quite as much money on AI because it costs a lot. Nobody really knows why they're doing this other than the fact it's what everyone else is doing. And basically, every person in every job has had somebody intimate that they're going to lose their job to a computer every time they open a newspaper or use a website.

And every app has some sort of desperate vulgar pop-up about a feature that will generate some bullshit. it, obfuscating the features you actually want to use in favor of those that might lose the company money? Because the company has to prove to the people that invested in the company that they're futuristic and have their AI integrations, even though no one likes them and they only seem to lose money. Alternatively, their CEO either has mild or severe AI psychosis to the point that they have decided to violate your user experience because AI is a non-consensual technology at its heart. This is what it is.

nobody asked for this. No one wants this. We've had it forced upon us. Even the people excited by it would rather do something else. And all of that excitement doesn't seem to amount to anything. And they all seem desperate and they seem anxious and scared and vulgar in the way they attack their detractors. And that's because they're losing. They all know it. They're desperate. They're scared. They're scared that the thing that they mortgage their companies and careers and reputations on is all falling apart. And it seems that there are nearly as many announcements of new large data center developments as there are cancellations of said data center projects. While hypers can dismiss that as a simple reallocation of capital and nothing to worry about,

it's harder to ignore the growing backlash against these facilities from locals and the success that these locals have had, especially in blocking multiple different developments or setting up actual, what, county-wide and statewide moratoriums depending on where you look. And it gets worse. Anthropic had to conspire with Elon fucking Musk to conjure up a single profitable quarter, with SpaceX deliberately discounting two months of compute costs as a means of swindling the media and its investors one last time. I swear to God, the object permanence in the valley is not so good folks, but in response, Open AI either leaked or had leaked that it had a negative 122% non-gap operating margin in Q1-20206 and chat GPT growth had stalled.

Anthropic is either the single most successful grifter of all time or speed running a con where it fudges together numbers to raise endless amounts of money to keep its billion or trillion dollar burn going. These are not the actions of honest, sustainable companies that will exist in the future. I believe that we are on course for a truly horrible crash, the likes of which may rewrite the venture capital industry and mortally wound one or more hyperscalers, as well as fundamentally divide society on so many levels into those that fell for this and those that did not. This will, in the short term, be absolutely fucking horrible for our markets and our wider economy as a result of the time bomb of private credit and private equity and their failed investments in

software and their failing investments in data centers. In the long term, I see it as that they live moment for many millions of secret imbeciles and credence in our mist, and I don't think it'll be easy to wash the stench off for those that really pledge themselves to the graveyard smash of AI. We will win long term. What they are doing is not working. The future will not be without pain, nor will it be easy or pleasant, or something I will relish him. But in the long term, I think this is a moment where the greater business idiot incursion faces a reckoning with a reality it believed it could change through sheer force of will.

These people don't know how to build things that work anymore, and thus the only thing they can do is spend money and fire people. They believe in nothing other than growth, and one cannot exist on belief in hype alone, at least not forever. And I can't wait to watch what happens when it collapses. Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matt Rosowski.

You can check out my book. more of his music and audio projects at Matersowski.com. M-A-T-T-O-S-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?org 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, for more from CoolZone visit our website, coolzonemedia.com, or check us out on the IHeartRadio app, Apple Podcasts, or wherever you get your podcasts. 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, How to Coppe. If you're craving inspiration to maximize your joy, tune into these candid, uplifting, and moving on-air chats. Open your free IHeart Radio, app search Joy 101 and listen now. Joy 101 with Hoda Kotfi is presented by CVS. Hey, this is Chuck from Stuff You Should Know, and we're submitting our most sciencey episodes for your peer review with our new stuff you should know doing science playlist.

Out now. You want to know about Occam's Razor? Simplest explanation is usually the right one? We got you covered. Wondered what chaos theory is ever since the first time you saw Jurassic Park. Well, come on down. So distill a nice pot of tea, everybody.

turn down the gas on your Bunsen burner and slip into your most comfortable lab coat and listen to the stuff you should know doing science playlist on the iHeart radio app apple podcasts or wherever you get your podcasts here's something that should not be as complicated as it is getting a racist statue removed and here's something that should be a whole lot easier than it is getting a new one put up in its place i'm akila hughes and rebel spirit season two is about both of those things as i was watching these statues come down. I was thinking about what it meant that I grew up in a majority black city in which there were more homages to enslavers than there were to enslave people. Listen to Rebel Spirit season two on the Iheart radio app, Apple Podcasts, or wherever you get your podcasts. June is Black Music Month, and on the Drink Chams podcast, we're speaking with the hottest names in the culture, like Sway Lee. Do you realize how legendary you are?

I appreciate that. I'd be seeing it, but I'm like, man, I still got like so much more to do. Like Prince, he dropped like 30 albums. We drop 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 an IHeart podcast. Guaranteed human.