TRASHFUTURE - PREVIEW: I Feel Like Margin Call ft. Ed Zitron

Episode Date: November 14, 2025

FULL EPISODE ON https://www.patreon.com/posts/i-feel-like-call-143560320 Ed Zitron returns to discuss all things AI bubble - specifically OpenAI's uncertain balance sheet, the potential government backstop of data centre construction, and the very real and material constraints (such as gas turbine production) on building god via Nvidia Blackwell chips. Also we get sidetracked and stunlocked by the new tranche of Epstein revelations at the very outset. Ed's writing can be found here: https://www.wheresyoured.at

Ed, I want to ask you a question. Yes. And I'm going to, I want to ask the whole question. It's trash YouTube, by the way. Okay. Is, oh, yeah, don't worry about it. You know what it is. Look, if you're listening to this, you already pay for it.

You know what you're listening to. We've been on a world historical run of introducing the show. But if we're so good at it. Ed, I want to ask you something. I want you to let me get through the whole question. Okay. Is it good if you and the CEO of Microsoft, an organization to which you pay what appears to be a deceptively large amount of money,

just imagine this. you and the CEO of Microsoft, you go on a podcast, it's hosted by an investor in your company. Let's say it's an AI lab. And you say on that podcast, you want to spend $1.4 trillion against $13 billion of annual recurring revenue. And the investor says, oh, cool, how? Is it good if your response is, we'll sell your shares if you don't believe in us? Also, we make more money than that. Is that good if that happened? Yes. Awesome. Perfect. Podcast over. Let's go back to the Epstein stuff. It's the good shit. And also, ideally you want to seem extremely bothered by the question.

The question needs to make you kind of recoil like you've been electrocuted a little. Almost as though someone's about to unveil a dark secret that you have. Yes, exactly. So you need to get ahead of that information as quickly and aggressively as possible.

So it's just Sam Altman sending Satya and Adela spinning 3D comic sans word art that's just stealing. Fraud. Love me. The Open AI internal email is leaking. It's just like, like, loved working with you on the AI that doesn't work.

Oh, no. Should we just tell them numbers that are bigger than a real? Sure. And then, of course, we also had the B word backstop. Oh, yes. I'll say, I'll ask you another question. Let's say on the same day, this is another, is this good, Ed, on the same day, in theory, on the day that you had that disastrous interview, sorry, that good interview, excuse me.

Let's say your CFO. Let's call her, I don't know, Sarah Fryer. Let's say she, at more or less the same time, goes in a while. Wall Street Journal panel and accidentally reveals that your organization has a hidden plan to have the government step in and guarantee your backstop, the huge amount of debt that you and your partners are taking on to build more data centers, and then your CEO immediately after managing one crisis, has to go manage another crisis and say, she didn't mean that. We're not going to get a backstop from the government, even though she said backstop from the government, is clearly

what they mean. Is that good? That's also good, but what would know, the only thing that would make that better is if a week previously you'd literally send a letter to the government asking for one. That idea. We're here for the bank's compute, not your compute. Your compute's insured by the federal government. You're not going to lose a dime. What's great about it is they weren't even asking for a backstop on their own revenue or compute. It was to build these data centers because nobody will lend them fucking money because their company looks like a dog's dinner.

Oh, so not only do you have to sort of backstop our sort of shit that doesn't work. You have to backstop our infinite growth as well. Yes, exactly. That's, you've nailed it. Oh, awesome. Banks don't even do that. November, they used to. It ended in 2008.

Yeah, no, what I mean is if you're like, okay, I need you to watch not just my store, but this pile of sweating dynamite that I've put in the basement under it. That's 2008 again. That's a since 2009 statistic. Oh, my God. Well, I don't think we have to worry because Altman did say that Open AI's revenue is well more than $13 billion. dollars. And I'm pretty sure, Ed, if I read your most recent piece right, their inference costs are actually much lower than we might think. So their profitability is considerably higher. Did I get that

right? I mean, you did other than the opposite, which is there much. How can they make such an embarrassing mistake? So the piece I put out, it's they've spent $8.67 billion on inference from beginning of January through end of September 2025, which is, and what's great is there's reports that are like $2.5 billion of inference for the first half of the year. So just to be clear, the actual inference costs for the first half of the $5.022 billion. So it's very obvious that the numbers that have been reported on this company are complete bollocks. Now, I was able to extrapolate in this piece because I got Microsoft's revenue share payments for Open AI as well. I was able to extrapolate Open AI's revenues. And they're just calamitously lower. They're just way lower than

everything reported. Not so low that something appears to be massively missing. just lower than they've said. And I've been speaking to some of my esteemed peers in the past 24 hours about it. And everyone has a fucking excuse. Are you suggesting that the entire tech journalist industry may not be particularly skeptical of the guy behind the big story that's selling all the clicks? I know. I was shocked too. I'm crazy. No, but it's, I've had people say, well, what if it's just their API revenue? It's not just their API revenue. They may, I think, let's see, I should bring up my numbers. So when I, also, fun fact, when I got these numbers through, I was walking to my girlfriend's house dressed as Fox Mulder from the X-Files for Halloween.

So just like a one, I literally walked into her room. It's like, you're never going to believe this. It was brilliant. Toss his file onto desk. No, it really, it really was. She was dressed as Scully. It's amazing. But yeah, so give you an example.

So everyone reported in 2024, the OpenAI made $3.7 billion and spent, what was it, $2 billion on computers. for just running the models, and $4 billion, I think, for training. But putting that aside, that's $2 billion for inference, $3.7 billion of revenue. So they may have got those numbers mixed up, because based on what I have, in 2024, open AI spent $3.767 billion just on inference, just for running the models, and they made $2.469 billion of revenue. Now, they do get paid money from their agreement with Microsoft for selling models, and they do get paid money for something out of Bing,

but I will tell you, it's not another billion fucking dollars, it isn't. And anybody saying that is a rube, but I think that they may have just been saying, I can't speak to the dark heart of Sam Altman, but I think they're just fucking fudging the numbers because all of the leaks have been from investor documents, which probably have paragraph long disclaimers at the end. I realize I'm just ranting now, but the last 24 hours have just been insane as watching people contort themselves into pretzels, trying to be like, well, maybe it's something else. Maybe it's not the full picture.

And I want to zoom out a little bit, right? Right. Which is Open AI is at the, it's the absolute dark heart of the entire generative AI LLM sector in America slash sort of the English-speaking worlds last year, whatever, right? Open AI is the biggest, baddest motherfucker at the center of all of it. It's the economy now, which is great. And in fact, there's recently been a report released by J.P. Morgan about a number of things have been happening at banks, such as Deutsche Bank hedging now against data center risk quite actively. Hell yeah.

The cost to ensure credit default for companies like Oracle spiking. I note, once again, Mr. Masayoshi, I noted SoftBanks selling its entire stake in Nvidia. Well, that's so you can give it to Open AI. I'm not even kidding. They owe them $22.5 billion of funding. I'm not giving, I'm not fucking with you. They had to sell shares in Deutsche Telecom, take a loan on their arm stock, and sell there in video shares just to give that money to open AI. It rules. It's the first time Masayoshi-San has ever gotten out of a, no, sorry, the second time

Masayoshi-san has ever gotten out of a bubble at the top, and it was to just buy back into a bubbly part of the bubble. It's like Yoda Olive meme. It's insane. Most of the money that he has, by the way, is just because he got out of one other bubble at the top, kind of by accident. Yes.

So, you think about it this way. This is the company, and if its numbers are this, let's say, unreliable, then what we're doing is we're building a gigantic amount of the economy on top of that. I mean, it's, I always, I'd like to sort of remind everybody that economic growth in the United States, the economic powerhouse of this, our block of the world, 80% of the gains in the S&P 500 were down to basically open AI, more or less. Like companies supplying them, building data centers, hyper-scalers, all things like this. I'm not really for open AI. It's just, this is actually

what's worse. So all of those data centers that are being built are just for random fucking companies. They're just random private equity firms standing up data centers and then being like, we will get a tenant once this bill. Sorry, it's just like, this shit is just driving me insane. Pardon me. Basically, but like 80% of the economy is down to the generative AI sector, which is sort of sitting on top of like this one very lie prone defensive asshole, essentially. So what Fryer said, by the way, at the Wall Street Journal conference is when she talked about the backstop, she said the U.S. government could backstop the guarantee that allows the financing to happen. What she said was, in a sort of non-terrifying way, the banks are out of money.

Or if they are, then the government will have to like do top. The one bank that lends to three companies that give us money is out of money. Well, so basically hyperscalers have been funding a lot of their like, you know, gigantic cash burn by depending on who you're talking about, if it's like alphabet or meta, open AI, different kinds of companies, different kinds of financing. Some sell shares. Some just use some of their giant revenues. Others get like huge amounts of money invested in them. But increasingly, all of that liquidity is drying up and they're having to turn to debt, which is fucking terrifying because debt is it's supposed to be a different kind of market. You're supposed to finance different kinds of projects with it. And also debt begins to get into

mainstream finance institutions like banks, for example, that might hold deposits and therefore be insured by the federal government, or there might be asking the federal government to come in and insure the debt anyway like they used to do with mortgages, which led to 2008, basically.