January 30, 2026 • 11 mins
In the final part of this week’s Dot Com Bubble series, Ed Zitron walks you through to the logical endpoints of his arguments about the AI bubble - a 40%-90% collapse of NVIDIA’s revenues, tens of billions of dollars of impairments for hyperscalers, an existential contraction in venture capital, the near-collapse of Oracle, and $200 billion or more in unpaid data center debt.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Media. Hello and welcome to bear off Line. I'm your
host ed Zetron. Today is the final part of Bubble
Week and our four part dot com Bubble special. I
(00:25):
am worryingly invested in this show. I've put so many
hours into it. This is the most I've done in
the January. I'm having the time of my fucking life.
But this four part has been rough, and it's not
been rough for the recording. It's rough because every time
I go over these details, they fill me full of anxiety.
I don't enjoy being right here. Sure I get the satisfaction,
(00:46):
Sure I get the clicks and all that, but like
it sucks, It sucks. I'm really fucking worried. I'm not
doing this to be contrarian. I'm seeing these things and
I'm worried more people aren't seeing them, and I'm worried
that the after effects will be so much worse than
the dot com bubble. So this Foe part was somewhat
(01:08):
drawn from a premium piece I did a few weeks
ago called Inventively. This is worse than the dot com bubble.
I really suggest you subscribe to my premium newsletter or
be in there. But if you don't. I've had a
little mustard on it and truncated it for this because
you needed to be different in voice. Nevertheless, you should subscribe.
But when I was writing that, I actually went into
it trying to prove myself wrong. I spent hours and
(01:31):
hours reading old articles through broken paywalls and archive dot
org links, in the hopes that I'd find some sort
of positive spin, a way that the AI bubble wasn't
as bad, some sliver or nugget of joy, some shread
of hope. And everything I've read has made me more worried,
not less. The real problem is that there are similarities,
but only with the worst parts of both bubbles. We've
(01:52):
got stupid amounts of money being sunk into stuff. We've
got stupid companies that want to ypo. We've got hopeless
startups duced up by edulous venture capitalists and marketed by
even more credulous journalists. Except this time we have the
worst margins this side of a vineyard planted in Las Vegas, Nevada,
and despicable boosters that will go to war with you
to try and improve You're wrong. Using ghost stories, fairy tales,
(02:14):
and Bixie dust, I realize I'm being a little cavalier
and colloquial about this, and that's because I feel emotionally drained,
is the way i'd put in. Things are so much
worse than I thought. I really thought i'd find something good.
I'd dig into the past and find that there were direct,
obvious similarities that would say, Okay, these GPUs will be useful.
(02:35):
There will be something we've built here. I can't find it.
I'm actually now convinced that things are going to be
much worse. The dot com bubble was relatively distributed and
created useful infrastructure. The ideas of some of the most
prominent dot com startups were valid, but based on stupid
hypergrowth business models that didn't make sense and were only
sustained through mass hysteria and ignorance. By comparison, AI startups
(03:00):
fundamentally illogical or selling unreliable software that's best known for
its consistent mistakes and active harms, backed by the corrosive
and ever worsening infrastructural costs of GPUs, and they're the
customers of the largest company on the stock market that
can only keep its valuation on which the markets depend
by selling more of it. An expensive to buy and
more expensive to install item that only appears to lose
(03:21):
its customers money. There is no squaring in Vidia's circle.
It is inevitable even if AI somehow worked out that
companies will have to stop buying as many GPUs, and
in Vidia cannot afford for them to slow down at all.
They must speed up, and they must do so forever.
There's also no other business model for GPUs that scales none.
(03:43):
There is no use case. This is not useful infrastructure.
Once the AI bubble bursts, these data centers cannot be
used for other things, at least not things that are
going to make more than a couple of single digit
millions in total. They will have to be emptied out
and replaced with useful gear. They will be those that
are finished, and I think going to be a bunch
of undone construction. They're going to be powered shells, which
(04:04):
are just empty buildings with power attached. And really, I
don't think that's gonna be. That's gonna be across the board.
I think we're gonna have a lot of failed construction.
And throughout all of this bullshit, the rest of them,
Magnificent seven has seen their stock values saw off the
back of pure hype because they weren't making a dime
of profit from selling artificial intelligence services, and they've done
(04:24):
so by it acquiring hundreds of billions of dollars of
physical assets. The whole point of these fucking companies was
that they were asset light and cash heavy. Now they're
full of fucking GPUs to depreciate. This is a fucking calamity.
I am fucking terrified because everything I've read about the
past makes me certain that this will be worse. The
(04:45):
hands will be longer, and nobody seems to want to
accept the true logical endpoint of my arguments, So I'm
gonna kind of lay them out depending on how right
I am. I'm worrying about the following things. And Nvidia
will lose anywhere between forty percent and night besore and
of its revenue in a relatively short amount of time,
a couple of quarters maybe, which will annihilate the value
(05:05):
of the S and P five hundred because the stock
will go down because the market will go Ah, Microsoft,
Google and Amazon will face massive multi billion dollar impairments
within the next few years. For God to say, meta,
but they are included too. Now, this one is funny
but will still be bad. Oracle will potentially face bankruptcy
or at least a severe horrendous series of layoffs and
(05:27):
restructuring efforts to try and write the shift after agreeing
to two hundred and forty eight billion dollars in lease
obligations and fifty six billion dollars in debt primarily to
build data centers to get the revenue from its three
hundred billion dollar five year long deal with open Ai,
a company that's going to run out of money in
the next year. Venture Capital is going to take such
(05:47):
a severe haircut from the AI bubble that it will
effectively kill any chances of raising a round off the
Series B for many, many years. I'm really worried about
the reported one hundred and seventy eight point five billion
dollars in US date center deals going underwater. I don't
think they're going to be paid, and it's going to
lead to massive losses with private equity and banks, which
will lead to a chill in effectively all debt markets
(06:10):
and massive job losses across the many many construction projects
that have started as a result of the AI bubble,
and if open Ai and Anthropic can actually manage to
go public. I think every investor is going to lose
out as they collapse under the weight of their bullshit assumptions.
Every partner, every company relying on them, every infrastructure partner,
every AI starter built on their tech will be burned.
(06:32):
I also believe that we as a society will face
a violent paradigm shift as the result of the AI
bubble bursting, because it revealed how many people just don't
understand stuff. The amount of bosses, influencers, movie stars, politicians,
and other individuals of note that have fallen behind generative
AI and claimed again and again that it can do
things that it can't have effatuated myths that will lead
(06:52):
to massive ciple harms both day and in the future,
have revealed themselves to be fucking frauds. It's been obvious
since twenty twenty three that generative AI flat out does
(07:15):
not do what many people say it does or will do,
and obvious since twenty twenty four that the economics didn't work.
Yet still, every single goddamn day, we are surrounded by
people screaming in our faces the AI is the future,
that AI will replace us, that AI is the panacea
to every fucking problem, even though it only seems to
create new ones. I also believe that AI psychosis is
(07:36):
a prevalent thing on a scale that few people want
to discuss. There's something about the process of using a
large language model that convinces people that AI is powerful
because they managed to bunk it on the head enough
times to make something useful come out seemingly intelligent. People
will spend hours and hours making clawed code burb out
quasi useful, quasi functional software, claiming that the productivity gains
(07:56):
are obvious, even when if you sat down and worked
out how long it took them and how much the
API rates for the software would be. If they weren't
being subsidized, they could probably have just learned to code
in the first place, or paid someone else to do it.
And no, please stop this thing of oh it's cheaper
than hiring a developer. Did you go out and ask
a developer? Did you actually get a quote? Do you
actually know what you're talking about? Do you know a
fucking thing about you're talking about? You see, I think
(08:20):
large language models that are a global gas lighting experiment,
where the test is to see whether inefficient and questionably
functional software can convince you that it works because you
managed to manipulate its handles with the right prompts, explaining
away failures as you go, and getting increasingly agitated with
those who don't agree with you that you're living in
the future. This series forced me to live in the
(08:42):
past for hours and hours and hours, and all it
taught me is that people are desperate to compare this
era to another as a means of explaining away the
bad habits and specious ideas of a tech industry run
by fucking influences and management consoles. By comparison, the dot
com bubble is relatively sensible, built on good ideas execut
by greedy people rushing to do things based on ideas
(09:02):
they didn't understand, and analyzes that were utter bullshit. The
AI bubble is happening in a remarkable era of digital
information and connectivity that allows us to process and analyze
details at scale and with speed, And everybody who inflated
this era should, and, by my fucking sword, will be
made to experience inextricable, permanent shame for the horrors that
(09:22):
follow as a result. And believe me, even if I'm
half right, things will likely be so much worse than
when the dot com bubble burst. I don't see a
scenario where anything survives the collapse of core we've let
alone the collapse of open AI. I don't see a
scenario where any more than a few AI starts survive,
if any and if that happens, there won't be any
customers for those GPUs, not that anywhere near enough existed
(09:44):
to fill even a tiny percentile of the demand that
currently exists, or for the capacity we've already built. On
some level. I hope I'm wrong. I just don't know
how anymore. I really don't thank you so much for listening.
It's been in intense January with this, with CES, with
the inchittaphone ential crisis. I'm probably going to take the
week off next week and run a call zone media
(10:05):
rewind to give my aching brain and lungs a break.
Thank you so much for listening. Who knows, though, some
bullshit will probably happen because it's earning season when this runs,
some crazy shit will happen, or maybe it'll be normal.
I could just rest, and if that happens, I'll probably
end up pinking and squawking into the micros. I always though, regardless,
you'll hear my voice one way or another. Thank you
(10:25):
so much everyone, This has been bubble week. Thank you
for listening to Better Offline.
Speaker 2 (10:39):
The editor and composer of the Better Offline theme song
is Matasowski. You can check out more of his music
and audio projects at Mattasowski dot com, m A T
T O S O W s ki dot com. You
can email me at easy at Better Offline dot com
or visit Better Offline dot com to find more podcast
links and of course, my newsletter. I also really recommend
(11:00):
you go to chat dot Where's Youread dot at to
visit the discord, and go to our slash.
Speaker 1 (11:04):
Better Offline to check out I'll Reddit. Thank you so
much for listening. Better Offline is a production of cool
Zone Media.
Speaker 2 (11:12):
For more from cool Zone Media, visit our website cool
Speaker 1 (11:15):
Zonemedia dot com or check us out on the iHeartRadio app,
Apple Podcasts, or wherever you get your podcasts.
Media. Hello and welcome to bear off Line. I'm your
host ed Zetron. Today is the final part of Bubble
Week and our four part dot com Bubble special. I
(00:25):
am worryingly invested in this show. I've put so many
hours into it. This is the most I've done in
the January. I'm having the time of my fucking life.
But this four part has been rough, and it's not
been rough for the recording. It's rough because every time
I go over these details, they fill me full of anxiety.
I don't enjoy being right here. Sure I get the satisfaction,
(00:46):
Sure I get the clicks and all that, but like
it sucks, It sucks. I'm really fucking worried. I'm not
doing this to be contrarian. I'm seeing these things and
I'm worried more people aren't seeing them, and I'm worried
that the after effects will be so much worse than
the dot com bubble. So this Foe part was somewhat
(01:08):
drawn from a premium piece I did a few weeks
ago called Inventively. This is worse than the dot com bubble.
I really suggest you subscribe to my premium newsletter or
be in there. But if you don't. I've had a
little mustard on it and truncated it for this because
you needed to be different in voice. Nevertheless, you should subscribe.
But when I was writing that, I actually went into
it trying to prove myself wrong. I spent hours and
(01:31):
hours reading old articles through broken paywalls and archive dot
org links, in the hopes that I'd find some sort
of positive spin, a way that the AI bubble wasn't
as bad, some sliver or nugget of joy, some shread
of hope. And everything I've read has made me more worried,
not less. The real problem is that there are similarities,
but only with the worst parts of both bubbles. We've
(01:52):
got stupid amounts of money being sunk into stuff. We've
got stupid companies that want to ypo. We've got hopeless
startups duced up by edulous venture capitalists and marketed by
even more credulous journalists. Except this time we have the
worst margins this side of a vineyard planted in Las Vegas, Nevada,
and despicable boosters that will go to war with you
to try and improve You're wrong. Using ghost stories, fairy tales,
(02:14):
and Bixie dust, I realize I'm being a little cavalier
and colloquial about this, and that's because I feel emotionally drained,
is the way i'd put in. Things are so much
worse than I thought. I really thought i'd find something good.
I'd dig into the past and find that there were direct,
obvious similarities that would say, Okay, these GPUs will be useful.
(02:35):
There will be something we've built here. I can't find it.
I'm actually now convinced that things are going to be
much worse. The dot com bubble was relatively distributed and
created useful infrastructure. The ideas of some of the most
prominent dot com startups were valid, but based on stupid
hypergrowth business models that didn't make sense and were only
sustained through mass hysteria and ignorance. By comparison, AI startups
(03:00):
fundamentally illogical or selling unreliable software that's best known for
its consistent mistakes and active harms, backed by the corrosive
and ever worsening infrastructural costs of GPUs, and they're the
customers of the largest company on the stock market that
can only keep its valuation on which the markets depend
by selling more of it. An expensive to buy and
more expensive to install item that only appears to lose
(03:21):
its customers money. There is no squaring in Vidia's circle.
It is inevitable even if AI somehow worked out that
companies will have to stop buying as many GPUs, and
in Vidia cannot afford for them to slow down at all.
They must speed up, and they must do so forever.
There's also no other business model for GPUs that scales none.
(03:43):
There is no use case. This is not useful infrastructure.
Once the AI bubble bursts, these data centers cannot be
used for other things, at least not things that are
going to make more than a couple of single digit
millions in total. They will have to be emptied out
and replaced with useful gear. They will be those that
are finished, and I think going to be a bunch
of undone construction. They're going to be powered shells, which
(04:04):
are just empty buildings with power attached. And really, I
don't think that's gonna be. That's gonna be across the board.
I think we're gonna have a lot of failed construction.
And throughout all of this bullshit, the rest of them,
Magnificent seven has seen their stock values saw off the
back of pure hype because they weren't making a dime
of profit from selling artificial intelligence services, and they've done
(04:24):
so by it acquiring hundreds of billions of dollars of
physical assets. The whole point of these fucking companies was
that they were asset light and cash heavy. Now they're
full of fucking GPUs to depreciate. This is a fucking calamity.
I am fucking terrified because everything I've read about the
past makes me certain that this will be worse. The
(04:45):
hands will be longer, and nobody seems to want to
accept the true logical endpoint of my arguments, So I'm
gonna kind of lay them out depending on how right
I am. I'm worrying about the following things. And Nvidia
will lose anywhere between forty percent and night besore and
of its revenue in a relatively short amount of time,
a couple of quarters maybe, which will annihilate the value
(05:05):
of the S and P five hundred because the stock
will go down because the market will go Ah, Microsoft,
Google and Amazon will face massive multi billion dollar impairments
within the next few years. For God to say, meta,
but they are included too. Now, this one is funny
but will still be bad. Oracle will potentially face bankruptcy
or at least a severe horrendous series of layoffs and
(05:27):
restructuring efforts to try and write the shift after agreeing
to two hundred and forty eight billion dollars in lease
obligations and fifty six billion dollars in debt primarily to
build data centers to get the revenue from its three
hundred billion dollar five year long deal with open Ai,
a company that's going to run out of money in
the next year. Venture Capital is going to take such
(05:47):
a severe haircut from the AI bubble that it will
effectively kill any chances of raising a round off the
Series B for many, many years. I'm really worried about
the reported one hundred and seventy eight point five billion
dollars in US date center deals going underwater. I don't
think they're going to be paid, and it's going to
lead to massive losses with private equity and banks, which
will lead to a chill in effectively all debt markets
(06:10):
and massive job losses across the many many construction projects
that have started as a result of the AI bubble,
and if open Ai and Anthropic can actually manage to
go public. I think every investor is going to lose
out as they collapse under the weight of their bullshit assumptions.
Every partner, every company relying on them, every infrastructure partner,
every AI starter built on their tech will be burned.
(06:32):
I also believe that we as a society will face
a violent paradigm shift as the result of the AI
bubble bursting, because it revealed how many people just don't
understand stuff. The amount of bosses, influencers, movie stars, politicians,
and other individuals of note that have fallen behind generative
AI and claimed again and again that it can do
things that it can't have effatuated myths that will lead
(06:52):
to massive ciple harms both day and in the future,
have revealed themselves to be fucking frauds. It's been obvious
since twenty twenty three that generative AI flat out does
(07:15):
not do what many people say it does or will do,
and obvious since twenty twenty four that the economics didn't work.
Yet still, every single goddamn day, we are surrounded by
people screaming in our faces the AI is the future,
that AI will replace us, that AI is the panacea
to every fucking problem, even though it only seems to
create new ones. I also believe that AI psychosis is
(07:36):
a prevalent thing on a scale that few people want
to discuss. There's something about the process of using a
large language model that convinces people that AI is powerful
because they managed to bunk it on the head enough
times to make something useful come out seemingly intelligent. People
will spend hours and hours making clawed code burb out
quasi useful, quasi functional software, claiming that the productivity gains
(07:56):
are obvious, even when if you sat down and worked
out how long it took them and how much the
API rates for the software would be. If they weren't
being subsidized, they could probably have just learned to code
in the first place, or paid someone else to do it.
And no, please stop this thing of oh it's cheaper
than hiring a developer. Did you go out and ask
a developer? Did you actually get a quote? Do you
actually know what you're talking about? Do you know a
fucking thing about you're talking about? You see, I think
(08:20):
large language models that are a global gas lighting experiment,
where the test is to see whether inefficient and questionably
functional software can convince you that it works because you
managed to manipulate its handles with the right prompts, explaining
away failures as you go, and getting increasingly agitated with
those who don't agree with you that you're living in
the future. This series forced me to live in the
(08:42):
past for hours and hours and hours, and all it
taught me is that people are desperate to compare this
era to another as a means of explaining away the
bad habits and specious ideas of a tech industry run
by fucking influences and management consoles. By comparison, the dot
com bubble is relatively sensible, built on good ideas execut
by greedy people rushing to do things based on ideas
(09:02):
they didn't understand, and analyzes that were utter bullshit. The
AI bubble is happening in a remarkable era of digital
information and connectivity that allows us to process and analyze
details at scale and with speed, And everybody who inflated
this era should, and, by my fucking sword, will be
made to experience inextricable, permanent shame for the horrors that
(09:22):
follow as a result. And believe me, even if I'm
half right, things will likely be so much worse than
when the dot com bubble burst. I don't see a
scenario where anything survives the collapse of core we've let
alone the collapse of open AI. I don't see a
scenario where any more than a few AI starts survive,
if any and if that happens, there won't be any
customers for those GPUs, not that anywhere near enough existed
(09:44):
to fill even a tiny percentile of the demand that
currently exists, or for the capacity we've already built. On
some level. I hope I'm wrong. I just don't know
how anymore. I really don't thank you so much for listening.
It's been in intense January with this, with CES, with
the inchittaphone ential crisis. I'm probably going to take the
week off next week and run a call zone media
(10:05):
rewind to give my aching brain and lungs a break.
Thank you so much for listening. Who knows, though, some
bullshit will probably happen because it's earning season when this runs,
some crazy shit will happen, or maybe it'll be normal.
I could just rest, and if that happens, I'll probably
end up pinking and squawking into the micros. I always though, regardless,
you'll hear my voice one way or another. Thank you
(10:25):
so much everyone, This has been bubble week. Thank you
for listening to Better Offline.
Speaker 2 (10:39):
The editor and composer of the Better Offline theme song
is Matasowski. You can check out more of his music
and audio projects at Mattasowski dot com, m A T
T O S O W s ki dot com. You
can email me at easy at Better Offline dot com
or visit Better Offline dot com to find more podcast
links and of course, my newsletter. I also really recommend
(11:00):
you go to chat dot Where's Youread dot at to
visit the discord, and go to our slash.
Speaker 1 (11:04):
Better Offline to check out I'll Reddit. Thank you so
much for listening. Better Offline is a production of cool
Zone Media.
Speaker 2 (11:12):
For more from cool Zone Media, visit our website cool
Speaker 1 (11:15):
Zonemedia dot com or check us out on the iHeartRadio app,
Apple Podcasts, or wherever you get your podcasts.
Host
Ed Zitron
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