July 11, 2025 • 25 mins
In part two of this week's two-part Better Offline, Ed Zitron makes a plea to the tech media - to stop automatically accepting what the tech executives have to say, and to admit that these people sound really, really stupid, even if they use long words.
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://www.instagram.com/edzitron
https://bsky.app/profile/edzitron.com
https://www.threads.net/@edzitron
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Zone Media. Hello and welcome to Better Offline. I'm your
host ed Zeitron. Please buy our merchandise. I need money now.
In the last episode, we talked about an unfortunate affliction
(00:24):
affecting people in tech, where they're primed to spouting these inane,
meaningless platitudes, and then the other affliction affecting people in
the tech media, where they NodD along and say, huh,
that makes sense to me. The thing is, if we
actually care about tech, it's upon us to actually challenge
these charlatans. We don't have to be mean or rude
or harsh. We just have to say, what does that mean?
Or what exactly do you mean? This is the pro
(00:46):
tech position. It's not about being a hater or a
cynic or whatever. It's an essential quality control mechanism that's
been sorely lacking, especially in the AI bubble. The problem
is that bullshit is a scarily effective mechanism by the
shameless and the cynical, and it's managed to bamboos for
so many, especially in the media, where the job is,
at least in theory, to do the exact opposite of
(01:07):
not reasonably and saying, oh this sounds good to me mate.
Let's say the media, not the actually good people who
I mentioned by naming the last episode, but slavish lickspills
like Kevin Ruce and Casey new and actually want these
companies to build powerful AI and believe they're smart enough
to do so. Say that somehow, looking at their decaying finances,
the lack of revenue, the lack of growth, and the
(01:27):
remarkable lack of use cases, they still come out of
it and say, sure, I think they're going to do this.
The problem with bullshit like the Della's Words Seller Buffet
and Altman's whatever the fuck he does is that it
allows people, ostensibly smart, reasonable people to reach these conclusions
without having to answer the silly little question of how, how,
how how they're going to do it. Why haven't they
(01:50):
done it yet? Why three years in are we still
aren'table to describe what it is that chat GPT actually
does and why we need it so badly? Take away
how much money open ai makes for us, second, and
indeed how much it loses. Does this product actually inspire
anything in you? What is it that's actually magical about
this other than the fact case so you get to
hang around lots of parties and you too, Kevin Kevy boy,
(02:12):
you get to hang around a lot of parties with
a bunch of people sniff in their own farts, like
that one episode of South Park with the priuses. And
on a business level, what is it that I'm meant
to be impressed by? Exactly? Open ai has allegedly hit
ten billion dollars in annualized revenue, essentially the biggest month
that can find multiplied by twelve, which is it's not
actually that much really, considering that open ai is the
(02:36):
most prominent software company in the world, with the biggest brand,
and with the attention of the entirety of the world's media.
Open ai allegedly has five hundred million weekly active users
on chat gpt and by the last count, only fifteen
point five million paying subscribers, an absolutely putrid conversion rate,
even before you realize that the actual conversion rate would
be monthly active subscribers. That's how any real software come
(03:00):
He actually defines its metrics by the fucking way. Why
am I meant to be impressed? Why? Because chat gpt
grew fast. It literally had more pr and more marketing
and more attention and more opportunities to sell to more people.
Than any company has ever had in the history of anything.
Every single industry has been told to think about AI
for three fucking years, and they've been told to do
(03:21):
so because of a company called open Ai. There isn't
a single goddamn product since Google or Facebook that has
had this level of media pressure, and both of those
companies launched without the massive amount of media and social
media that we have today. Having literally everybody talking about
your product all the time for years is pretty useful.
Why isn't this company making more money? And why are
(03:42):
we taking any of these people? Seriously? Mark Zuckerberg paid
fourteen point three billion dollars to invest forty nine percent
in but really to acquire Scale Ai, an AI data company,
as a means of hiring its CEO, Alexander Wang to
run his superintelligence team, and has been offering random Open
air Eye employees one hundred million dollars to join Meta.
(04:02):
And they also, by the way, thought about buying both
AI search company Perplexity and general iv AI video company Runway,
And they even tried to buy open ai co foundery
Suits Caves pre product thirty two billion dollar valuation company
Save Superintelligence, settling instead to hire its CEO and his
venture fund. I just want to be clear superintelligence refers
(04:25):
to a fictional concept. These people they may as well
be saying they're gonna hunt and kill the fucking tooth Fairy.
I feel like I'm going insane hundreds of millions, billions
of dollars put into an idea that's fictional. It's like
they're trying to make the Ninja turtles happen. Are they
going to capture Santa Claus. Are they finally going to
(04:45):
kill Slender Man? Are they going to find the Marrio brothers?
Are we going to stop the Cooper Sam Altman? Is
Mark Zuckerberg going to kill who is the bad guy
from Sacrifice? Anyway, we'll get back to that later when
you put aside the big number. These are the actions
of a desperate dim wit with a failing product trying
to buy his way to make generative AI into super intelligence.
(05:08):
And by the way, just want to make it clear,
the chief AI scientist, Yan Lakun they callin Yan Lacum,
says it isn't going to work. Generative AI isn't going
to make super intelligence market. Mark, You're going to listen
to the people you fucking hired and just jack off
and give people too much money. I'll take a hundred
million dollars mate, while you're out there. But by assuming
(05:30):
that there's some sort of grand strategy behind these moves beyond,
if we get enough smart people together, something will happening.
The media helps boost the powerfuls messaging and buoy their
stock valuations. You are not educating anybody by humoring these goofballs.
In fact, the right way to approach this would be
to ask meta a very simple question. Why why does
a multi trillion dollar market cap company with a near
(05:52):
monopoly overall social media spend billions of dollars in what
appears to be a totally irresponsible way? No, no, no,
no need to do that, No need to think these
these big thoughts that might make people uncomfortable. No no, no,
we just need like ten or fifteen different articles suggesting
that Mark Zuckerberger is a genius and we're watching him
be a genius. Anyway, putting that aside, what exactly is
(06:16):
the impressive part of generative AI again, I'm coming back
to this the fucking code. Enough about the code. I'm
tired of hearing about the code as where to god,
you people think that being a software engineer is only
fucking coding, and it's fine if you ship mediocre code.
Is it bad? Code? Can't bring down entire organizations? What
is it you think a software engineer does? Is all
they do code? If you think the answer is yes,
(06:36):
you are wrong. Human beings may make mistakes in writing code,
but at least they know what a mistake looks like,
which a generative AI does not. Because a generative AI
doesn't know what anything is or anything at all, because
it is a probabilistic model. Congratulations, you've made another way
way in which software engineers can automate parts of their jobs.
Stop being so fucking excited about the idea that people
(06:58):
are going to lose their livelihoods. It's not and founded
on absolutely nothing other than your adulation for the powerful.
These models are dangerous and chaotic, built with little intention
of regard for the future, just like the rest of
big text products. Chat GPT would have been a much
smaller deal if Google had any interest in tending Google
Search into a product that truly answered the query, as
opposed to generating more of them to show more impressions
(07:19):
to advertisers. A nuance search engine that could look at
a user's query and spit out a series of websites
that might help answer a question, rather than just summarizing
a few of them for an answer, or just giving
you a series of SEO articles. And if you ever
need proof that Google just doesn't know how to fucking
innovate anymore, really look at those AI summaries. It's a
product that both misunderstands search and why people use chat
(07:42):
GPT as a search replacement in the first place. While
open AI may summarize stuff to give an answer, it
at least gives something approximating an answer answer, rather than
a summary that feels like an absent tee parent trying
to get rid of you and then throwing twenty bucks
at you and the hopes you'll leave them alone. And
even when it does answer shit, it does so in
this very peculiar way and gets very obvious things wrong.
(08:04):
I looked at the pricing for Claude the Anthropic. I
looked up for what the price of claud code was,
and it was like, yeah, sixty dollars. There's no sixty
dollars plan that I could find on Anthropic, maybe one
of the team's plans. Anyway, Google Search makes them like
one hundred billion dollars a year. It's fucking insane. If
(08:33):
Google Search truly evolved, chat GPT wouldn't really matter, because
the idea of a machine that can theoretically answer a
question is kind of why people use Google in the
fucking first place. Why doesn't the state of Google dominate
tech news just like how random ketamine fuel tweets from
me long Musk do. Why aren't we collectively repulsed by
Google as a company, and why aren't we collectively repulsed
(08:56):
by open Ai? No matter how big chat GPT is,
the fact that there's a product out there with hundreds
of millions of users that constantly gets answers wrong is
genuinely worrying for society. And that's before you get to
the environmental damage. The fact it's trained its models on
hundreds of millions of people's art and writing, and now
I don't know the fact that it loses over it
loses like billions of it's probably more like twelve billion
(09:18):
dollars a year. It's planning to lose over one hundred
billion dollars a year before becoming profitable, and it can't
even they can't even explain how it become profitable. I'm
trying to calm down, all right, I'm trying. I don't
even I don't write in here to get pissed off.
It's just when I think about it too much. Starting
the music from Kill Bill anyway, But why are we
(09:40):
not more horrified? Why are we not more forlorn that
this is where hundreds of billions of dollars are being
forced The most prominent company in the tech industry is
an unstable monolith with a vague product that can only
make ten billion dollars a year in revenue, not profit,
as the very fabric of its existence is shoved down
the throat of every executive the world at once. Also,
(10:02):
if it's not fed by the way twenty to forty
billion dollars a year, it will die. Give me a
fucking break. I don't know. I sound pretty ornery. I
get accused of being a hater or missing the grand
mystery of this bullshit every few minutes by somebody with
an AI avatar of a guy who looks like he's
been banned from multiple branches are best Buy. I understand
there are things that people do with large language models.
(10:22):
I am aware, but none of it matters because the
way they're being discussed is like we're two steps away
from digitally replacing hundreds of millions of people's jobs. The
reality is far simpler. We have an industry that has
spent nearly half a trillion dollars between its capital expenditures
and venture capital funding to create an industry with the
combined revenue of the fucking smart watch industry. What I'm
(10:44):
talking about isn't inflammatory. In fact, it's far more deeply
rooted in reality than those claiming the open ayes building
the future or Kevin Ruce walking up on stage dressed
like a fucking ring master. Anyone, if you're a listener
who is at the hard Fork Live show, email me.
Please email me and tell me what that was about.
And if you don't know what I'm talking about, Kevin
Rouse dress like a fucking circus ring master, this podcast shameful, man, shameful,
(11:09):
Take a shower, take a walk, go outside, mate. But
look like I said, what I'm saying sounds inflammatory, but
it's not. If we add up the combined capital expenditures
and projected AI revenues of the big four hyperscalers, we
end up with roughly three hundred and twenty seven billion
dollars in capital expenditures and only eighteen billion dollars in revenue.
(11:31):
And that's not profit, by the way, I really do
mean it. That's less than the projective revenue of the
global smartwatch industry. But then someone smashes through my door
and they go, ooh, what about open Ai. I've talked
about this so much. So what open ai makes twelve
point seven billion dollars this year but they lose like
ten fourteen billion dollars. What does that mean to you? Exactly?
(11:52):
What do you what are you gonna say the cost
of inference is coming down? No? No, if you are
someone who's saying the cost of inference is coming down,
I need you to stop. You are wrong. You are wrong.
You are wrong. I hate hearing this because you are
so wrong. No, the cost that people are being charged
is going down. We have no firm data on the
(12:12):
actual costs of inference because the companies don't want to
talk about it. And yes, they will absolutely lower prices
to compete with other companies. The Information just reported the
open Ai was doing this to compete with Microsoft a
couple weeks back, and fucking open Ai reduced the price
of their O through Reasoning Model one focused on code
by eighty percent to compete with Claude four Opusmax, just
(12:35):
that any of you could fucking look at. I know
I'm getting mad at people who probably don't listen to
the podcast, but one day they will. I'll make them anyway.
Even if we add open AI's revenue to the part,
we're at about thirty point seven billion dollars. If we
had the supposed one billion in revenue from training data
startup search three hundred billion dollars in annualized revenue from churing.
We optimistically assume that Perplexity will have one hundred million
(12:58):
arr up than thirty four million in twenty twenty four,
but they lost sixty four million, and say they make
one hundred million in twenty twenty five, and assume that
any sphere which makes cursor that their five hundred million
dollar run rate stays consistent through twenty twenty five, even
though they just had to completely change their pricing, because
because open ai and Anthropic joked on the prices, we
(13:20):
are at carry the two about thirty two point seven billion. Hmm.
That's not good. But I'm not being fair, am I.
I include many of the names from the Information's Generator
AI database. I'm stubborn, so I made a point of
adding them all up and ended up with a total
of less than thirty nine billion dollars of total revenue
(13:42):
in the entire generator of AI industry. Jesus fucking Christ,
Fuck God, damn it. This this is what we've been
doing for three years. If you're missed, blanket fan, this
is my Kodak printer moment. Why why did you do it?
According to the Information Generative, AI companies have raised more
(14:02):
than eighteen point eight billion dollars in the first quarter
of twenty twenty five, after Vis's invested twenty one billion
dollars in Q four twenty twenty four and four billion
dollars in Q three twenty twenty four, for grand total
of forty three point eight billion, or a total of
three hundred and seventy point eight billion dollars of investment
and capital expenditures for an industry that, despite being the
single most talked about thing on the planet, cannot even
(14:24):
create a tenth of the dollars it requires to make
it function. These companies are predominantly unprofitable, perpetually searching for
product market fit and even when they find it seeming
capable of generating revenue numbers that remotely justify their valuations.
And if I'm honest, I think the truly radical position
here is the one taken by most tech reporters that
would rather take the lazy position of well, Uber lost
a lot of money than think for two seconds about
(14:45):
whether we're all being sold a line of shit. What
we're watching is a mountain of waste perpetuated by the
least charming failed sons of our generation. Nobody should be
giving sach In the Della or Sam Ortman a glossy profile.
They should be asking direct, brutal questions, much like Joanna's
Stern just did of Craig Federighi, who had absolutely fucking
nothing to share about why Apple Intelligence sucked because he's
(15:06):
never been pushed like this. Put aside the money for
a second, to be honest, These men are pathetic, unimpressive, uninventive,
and dreadfully, dreadfully boring anthropics Warrio Ama Day and Open
Ai is Clammy. Sam Mortman a farmer in common with
televangelist Joe Olstein than the level out with Steve Jobs
or any number of people that have actually invented things,
and I know about Steve Jobs. And they got that
(15:26):
way because we took them seriously instead of saying, wait,
what do you mean? What do you mean? What does
that mean? To a single one of their wrongheaded o
fish and dim witted hype ERPs, it's boring. I'm terribly
horribly bored. And if you're interested in this ship, I'm
genuinely curious why, especially if you're a reporter, because right now,
the innovation happening in AI is at best further mutations
(15:48):
of the software as a service business model, providing far
less value than previous innovations that are calamitous cost reasoning
models don't even reason. It's proven by an Apple paper
released a few weeks ago, and agents as a sceptu
fucked because large language models are inherently unreliable. And yes,
a study out of fucking Salesforce found that agents began
to break down when given multi step tasks, such as
(16:10):
any task that you'd want to have an agent automating.
But but, but but but I have one radical suggestion,
(16:34):
let's start making fun of them. Let's start making fun
of these people. They're not charming, they're not building anything
they've scootered long a massing billions of dollars, promising the
world and delivering you a hell is shit. They deserve
our derision or at the very least, our deep unerring suspicion,
if not for what they've done, for what they've not done.
Sam Ltman is nowhere near delivering a functioning agent, let
(16:54):
alone anything approaching intelligence, and really only has one skill
making other companies risk a bunch of money on this
you bid fucking ideas. No, really, he convinced Oracle to
buy forty billion dollars of then video chips to put
in the Abilene takes a Stargate data center, despite the
fact that the Stargate organization is yet to be formed,
as reported by The Information, SoftBank and Microsoft pay for
all of open AI's bills, and the media does his
(17:15):
marketing for him. Open Ai is, as I have said before,
a banana republic. It requires the media and the markets
to make up why it should exist. It requires other
companies to pump it full of money and build its infrastructure,
and it doesn't even make products that matter. While Sam
Altman constantly talks about all the other exciting shit that
people will build that never seems to get built. You
(17:35):
can keep honking off about how it will build the
API that will power the future. But if that's the case,
where's the fucking future? Exactly where is it? What am
I looking at here? Where's the economic activity? Where's the productivity?
The return sucked? The costs are too high? Why am
I the radical person saying this? This entire situation is
goddamn ridiculous and incomparable waste, even if it's somehow went
(17:58):
to the green. For the horrendous amount of capital and
generative AI to make sense, the industry would have to
have more revenue than the smartphone and enterprise SaaS market combined,
rather than less than half of the mobile gaming industry.
Sacha Nadella, sam Orman, Wario Ammada, Tim Cook, Andy Jesse.
They deserve to be laughed at, mocked, or at least
very heavily interrogated because their combined might has produced no
(18:21):
exciting or interesting products outside of, at best, what will
amount to a productivity upgrade for integrated development environments and
faster ways to throw out code that may or may
not be reliable. These things aren't nothing, but they're nowhere
near the something that we've been promised, So I put
it to you, dear listener, why are we taking them seriously?
What is there to take seriously other than their ability
(18:41):
to force stuff on people and make money doing so.
And I want to ask you a question, how do
they manage to keep doing this? They always seem to
find new growth every single quarter, every single quarter, without fail.
Is it because they keep coming up with ideas? Or
is it because they keep coming up with new ideas
to get more money a vastly different choice that involves
increasing the products or making them worse so that they
(19:02):
can show you more ads. My positions aren't radical, and
if you believe they are, your deverence to power disgusts me.
In any case, I want to end this episode with
something a little more inspirational, because I believe things can
change when regular people feel stronger and more capable. I
want you to know that you are fully capable of
understanding all of this. I don't care if you think
(19:23):
you're not a numbers person or you don't really get business.
I don't have a single iota of economics training, and
everything you've ever heard me say or read me right
has been something I've had to learn, and I really
mean that I was a lay person right up until
the time I learned the stuff, and I be kind
of stuff, knowah, just like you can be. The tech industry,
the finance industry, the entire mechanisms of capital want you
(19:48):
to believe that everything they do is magical and complex,
when it's all far more obvious than you believe. You
don't have to understand the entire fundamentals of finance to
know how venture capital works. They buy percentages of come
copanies at evaluation that they hope is much lower than
the company would be worth in the future when they
sell or go public. You don't need to be technical
to know that large language models generate a response based
(20:09):
on billions of pieces of training data and by guessing
at what the next bit of text or thing might
be in a line should be based on based on
what they've seen in the model previously. These people love
to say things like ah, but didn't see and present
some anecdote, when no anecdote will ever defeat the basics
of your business does not make enough money, the software
does not do the things you claim it's meant to,
(20:29):
and you have no path to profitability. They can yamor
at you. All they want about lots of people using CHATGPT,
but that doesn't change the fact that chat GPT just
isn't that revolutionary, and their only play here is to
make you feel stupid, rather than actually showing you why
it's so fucking revolutionary. This is the argument of a
manipulator and a coward, and you're above such things. You
(20:50):
don't really have to be a specialist in anything to
pry this shit apart, which is why so much of
my work is either engaging to those who learn something
from it or frustrating to those that intentionally deceive others.
By god boy goog heipespiel bullshit. I will sit here
and explain every fucking part of this horrid chain of freaks,
and I'll break it down into whatever pieces it takes
to educate as many people as I have to to
(21:10):
make things change. I need to be clear about something
I'm nobody. I started writing my news later with three
hundred subscribers and no other reason than the fact that
I wanted to and I was depressed. And guess what,
four years later, I've nearly sixty five thousand subscribers, an
award winning podcast, and people actually pay me for shit.
(21:30):
I have no economics training, no special access, no deep sources,
just the ability to look at things that are happening,
and then I say stuff. I taught myself everything I
know about this industry, and there is nothing stopping you
from doing the same. I was convinced I was stupid
until about two years ago. Now, if my honesty might
have been last year, I felt other the majority of
my life, convinced by people that I'm incapable or unwelcome,
(21:51):
And as such, I've become more articulate and confident in
who I am and what I believe in. And I've
noticed that the only people that seek to degrade or
suppress are those of weak minds and wills, business idiots
in different forms and flavors. I've learned to accept who
I am, that I'm not like most people, and people
conflate my passion and vigor with anger or hate, but
what they're experiencing is somebody different who deeply resents what
(22:12):
the powerful have done to the computer. And while I
complain about the state of the media, what I've seen
in the last year is that there are many many
people like me, readers, listeners, and peers that resent things
in the same way I conflated different with being alone,
and I couldn't have been more wrong. For those of
you that don't wish to lick the boots of the
people fucking up every tech product, the tent is large,
(22:32):
it's a big club, and you're absolutely in it. A
better tech industry is one where the people writing about
it hold it accountable, pushing it towards creating the experiences
and connectivity that truly change the world, rather than repeating
and reinforcing the status quo. Don't watch the mouth, watch
the hands. These companies will tell you that they're amazing
as many times as they want, but you don't need
(22:53):
to prove that they do. I don't care if you
tell a single human soul about my work, but if
it helps you understand these people, better to teach other people. Now,
these tech executives, they may seem more powerful, but they've
built the rot economy and a combination of anonymity in
a play cant press. But pressure against them starts with
you and those you know, understanding how those businesses work,
(23:15):
and trusting that you can understand because you absolutely fucking
can millions of people understanding how these people run their
companies now poorly they've built their stuff software will stop
people like sunned up as Shy from being able to
quietly burn Google Search to the ground. People like Sam
Wultman are gambling that you're easily confused, easily defeated, and
incurious when you could be writing thousands of words on
(23:35):
a newsletter or speaking for hours on a podcast that
you never ever really edit for like Brevity, or perhaps
you go on a site no you ever hear Killer
be Killed, Great metal badge, you'd give them a lesson anyway.
I know it sounds smaller and like your role is
even smaller than that, But the reason they've grown so
rapaciously is driven by the sense that the work they
do is some sort of black magic. I mean, it's
(23:56):
actually really fucking stupid, boring finance stabled into a tech
industry that's run out of ideas. You are more than
capable of understanding this entire world, including the technology along
with the finances that ultimately decide what technology gets made next.
These people have got rich and famous and escaped all
blame by casting themselves as somehow above us. But if
I'm honest, I've never looked down on somebody quite as
(24:17):
much as I do the current gaggle of management consultant
fucks that have driven Silicon Valley into the ground. You're
actually smarter than them. You can learn all of this,
and I'm here to help you every fucking week. Thank
you for your time, Thank you for listening to Better Offline.
(24:41):
The editor and composer of the Better Offline theme song
is Matasowski. You can check out more of his music
and audio projects at Matasowski dot com, M A T
T O. S O w Ski dot com. You can
email me at easy at Better Offline dot com or
visit Better Offline dot com to find more podcast link
and of course my newsletter. I also really recommend you
(25:03):
go to chat dot Where's youoead dot at to visit
the discord, and go to our slash Better Offline 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 cool Zonemedia
dot com, or check us out on the iHeartRadio app,
Apple Podcasts, or wherever you get your podcasts.
Zone Media. Hello and welcome to Better Offline. I'm your
host ed Zeitron. Please buy our merchandise. I need money now.
In the last episode, we talked about an unfortunate affliction
(00:24):
affecting people in tech, where they're primed to spouting these inane,
meaningless platitudes, and then the other affliction affecting people in
the tech media, where they NodD along and say, huh,
that makes sense to me. The thing is, if we
actually care about tech, it's upon us to actually challenge
these charlatans. We don't have to be mean or rude
or harsh. We just have to say, what does that mean?
Or what exactly do you mean? This is the pro
(00:46):
tech position. It's not about being a hater or a
cynic or whatever. It's an essential quality control mechanism that's
been sorely lacking, especially in the AI bubble. The problem
is that bullshit is a scarily effective mechanism by the
shameless and the cynical, and it's managed to bamboos for
so many, especially in the media, where the job is,
at least in theory, to do the exact opposite of
(01:07):
not reasonably and saying, oh this sounds good to me mate.
Let's say the media, not the actually good people who
I mentioned by naming the last episode, but slavish lickspills
like Kevin Ruce and Casey new and actually want these
companies to build powerful AI and believe they're smart enough
to do so. Say that somehow, looking at their decaying finances,
the lack of revenue, the lack of growth, and the
(01:27):
remarkable lack of use cases, they still come out of
it and say, sure, I think they're going to do this.
The problem with bullshit like the Della's Words Seller Buffet
and Altman's whatever the fuck he does is that it
allows people, ostensibly smart, reasonable people to reach these conclusions
without having to answer the silly little question of how, how,
how how they're going to do it. Why haven't they
(01:50):
done it yet? Why three years in are we still
aren'table to describe what it is that chat GPT actually
does and why we need it so badly? Take away
how much money open ai makes for us, second, and
indeed how much it loses. Does this product actually inspire
anything in you? What is it that's actually magical about
this other than the fact case so you get to
hang around lots of parties and you too, Kevin Kevy boy,
(02:12):
you get to hang around a lot of parties with
a bunch of people sniff in their own farts, like
that one episode of South Park with the priuses. And
on a business level, what is it that I'm meant
to be impressed by? Exactly? Open ai has allegedly hit
ten billion dollars in annualized revenue, essentially the biggest month
that can find multiplied by twelve, which is it's not
actually that much really, considering that open ai is the
(02:36):
most prominent software company in the world, with the biggest brand,
and with the attention of the entirety of the world's media.
Open ai allegedly has five hundred million weekly active users
on chat gpt and by the last count, only fifteen
point five million paying subscribers, an absolutely putrid conversion rate,
even before you realize that the actual conversion rate would
be monthly active subscribers. That's how any real software come
(03:00):
He actually defines its metrics by the fucking way. Why
am I meant to be impressed? Why? Because chat gpt
grew fast. It literally had more pr and more marketing
and more attention and more opportunities to sell to more people.
Than any company has ever had in the history of anything.
Every single industry has been told to think about AI
for three fucking years, and they've been told to do
(03:21):
so because of a company called open Ai. There isn't
a single goddamn product since Google or Facebook that has
had this level of media pressure, and both of those
companies launched without the massive amount of media and social
media that we have today. Having literally everybody talking about
your product all the time for years is pretty useful.
Why isn't this company making more money? And why are
(03:42):
we taking any of these people? Seriously? Mark Zuckerberg paid
fourteen point three billion dollars to invest forty nine percent
in but really to acquire Scale Ai, an AI data company,
as a means of hiring its CEO, Alexander Wang to
run his superintelligence team, and has been offering random Open
air Eye employees one hundred million dollars to join Meta.
(04:02):
And they also, by the way, thought about buying both
AI search company Perplexity and general iv AI video company Runway,
And they even tried to buy open ai co foundery
Suits Caves pre product thirty two billion dollar valuation company
Save Superintelligence, settling instead to hire its CEO and his
venture fund. I just want to be clear superintelligence refers
(04:25):
to a fictional concept. These people they may as well
be saying they're gonna hunt and kill the fucking tooth Fairy.
I feel like I'm going insane hundreds of millions, billions
of dollars put into an idea that's fictional. It's like
they're trying to make the Ninja turtles happen. Are they
going to capture Santa Claus. Are they finally going to
(04:45):
kill Slender Man? Are they going to find the Marrio brothers?
Are we going to stop the Cooper Sam Altman? Is
Mark Zuckerberg going to kill who is the bad guy
from Sacrifice? Anyway, we'll get back to that later when
you put aside the big number. These are the actions
of a desperate dim wit with a failing product trying
to buy his way to make generative AI into super intelligence.
(05:08):
And by the way, just want to make it clear,
the chief AI scientist, Yan Lakun they callin Yan Lacum,
says it isn't going to work. Generative AI isn't going
to make super intelligence market. Mark, You're going to listen
to the people you fucking hired and just jack off
and give people too much money. I'll take a hundred
million dollars mate, while you're out there. But by assuming
(05:30):
that there's some sort of grand strategy behind these moves beyond,
if we get enough smart people together, something will happening.
The media helps boost the powerfuls messaging and buoy their
stock valuations. You are not educating anybody by humoring these goofballs.
In fact, the right way to approach this would be
to ask meta a very simple question. Why why does
a multi trillion dollar market cap company with a near
(05:52):
monopoly overall social media spend billions of dollars in what
appears to be a totally irresponsible way? No, no, no,
no need to do that, No need to think these
these big thoughts that might make people uncomfortable. No no, no,
we just need like ten or fifteen different articles suggesting
that Mark Zuckerberger is a genius and we're watching him
be a genius. Anyway, putting that aside, what exactly is
(06:16):
the impressive part of generative AI again, I'm coming back
to this the fucking code. Enough about the code. I'm
tired of hearing about the code as where to god,
you people think that being a software engineer is only
fucking coding, and it's fine if you ship mediocre code.
Is it bad? Code? Can't bring down entire organizations? What
is it you think a software engineer does? Is all
they do code? If you think the answer is yes,
(06:36):
you are wrong. Human beings may make mistakes in writing code,
but at least they know what a mistake looks like,
which a generative AI does not. Because a generative AI
doesn't know what anything is or anything at all, because
it is a probabilistic model. Congratulations, you've made another way
way in which software engineers can automate parts of their jobs.
Stop being so fucking excited about the idea that people
(06:58):
are going to lose their livelihoods. It's not and founded
on absolutely nothing other than your adulation for the powerful.
These models are dangerous and chaotic, built with little intention
of regard for the future, just like the rest of
big text products. Chat GPT would have been a much
smaller deal if Google had any interest in tending Google
Search into a product that truly answered the query, as
opposed to generating more of them to show more impressions
(07:19):
to advertisers. A nuance search engine that could look at
a user's query and spit out a series of websites
that might help answer a question, rather than just summarizing
a few of them for an answer, or just giving
you a series of SEO articles. And if you ever
need proof that Google just doesn't know how to fucking
innovate anymore, really look at those AI summaries. It's a
product that both misunderstands search and why people use chat
(07:42):
GPT as a search replacement in the first place. While
open AI may summarize stuff to give an answer, it
at least gives something approximating an answer answer, rather than
a summary that feels like an absent tee parent trying
to get rid of you and then throwing twenty bucks
at you and the hopes you'll leave them alone. And
even when it does answer shit, it does so in
this very peculiar way and gets very obvious things wrong.
(08:04):
I looked at the pricing for Claude the Anthropic. I
looked up for what the price of claud code was,
and it was like, yeah, sixty dollars. There's no sixty
dollars plan that I could find on Anthropic, maybe one
of the team's plans. Anyway, Google Search makes them like
one hundred billion dollars a year. It's fucking insane. If
(08:33):
Google Search truly evolved, chat GPT wouldn't really matter, because
the idea of a machine that can theoretically answer a
question is kind of why people use Google in the
fucking first place. Why doesn't the state of Google dominate
tech news just like how random ketamine fuel tweets from
me long Musk do. Why aren't we collectively repulsed by
Google as a company, and why aren't we collectively repulsed
(08:56):
by open Ai? No matter how big chat GPT is,
the fact that there's a product out there with hundreds
of millions of users that constantly gets answers wrong is
genuinely worrying for society. And that's before you get to
the environmental damage. The fact it's trained its models on
hundreds of millions of people's art and writing, and now
I don't know the fact that it loses over it
loses like billions of it's probably more like twelve billion
(09:18):
dollars a year. It's planning to lose over one hundred
billion dollars a year before becoming profitable, and it can't
even they can't even explain how it become profitable. I'm
trying to calm down, all right, I'm trying. I don't
even I don't write in here to get pissed off.
It's just when I think about it too much. Starting
the music from Kill Bill anyway, But why are we
(09:40):
not more horrified? Why are we not more forlorn that
this is where hundreds of billions of dollars are being
forced The most prominent company in the tech industry is
an unstable monolith with a vague product that can only
make ten billion dollars a year in revenue, not profit,
as the very fabric of its existence is shoved down
the throat of every executive the world at once. Also,
(10:02):
if it's not fed by the way twenty to forty
billion dollars a year, it will die. Give me a
fucking break. I don't know. I sound pretty ornery. I
get accused of being a hater or missing the grand
mystery of this bullshit every few minutes by somebody with
an AI avatar of a guy who looks like he's
been banned from multiple branches are best Buy. I understand
there are things that people do with large language models.
(10:22):
I am aware, but none of it matters because the
way they're being discussed is like we're two steps away
from digitally replacing hundreds of millions of people's jobs. The
reality is far simpler. We have an industry that has
spent nearly half a trillion dollars between its capital expenditures
and venture capital funding to create an industry with the
combined revenue of the fucking smart watch industry. What I'm
(10:44):
talking about isn't inflammatory. In fact, it's far more deeply
rooted in reality than those claiming the open ayes building
the future or Kevin Ruce walking up on stage dressed
like a fucking ring master. Anyone, if you're a listener
who is at the hard Fork Live show, email me.
Please email me and tell me what that was about.
And if you don't know what I'm talking about, Kevin
Rouse dress like a fucking circus ring master, this podcast shameful, man, shameful,
(11:09):
Take a shower, take a walk, go outside, mate. But
look like I said, what I'm saying sounds inflammatory, but
it's not. If we add up the combined capital expenditures
and projected AI revenues of the big four hyperscalers, we
end up with roughly three hundred and twenty seven billion
dollars in capital expenditures and only eighteen billion dollars in revenue.
(11:31):
And that's not profit, by the way, I really do
mean it. That's less than the projective revenue of the
global smartwatch industry. But then someone smashes through my door
and they go, ooh, what about open Ai. I've talked
about this so much. So what open ai makes twelve
point seven billion dollars this year but they lose like
ten fourteen billion dollars. What does that mean to you? Exactly?
(11:52):
What do you what are you gonna say the cost
of inference is coming down? No? No, if you are
someone who's saying the cost of inference is coming down,
I need you to stop. You are wrong. You are wrong.
You are wrong. I hate hearing this because you are
so wrong. No, the cost that people are being charged
is going down. We have no firm data on the
(12:12):
actual costs of inference because the companies don't want to
talk about it. And yes, they will absolutely lower prices
to compete with other companies. The Information just reported the
open Ai was doing this to compete with Microsoft a
couple weeks back, and fucking open Ai reduced the price
of their O through Reasoning Model one focused on code
by eighty percent to compete with Claude four Opusmax, just
(12:35):
that any of you could fucking look at. I know
I'm getting mad at people who probably don't listen to
the podcast, but one day they will. I'll make them anyway.
Even if we add open AI's revenue to the part,
we're at about thirty point seven billion dollars. If we
had the supposed one billion in revenue from training data
startup search three hundred billion dollars in annualized revenue from churing.
We optimistically assume that Perplexity will have one hundred million
(12:58):
arr up than thirty four million in twenty twenty four,
but they lost sixty four million, and say they make
one hundred million in twenty twenty five, and assume that
any sphere which makes cursor that their five hundred million
dollar run rate stays consistent through twenty twenty five, even
though they just had to completely change their pricing, because
because open ai and Anthropic joked on the prices, we
(13:20):
are at carry the two about thirty two point seven billion. Hmm.
That's not good. But I'm not being fair, am I.
I include many of the names from the Information's Generator
AI database. I'm stubborn, so I made a point of
adding them all up and ended up with a total
of less than thirty nine billion dollars of total revenue
(13:42):
in the entire generator of AI industry. Jesus fucking Christ,
Fuck God, damn it. This this is what we've been
doing for three years. If you're missed, blanket fan, this
is my Kodak printer moment. Why why did you do it?
According to the Information Generative, AI companies have raised more
(14:02):
than eighteen point eight billion dollars in the first quarter
of twenty twenty five, after Vis's invested twenty one billion
dollars in Q four twenty twenty four and four billion
dollars in Q three twenty twenty four, for grand total
of forty three point eight billion, or a total of
three hundred and seventy point eight billion dollars of investment
and capital expenditures for an industry that, despite being the
single most talked about thing on the planet, cannot even
(14:24):
create a tenth of the dollars it requires to make
it function. These companies are predominantly unprofitable, perpetually searching for
product market fit and even when they find it seeming
capable of generating revenue numbers that remotely justify their valuations.
And if I'm honest, I think the truly radical position
here is the one taken by most tech reporters that
would rather take the lazy position of well, Uber lost
a lot of money than think for two seconds about
(14:45):
whether we're all being sold a line of shit. What
we're watching is a mountain of waste perpetuated by the
least charming failed sons of our generation. Nobody should be
giving sach In the Della or Sam Ortman a glossy profile.
They should be asking direct, brutal questions, much like Joanna's
Stern just did of Craig Federighi, who had absolutely fucking
nothing to share about why Apple Intelligence sucked because he's
(15:06):
never been pushed like this. Put aside the money for
a second, to be honest, These men are pathetic, unimpressive, uninventive,
and dreadfully, dreadfully boring anthropics Warrio Ama Day and Open
Ai is Clammy. Sam Mortman a farmer in common with
televangelist Joe Olstein than the level out with Steve Jobs
or any number of people that have actually invented things,
and I know about Steve Jobs. And they got that
(15:26):
way because we took them seriously instead of saying, wait,
what do you mean? What do you mean? What does
that mean? To a single one of their wrongheaded o
fish and dim witted hype ERPs, it's boring. I'm terribly
horribly bored. And if you're interested in this ship, I'm
genuinely curious why, especially if you're a reporter, because right now,
the innovation happening in AI is at best further mutations
(15:48):
of the software as a service business model, providing far
less value than previous innovations that are calamitous cost reasoning
models don't even reason. It's proven by an Apple paper
released a few weeks ago, and agents as a sceptu
fucked because large language models are inherently unreliable. And yes,
a study out of fucking Salesforce found that agents began
to break down when given multi step tasks, such as
(16:10):
any task that you'd want to have an agent automating.
But but, but but but I have one radical suggestion,
(16:34):
let's start making fun of them. Let's start making fun
of these people. They're not charming, they're not building anything
they've scootered long a massing billions of dollars, promising the
world and delivering you a hell is shit. They deserve
our derision or at the very least, our deep unerring suspicion,
if not for what they've done, for what they've not done.
Sam Ltman is nowhere near delivering a functioning agent, let
(16:54):
alone anything approaching intelligence, and really only has one skill
making other companies risk a bunch of money on this
you bid fucking ideas. No, really, he convinced Oracle to
buy forty billion dollars of then video chips to put
in the Abilene takes a Stargate data center, despite the
fact that the Stargate organization is yet to be formed,
as reported by The Information, SoftBank and Microsoft pay for
all of open AI's bills, and the media does his
(17:15):
marketing for him. Open Ai is, as I have said before,
a banana republic. It requires the media and the markets
to make up why it should exist. It requires other
companies to pump it full of money and build its infrastructure,
and it doesn't even make products that matter. While Sam
Altman constantly talks about all the other exciting shit that
people will build that never seems to get built. You
(17:35):
can keep honking off about how it will build the
API that will power the future. But if that's the case,
where's the fucking future? Exactly where is it? What am
I looking at here? Where's the economic activity? Where's the productivity?
The return sucked? The costs are too high? Why am
I the radical person saying this? This entire situation is
goddamn ridiculous and incomparable waste, even if it's somehow went
(17:58):
to the green. For the horrendous amount of capital and
generative AI to make sense, the industry would have to
have more revenue than the smartphone and enterprise SaaS market combined,
rather than less than half of the mobile gaming industry.
Sacha Nadella, sam Orman, Wario Ammada, Tim Cook, Andy Jesse.
They deserve to be laughed at, mocked, or at least
very heavily interrogated because their combined might has produced no
(18:21):
exciting or interesting products outside of, at best, what will
amount to a productivity upgrade for integrated development environments and
faster ways to throw out code that may or may
not be reliable. These things aren't nothing, but they're nowhere
near the something that we've been promised, So I put
it to you, dear listener, why are we taking them seriously?
What is there to take seriously other than their ability
(18:41):
to force stuff on people and make money doing so.
And I want to ask you a question, how do
they manage to keep doing this? They always seem to
find new growth every single quarter, every single quarter, without fail.
Is it because they keep coming up with ideas? Or
is it because they keep coming up with new ideas
to get more money a vastly different choice that involves
increasing the products or making them worse so that they
(19:02):
can show you more ads. My positions aren't radical, and
if you believe they are, your deverence to power disgusts me.
In any case, I want to end this episode with
something a little more inspirational, because I believe things can
change when regular people feel stronger and more capable. I
want you to know that you are fully capable of
understanding all of this. I don't care if you think
(19:23):
you're not a numbers person or you don't really get business.
I don't have a single iota of economics training, and
everything you've ever heard me say or read me right
has been something I've had to learn, and I really
mean that I was a lay person right up until
the time I learned the stuff, and I be kind
of stuff, knowah, just like you can be. The tech industry,
the finance industry, the entire mechanisms of capital want you
(19:48):
to believe that everything they do is magical and complex,
when it's all far more obvious than you believe. You
don't have to understand the entire fundamentals of finance to
know how venture capital works. They buy percentages of come
copanies at evaluation that they hope is much lower than
the company would be worth in the future when they
sell or go public. You don't need to be technical
to know that large language models generate a response based
(20:09):
on billions of pieces of training data and by guessing
at what the next bit of text or thing might
be in a line should be based on based on
what they've seen in the model previously. These people love
to say things like ah, but didn't see and present
some anecdote, when no anecdote will ever defeat the basics
of your business does not make enough money, the software
does not do the things you claim it's meant to,
(20:29):
and you have no path to profitability. They can yamor
at you. All they want about lots of people using CHATGPT,
but that doesn't change the fact that chat GPT just
isn't that revolutionary, and their only play here is to
make you feel stupid, rather than actually showing you why
it's so fucking revolutionary. This is the argument of a
manipulator and a coward, and you're above such things. You
(20:50):
don't really have to be a specialist in anything to
pry this shit apart, which is why so much of
my work is either engaging to those who learn something
from it or frustrating to those that intentionally deceive others.
By god boy goog heipespiel bullshit. I will sit here
and explain every fucking part of this horrid chain of freaks,
and I'll break it down into whatever pieces it takes
to educate as many people as I have to to
(21:10):
make things change. I need to be clear about something
I'm nobody. I started writing my news later with three
hundred subscribers and no other reason than the fact that
I wanted to and I was depressed. And guess what,
four years later, I've nearly sixty five thousand subscribers, an
award winning podcast, and people actually pay me for shit.
(21:30):
I have no economics training, no special access, no deep sources,
just the ability to look at things that are happening,
and then I say stuff. I taught myself everything I
know about this industry, and there is nothing stopping you
from doing the same. I was convinced I was stupid
until about two years ago. Now, if my honesty might
have been last year, I felt other the majority of
my life, convinced by people that I'm incapable or unwelcome,
(21:51):
And as such, I've become more articulate and confident in
who I am and what I believe in. And I've
noticed that the only people that seek to degrade or
suppress are those of weak minds and wills, business idiots
in different forms and flavors. I've learned to accept who
I am, that I'm not like most people, and people
conflate my passion and vigor with anger or hate, but
what they're experiencing is somebody different who deeply resents what
(22:12):
the powerful have done to the computer. And while I
complain about the state of the media, what I've seen
in the last year is that there are many many
people like me, readers, listeners, and peers that resent things
in the same way I conflated different with being alone,
and I couldn't have been more wrong. For those of
you that don't wish to lick the boots of the
people fucking up every tech product, the tent is large,
(22:32):
it's a big club, and you're absolutely in it. A
better tech industry is one where the people writing about
it hold it accountable, pushing it towards creating the experiences
and connectivity that truly change the world, rather than repeating
and reinforcing the status quo. Don't watch the mouth, watch
the hands. These companies will tell you that they're amazing
as many times as they want, but you don't need
(22:53):
to prove that they do. I don't care if you
tell a single human soul about my work, but if
it helps you understand these people, better to teach other people. Now,
these tech executives, they may seem more powerful, but they've
built the rot economy and a combination of anonymity in
a play cant press. But pressure against them starts with
you and those you know, understanding how those businesses work,
(23:15):
and trusting that you can understand because you absolutely fucking
can millions of people understanding how these people run their
companies now poorly they've built their stuff software will stop
people like sunned up as Shy from being able to
quietly burn Google Search to the ground. People like Sam
Wultman are gambling that you're easily confused, easily defeated, and
incurious when you could be writing thousands of words on
(23:35):
a newsletter or speaking for hours on a podcast that
you never ever really edit for like Brevity, or perhaps
you go on a site no you ever hear Killer
be Killed, Great metal badge, you'd give them a lesson anyway.
I know it sounds smaller and like your role is
even smaller than that, But the reason they've grown so
rapaciously is driven by the sense that the work they
do is some sort of black magic. I mean, it's
(23:56):
actually really fucking stupid, boring finance stabled into a tech
industry that's run out of ideas. You are more than
capable of understanding this entire world, including the technology along
with the finances that ultimately decide what technology gets made next.
These people have got rich and famous and escaped all
blame by casting themselves as somehow above us. But if
I'm honest, I've never looked down on somebody quite as
(24:17):
much as I do the current gaggle of management consultant
fucks that have driven Silicon Valley into the ground. You're
actually smarter than them. You can learn all of this,
and I'm here to help you every fucking week. Thank
you for your time, Thank you for listening to Better Offline.
(24:41):
The editor and composer of the Better Offline theme song
is Matasowski. You can check out more of his music
and audio projects at Matasowski dot com, M A T
T O. S O w Ski dot com. You can
email me at easy at Better Offline dot com or
visit Better Offline dot com to find more podcast link
and of course my newsletter. I also really recommend you
(25:03):
go to chat dot Where's youoead dot at to visit
the discord, and go to our slash Better Offline 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 cool Zonemedia
dot com, or check us out on the iHeartRadio app,
Apple Podcasts, or wherever you get your podcasts.
Host
Ed Zitron
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.