Monologue: AI's Desperation Era

Episode Transcript
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Speaker 1 (00:02):
Zone Media. Hello on, Welcome to this week's Better Offline Monologue.
I'm your host ed Zetron. What it's been a peculiar week.
Two days ago, Sarah Fryar, chief financial officer of open AI,

(00:22):
said in a stage at a Wall Street Journal conference
that an IPO isn't on the cards and foolishly said
the open AI was and I quote looking for an
ecosystem of banks, private equity, maybe even governmental and that
the way governments can come to bear can really drop
the cost of financing but also increase the loan to value,
so the amount of debt you can take on top
of an equity portion. Now, she also, according to Bloomberg,

(00:45):
hinted at some sort of federal backstop, literal government backing
for loans for data centers. Very strange. Now, I will
add this as being completely misreported as open AI demanding
government funds. Had someone ring me the other night say
did you hear about this? It's not what happened. To
be clear, I believe absolutely that Sarah Fryer was throwing
out the idea to see if governments might buy, only

(01:05):
to find the entirety of social media and most of
the mainstream media reacting like Friar had kicked the family dog. Nevertheless,
I want to be clear that open AI has not
requested a federal backstop, and that as ever, it appears
that even the big media outlets do not seem to
go and listen to the things that people say or check.
It's ridiculous. This is a huge story if you misreported,

(01:26):
which is what's happened. Nevertheless, as I said on Blue Sky,
this is an absolute diva moment for open AI. Oh
I'm so messy. I can't even afford mid data centers. Please,
Uncle Sam, I promised to spend one point five trillion
dollars in the next five years. Oh, I'm so weak
and powerless in the face of all the promises I made.
Grow up, wipe your own ass. If regular people promised

(01:46):
a bunch of people a ton of money that they
couldn't afford, they be sued, but in prison or have
their assets reduced to zero. Why do we have to
do something different for open AI? Anyway, this is not
going to happen. I've never seen a more aggressive bipartisan
descent for an idea by everyone from better offline listeners
in the middle of prying hubcaps off of cars to
the powerful Dunce coalition led by Matty Iglesias. Everybody fucking

(02:08):
hates this idea, and if I'm honest, I think everybody
is sick and tired of AI. What was once a
market wide consensus that AI was the future has now
become a cacophony of hand ringing in just about every
major media outlet. What hasn't helped was a very very
weird post through a Nvidia's social media account, a single
image that said, statement from Nvidia CEO Jensen Wang. As
I have long said, China is nanoseconds behind America in AI,

(02:30):
it's vital that America wins by wrestling ahead and winning
developers worldwide. Not really sure what that meant, but this
was I found after the fact, tied to a statement
Huang made to the Financial Times that mostly said the
same thing. But I've got to say, this is the
weirdest statement I've seen. It's so weird. What do you want, Jensen?
More developers to developers by GPUs or so wait a second,

(02:54):
China doesn't have the latest in video GPUs. How are
they nanoseconds behind America? Surely America should be I don't
know hours days at Jensen, I don't know why you're
using words that relate to time as measures of distance.
But nevertheless, why aren't American companies further ahead when they
have easy access to Blackwell and soon via Rubin GPUs?

(03:15):
What exactly do you want us to do? Jensen? What
is the thing? It's like vague posting, being like I
really shouldn't be alone right now, you know, I just
I've had such a bad night. I wish someone would
text me and tell me they're buying a gpu Hanah. No, man,
you're the CEO of the largest company on the stock market.
Do you not have a little more bizaz, little more

(03:37):
riz rizzless? Jensen, You're rizzless even with those beautiful leather jackets.
And it's almost as if there isn't a coherent reason
to buy GPUs or any real progress coming out of
American AI labs, or really any of them were still though,
and this was the one that really I think was underreported.
During Microsoft's last earnings, the company reported a four point
one billion dollar loss on their thirty two point five

(03:58):
percent staking open air, meaning that due to the company
using the equity method for accounting OpenAI lost twelve billion
dollars in the third quarter of this calendar year. Now,
open Ai CFO Sarah Fryar said that this was way overestimated.
And I want to be clear about something. Microsoft's earnings
are public filings as they are a public company, meaning

(04:20):
that these are looked over by accountants and lawyers. Why
is the chief financial officer of open ai disputing these numbers.
That's extremely goddamn weird. And this isn't the first time
Sarah Friar has said some weird shit, even in this
conference appearance, but in general. The other time I saw
her say that it was thirty five dollars a token
in the past for open AI's models. Thirty five bucks

(04:43):
per million tokens doesn't even make sense, but I think
thirty five bucks per token would mean if they spend
like trillions of dollars a year. Regardless, you're the CFO
of open Ai. Shouldn't you know this shit a little
bit better? Now? Before you email me something about gap
earnings or accounting. I'm going to include links in the
show notes because I assure you this loss is directly
reflective of open Eye's actual losses, and that's really weird.

(05:05):
By the way. It's really weird. Indeed, and now that
we know that, we have to ask how bad are
open aye's actual losses? How much worse are things than
we know? I assure you this loss is real. I
trust it. It's been well reported, looked over by actual accountants,
and a link to a Wall Street Journal piece where

(05:26):
an actual accountant looked at this and made this statement.
And I got to ask, what is it that Sarah
Fryar and Clammy Sammy don't want us to know what
is going on? The Information reported that in the first
half of this year, open aye made four point three
billion dollars of revenue but had a net loss of
thirteen point five billion dollars. But that's in six months.

(05:46):
Are those indicative of the real numbers? Has someone been fibbing?
I trust the Information's reporting, by the way, I fully
believe them, and I at this point am just concerned
that we're not getting the full picture. I don't know
what open ai is sharing to people. I don't know
how these reporters have got these numbers, But that twelve

(06:08):
billion dollar loss in a quarter that feels quite dramatic,
and it feels a lot more than open ai has
been hinting they're losing. What else? Don't we know what
else is going on in Open Ai that we are
not Party two? Hopefully we find out soon. In any case,
it feels like something came unbuckled this week. Glamuel the

(06:31):
Smiling Man is watching a specter horned Silicon Valley

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Ed Zitron

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