September 26, 2025 • 10 mins
In this week’s Better Offline monologue, Ed Zitron walks you through NVIDIA and OpenAI’s nonsense deal, and how OpenAI now needs $600 billion in the next four years to survive.
OpenAI and NVIDIA Announce Strategic Partnership to Deploy 10 Gigawatts of NVIDIA Systems
https://nvidianews.nvidia.com/news/openai-and-nvidia-announce-strategic-partnership-to-deploy-10gw-of-nvidia-systems
New York Times - OpenAI to Join Tech Giants in Building 5 New Data Centers in U.S.
https://archive.is/vUf0t
The Information - In OpenAI Megadeal, Nvidia Discusses a New Business Model: Chip Leasing
https://www.theinformation.com/articles/openai-megadeal-nvidia-discusses-new-business-model-chip-leasing?rc=kz8jh3
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):
Z Media. Hell, welcome to this week's Better Offline Monologue.
I'm your host ed Zeitrono. As I wrote while drafting this,
I'm the house house, a line I'm leaving in as
I'm being accountable to you, the customer. Anyway, you've heard
(00:26):
about the in Video Open Ai deal. By now that
InVideo will and I put this in air quotes invest
one hundred billion dollars in open Ai. And I want
to start out by being explicit that Invidia is not
wired open Ai as single goddamn dollar. All right, So
the deal is that in VideA is investing ten billion
dollars up front, according to CNBC, despite the fact that
the date before it said that they would be investing
(00:49):
ten billion dollars with the first gig. But anyway, they're
investing ten billion dollars in a month, allegedly, and I
quote here once the deal is finalized, which means in
simpler terms, that nothing has actually been and Video will
then invest ten billion dollars in tranches for each Gigawa
have capacity to that open Ai built. That's right, That's right. Everyone.
Most of this funding is gated behind open Ai, a
(01:10):
company that burns billions of dollars building huge amounts of
data centers, something they have never done, and that also
costs billions of dollars. And just as an aside, open
ai really has built nothing themselves. Everyone else is building
it for them. These fucking silicon value libertarians. They love
themselves and welfare, don't they? Anyway? How does open ai
(01:31):
afford to build these data centers? I don't know. Nobody
else seems to know. Where are they being built? Who knows?
It's unclear. Has the land been purchased? Also unclear. There's
some sort of crap announcement about oh stargate, We've got
a list of different fucking new places, and I had
someone on the reddit suggests I was wrong. I just
want to be clear. Of the list of the five
(01:52):
new stargate locations, one of them is in Shackleford, Texas,
which was already chosen to be one of Oracle's data centers.
This was already an announced. They're re announcing stuff as
a pr professional, When you're re announcing shit, it's because
you run out of stuff to announce this real. But look,
let's let's be explicit about one thing. Data centers take
(02:13):
a long long time to build, right, now, Crusoe is
building a data center in Abilene, Texas, made up of
eight buildings, which will amount to about one point two
gigawats of compute capacity. This is the one for Oracle
and open AI, and at the current rate of development,
it's taken about two and a half years per giga one. Look,
I realize it's easy to get drowned in big numbers
and ridiculous promises and media headlines where the writers don't
(02:35):
seem to bother to learn even the simplest fucking thinks.
But data centers are expensive and take forever, and this
entire plan hinges upon open AI building data centers. In fact, look,
I've seen lots of people suggest that the ten billion
dollars the open AI is getting from Nvideo will let
them build data centers. And again, can somebody please actually
(02:56):
learn the basics here? The Abilene data center venture requires Crusoe,
Blue Oul and Primary Digital Infrastructure to raise fifteen billion
dollars in debt just for the data center itself, the construction,
the people, the water, the power, and all that good stuff,
with Oracle footing the bill for the hundreds of thousands
of GPUs to go inside. At a price of I
think about twenty four billion dollars. It works out to
(03:17):
by my calculations, open ai will need one hundred and
twenty five billion dollars just to build the data centers
to get the funding from in Video, which will require
another two hundred billion dollars in GPUs. By the way,
the information also reports that in Video is going to
be potentially leasing GPUs to open ai, setting up a
special purpose entity to buy the GPUs from themselves that
(03:39):
they would then lease to open AI. I've really hesitated
to bring up any Enron comparisons. I've kind of flirted
with one with core We even then that's that's straight
Enron shit. Like, man, they haven't conferred they're going to
do it. It's an information report or put a link
in there. You'll complain that you have to pay for it.
I recommend the information. I just every day, every day,
(04:03):
these new pieces of news where everyone kind of like
trumpets them like Jesus just woke up from behind that
big fucking rock, when in fact, I think something far
worse is happening. But I really want to break something
down for you, and you'll likely hear this again in
a future episode. I want to get into the actual
economics here, Cruso's one point two gigawatts of compute for
(04:25):
open Ai is a fifteen billion dollar joint venture, which
means a gigawa of compute runs about twelve point five
billion dollars. Abilene's eight buildings are meant to hold about
fifty thousand in video GB two hundred GPUs in their
associated networking infrastructure. So let's say a giga what is
about three hundred and three thousand, three hundred and thirty
(04:45):
three Blackwell GPUs. Yeah, this math is a little bit
funky due to in Video promising to install theirny Reubin
GPUs in these theoretical data centers. But I really do
think that they'll require about just a little under two
hundred billion dollars worth of GPUs. And this is on
top of the four hundred billion dollars the open Ai
has promised to spend with Oracle over the next five years,
(05:05):
when open ai had already leaked that they'd be burning
one hundred and fifteen billion dollars over the next four years.
This math does not make any sense. It's complete nonsense.
For open ai to survive, they're going to need around
six hundred billion dollars in the next five years. It's ridiculous, astonishing,
and insulting to the general public that the media keeps
acting as if these deals are signed or promoted in
(05:27):
good faith. And I'm shocked that more people aren't doing
the very simple maths that And I've seen a disgraceful
amount of people talking about Open Aiy's revenue projections, which
involve them making one hundred billion dollars in twenty twenty
eight and one hundred and forty five billion dollars in
twenty twenty nine, and that's revenue, not profit. They're losing
tens of billions of dollars both those years, and they're
acting as if these are serious, meaningful statements rather than
(05:50):
egregious lies from a gaggle of Charlatan's. It's a fucking joke.
It's sickening. Oh, by the way, Open Eyes projected to
make thirteen billion this year. From Mike calculs, they made
about six point twenty six billion. Is it's wank And
that's the technical term they use it. The financial analysts
put it. When you pay JP Morgan to see their
private shit, it's or yeah, this is all wank. This
(06:12):
is wink. Okay, I'll keep going now for the next
three part episode I'm gonna put out next week. I've
done a lot of digging into how much actual money
exists to invest in general, and we're genuinely running up
against the limits of private and public capital. By my calculations,
there's only about four hundred and seventy seven billion dollars
of available capital across the top ten private equity funds,
(06:33):
and I'm deadly serious. I will be publishing the links
and maybe one hundred and sixty four billion dollars of
US venture capital left, and maybe let's call that another
one hundred and fifty BILLI in other funds sloshing around.
Are we really going to carve out half to two
thirds of available global capital for one fucking company that
burns a billion fucking dollars every two fucking seconds. I
(06:56):
know it's slower than that. Shut up. I'm just I'm
a little bit ornery. I'm not going to lie. You
can hear it in my voice. And I am even
more ornery than ever, more ornery than ornery, as Rob
Zombie once sung. I'm just pissed off because when you
look at these numbers, they do not make sense. There's
no parallel in history for any company or any industry
(07:18):
that's ever spent this much money. There's never been one
company that has been the focus like this. And honestly,
I've never seen a company less deserving of any investment
than open AI. They've burned billions of dollars. Their product
is questionably useful, it's incredibly commoditized. They have yet to
create anything really exciting or new since And if I'm
(07:39):
being kind reasoning, but let's be honest. GPT four, Oh
they are washed. And yet everybody's sitting around them clapping
like they're a gifted child and insult to children and
startup founders. And that really is something that pisses me
off as well, because AI took thirty three percent of
US venture capital last year and I think they're probably
taking more this year. And what's insane is nothing has
(08:02):
been proven. None of these companies are profit generating, none
of these products are popular. Every single day, it feels
like a study comes out saying, yeah, no one really
likes this stuff, no one wants to pay for it.
And by my calculations, I think the whole industry's revenue
have include core we even all those shits, maybe fifty
five billion dollars in twenty twenty five. That's on four
(08:24):
hundred billion plus capex. Is anyone having fun? Does this
feel like the future or does this feel like the
future of how we're going to blow hundreds of billions
of dollars on nothing? And the longer it takes for
people to walk away from open Ai, and the longer
it takes for this company to die, the more damage
(08:46):
that's going to be caused. Because right now in video
is putting everything on open Ai. If we had functioning
regulatory boards, we'd actually have something done about this. But instead,
what's going to happen is they're going to inflate this
bubble just a little further, and then when it bursts,
it's going to fuck retail investors and a ton of
venture capitalists too, ton of private equity people as well,
which will be kind of funny, but the financial apocalypse
(09:09):
will hit everyone and it will be grizzly. But I'll
be here to talk about it. I'm having the time
of my life doing this show. Next week's three part
Who is Completely Insane? I wrote it in kind of
a two day, fifteen thousand word kind of like ejection.
I was going to say, I was going to say
another word, which wouldn't have sounded quite as good, But nevertheless,
(09:29):
that's the fun brandy part of these monologues. But I'm
really excited for you to hear it because I pulled
together a lot of numbers that show how fascical this
industry has become. And I think as the bubble approaches
its eventual burst, a lot of you are going to
feel really good about how right you are. Maybe some
of you still disagree with me, and I will work
to compel you, and even if I don't, I hope
(09:50):
you have a good time listening. Got great episodes coming
up in the future as well. Going to be going
to see Stephen Burke of Gamers next is, do a
long interview with him, some fun you a better offline,
and then I'm already working on some big guests. It's
going to be a really fun few months. I don't
know if anyone else, but I'm definitely enjoying doing this podcast.
Thank you, zever for listening.
Z Media. Hell, welcome to this week's Better Offline Monologue.
I'm your host ed Zeitrono. As I wrote while drafting this,
I'm the house house, a line I'm leaving in as
I'm being accountable to you, the customer. Anyway, you've heard
(00:26):
about the in Video Open Ai deal. By now that
InVideo will and I put this in air quotes invest
one hundred billion dollars in open Ai. And I want
to start out by being explicit that Invidia is not
wired open Ai as single goddamn dollar. All right, So
the deal is that in VideA is investing ten billion
dollars up front, according to CNBC, despite the fact that
the date before it said that they would be investing
(00:49):
ten billion dollars with the first gig. But anyway, they're
investing ten billion dollars in a month, allegedly, and I
quote here once the deal is finalized, which means in
simpler terms, that nothing has actually been and Video will
then invest ten billion dollars in tranches for each Gigawa
have capacity to that open Ai built. That's right, That's right. Everyone.
Most of this funding is gated behind open Ai, a
(01:10):
company that burns billions of dollars building huge amounts of
data centers, something they have never done, and that also
costs billions of dollars. And just as an aside, open
ai really has built nothing themselves. Everyone else is building
it for them. These fucking silicon value libertarians. They love
themselves and welfare, don't they? Anyway? How does open ai
(01:31):
afford to build these data centers? I don't know. Nobody
else seems to know. Where are they being built? Who knows?
It's unclear. Has the land been purchased? Also unclear. There's
some sort of crap announcement about oh stargate, We've got
a list of different fucking new places, and I had
someone on the reddit suggests I was wrong. I just
want to be clear. Of the list of the five
(01:52):
new stargate locations, one of them is in Shackleford, Texas,
which was already chosen to be one of Oracle's data centers.
This was already an announced. They're re announcing stuff as
a pr professional, When you're re announcing shit, it's because
you run out of stuff to announce this real. But look,
let's let's be explicit about one thing. Data centers take
(02:13):
a long long time to build, right, now, Crusoe is
building a data center in Abilene, Texas, made up of
eight buildings, which will amount to about one point two
gigawats of compute capacity. This is the one for Oracle
and open AI, and at the current rate of development,
it's taken about two and a half years per giga one. Look,
I realize it's easy to get drowned in big numbers
and ridiculous promises and media headlines where the writers don't
(02:35):
seem to bother to learn even the simplest fucking thinks.
But data centers are expensive and take forever, and this
entire plan hinges upon open AI building data centers. In fact, look,
I've seen lots of people suggest that the ten billion
dollars the open AI is getting from Nvideo will let
them build data centers. And again, can somebody please actually
(02:56):
learn the basics here? The Abilene data center venture requires Crusoe,
Blue Oul and Primary Digital Infrastructure to raise fifteen billion
dollars in debt just for the data center itself, the construction,
the people, the water, the power, and all that good stuff,
with Oracle footing the bill for the hundreds of thousands
of GPUs to go inside. At a price of I
think about twenty four billion dollars. It works out to
(03:17):
by my calculations, open ai will need one hundred and
twenty five billion dollars just to build the data centers
to get the funding from in Video, which will require
another two hundred billion dollars in GPUs. By the way,
the information also reports that in Video is going to
be potentially leasing GPUs to open ai, setting up a
special purpose entity to buy the GPUs from themselves that
(03:39):
they would then lease to open AI. I've really hesitated
to bring up any Enron comparisons. I've kind of flirted
with one with core We even then that's that's straight
Enron shit. Like, man, they haven't conferred they're going to
do it. It's an information report or put a link
in there. You'll complain that you have to pay for it.
I recommend the information. I just every day, every day,
(04:03):
these new pieces of news where everyone kind of like
trumpets them like Jesus just woke up from behind that
big fucking rock, when in fact, I think something far
worse is happening. But I really want to break something
down for you, and you'll likely hear this again in
a future episode. I want to get into the actual
economics here, Cruso's one point two gigawatts of compute for
(04:25):
open Ai is a fifteen billion dollar joint venture, which
means a gigawa of compute runs about twelve point five
billion dollars. Abilene's eight buildings are meant to hold about
fifty thousand in video GB two hundred GPUs in their
associated networking infrastructure. So let's say a giga what is
about three hundred and three thousand, three hundred and thirty
(04:45):
three Blackwell GPUs. Yeah, this math is a little bit
funky due to in Video promising to install theirny Reubin
GPUs in these theoretical data centers. But I really do
think that they'll require about just a little under two
hundred billion dollars worth of GPUs. And this is on
top of the four hundred billion dollars the open Ai
has promised to spend with Oracle over the next five years,
(05:05):
when open ai had already leaked that they'd be burning
one hundred and fifteen billion dollars over the next four years.
This math does not make any sense. It's complete nonsense.
For open ai to survive, they're going to need around
six hundred billion dollars in the next five years. It's ridiculous, astonishing,
and insulting to the general public that the media keeps
acting as if these deals are signed or promoted in
(05:27):
good faith. And I'm shocked that more people aren't doing
the very simple maths that And I've seen a disgraceful
amount of people talking about Open Aiy's revenue projections, which
involve them making one hundred billion dollars in twenty twenty
eight and one hundred and forty five billion dollars in
twenty twenty nine, and that's revenue, not profit. They're losing
tens of billions of dollars both those years, and they're
acting as if these are serious, meaningful statements rather than
(05:50):
egregious lies from a gaggle of Charlatan's. It's a fucking joke.
It's sickening. Oh, by the way, Open Eyes projected to
make thirteen billion this year. From Mike calculs, they made
about six point twenty six billion. Is it's wank And
that's the technical term they use it. The financial analysts
put it. When you pay JP Morgan to see their
private shit, it's or yeah, this is all wank. This
(06:12):
is wink. Okay, I'll keep going now for the next
three part episode I'm gonna put out next week. I've
done a lot of digging into how much actual money
exists to invest in general, and we're genuinely running up
against the limits of private and public capital. By my calculations,
there's only about four hundred and seventy seven billion dollars
of available capital across the top ten private equity funds,
(06:33):
and I'm deadly serious. I will be publishing the links
and maybe one hundred and sixty four billion dollars of
US venture capital left, and maybe let's call that another
one hundred and fifty BILLI in other funds sloshing around.
Are we really going to carve out half to two
thirds of available global capital for one fucking company that
burns a billion fucking dollars every two fucking seconds. I
(06:56):
know it's slower than that. Shut up. I'm just I'm
a little bit ornery. I'm not going to lie. You
can hear it in my voice. And I am even
more ornery than ever, more ornery than ornery, as Rob
Zombie once sung. I'm just pissed off because when you
look at these numbers, they do not make sense. There's
no parallel in history for any company or any industry
(07:18):
that's ever spent this much money. There's never been one
company that has been the focus like this. And honestly,
I've never seen a company less deserving of any investment
than open AI. They've burned billions of dollars. Their product
is questionably useful, it's incredibly commoditized. They have yet to
create anything really exciting or new since And if I'm
(07:39):
being kind reasoning, but let's be honest. GPT four, Oh
they are washed. And yet everybody's sitting around them clapping
like they're a gifted child and insult to children and
startup founders. And that really is something that pisses me
off as well, because AI took thirty three percent of
US venture capital last year and I think they're probably
taking more this year. And what's insane is nothing has
(08:02):
been proven. None of these companies are profit generating, none
of these products are popular. Every single day, it feels
like a study comes out saying, yeah, no one really
likes this stuff, no one wants to pay for it.
And by my calculations, I think the whole industry's revenue
have include core we even all those shits, maybe fifty
five billion dollars in twenty twenty five. That's on four
(08:24):
hundred billion plus capex. Is anyone having fun? Does this
feel like the future or does this feel like the
future of how we're going to blow hundreds of billions
of dollars on nothing? And the longer it takes for
people to walk away from open Ai, and the longer
it takes for this company to die, the more damage
(08:46):
that's going to be caused. Because right now in video
is putting everything on open Ai. If we had functioning
regulatory boards, we'd actually have something done about this. But instead,
what's going to happen is they're going to inflate this
bubble just a little further, and then when it bursts,
it's going to fuck retail investors and a ton of
venture capitalists too, ton of private equity people as well,
which will be kind of funny, but the financial apocalypse
(09:09):
will hit everyone and it will be grizzly. But I'll
be here to talk about it. I'm having the time
of my life doing this show. Next week's three part
Who is Completely Insane? I wrote it in kind of
a two day, fifteen thousand word kind of like ejection.
I was going to say, I was going to say
another word, which wouldn't have sounded quite as good, But nevertheless,
(09:29):
that's the fun brandy part of these monologues. But I'm
really excited for you to hear it because I pulled
together a lot of numbers that show how fascical this
industry has become. And I think as the bubble approaches
its eventual burst, a lot of you are going to
feel really good about how right you are. Maybe some
of you still disagree with me, and I will work
to compel you, and even if I don't, I hope
(09:50):
you have a good time listening. Got great episodes coming
up in the future as well. Going to be going
to see Stephen Burke of Gamers next is, do a
long interview with him, some fun you a better offline,
and then I'm already working on some big guests. It's
going to be a really fun few months. I don't
know if anyone else, but I'm definitely enjoying doing this podcast.
Thank you, zever for listening.
Host
Ed Zitron
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