Monologue: The Year Ahead

In this week's Better Offline monologue, Ed Zitron walks you through the seeming collapse of Mira Murati’s Thinking Machines, and why the AI bubble can’t survive the death of OpenAI.

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Kylie Robison’s scoop about Thinking Machines: https://x.com/kyliebytes/status/2011572331798548899

Max Zeff of WIRED’s follow-on story: https://www.wired.com/story/thinking-machines-lab-cofounders-leave-for-openai/

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Episode Transcript

Speaker 1 (00:02):
Alzo Media. Hello and welcome to your first Better Offline
monologue of twenty twenty six. I'm your host ed Zitron.
We're back from CES and we've already had a great
conversation with the wonderful Steve Burke of Games Nexus, and

(00:23):
this felt like a good time to take stark and
talk about what I see happening in the year ahead. Also, legitimately,
thank you for all for listening at CES. It was
one of the best weeks of my life, and we
made some amazing stuff and you've all sent wonderful emails
and such love hearing from you. But let's talk about
this year. I have a strong gut instinct that this
is the year of reckonings for the AI bubble. Nothing

(00:44):
I'm seeing in the news, the markets, or hearing from
people I talked to behind the scenes suggests that things
are improving at all. In fact, it kind of feels
like when your dog takes a shit somewhere in your
apartment but you can't quite find it. There's that little stink,
but it's not strong enough to give you an idea
of where it is. But you know, one day, without fail,
you're going to a nasty brown delight under your foot
colorful Simile's aside, though Generative AI is not becoming cheaper,

(01:06):
more effective, or more efficient in Vidio's new Vira Ruben,
GPUs are likely to be more expensive than ever, in
part thanks to the ever increasing price of RAM and
in part because of its single vendor mod monopoly, which
allows them to set prices well to stun. And the
other thing with them as well is they're going to
allow people to use the same racks from Blackwell, so
the things you put the GPUs into, but only for

(01:27):
the beginning of Verra Ruben. Then they're going to move
to these giant I think they're called Kaiber racks. The
current ones are called Oberon. Someone will email and correct me,
but it's one of those two. The new one is
going to require an entirely new cooling system architecture. It's
all very good, but on the subject of things that
are also very good, I believe we're also on the

(01:47):
verge of the multiple con jobs of the AI bubble
collapsing too. In July of last year, former open AI
CTO Mira Marati, who barely appear to be able to
get out of fucking sentence in every interview. I've seen
founded Thinking Machines raising two two billion dollars at a
twelve billion dollar valuation, all while refusing to tell investors
what product they'd make, or what the business plan was,
or how they'd make money or anything like that. Naturally,

(02:09):
investors were like, take my money, please, I need to
give this to your mirror. I am an idiot, I'm
a moron, I'm a goofboar. I just love wasting money. Now,
when this happened, they were able to poach open AISVP
of Research for Post Training, Barrett Zov, among two other
staff as I just really can't engineer the excitement to name.
And then, a few days ago, as reported by a

(02:30):
friend of the show, Kylie Robinson of Core Memory, Zof
was fired from Thinking Machines after telling Marati he was
considering leaving with wiredsmac Zef reporting in a follow up
that the firing involved Zov sharing confidential information with competitors.
What confidential information? What possible information could he have had
about the things they're not building? About the bullshit? Who knows?

(02:53):
I think she just fired him because she was mad
that he was leaving. What the fuck is Thinking Machines
building exactly would have had a single AI thing last
year for and I quote, controlling every aspect of model
training and fine tuning or some such bollocks. I realize
I'm being a little dismissive, but I just do not
have it in me anymore to feign excitement over every
single one of these two or three or whatever fraudulent Okay,

(03:16):
not literally fraudulent. I have no evidence of that. This
is a libel blah blah blah. It's not fraudulent. It
just looks like bollocks. I can't be excited about the
new asshole who raised a billion or two billion dollars
to do nothing. I don't have it in me anymore.
I'm not going to read a sentence about post training
or fine tuning and pretend that means anything. It doesn't

(03:37):
mean anything anymore. Nothing has changed, nothing is going on.
Everyone is wasting money, and I can't care about who
looted billions of dollars from venture capitalists last nor do
I believe that anything should happen to this venture capitalists
other than being tard and feathered by the limited partners.
These people aren't building anything. They're huffing their own farts
and getting paid tens of billions of dollars to do it.

(03:59):
I'm sick of here wrying about them, and I think
this is the year we see this kind of con diet.
We're long past the point at which generative AI has
made sense. Bloomberg reported last year that there were one
hundred and seventy eight point five billion dollars of data
center deals in the US alone in twenty twenty five,
and based on my rough analysis, there's less than a

(04:19):
billion dollars of actual compute revenue outside of hyperscalers who
are just trying to move it off of their balance
sheet so their earnings look better. The demand isn't arriving,
and neither of the products and all of this speculative
money sloshing around is going to zero. I also want
to be clearer about something else I keep hearing about.
If open ai dies, the AI bubble bursts with it.

(04:40):
Mister Sebastian Malabi of the Council on Foreign Relations had
a piece in The New York Times a few days
ago saying that he believed open ai would run out
of money by July twenty twenty seven, adding that and
I quote an open ai failure wouldn't be an indictment
of AI, but merely the end of the most hype
driven builder of it. He also said that the probable
result is that open ai would be absorbed by Mike, Microsoft, Amazon,

(05:00):
or another cash rich behemoth, which I am going to
sit down and reread a lot of my newsletters because
I'm pretty sure that's fucking lifted from my work, Like
open ai being absorbed by Microsoft. I know I fucking
said it. If you can find it, email me easy
at better Offline dot com and I will give you
a big thumbs up in a photo. But I want
to be clear. In any case, if open ai dies,
the bubble burst aggressively and brutally. Open ai is the

(05:23):
biggest brand name in AI. Samultman is the only well
known founder, and chat gpt is the only AI product
with any consumer penetration, and no Microsoft and Google renaming
products doesn't count, nor does Nano Banana. I can't believe
I nearly got away with saying or thinking that Nano
Banana for a week. More important, the open ai is

(05:45):
the only company with any real demand for a compute
outside of Anthropic, another company that relies on billions of
dollars of venture capital and subsidies to stop itself from
falling over and dying. As you can hear them a
little bit heated on this subject because I'm really really
sick of hearing this. I'm really sick of hearing things
from these AI boosters are getting more crazy and more defensive,

(06:08):
claiming that this is an open AI bubble, not an
AI bubble. What do you think happens when AI companies
try and raise money after open ai dies? Do you
think investors are going to think? You think they're going
to do the Tobias fun K poly thing from arrested Development,
where it didn't work for name, it will work for us.
Now they're going to say, oh shit, oh shit. The

(06:30):
one company with all the press, all the money, all
the infrastructure, all the attention, all of the governmental support
died on its ass. Why would I invest in more
in this? And I realize venture capitalists are fucking stupid
at the best of times, but even by this standard,
I think that they're going to be too scared to
put the money in. And I don't think anyone else

(06:50):
is going to be able to justify it either. But
I do think by the way AI boosters are about
to get real crazy out there. I think you're going
to see them say it's an open AI bubble, not
and a bubble them. We need these investments to beat China.
Then they're gonna blame people like me AI skeptics. They're
gonna say luddites destroyed innovation. And if you hear that,
know that in reality, the people destroying innovation are the

(07:13):
ones diverting more than half of all venture capital to
invest in unreliable, unproductive, unsustainable, and unremarkable software in pursuit
of creating the future of digital slavery. I'm sick of
these fucking people, but that doesn't mean I won't be
here to tell you all about their collapse. I'll be
back next week with a three or four parter. This
is gonna be a bomb burner. You're gonna love it.

(07:34):
Zichron out