I'm Mad As Hell, And I'm Not Gonna Take It Anymore

This is an iHeart podcast.

Hi, I'm Morgan Sung, host of Close All Tabs from KQED, where every week we reveal how the online world collides with everyday life.

There was the six-foot cartoon otter who came out from behind a curtain.

It actually really matters that driverless cars are going to mess up in ways that humans wouldn't.

Should I be telling this thing all about my love life?

I think we will see a Twitch stream or a president, maybe within our lifetimes.

You can find Close All tabs wherever you listen to podcasts.

There's more to San Francisco with the Chronicle.

More to experience and to explore.

Knowing San Francisco is our passion.

Discover more at sfchronicle.com.

In business, they say you can have better, cheaper, or faster, but you only get to pick two.

What if you could have all three at the same time?

That's exactly what Kohir, Thomson Reuters, and Specialized Bikes have since they upgraded to the next generation of the cloud.

Oracle Cloud Infrastructure.

OCI is the blazing fast platform for your infrastructure, database, application development, and AI needs, where you can run any workload in a high-availability, consistently high-performance environment, and spend less than you would with other clouds.

How is it faster?

OCI's block storage gives you more operations per second.

Cheaper?

OCI costs up to 50% less for computing, 70% less for storage, and 80% less for networking.

Better?

In test after test, OCI customers report lower latency and higher bandwidth versus other clouds.

This is the cloud built for AI and all your biggest workloads.

Right now, with zero commitment, try OCI for free.

Head to oracle.com slash strategic.

That's oracle.com slash strategic.

Every business has an ambition.

PayPal Open is the platform designed to help you grow into yours with business loans so you can expand and access to hundreds of millions of PayPal customers worldwide.

And your customers can pay all the ways they want with PayPal, Venmo, Pay Later, and all major cards so you can focus on scaling up.

When it's time to get growing, there's one platform for all business: PayPal Open.

Grow today at paypalopen.com.

Loan subject to approval in available locations.

Callzone Media.

I'm mad as hell and I'm not going to take it anymore.

Welcome to Better Offline.

I'm your host, Ed Zittron.

Now, this is the second part of a two-part series about how OpenAI's stupid bloody growth myth has conned the entire media ecosystem, forcing people who really should know better to repeat absolutely insane things as though they're actually perfectly reasonable.

Now if you haven't already listened to the last episode and come back.

Just go.

Just go.

I'll need you to listen to it.

Otherwise let's talk about why this bubble actually inflated.

And I realized I did a monologue about this, but it's so obvious that I needed to do a longer episode.

But let's start simple.

The term artificial intelligence is bastardized to the point it effectively means nothing and everything at the same time.

When people hear AI, they think of an autonomous intelligence that can do things for them.

And generative AI can do things for you, like generate an image or a text from a simple prompt.

As a result, it's easy to manipulate people who don't know much about tech or even try it in the first place into believing that this will naturally progress from it can create a bunch of text for me that I have to write for my job just by me typing in a prompt to it can do my job for me just by typing in a prompt.

Basically everything you've read about the future of AI extrapolates generative AI's ability to sort of generate something a human would make and turns it into a it can do whatever a human can do, or because some tech in the past has sometimes been bad at the beginning and linearly improved as time drags on.

This illogical thinking underpins the entire generative AI boom because we found out exactly how many people do not know what the fuck they're talking about and are willing to believe the last semi-intelligent person that they talk to.

Generative AI is kind of a remarkable con a just good enough version of human expression to get it past the gatekeepers in finance and the media, knowing that neither will apply a second gear of critical thinking beyond hook as we're doing AI now.

The expectation that generative AI will transform into this much more powerful version requires you to first ignore its existing limitations, believing it to be more capable than it is, and also ignore the fact that these models have yet to show meaningful improvement over the past few years, unless you're looking at, of course, the benchmarks that they are built specifically to pass.

They still hallucinate.

They're still ungodly expensive to run.

They're still unreliable and they still don't really do that much.

Worse still, ChatGPT's growth has galvanized these people into believing that this is a legitimate, meaningful movement, rather than the most successful public relation campaign of all time.

Think of it like this.

And some of you really don't like this argument.

You're like, something couldn't be this big just because of the media.

It really could.

If almost every single media outlet talked about one thing, this thing being generative AI, and that one thing was available from one company, OpenAI, wouldn't it look exactly how things look today?

You've got OpenAI with hundreds of millions of monthly active users, and then a bunch of other companies, including big tech firms with multi-trillion dollar market caps with somewhere between 10 and 69 million monthly active users and I don't count Gemini because they're cheating.

You can't slap it on Google Assistant.

That's unfair.

What we're seeing here is one company taking most of the users and money available and doing so because the media fucking help them.

People aren't amazed by ChatGPT.

They're curious.

They're curious about why the media won't shut up about it.

And we have to realize and recognize and accept that part of the reason this bubble was inflated was the failure of Google search.

Everyone I talk to that uses ChatGPT regularly uses it as either a way to generate shitty limerick or as a replacement for Google search, a product that Google has deliberately made worse as a means of increasing profits.

Listen to our award-winning episode, The Man That Destroyed Google Search.

I'm going to say that forever.

And by the way, that's absolutely what you should listen to.

It's Webby Award-winning, the best business episode.

We won it, folks.

Anyway, I hate to say this.

I really don't like saying this.

I don't like to give it to them, but ChatGPT, if I'm honest, is better at processing search strings than Google Search, which is not so much a sign that ChatGPT is good at something as it is that Google has stopped innovating in any meaningful way.

Over time, Google Search should have become something that was able to interpret searches into kind of like a perfect result, which would require the company to improve how it processes your requests.

It should be how Google used to feel, magical.

Instead, Google search has become dramatically worse, mostly because the company's incentives changed from help people find something on the web to funnel as much traffic and show as many ad impressions as possible on google.com.

It does little annoying things like ignoring random words in the search string, even though those words were there for a reason.

And Google doesn't know better than you what you want.

Ideally, though, they should when it comes to a search product.

That's ideally what a...

You get someone to search something for you.

You want them to bring back the best thing.

And by this point, Google search should have been far more magical, more capable of taking a dim-witted question and turning it into a great answer, with said answer being a result from the internet, right?

Note that nothing I'm saying here is actually about generating a result.

It's about processing a user's query and presenting an answer.

The very foundation of computing and the thing that Google at one point was the best in the world at doing.

Thanks to Probagar Raghavan, the former head of ads that led a coup to become the head of search, Google has pulled away from being the meaningful source of information on the internet.

It really is actually quite sad when you think about it.

And I'd argue that ChatGPT filled the void left by Google search by doing the thing that people wanted Google search to do.

Answer a question, even if the user isn't really sure how to ask it.

Google search has become clunky and messy, putting the burden of using the service on the user rather than helping fill the gap between a query and an answer in any meaningful way.

Google's AI summaries don't even try to do what ChatGPT does.

They just generate summaries based on search results and say, uh,

mate, is this what you want?

I don't fucking know.

I only make like $10 billion a quarter.

Give me a fucking break.

But one note on Google's AI summaries.

They're designed to answer a question rather than provide a right answer.

There's a distinction that needs to be made here because it speaks to the underlying utility of search itself.

One good illustration came earlier this week when someone noticed that you could ask Google to explain the meaning of a completely made-up phrase, and it would dutifully obey you.

Two dry frogs in the situation, Google said, referred to a group of people in an awkward or difficult social situation.

Not every insect has a mortgage, Google claimed, is a humorous way of explaining that not everything is as it seems.

But my favorite is

sorry, I haven't read this back since I wrote.

Big winky on the skillet bowl is apparently a slang term that refers to a piece of bread with an egg in the middle.

Very funny, sure, but is it useful?

No.

And it's also really cool that this company just makes billions of dollars off of this.

With all its data and all its talent, Google has put out the laziest version of an LLM on top of its questionably functional search product as a means of impressing shareholders.

And I'd like to say the results speak for themselves.

Now, I must be clear, none of this is to say that ChatGPT is good.

Like, it really isn't.

It's just better at understanding a user's request than Google search.

Yes, I fundamentally believe, by the way, that 500 million people a week could be using ChatGPT as some sort of search replacement.

And no, no, I do not believe that's a functional business model, in part because if it was ChatGPT, OpenAI, they'd have a functional business.

And to be clear, that's a...

Load-bearing cut because I know that 500 million people aren't using ChatGPT as a search replacement.

It's hypothetical.

We actually don't know, and we cannot trust what comes out of them.

Not that they share.

It's not just that OpenAI is a shambles of a company.

It appears that Google's ability to turn search into such a big business was because it held a monopoly on search, search advertising, and pretty much the entire online ads industry.

And if it was a truly competitive market and Google wasn't allowed to be vertically integrated with the entire digital advertising apparatus of the web, it would likely be making much less revenue per user.

And that's bad if your Google replacement costs many, many, many, many, many more times more money than Google to run.

As an aside, by the way, if you're wondering, no, OpenAI cannot just create a Google search competitor.

Search GPT will be a significantly more expensive product to run at Google scale than ChatGPT, both infrastructurally and then the cost of revenue itself, with OpenAI being forced to create this massive advertising arm that does not exist.

And by the way, Another great critique I get is like, OpenAI can just hire a bunch of ads people.

Why do you think there hasn't been another competitor to search?

You realize that there are lots of other companies with lots of other money that could just do this, and indeed they've tried.

Why do you think that hasn't worked?

Is it because of the monopoly?

It's because of the monopoly.

It's because of the monopoly.

Look, people love the chat GPT interface.

It's the box where you can type in one thing, get another thing out, because it resembles how everybody has always wanted Google search to work.

Does it work well?

Who knows?

But people feel like they're getting more out of it.

Hi, I'm Morgan Sung, host of Close All Tabs from KQED, where every week we reveal how the online world collides with everyday life.

There was the six-foot cartoon otter who came out from behind a curtain.

It actually really matters that driverless cars are going to mess up in ways that humans wouldn't.

Should I be telling this thing all about my love life?

I think we will see a Twitch stream or president, maybe within our lifetimes.

You can find Close All tabs wherever you listen to podcasts.

So I've shopped with Quince before they were an advertiser and after they became one.

And then again, before I had to record this ad, I really like them.

My green overshirt in particular looks great.

I use it like a jacket.

It's breathable and comfortable and hangs in my body nicely.

I get a lot of compliments.

And I liked it so much I got it in all the different colours, along with one of their corduroy ones, which I think I pull off.

And really, that's the only person that matters.

I also really love their linen shirts too.

They're comfortable, they're breathable, and they look nice.

Get a lot of compliments there, too.

I have a few of them.

Love their rust-coloured ones as well.

And in general, I really like Quince.

The shirts fit nicely, and the rest of their clothes through too.

They ship quickly, they look good, they're high quality, and they partner directly with ethical factories and skip the middleman.

So you get top-tier fabrics and craftsmanship at half the price of similar brands.

And I'm probably going to buy more from them very, very soon.

Keep it classic and cool this fall.

With long-lasting staples from Quince, go to quince.com/slash better for free shipping on your order and 365-day returns.

That's q-u-in-ce-e.com slash better.

Free shipping and 365-day returns.

Quince.com slash better.

Every business has an ambition.

PayPal Open is the platform designed to help you grow into yours with business loans so you can expand and access to hundreds of millions of PayPal customers worldwide.

And your customers can pay all the ways they want with PayPal, Venmo, Pay Later, and all major cards so you can focus on scaling up.

When it's time to get growing, there's one platform for all business, PayPal Open.

Grow today at PayPalOpen.com.

Loan subject to approval in available locations.

As a founder, you're moving fast toward product market fit, your next round, or your first big enterprise deal.

But with AI accelerating how quickly startups build and ship, security expectations are higher earlier than ever.

Getting security and compliance right can unlock growth or stall it if you wait too long.

With deep integrations and automated automated workflows built for fast-moving teams, Vanta gets you audit-ready fast and keeps you secure with continuous monitoring as your models, infra, and customers evolve.

Fast-growing startups like Langchain, Writer, and Cursor trust Advanta to build a scalable foundation from the start.

Go to Vanta.com/slash iHeart to save $1,000 today through the Vanta for Startups program and join over 10,000 ambitious companies already scaling with Vanta.

That's vanta.com/slash iHeart to save $1,000 for a limited time.

But before I go any further, I'd like to talk to you about AGI, artificial general intelligence.

Artificial bloody general intelligence, the conscious computer that does not exist and is entirely fictional.

And this two-part, by the way, has been a break from my usual onerous, tortured, punished, and analysis.

And it's because I needed to have a little fun.

And I think you've kind of heard that in the episode.

I'm like a little flexible.

I'm all like limber and excited.

And it also comes from a place of frustration.

None of this AI stuff has ever felt substantive or real because the actual things that you can do with generative AI never seem to come close to the things that people like Sam Altman and Warry O'Amade seem to be promising.

Nor do they come close to the bullshit like people Casey Newton and Kevin Roos are peddling.

None of this ever resembled artificial general intelligence.

And if I'm honest, very little of it seems to even suggest it's a functional industry.

And when cynical plants like Kevin Roos of the Times bumble around asking theoretical questions such as, do you think that there's a 50% chance or higher that AGI defined as an AI system that outperforms human experts at virtually all cognitive tasks will be built before 2030?

I think when we're reading people saying that, and that was Kevin Roos at like some little AI panel thing surrounded by just like venture capitalists and the senior officials of Anthropic, When you've got like the lead columnist of the Times saying this, we should all be terrified.

We should be terrified, but not of AGI, but that the lead technical columnist that the New York Times appears to have an undiagnosed concussion.

Roos's logic, as with KEC Newton's, is based on the idea that he's talked to a bunch of people that say, yeah, yeah, mate, AGI is right around the corner, rather than any kind of like tangible proof or evidence, just line going up.

Do you see it?

The line's going up.

Which line is it?

Get out of my house.

Look,

I will say, I've been a little mean on Kevin Roos.

I've been saying that he's written the worst shit about artificial intelligence, that he is a credulous buffoon or at worst a cynical plant, that he Kevin Roos at the New York Times is regularly pushing things like NFTs and crypto and getting basic things wrong like the Helium piece in which Helium lied about

their customers.

I've said that Kevin Roos regularly says things that don't make any sense and he has indeed written the worst tech criticism out there, criticism being the wrong word, tech analysis out there.

And I want to just say that I've been wrong.

I've been wrong the entire time.

What I should have said is that he's written the worst stuff yet.

And I should have said that because he's recently published one of the dumbest fucking things I've read in my life, and I can't wait to tell you about it.

His most egregious example of credulousness came in late April when he published this thinly veiled puff piece about what to do if AI models become conscious in the future.

Now this piece, this piece is possibly the dumbest tech piece I've read in my life.

I really mean this.

I've read some dog shit.

I've gone on Telegram groups for the smallest ICOs you've seen in your life.

I'm doing the Rutger Hauer speech from a Blade Runner right now.

The things I've seen with your eyes, different speech, I realize.

This piece from the New York Times is called, If AI Systems Become Conscious, Should They Have Rights?

And the subhead is, as artificial intelligence systems become smarter, one AI company is trying to figure out what to do if they become conscious.

I'm going to give you exactly one guess, what company he's talking about.

And here's a clue.

It's the company Casey Newton's boyfriend works at.

That's right, it's Anthropic.

Kevin Roos interviewed two people, both employed by Anthropic, with one holding the genuinely hilarious job description of AI welfare researcher, who said nakedly insane things like, there's only a small chance, maybe 15% or so, that Claude or another AI system is conscious.

And it seems that if you find yourself in a situation of bringing some new class of being into existence, dot dot dot, then it seems quite prudent to at least be asking questions about whether that system might have its own kinds of experiences.

Well, I'm experiencing brain damage reading this article out.

And what makes this article so appalling is that Roos acknowledges that this shit is seen by most level-headed people as utterly fantastical.

He describes the concept of AI consciousness as a taboo subject and that many critics will see this as crazy talk, but doesn't bother to speak to any actual critics.

He does, however, speculate on the motives of said critics, saying that they might object to an AI company's studying consciousness in the first place, because it might create incentives to train their systems to act more sentient than they actually are.

Yeah, Kevin, wouldn't wouldn't it be really bad if a generative AI company deliberately did something to convince someone that their systems were sentient?

You know, someone really credulous who would accept whatever narratives said AI company was pushing, such as that they created a special job just in case AI was sentient.

Genuine question, Kevin.

When you walk past the mirror, do you start barking at it because you see another guy?

Anyway, nothing about anything that OpenAI or Anthropic is building or shipping suggests that we are anywhere near any kind of autonomous computing.

They've used the concept of AI safety and now AI welfare as a marketing term to convince people that their expensive, wasteful software will somehow become conscious because they're having discussions about what to do if it does so.

And anyone, literally any reporter accepting this at face value is doing their readers a disservice and embarrassing themselves in the process.

If AI safety advocates cared about, I don't know, safety or AI, they'd have cared about the environmental impact or the fact that these models train using stolen material or the fact that these models don't really deliver on their promises.

And if they did, it would shock the labor market.

And it would hurt millions, if not billions of people.

And we don't have anywhere near the social safety network to support the ones we have right now, let alone in this completely fictional future.

These companies do not care about your safety and they don't have any way to get to AGI.

They're full of shit and it's time to start being honest that you don't have any proof that they do anything that they say they will.

Also, by the way, I think the bubble might actually be bursting.

Yeah, remember in August of last year, I was talking about the pale horses of the AI apocalypse.

Well, one of the major warning signs that the bubble was bursting was big tech firms would be reducing their capital expenditures.

And this is a call I've made quite a few times.

And there was one in alarming clarity from April 4th, 2024.

And I'm going to quote myself here.

Well, I hope I'm...

Nope, that's the wrong voice.

While I hope I'm wrong, the calamity I fear is one where the massive overinvestment in data centers is met with a lack of meaningful growth or profit, leading to the markets turning on the major cloud players that stake their future on unproven generative AI.

If businesses don't adopt AI at scale, not experimentally, but at the core of their operations, the revenue is simply not there to sustain the hype.

And once the market turns, it will turn hard, demanding efficiency and cutbacks that will lead to tens of thousands of job cuts.

Well, we're about to find out if I'm right.

On April 21st, Yahoo Finance reported that analyst Josh Schbeck said that Amazon's generative AI revenue for Amazon web services would be $5 billion.

$5 billion this year.

A remarkably small sum that is not profit, by the way, and also a drop in the bucket compared to Amazon's projected $105 billion in capital expenditures in 2025.

It's $78.2 billion in expenditures in 2024, or it's $48.4 billion in 2023.

And is that really fucking it?

Are you fucking kidding me?

Are you fucking kidding me?

I have had jackholes for years telling me this was the next big money driver.

$5 billion?

$5 billion goddamn dollar.

Are you fucking kidding?

You'd make more money auctioning dogs.

This is a disgrace.

And if you're wondering, yes, all of this is for AI.

All of that capex.

From the Yahoo Finance article, the wonderful Laura Bratton wrote, well, this is a quote, by the way, from the article.

CEO Andy Jassy said in February that the vast majority of this year's $100 billion in capital investments from the tech giant will go towards building out artificial intelligence capacity for its cloud segment, Amazon Web Services, AWS.

Well, shit, I bet investors are going to love this.

Better save some money, Andy.

What's that?

What's that, Andy?

What?

Oh, you're saving money already.

How?

Oh, shit.

Oh, uh-oh.

A report from Wells Fargo analysts published at the end of April called Data Centers, AWS Goes on Pause, says that Amazon has paused the portion of its leasing discussions on the co-location side.

And while it's not clear the magnitude of the pause, the positioning is similar to what analysts have heard recently from Microsoft, that they are digesting aggressive recent lease-up deals pulling back from a pipeline of LOIs or SQQs.

Now, some arsehole is going to say LOIs and SQQs aren't a big deal, but they are.

They are.

Go listen to the power cut episodes.

Go listen.

Go back and listen to them right now.

Get off my, how'd you get in my house?

Anyway, digesting in this case refers to when hyperscalers sit with their current capacity for a minute.

And Wells Fargo adds that these periods typically last six to twelve months, though they can be much shorter.

It's not obvious how much capacity Amazon is walking away from, but they're walking away from capacity.

It's happening.

Hi, I'm Morgan Sung, host of Close All Tabs from KQED, where every week we reveal how the online world collides with everyday life.

There was the six-foot cartoon otter who came out from behind a curtain.

It actually really matters that driverless cars are going to mess up in ways that humans wouldn't.

Should I be telling this thing all about my love life?

I think we will see a Twitch stream or a president maybe within our lifetimes.

You can find Close All Tabs wherever you listen to podcasts.

Every business has an ambition.

PayPal Open is the platform designed to help you grow into yours with business loans so you can expand and access to hundreds of millions of PayPal customers worldwide.

And your customers can pay all the ways they want with PayPal, Venmo, Pay Later, and all major cards so you can focus on scaling up.

When it's time to get growing, there's one platform for all business, PayPal Open.

Grow today at PayPalOpen.com.

Loan subject to approval in available locations.

Lily is a proud partner of the iHeartRadio Music Festival for Lily's Duets for Type 2 Diabetes Campaign that celebrates patient stories of support.

Share your story at mountjaro.com/slash duets.

Mountjaro terzepatide is an injectable prescription medicine that is used along with diet and exercise to improve blood sugar, glucose in adults with type 2 diabetes mellitus.

Mount Jaro is not for use in children.

Don't take Mount Jaro if you're allergic to it, or if you or someone in your family had medullary thyroid cancer or multiple endocrine neoplasia syndrome type 2.

Stop and call your doctor right away if you have an allergic reaction, a lump or swelling in your neck, severe stomach pain, or vision changes.

Serious side effects may include inflamed pancreas and gallbladder problems.

Taking Manjaro with a sulfinyl norrhea or insulin may cause low blood sugar.

Tell your doctor if you're nursing, pregnant, plan to be, or taking birth control pills, and before scheduled procedures with anesthesia.

Side effects include nausea, diarrhea, and vomiting, which can cause dehydration and may cause kidney problems.

Once-weekly Manjaro is available by prescription only in 2.5, 5, 7.5 10 12.5 and 15 milligram per 0.5 milliliter injection.

Call 1-800-LILLIERX-800-545-5979 or visit mountjaro.lilly.com for the Mountjaro indication and safety summary with warnings.

Talk to your doctor for more information about Mountjaro.

Mountjaro and its delivery device base are registered trademarks owned or licensed by Eli Lilly and Company, its subsidiaries or affiliates.

Mint is still $15 a month for premium wireless.

And if you haven't made the switch yet, here are 15 reasons why you should.

One, it's $15 a month.

Two, seriously, it's $15 a month.

Three, no big contracts.

Four, I use it.

Five, my mom uses it.

Are you playing me off?

That's what's happening, right?

Okay, give it a try at mintmobile.com/slash switch.

Upfront payment of $45 for three months plan, $15 per month equivalent required.

New customer offer first three months only.

Then full price plan options available.

Taxes and fees extra.

See mintmobile.com.

But what if it wasn't just Amazon?

Another report from a friend of the podcast, Read People I email occasionally asking for a PDF, of course, referring to analyst T.D.

Cohen, put out a report last week that, while titled in a way that suggested there wasn't a pullback at all, actually said that there was.

It was called like hyperscaler demand is up.

Let's take a look at one damning quote.

Relative to the hyperscaler demand backdrop at PCC, which is a conference, hyperscalar demand has moderated a bit, driven by the Microsoft pullback and to a lesser extent Amazon discussed later, particularly in Europe, there has been a broader moderation in the urgency and speed with which the hyperscalers are looking to take down capacity.

And the number of large deals, i.e., 400 megawatt deals in the market, appears to have moderated.

In plain English, this means demand has come down, there's less urgency to build stuff, and the market is also slowing down.

Cohen also added that it observed a moderation in the exuberance around the outlook for hyperscaler demand, which characterized the market this time last year.

Brother, my brother in Christ, isn't this meant to be the next big thing?

We need more exuberance, not less.

Worse still, Microsoft appears to have pulled back even further with TD Cohen noting that there has been a slow in demand, slow down in demand, and that it saw very little third-party leasing from Microsoft this quarter.

And most damningly, and I'll book, and I'll be kind of, I really want you to like take this, let it ring through you.

These deals in totality suggest that Microsoft's run rate demand has decelerated materially.

For those of you wondering, it means that they're not getting any fucking revenue demand for generative AI.

Well, at least Meta and Oracle aren't slowing down, right?

Well,

TD Cohen also reported that it received reverse inquiries from industry participants around a potential slowdown in demand from Oracle, leading to the analysts to ask around and find that there had been a near-term slowdown in decision-making and organizational changes at Oracle.

That adds that this might not mean this is changing its needs or the speed at which it secures capacity.

And if you're wondering what else this could mean, you are correct in doing so because slowing down traditionally refers to a change in speed.

Yeah,

even the analysts are kind of like trying to dance around this.

It's kind of sad.

TD Cohen also adds that Meta is continued demand, which means that they're buying more stuff, albeit with less volume of megawatt signings quarter over quarter.

Then adding that Meta's data center activity has historically been characterized by short periods of strong activity followed by digestion.

In essence, Meta is signing less megawatts of compute and has in the past followed these kind of aggressive build outs with

fewer buildouts.

outs it doesn't sound good does it it doesn't sound like we're cooking and now we're going to get to and the whole thing's been kind of defensive i don't care i mean not i've yet to receive an email that meaningfully changes my opinion on any of this stuff but a little bit of defensiveness in this it's not because i feel self-conscious it's because i'm tired of hearing the same fucking questions but i'll ask you if you're a critic or a a hater or one of the many people who would like to see me punished, put me on the cross, set me on fire.

It's what you would love, wouldn't it?

But you'd love it if I was dead.

Putting that joke aside, I will ask my haters a question.

If I'm wrong, how exactly am I wrong?

I don't know, man.

All of this seems...

all this stuff sure seems like the hyperscalers are reducing their capital expenditures at a time when tariffs and economic uncertainty are making investors far more critical of revenues it sure seems that nobody outside of open ai is making any real revenue on generative ai and they're certainly not making a profit it also seems at this point it's pretty obvious that generative ai isn't going to do much more than it does today If Amazon is only making $5 billion in revenue from the literal only shiny new thing it has sold on the world's premier cloud platform at a time when businesses are hungry and desperate to integrate AI, then there's little chance this suddenly turns into a remarkable revenue driver.

Amazon made $187.79 billion in their last quarterly earnings, and if only $5 billion of that is coming from AI at the height of the bubble, it heavily suggests that there may not actually be that much money to make, either because it's too expensive to run these services or or because, well, these services don't have the kind of addressable market that AWS generally has.

Microsoft has reported that it was making a paltry $13 billion a year in annualized revenue, so the equivalent of $3.25 billion a quarter, selling generative AI services and model access.

The information reported that Salesforce's agent force bullshit isn't even going to boost sales growth in 2025, in part because it's pitching it as a digital labor that can essentially replace humans for tasks.

And it turns out that it doesn't do that very well at all, costs $2 dollars a conversation and requires paying Salesforce to use its data cloud product what if anything suggests that I'm wrong here that things have worked out in the past with things like the internet and smartphones and that surely that's gonna happen with generative AI and by extension open AI that companies like uber lost money and eventually worked it out and I've actually written a thing I'll link to about that you can get it in the episode notes is it that open ai is growing fast and that somehow discounts the fact that it burns billions of dollars and does not appear to have any path path to profitability.

Do you think that agents will suddenly start working and everything will be fine?

It's a fucking joke.

I'm tired of it.

I'm really, I'm just,

I've tried to be like intellectual.

I've tried to explain it nicely and I'll probably still continue, but I'm just kind of fucking tired of it.

I'm not going to stop doing this, by the way.

If anything, I'm more galvanized by my rage.

My aura ring is going to claim I did a workout these episodes.

It's great.

I'm burning calories in real time.

But large language models and their associated businesses, in my opinion, are a $50 billion industry masquerading as a trillion-dollar solution for a tech industry that's lost the fucking plant.

Silicon Valley is dominated by management consultants that no longer know what innovation looks like, and they've been tricked by Sam Altman, who's kind of a savvy con artist that took advantage of their desperation for growth.

Generative AI is the perfect nihilistic form of tech bubbles, a way for people to spend a lot of money on power on cloud compute because they don't have anything else to do.

Large language models are boring, unprofitable cloud software stretched to the limits, both ethically and technologically speaking, as a means of kind of keeping tech's collapsing growth era going.

And OpenAI's non-profit mission has been fattened up to make foie gras for SaaS companies to upsell their clients and cloud compute companies to sell GPUs at an hourly rate.

The rot economy has consumed the tech industry.

Every American tech firm has been corrupted by the growth at all cost mindset, and thus they no longer know how to make sustainable businesses that solve real problems, largely because the people that run them haven't experienced them for decades.

As a result, none of them were ready for when Sam Altman tricked them into believing he was their savior.

Generative AI isn't about helping you or me to do things or even about replacing workers.

It's about making new SKUs, new monthly subscription costs for consumers and enterprises, new ways to convince people to pay more for the things they already have used in slightly different ways that oftentimes end up being worse.

Only an industry out of options would choose this bubble, and the punishment for them doing so will be grim.

I don't know if you think I'm right or not.

I don't know if you think I'm insane for the way I communicate about this industry.

Even if you think I am, think long and hard about why it is you disagree with me and the consequences of me being wrong or right.

There's nothing else left after generative AI.

There are no hypergrowth markets left in tech.

SaaS companies are out of things to upsell.

Google, Microsoft, Amazon, and Meta do not have any other ways to continue showing growth.

And when the market works that out, there will be hell to pay.

Hell that will reverberate through the valuations of, at the very least, every public software company and many of the hardware ones too.

I have no idea how this ends and I can't see how any of it works out well for anyone.

In any case I'll be here to tell you whether it does or not and

I must say I love doing the show so much and thank you for humoring me when I experience brain madness every week.

I'm not going to stop.

I really enjoy doing this and the emails I got around the Webby were genuinely wonderful.

The people on the Reddit, people over email messages, just you're all so wonderful.

I'm going to keep doing this.

I mean, I'm contractually agreed to as well, but I love doing this, and I genuinely feel very lucky to be able to.

Thank you for listening to Better Offline.

The editor and composer of the Better Offline theme song is Matosowski.

You can check out more of his music and audio projects at matosowski.com.

M-A-T-T-O-S-O-W-S-K-I dot com.

You can email me at easy at betteroffline.com or visit betteroffline.com to find more podcast links and of course my newsletter.

I also really recommend you go to chat.where's your ed.at to visit the Discord and go to r/slash betteroffline to check out our Reddit.

Thank you so much for listening.

Better Offline is a production of CoolZone Media.

For more from CoolZone Media, visit our website coolzonemedia.com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

Hi, I'm Morgan Sung, host of Close All Tabs from KQED, where every week we reveal how the online world collides with everyday life.

There was the six-foot cartoon otter who came out from behind a curtain.

It actually really matters that driverless cars are going to mess up in ways that humans wouldn't.

Should I be telling this thing all about my love life?

I think we will see a Twitch stream or a president maybe within our lifetimes.

You can find Close All Tabs wherever you listen to podcasts.

Ah, Smart Water Alkaline with Antioxidant.

Pure, crisp taste, perfectly refreshing.

Whoa, that is refreshing.

And a 9.5 plus pH.

For those who move, those who push further, those with a taste for taste.

Exactly.

I did take a spin class today after work.

Look at you.

Restoring like a pro.

I mean, I also sat down halfway through.

Eh, close enough.

Smartwater alkaline with antioxidant.

For those with a taste for taste, grab yours today.

Every business has an ambition.

PayPal Open is the platform designed to help you grow into yours with business loans so you can expand and access to hundreds of millions of PayPal customers worldwide.

And your customers can pay all the ways they want with PayPal, Venmo, Pay Later, and all major cards so you can focus on scaling up.

When it's time to get growing, there's one platform for all business, PayPal Open.

Grow today at paypalopen.com.

Loan subject to approval in available locations.

Lilly is a proud partner of the iHeartRadio Music Festival for Lily's duets for Type 2 Diabetes campaign that celebrates patient stories of support.

Share your story at mountjaro.com slash duets.

Mountjaro terzepatide is an injectable prescription medicine that is used along with diet and exercise to improve blood sugar, glucose in adults with type 2 diabetes mellitus.

Mount Jaro is not for use in children.

Don't take Mount Jaro if you're allergic to it or if you or someone in your family had medullary thyroid cancer or multiple endocrine neoplasia syndrome type 2.

Stop and call your doctor right away if you have an allergic reaction, a lump or swelling in your neck, severe stomach pain, or vision changes.

Serious side effects may include inflamed pancreas and gallbladder problems.

Taking Manjaro with a sulfinal norrrea or insulin may cause low blood sugar.

Tell your doctor if you're nursing pregnant plan to be or taking birth control pills and before scheduled procedures with anesthesia.

Side effects include nausea, diarrhea, and vomiting, which can cause dehydration and may cause kidney problems.

Once-weekly Manjaro is available by prescription only in 2.5, 5, 7.5, 10, 12.5, and 15 milligram per 0.5 milliliter injection.

Call 1-800-LILLIRX-800-545-5979 or visit mountjaro.lilly.com for the Mountjaro indication and safety summary with warnings.

Talk to your doctor for more information about Mountjaro.

Mountjaro and its delivery device base are registered trademarks owned or licensed by Eli Lilly and Company, its subsidiaries or affiliates.

This is an iHeart podcast.