All Zone Media. Hello, Hi, welcome to Better Offline. I'm your host ed ze Trunk. For weeks now, I've been writing and speaking about what I believe to be an inevitable and possibly imminent collapse in generative AI. In the last episode, I talked about the early signs of disquire, particularly among investors, were growing increasingly uncomfortable about the many billions being spent by Microsoft, Google and others to support an industry that does not appear to make anyone much money and costs so much more than it makes. And I believe that this is a moment for the tech industry to atone and to learn and to change in the wake of what I think is an a one hundred billion dollar group psychosis, a big, nasty waste that I will now get to in agonizing detail. Generative AI was always unsustainable, and it was always dependent on reams of training data that necessitated stealing from millions of people. With its utility vague and its ubiquity overstated, the media and the markets have tolerated the technology that, while not inherently bad, was implemented in a way so nefariously and wastefully that it necessitated theft billions of dollars in cash and the double digit percent increase in Hyperscaler's emissions. The desperation for the tech industry to have something new has led to such ruinous success, and if this bubble collapses, it'll be a result of a shared myopia in both big tech dimwitz like satch in Adela and sundarp Isshai and Silicon Valley power players like Reid Hoffman, Sam Altman, Bryan Chesky and of course Mark Hantreeson. The people propping up this bubble no longer experience human problems, and thus I don't think they can be trusted anymore to solve them. Ultimately, this is a story of waste, ignorance and greed, of wasted money and have wasted opportunity, because let's face it, a fraction of the money spent by Microsoft alone chasing the generative AI bullshit machine could have been spent in many other profitable and societally useful ways. And it's a story of tech executives that are so desperate to own the future, but are so disconnected from actually building it. And this arms race is a monument to the lack of curiosity rife in the highest ranks of the tech industry. They refuse to do the hard work to create, to be curious, to be excited about the things they're building and the people they're serving, And so they spent billions of dollars to eliminate the risk they even might have to do any of those things. Ever, again, they just wanted the machine to do it for them. Had Sandhar Pishai looked at Microsoft's investment in open Ai in twenty nineteen and said, nah, no, thanks, which you did with the metavers. By the way, it's likely that none of this would have happened. But a combined hunger for growth and a lack of any natural predators means that big tech no longer knows how to make a competitive or useful product, and thus they can only see what their competitors are doing and say, ah, yeah, yeah, that's what it is. That's what we're all doing now. Before the AI hype boom, Mark Zuckerberg was once so disconnected from Meta's work on AI that he literally had no idea what breakthrough Sandar Peshai had complimented him on in a meeting they had together mere months before. Meta's own obsession with AI truly began, and none of these guys seem to have any idea what's going on and why are they having these chummy little meetings. These aren't competitors, they're co conspirators. They're just people meeting to say, what's the latest con we're all jumping on. What's the latest market that we're all going to monopolize. I can't wait for the monopoly episode. And these companies, they're too large, they are too unwieldy, they're too disconnected, and they do too much. They lack the focus that makes a truly competitive business, and they lack any kind of cohesive culture, the kinds that are built on solving real human problems or real business problems that humans have. These are not companies built for anything other than growth. And none of them, not even Apple, have built something truly innovative and life changing in the best part of a decade, with the exception perhaps of maybe contactless mobile payments, which are actually really cool. These companies are run by rot economists, and they have these disconnected, chaotic cultures full of these little fiefdoms. We're established technologists are rap fuck by management goons when they try to make their products better instead of making them more money, and the depressing thing is that they really don't need to be that way. Seriously, there's a world where these companies just make a billion dollars a quarter and they don't even have to fire people every time they do so. And there's one where these companies actually solve real problems too, and then they still make incredibly large amounts of money for doing so. The problem is they're greedy. They run by greedy idiots, and they're addicted to growth and are incapable of doing anything other than following what the last guy did. And what's funny is this is very Jack Welch from the Shareholder Supremacy. They just see a market and like, what if we put money in that? Can we take the money from the market. That's all they can do. Now. Sundarpishi is a terrible executive, but he's a really good Jack Welch clone. And by the way, if you don't know who Jack Welch is, please go back to the Shareholder Supremacy episode. It's important because you really need to see who fucked all this up. Okay, so where were we what happens next? Well, there's enough money sloshing around right now that open ai probably can be bankrolled a little further, and like I've mentioned in the previous episode, it'll need to be is it needs another five billion dollars, if not ten billion dollars to make it to the end of twenty twenty five, That very large amount of money's going to have to come from somewhere, and I think that they're going to be reduced to go into the Kingdom of Saudi Arabia or soft bank, or probably taking on private debt, and that last one, I'm just really not sure is going to happen. And those suitors they're not going to be quite as generous with their terms and they won't give them a devil's deal like Microsoft did, which, as I previously argued across multiple newsletters and podcasts, effectively owns all of open AI's research and intellectual property. Someonlman is a terrible deal maker. By the way, while the venture capital system theoretically could afford to prop up open ai for another year or so, they're limited partners. Who are the people funding the vcs. They're probably still a little sore from twenty twenty one and twenty twenty two, when massive amounts of money went into nothing, not to mention the sudden and rapid rise and interest rates, and they'll probably bulk at the amounts they can need. We're talking multiple, probably ten one hundred million dollar checks or two hundred million dollar checks. Open ai needs so much more money than the VC system is ready to give to one company, and it really will only take one person blinking to create a panic in both the public and the private markets. Open Ai may still be able to raise money, but investors have no real path to liquidity as open ai most assuredly will not be able to go public, and in the process of investing these vcs will likely find out exactly how bad things are there. While there is a chance we get one more round, kind of a dead cat bounce situation, it's honestly a little tough to imagine how it keeps going even if open ai raises another ten billion dollars. But how does the collapse happen? Well, as I said last time, there's the obvious one open ai or Anthropic shuts down, but I think that them shutting down is very unlikely based on the corporate structure open AI or Anthropic collapsing will be more like the character dot Ai deal an attempt to hide the ugly mess, where a big tech firm absorbs them in and just goes there. Now the AI division. You saw a version of this, by the way, when Sam got fired from open Ai and he was like the head of AI at Microsoft for two minutes. But if I had to guess, Anthropics most likely home would be with Amazon, which completed its four billion dollar investment into the company earlier this year and also has a profit share with them. In any case where this happens, even if the entity Anthropical or open Ai keeps going without the key people in power such as Anthropic CEO Dario Omdey going in house Amazon or Google again, it doesn't really matter. They will eventually die and raising around for a generative AI company in this market, it's likely going to be quite difficult, if not impossible. The narrative shifted, and the people with the money to invest don't really know what they're talking about technologically speaking, so they're investing based on how everybody else is feeling, what the vibes are in the air, what they sniff each other's asses, and they say, oh, fuck, is AI good or bad? Now? I don't really know, And when we really strip away everything. We strip away all of the lies and the marketing, and you just get down to incentives and you think, well, they just want money, right, If that's all they want, that really is just the problem, because fundamentally this tech really isn't that exciting. I'm sorry it isn't. Generative AI is not the AI from Iron Man. It is not the magical future computer. It's a generative AI. That picture of Garfield with a gun or Scooby Doo sitting on top of a rocket, those are aren't useful. That's not the future. That's just image creation. I'm sure some very insufferable freak is going to email me after this and be like, wow, I'm set up generative AI in all of these ways. Mate. I appreciate your time, Thank you for emailing me. I'm sure you don't even sound like that. The point I'm not making is that this is useless. The point I'm making is it is not even in the same galaxy of usefulness that it requires to go forward to be worth all of this money. And on top of that, it's boring. It's so goddamn boring. It's so I am so bored. It doesn't even do my boring business stuff. I have a pr business in my day job, but I would love a dn ky AI to move my shit around. It can't even do that. I want it to help me, and it won't do it. And if you say ed, you're a stupid idiot, You're a moron. You have the brain of a bird or a dog or a dog bird hybrid. You drool all the time because your brain cannot keep your mouth closed. All of these things are true, but it's not my job to sell Generative AI to myself. It's the companies. And the idea of a super smart friend that knows everything about me is exciting, don't get me wrong. As is the idea of making away drudgery all of my spreadsheets and documents, for example. But Generative AI does not do these things, putting aside any personal feelings I may have. It has not changed my life or even like slightly improved it. And I'm a guy who loves using tech, and he is willing to put hours hours into finding solutions to automate or mitigate very small problems that I only really deal with occasionally. I'm not lazy, I'm efficient, at least that's what I tell my doctor, and I don't know a single person that has meaningfully changed their workflow or life as a result of generative AI, outside of being able to integrate it to speed up some part of their already existing system. I've literally never met or spoken to someone other than one guy on Twitter who has talked about using this every day in a way that truly changes things, and I should. As an aside, I do occasionally get someone on Twitter and it's always a blue check and they always say, oh, yeah, well, it's changed the way our code changy allows me to code so much faster. They then get eighteen responses of someone saying, I'm an engineer and this is very unstable, and it really feels like generative AI is just catnip for the truly incurious. I don't want to say lazy, because I think everyone is kind of lazy on some level. We all want things to be easier, we really do. And there is, when it comes to creativity, a degree where the problems you face making something are what makes it what it is. The struggles I've had writing and reading this script are what make me a better orator or a better writer. That process is important, but it's hard, and it's annoying, and you have to suck a few times, you have to write crap, You have to retake things three or four times, and your poor editor, Mattasowski sitting there going, mate, you've reread that paragraph three times, you messed the same word up. But it's fun. This is what curiosity is. And I don't think these people have it. These people don't want to solve software problems. They want to type a thing into a computer, hit enter and then the problem is solved, never understanding why they did it. And this isn't the same thing as calculators, by the way, I'd argue software development as are, but that's a separate thing. And ultimately, this whole movement just doesn't even feel real. Nothing about it really felt real. It's just a farce. It costs so much money, and it's still costing so much money today, and the promises of artificial intelligence will not be kept through the pursuit of generative AI. As generative AI is a dead end technology that has peaked, and it costs too much both financially and socially to keep it going or to justify its continued existence. There's no heroic story here. There are a few people who are sincerely cheering for these companies to win, those who, of course don't have a tangible financial term banking on the value of open AI or they have so one of the one hundred different guys claiming the Heaven AI newsletter, and let's be honest, nobody really loves this, do they. Nobody really uses CHATGBT and has that oh shit moment you got when you first use an iPhone, when you're first sent a file with Dropbox, that those little times when you really fell in love with technology again and again. And there's no magic in it. There's no whimsy, there's no joy in any of these larger language models, and they're not really helping enough people to make it worthwhile. I nearly said they're not helping anybody. But there are users, there are people who actually care about this. How much do they really care? And does any of that outweigh the costs and the environmental damage. The answer is no, by the way, and their peddlers always demand that we just give them another minute as they burn billions of dollars to get nowhere. And the general public has known the problems and limitations of generative AI for months. I constantly get emails from better offline listeners, artists, engineers, teachers, massionists, poison makers, journalists, consultants, cleaners, and copy editors, all saying the same thing. This all seems like a croc of shit, and the outputs are terrible because people who actually make things respect the output and the production itself, and they can see how bad this stuff is. Generative AI was also not peddled as a solution to any problem other than tech's lack of a hypergrowth market, and it's the kind of bet that only a tech industry devoid of natural selection truly builds. None of these big tech firms, and I'd argue venture capitalists really take risks anymore because they don't want to end up looking stupid, and they want to follow each other. And regular people know. They know Google is worse, they know Facebook is bordering unusable, They know that generative AI does not do anything obviously useful at scale, and that these companies have never made more money than they're making today as they fuck the customer again and again. And I believe we're in the beginnings of a true revolt against big tech and their rotten little promises, their lucks run out, and these formless private equity vehicles dressed up as software companies are no longer bred to create new things. We're all sitting and staring at innovation's corps, stabbed full of holes by McKinsey veterans and slimy con artists, and it's time for men like Sandar Pashai and Sachin Adela to atone because their big bet looks like a gigantic waste, one so obviously rotten from the beginning that they've never been able to tell anyone that they never had a plan beyond throw money at it and eventually it will do something, or we will do this as long as the other guy does it too. This is a big, ugly mess, a monument to the excess that burned more than two hundred billion dollars and allowed equally lazy and uncreative people to replace real people with shitty facsimiles that are just good enough. But do you want to be more than good enough? Do you want to excel in all things as I demand of all my listeners, then buy one of the following products, which, as usual, will reflect my exact beliefs, wants and needs and we're back, and now that I'm back, I want to say something to my peers in the media. It's time for a fundamental re evaluation of how we treat big tech, and it's time to question the promises of those who sought to peddle this generative nonsense. It's no longer time to ask Mark Zuckerberg about his chain. It's time to ask him how long he intends to burn tens of billions of dollars on nothing, and why the website that made him so many billions of dollars is falling apart at the seams, pumped full of content created by the big, stupid bullshit machine he's helped popularize. It's no longer time to gingerly cool about Sundar pishe Oh, he's looking at my smartphone. It's time to ask him how Gemini is going to make a profit and what it is that it will do, and press him again and again and again and again and again until he talks about why Google Search is so bad. Now, it's no longer time to let Sach and Adela oscillate from referendums on capitalism twenty twenty to laying off tens of thousands of people in twenty twenty three. It's time to ask him if he's prepared to bankroll open AI to the tune of thirty billion dollars and refuse to leave the conversation without committing to a number. These men have burned hundreds of billions of dollars on a machine that boils lakes to make the most mediocre version of the past. These men are not supporting innovation. They're aggressive forces, too scared to piss off the markets to actually change the world, domesticated animals that fear no natural predators and thus have no hunger for something new. They propped up generative AI because their followers rather than leaders that have paid hundreds of millions of dollars to empower a nihilistic kind of growth capitalism that dresses up monopolies as disruption. They have propped up generative AI because building the future is hard and expensive and involves taking risks and making sure that you have a culture that doesn't expect the answer to a question in the fastest amount of time possible. Innovation is an efficient. It's lossy. It has indeterminate time scales and requires both capital investment and space required for great people to think of actual solutions to problems that involve them talking to and caring about the lives of real people. Fire satch In the Dellar of Microsoft, Fire sund Arpishai of Google, and work out a way to fire Mark Zuckerberg of Meta. These men are unworthy. They do not find any of this exciting or meaningful. They have no curiosity. They're private equity guys dressed up as software guys. They are con artists. They are running their products into the ground, and they're making more money than ever. Big Tech has been overcome with narcissism and nihilism, and it must change its ways to not eventually face perdition. I am fucking serious. Do you think these people have a backup plan? Do you think they've burned all of this money on such a mediocre and wasteful solution because they've got other better ideas? No, they're all out. Big Tech does not have another thing. Google doesn't have any ideas. Meta is so out of ideas that they change their name to another worse idea, one associated with Mark Zuckerberg burning forty five billion dollars for no reason. In fact, there's a Yahoo Finance story about the fact that all of that money that's allegedly going into the metaverse is just organizational loss. It's a horribly run place where the management constantly changes. These goddamn people. And Amazon, they've never really been in the ideas business. They're the founder of a cloud storage cartel with Microsoft, Oracle and Google. They work together to set the prices. Everyone wins except anyone who isn't them. And big tech is lazy because they've all agreed to compete only a little bit, never coloring too far out of the lines because doing so might expose them to an actual risk, like regulation or having to hire people that build new things, versus finding increasingly more annoying ways to exploit their current customers. And I really am sure that there's a societal shift coming against big tech, the natural result of years of excess and bullshit of the loudest people in tech trying to convince people that a large language model that can generate texts and images that kind of suck is basically the same thing as an iPhone. I have no idea how quickly the shift comes, but it's coming. It's inevitable. This lack of big, profitable ideas will eventually lead to some sort of reckoning or collapse. In big tech, healthy, well run companies, they don't do things like this, let alone several different trillion dollar companies all bumbling into each other like the Three Stooges, billions of dollars of cash falling out of their pockets. It's an absolute disgrace. I will say, if the AI bubble really does pop, this is a great time to point and laugh. Regular people like yourself could see this was bullshit from the beginning. Most people find generative AI either briefly interesting or somewhat disgusting, and they're capable of seeing that. Stealing the entire Internet so you could spend one hundred billion dollars making a shitty version of the past is kind of a stupid idea. The utility really hasn't been there from the beginning. Describing what chat GBT is is actually kind of difficult, and any technology that's going to be worth trillions of dollars should not have the user saying, wait, what does this do exactly? And I really feel like regular people notice this. If this was as magical as it was, regular people would be lining up to use it. And while it has a lot of users. I don't know anyone who's fanatical over it other than AI fanatics. It's just very sad. But regular people aren't the only ones. And I have criticized journalists for missing this, but I want to call some people out in a good way. Economists, analysts and journalists have been saying this isn't the future, like I said. Shira a v Day in March twenty twenty three, mere months after chat GPT's launch, said it wasn't magic. For example, in the Washington Post, Shearer the Goat, Alex Kantrowitz and Douglas Gorman reported in August fifteenth to twenty twenty three that chat gpt isn't good enough to take jobs and it's unlikely to cause mass layoffs. The hot takes have run into reality a little bit early, but you're correct. Paris Mark's called the chat GPT revolution another take fantasy in July twenty twenty three, and Gary Marcus worried about Generative AI being a dud in August twenty twenty three. While this is by no means an exhaustive list, it's important to note that people have been saying this. People with big platforms and the markets chose to ignore them as an aside. A year later, when many outlets were still tripping over themselves to say that generative AI was the future. Sure A Viday of The Washington Post asked, if these chatbots are supposed to be magical, why are so many of them as dumb as rocks. It's important to call out when a national newspaper actually does the work that needs to be done to critique the powerful good works here, Open invites come on the show. At this point, it seems inevitable that the bubble will burst, that the acceleration has stopped, that the funding won't be there, and that the markets taste for the billions of dollars it's going to take to make generative AI. Some indeterminate level of better just really isn't there. By all means tell me I'm wrong. You certainly do on Twitter, and you certainly do on email. And I'd be genuinely intrigued to see how open ai wriggles out of this jam, especially because it would mean they made a meaningful product that makes money when they don't have the chips to train GPT five, a model that likely still wouldn't change the game enough to matter. I mean, what if they have a new architecture, I guess, but I refuse to give them credit for something they haven't done yet. And in the event that Open Ai or Anthropic is able to raise again, we'll see the cycle continue another quarter. I'm confident, at which point something crazy would need to happen to make any of this worth it. If these companies can actually raise, they'll keep the bubble inflated. But it really is borrowed time. There's enough money to fund them both maybe one more time, and after that, where is the profit? Where's this going? And it's really worth considering that the narrative is bad and that there is very little that anyone can really do to change it outside of something truly incredible. These companies can play for time. Hope that satch In a Dele and sun A Peshai stan pats say that they have great faith in the promise of AI, but I really don't think they get another series of earnings for big tech like this. In many ways, though, this is sam Ortman's greatest gambit, and so much lies and Open Eyes back as a result. This is the moment we find out if Sam Altman has really got it. Whether it's worth agonizing and wringing our hands about how scary he is, or whether he's just able to hoodwink enough credulous billionaires that have their hands well did to eternal money printers. Impress me, Samuel, Wake up, Sammy, mister alt men, bring me the technology. Show me what you've got, Show me your great works, Show me the works you have buried in that non profit for profit monstrosity. You've used the trick other visionless power brokers into giving you their entire futures for a dead end friend best known for an absenteism that raankled his peers and some of the startups he was supposed to nurture. Show me what you've got, Sam, show us all. You're so smart. You allegedly can solve problems in a single phone call. Everyone talks about your big brain. What's the big play, big guy? You've got maybe six months and that's the most general estimate I've got. What is it? What's the plan? Wait? What's that? Search? GPT? Search? GPT? Sam? You're crazy, You're crazy, mister ortman. There's no way you can build a Google Search competitor. Trust me. I know, no, really, I worked it out. I spent a few hours looking up Google's financial reports over the last decade or so, trying to figure out how much the company spends and operating costs and capital expenditures just related to search alone. Due to the way Google structures it's financials, I had to make some guesses, some more informed than others. But I reckon it costs Google about thirty billion dollars a year to run their search product, and that's not taken into account the cost of the generative AI powered search summaries. All right, Sam, here we are. So that's thirty billion dollars a year to create something that can scale to the size of Google Search. And that's just the start you with me, Man, things do not get easier. You see, you're not just building a Google Search competitor with search gpt as. You also have to build the ad take infrastructure to actually make money off of it, which you are not good at. Okay, but you've got to copy features from companies like double Click, which Google acquired in two thousand and seven for three point one billion dollars and pretty much underpins the whole operation. Or maybe you have to build something like AdWords, which Google got when it acquired Applied Semantics two thousand and three. You will need something like both of these, and that's going to cost you, in the best light, in the best day ever, about three billion, or you're gonna have to outsource it, which will make it worse and less profitable because outsourced companies are going to take a cut of your revenue, thus reducing your margins, which are already really bad. Then you've got to hire experienced ad personnel and use that ad tech infrastructure you built. You built that right to enter a market. Google will use their entire cartel power to kick you out of Wait what was that? Sam? Wait? What? Right? Right? You've got to make money, and ideally more of it than you spend something. As I've mentioned, you have some issues with. Like I said, Google Search costs an absolute shit toun to run thirty billion dollars easy, and that's with decades of optimization, a coding language that they invented, thousands of miles of underground cables, and decades experience in doing a thing you're just learning to do, and they have PhDs who specialize it. Wh've been at the company decades. You did all that? Whoa? Okay? Sam? I'm impressed. You're on a roll. You can do this. I believe in you, mister Altman. Now just checking, how many AD salespeople do you have? What's that? None? You don't have any ad salespeople for your search engine, Sam, You're gonna need them. Google had over thirty thousand AD salespeople before. It's the last round of layoffs. You're not gonna make this thing profitable without ads. In fact, I don't think Sam, you're gonna make this search product profitable at all. But you know what may or may not be profitable. One of our advertisers who will soon invade your living room, car, or other place you listen to podcasts filling your various crevices with commerce. Behold, they're bounty. All right, right, we're back, and I'll dispense with the sam Ormond ben so one was looking up Google's financials, As I mentioned, I was able to make a few educated guesses, and I've got a hunch that Google has about a thirty five percent profit margin, which is pretty good. But that's with over two decades of infrastructure and a near monopoly on the search market. Open Ai has none of those things. They don't really own their infrastructure at all, as I mentioned, and it's going to be relying entirely on GPT for the most part, which is insanely power and compute intensive and thus cost a lot more. And as I've said a billion times already, GPT and other transformer based architecture is deeply unprofitable, unsustainable. And that's before you even get to the hallucinations, the hallucinations that underpin your search engine. You need to be profitable, which isn't profitable. Oh boy, this is really bad for them. Assuming the bulk of the costs associated with running Google Search comes from the vast number of service required to actually power it, it's hard to imagine how anything open ai does could even ever reach a profit, even if they had the monopoly Google has. Now, I'm confident that open ai is trying to raise cap or right now on the idea that search GPT is able to create a meaningful competitor to the most profitable software business ever made, one that Google will likely protect with various monopolistic weapons like its treacher trove of patents. While the Department of Justice did just declare that Google had a monopoly over the search market, and I'll get to that in an upcoming episode. It will take years for things to move on that front, and nothing about this situation fixes any of open AI's problems. On top of that, Google spends, as I've previously mentioned, billions of dollars on hardware and property. An open ai would likely have to build infrastructure that dwarfs even the outlays of Generative AI to scale a search engine that could handle even hundreds of millions that loan the billions of people that use Google Search. It could get Microsoft to build it or lease it from the likes of Oracle, and Microsoft could probably pay for it too, but that would be another massive increase in capital expenditures at a time when the markets are waiting for the stuff to make money, rather than the companies to spend more money on it. And I also should note that Microsoft reason he described open ai as a competitor in the search business, and it's unlikely to kill bing, which has been profitable since twenty sixteen. Let's be honest, though this is all fan fection. Open ai isn't competing with Google Search. It would cost too much money, and the underlying technology is neither good enough nor efficient enough to actually support a search engine at scale, and even if it was, is it better? Probably not. What about chat? GPT says that it's going to be more reliable than Google Search, and God, all of this is such a boring fucking face. We're not watching startups mess around Silicon Valley experimenting in ways to fix weird problems. We're watching big tech outsource their research and development costs to one of a few hand selected con artists that they'll drop the second that Wall Street gets pissy. Why even pretend anymore? Anthropic is propped up by Google and Amazon, who invested billions of dollars in cloud credits. Microsoft props up open Ai to the point that the Nvidia chips crisis affected here because Daddy Microsoft was buying them for open Ai to use, and Google, Amazon, and Microsoft are all making their own models, to the point that Microsoft has already reported, like I said, that they see open ai as a competitor. It's just it's just also craven. Big tech funded a cloud dependent product that costs so much more than anything else in the market based on a spacious hype about what artificial intelligence could or could not do. They do so as a means of selling a new product, one that, while not particularly useful, also means that they can charge a lot for the cloud compute service it runs on, creating demand for a product that pays them money just for existing, allowing them to vastly expand their physical data center locations, further enforcing their monopolies over the cloud storage industry. Microsoft, Google, Meta, and Amazon created a new way to turn money into more money investing in a tech that required you to pay them all a lot of money for cloud computing services to run on. Like I said, the problem, it seems, was that none of them were willing to consider a world where this stuff never really turned into anything remarkable other than in its waste. And a lack of creativity in the tallest towers of the valley in Redmond has allowed the richest men in the industry to be conned by a snake oil machine that loses billions of billions of dollars. To be clear, there's nothing wrong on its face inherently with generative AI. It does interesting things with documents, and I fully believe there'll be some low five version of generative AI that plugs around silently once the hyperscalers piss off. My problem is that it's so horribly wasteful to put all of this money into these large language models, the ones that steal everything, that require so much energy and create so little in return. Now there reason not brought up previously. The whole calculation of open AI needing five to ten billion dollars to survive is because I wanted to make it clear how expensive them staying in places. That is the money they will need to continue building the thing they are doing today. They don't have anything in reserve. I am confident about it. Maybe they can survive, Maybe they can surprise me. Maybe that can happen, But I just don't really see it happening. Greg Brockman's gone, and I mean, he was just another non technical guy. What's going to happen. You think Mirror Marat's is going to come up with something, You think Sura is going to do it. No, they don't have anything. And I realize it's so strange to say this, especially if you're a member of the media listening to this. I know it's strange to accept this. But what if they're just full of shit? What if this is the best they've got? How do we deal with this? And I think we start by accepting that all of this was completely and utterly ridiculous. We live in incredible times. We're at a boiling point in the tech industry's history where these sins of excess and this total lack of vision of crippled big tis ability to make new things. Things have been too easy, too comfortable, and too frictionless for too long for people like Sundhar Peshai and Sachinidella, and even people like Larry Page and Sergey Brin, who are the only two people who can fire Sandar from Google. Tech needs to go back to creating interesting and cool things and having companies run by people that actually care about build holding them. Technology is capable of solving real problems, or at least it has been in the past and proven time and time again how profitable it can be to do so, and I believe it can do just fine without having four or five companies that do every single thing that technology can do at the same time in hopes that they can monopolize it. I don't think the most powerful people in tech realize how frustrated people are, how deeply affected by technology everyone is, even those who don't identify as tech nerds or enthusiasts, and I think men like Sandhar Peshai and Sachi Nadella are deeply unaware of how ready people are for a change, how disgusted they are by the crater in quality of the average tech product at a time when executives have never been richer. Regular consumers know that Google Search sucks. They know that Facebook sucks. They know that websites are worse, that they visit certain ones and there's eighteen pop ups and your phone's really hot. They know that their iPhones are randomly trying to make them buy Apple News, and they know that there are people responsible. Tim Cook, EDDIQA Apple By the way, welcome to come on the show, But guys, stop trying to sell me Apple News. I don't want it. I don't want any of this Apple shit. Don't make me use it unless I have to other than I message. But moving on, there are real targets here. There are people that need to go to fix things. S Darpishai and Sachinidella must go. They are no longer trustworthy stewards of the future and have inspired hundreds of billions of dollars of waste in the hearts of their equally myopic competitors. These men do not care about their customers, they don't fear competition, and the government should break every single hyperscala up, Google, Meta, Amazon, Apple, Oracle, all of them, and find ways to stop them ever growing so large. In the future. Maybe we shouldn't have such large tech companies. Maybe we don't need multiple trillion dollar juggernauts that do everything in a shitty way. Maybe we don't need companies that do online advertising and or so provide a platform, because that kind of monopoly leads to insane incentives like you're seeing with Google Search and Facebook, and we all deserve better, and the way to get there is to say the names of those responsible, to document their disgraceful acts, and call for accountability again and again and again and again until something actually happens and changes. And it is changing. The narrative is changing, and soon it will shift more aggressively and more violently against big tech. And I think this is a great thing for the world and ultimately to take industry at large. Now as we see the bubble, the AI bubble collapse, and must be clear, none of this is a victory lap for me. This is not actually, how I wish this went. I wish this bubble had burst earlier. It would have caused less harm to the environment, to the markets, to the freelancers who lose their jobs, to the artists who email me every week. It would have wasted less money, taken less attention away from the rest of the industry, and allowed Sam Wortman to accumulate less money and power. Instead, this bubble has been allowed to swell so long it will only emphasize how bereft of ideas big tech has become, and the consequences are a growing distent against tech from the general public. And this era was ultimately the result of a lack of fear in the hearts of big tech and a deeply held belief that their positions were permanent and their customers were trapped. My purpose in documenting this in what feels at times like narrating the end of the world. I'm not looking to be a pundit or a talk in head, or a person who wants to be given credit for calling out the bubble, as none of these serve you, the customer, the listener, or history itself. What I say may be imperfect, but it exists to try and give you a clear understanding of what's happening. And yes, it's a little emotionally charged and very clear in its biases. I believe that the tech industry has lost its love and curiosity, and I find it disgusting, and the best way to fight back is to studiously explain things as they happen from my perspective at length, but with I hope a clarity that doesn't require a ton of technical knowledge. As things have accelerated, I've become a little more introspective about the role of my podcas as, my newsletter and my posts. I don't have a particularly profound conclusion other than that I believe that I have a brevity and clarity about the tech industry that many don't. And I also find that I'm extremely fast at writing. And I also find this all very interesting because I'm a horrible little goblin, and I don't talk for nearly two hours or write thousands of words because I desperately need the attention, which I do love. I do it for the thrill I like covering this stuff, and because if I don't say these things out loud, the cats in my brain will eventually try and emerge. But seriously, though I do these things as I need to. This is important to me. Maybe I'm fighting back. Maybe I just like creating. I don't really know. This is me processing watching an industry I care deeply about get ransecked again and again by people who don't seem to actually care about technology. The Internet made me who I am, connecting me and in many cases, introducing me to the people I hold dearest to my heart. It let me run a successful PR business despite having a learning disability dyspraxia, or as it's called in America, developmental coordinational distort that makes it difficult for me to write words with a pen and thrive, despite being regularly told in secondary school that I wouldn't amount to much any of you listen, then, guy, fuck yourself. I believe that there are many, many, many people that have been allowed to live better, full and more meaningful lives as a result of technology, and I believe that the people who built the tools that allowed them to do so no longer control the future. And that makes me really fucking annoyed. I refuse to watch this bullshit happen in silence, and I encourage you, as I have before, to fill social media and conversations with the names of those responsible. Satch In a Dela of Microsoft, Sundar Peshai of Google, Mark Zuckerberg of Meta, Andy Jesse of Amazon, Sam Altman of Associated cons Mir Marati CTO of Open Ai, and Read Hoffman, the venture capitalist who seems to always benefit over the next bullshit machine, all responsible for this echoing nihilism that's created the generative AI boom. All of these people will be fine, by the way, when this collapses. All of these people will just fine. Multi billionaires, they will be just fine. But the people that won't be are the people they will lay off, the people that have invested and lost money in these things, the people that may even come to rely on chat GPT in some small way, who won't be able to afford it when it goes tits up or gets jacked up price wise, because that's the only way to make it affordable for the company. Or maybe all of this just disappears and these customers are left with nothing. But sometimes I understand you might feel a little doomed, the doomer in you. Someone recently called me a duma, which really pissed me off, because I'm not I'm angry, and I know some of you might be too. I won't say you're angry, that isn't fair, but based on the emails again, some of you seem pretty pissed. And I'm not speaking for you here, but I'm angry because I know that TED can be cooler and better and more interesting, that there are real problems of poverty and climate change, of the myriad systems that don't connect very well on every laptop and phone, That things can be better, problems that can be solved, but right now they need to put tens of billions and dollars into generative AI. Come on, man, we can do better than this. And while there might be little you can do to them directly, I encourage you to say these names to your friends on social media. Prabagar Ragavan, remember him from Google. Tell people all about him too. I encourage you to let anybody and everybody you know know who's responsible for this, because ultimately what may pop the AI bubble is a narrative, and narratives shift, and narratives are shifted by word of mouth, and they shift because of people like you and like me who never shut up. Thank you for listening to better Offline.