WEBVTT - The Rot-Com Bust 0:00:02.480 --> 0:00:06.800 All Zone Media. Hello and welcome to Better Offline. I'm 0:00:06.840 --> 0:00:21.400 your host ed Zitron. What last episode I posited that 0:00:21.520 --> 0:00:24.400 everything weird and bad you're seeing in the tech industry 0:00:24.480 --> 0:00:26.800 right now can be attributed to the death of its 0:00:26.840 --> 0:00:30.920 hypergrowth era. You see, up until around twenty nineteen, take 0:00:31.000 --> 0:00:35.080 experience this epoch where there were these obvious, giant, multi 0:00:35.080 --> 0:00:38.240 trillion dollar markets to conquer, things like software as a service, 0:00:38.280 --> 0:00:42.360 cloud storage, streaming, audio and video, things like that, along 0:00:42.360 --> 0:00:45.960 with billions of people that were getting online every single year. 0:00:46.720 --> 0:00:50.520 Yet now they face another problem that only one hundred 0:00:50.640 --> 0:00:53.120 million new people got online between twenty twenty two and 0:00:53.120 --> 0:00:56.040 twenty thirty three, and the traffic that they're sending to 0:00:56.080 --> 0:00:58.840 the majority of the Internet's top one hundred Internet properties 0:00:59.200 --> 0:01:03.800 has entered this prolonged, agonizing period of declient and were 0:01:03.920 --> 0:01:06.640 still they don't appear to be any new multi trillion 0:01:06.680 --> 0:01:10.080 markets left to grow into. This led to a profound 0:01:10.240 --> 0:01:13.759 period of desperation in tech. The tech industry got high 0:01:13.800 --> 0:01:16.399 on the hog promising the world and then somehow actually 0:01:16.440 --> 0:01:20.039 managing to deliver it. You see Facebook, they actually connected 0:01:20.080 --> 0:01:23.279 billions of people. There are millions of electric cars, cloud 0:01:23.280 --> 0:01:27.960 products are both ubiquitous and useful. You can stream music anywhere. 0:01:28.040 --> 0:01:31.280 There are real things, real ideas, new things that they 0:01:31.319 --> 0:01:34.319 could just pump money into and then reap the benefits until, 0:01:34.360 --> 0:01:39.080 of course there weren't. Venture capital also got used to 0:01:39.120 --> 0:01:42.480 making easy, safe bets on new startups and seeing pretty 0:01:42.560 --> 0:01:46.279 much automated massive returns because there were still these massive 0:01:46.280 --> 0:01:48.640 markets to enter, and of course they were able to 0:01:48.680 --> 0:01:52.080 get very cheap money borrowed from limited partners and I 0:01:52.240 --> 0:01:54.400 at some point really do need to explain exactly how 0:01:54.480 --> 0:01:57.320 venture capital works, but that's a future episode. Yet, since 0:01:57.360 --> 0:02:01.840 twenty nineteen, tech's biggest ideas of being a beer, it wank. 0:02:03.520 --> 0:02:08.400 These new ideas they've had, NFTs, cryptocurrency, the metaverse, generative AI, 0:02:08.680 --> 0:02:12.640 these movements, they seem to sell ideas and glimpses of 0:02:12.680 --> 0:02:15.360 the future rather than an actual product that would solve 0:02:15.400 --> 0:02:18.120 an actual problem for anyone, let alone the billions of 0:02:18.120 --> 0:02:21.800 people required to make a giant market. And the commonality 0:02:21.840 --> 0:02:24.600 between all of these products is that they're all trying 0:02:24.639 --> 0:02:27.200 to create one. They all need to make a new 0:02:27.280 --> 0:02:30.040 hypergrowth market, an industry that could be worth hundreds of 0:02:30.080 --> 0:02:33.040 billions or even trillions of dollars for investors to pile 0:02:33.120 --> 0:02:36.119 capital into or i should say, into startups that will 0:02:36.120 --> 0:02:39.880 then grow into these industries. But in all of their 0:02:39.919 --> 0:02:42.119 cases they kind of seem to fall short the moment 0:02:42.160 --> 0:02:45.560 they enter the real world. Had NFTs actually been a 0:02:45.600 --> 0:02:48.840 replacement for art or collectibles, they could have created an 0:02:48.880 --> 0:02:52.280 industry worth hundreds of billions of dollars, except they lacked 0:02:53.280 --> 0:02:56.560 any compelling use case of reason to do so, other 0:02:56.639 --> 0:02:59.840 than the fact that venture capitalists really wanted them to 0:02:59.840 --> 0:03:04.280 do so. The same went for cryptocurrency, which draped itself 0:03:04.320 --> 0:03:09.239 in these horrible manipulative concepts like decentralized software, programmable money, 0:03:09.360 --> 0:03:14.600 democratized finance, ideas that could theoretically be trillion dollar concepts, 0:03:15.080 --> 0:03:18.320 except in practice cryptocurrency is horrible as a store of 0:03:18.400 --> 0:03:21.440 value and even worse as an operable piece of software. 0:03:21.800 --> 0:03:24.000 But the same does go for the metaverse and for 0:03:24.080 --> 0:03:26.960 generative AI. Their concepts sold on the idea of what 0:03:27.000 --> 0:03:29.560 if it could do this, rather than what it can 0:03:29.600 --> 0:03:33.000 actually do. And that's before if you got to the nasty, 0:03:33.000 --> 0:03:36.960 messy problem of whether actually people wanted them to do anything, 0:03:37.000 --> 0:03:40.880 whether people wanted to live in the metaverse or transact 0:03:40.880 --> 0:03:43.880 with digital money, you can do that using zell or 0:03:43.960 --> 0:03:46.600 Vemo today, you could do it years ago. I don't 0:03:46.640 --> 0:03:49.000 really get it. And yet the most obvious problem with 0:03:49.040 --> 0:03:52.920 these movements is that they're constantly having to explain why 0:03:52.960 --> 0:03:55.880 you should care, rather than showing you why you should care. 0:03:56.560 --> 0:03:59.360 The promises they've made they're not based on things that 0:03:59.360 --> 0:04:02.840 they're actually doing, but on showing you this kind of messy, 0:04:03.040 --> 0:04:06.080 childish drawing of a concept of something that one day 0:04:06.200 --> 0:04:09.160 might exist, and almost universally rely on this kind of 0:04:09.200 --> 0:04:12.440 pseudo religious belief system where one has faith in an 0:04:12.520 --> 0:04:15.760 industry and that doing so makes you smart. And you 0:04:15.840 --> 0:04:20.280 need to decry cynics as Luodites that hate progress, because well, 0:04:20.600 --> 0:04:23.480 one has to be first, right And what's crazy as 0:04:23.480 --> 0:04:25.520 well with all the AI people who are like, ah, 0:04:25.560 --> 0:04:27.400 you need to believe in AI. A lot of these 0:04:27.440 --> 0:04:29.760 people aren't invested in these companies. They just want to 0:04:29.800 --> 0:04:32.440 be part of a movement. It's so sad, but it's 0:04:32.480 --> 0:04:37.280 also so craven and manipulative. And the problem isn't so 0:04:37.360 --> 0:04:40.040 much that these concepts are bad, but that they're premature. 0:04:40.640 --> 0:04:43.000 The metaverse is a silly idea at the scale that 0:04:43.080 --> 0:04:45.800 Zuckerbo pitched it, but digital worlds that people spend thousands 0:04:45.839 --> 0:04:47.680 of hours of their lives and are not The take 0:04:48.000 --> 0:04:50.880 that he's talking about just isn't there and may not 0:04:51.080 --> 0:04:54.400 actually be, And without that tech, I just don't think 0:04:54.400 --> 0:04:57.600 they become ubiquitous concepts adopted by hundreds of millions or 0:04:57.600 --> 0:05:00.159 billions of people in the way that he said. To 0:05:00.200 --> 0:05:03.279 do the things that he demonstrated in the twenty twenty 0:05:03.320 --> 0:05:06.719 one video he showed when he changed Facebook's name to 0:05:06.839 --> 0:05:10.280 Meta would require, as I mentioned last episode, all of 0:05:10.320 --> 0:05:16.240 this extrasensory tech that is nowhere near existing. But let's 0:05:16.240 --> 0:05:18.520 get a little bit into the present for a second 0:05:18.960 --> 0:05:21.800 and talk about generative AI, which has use cases and 0:05:22.000 --> 0:05:25.479 can do some cool things, but the desperation to make 0:05:25.520 --> 0:05:28.599 it the next big hypergrowth market has turned it into 0:05:28.640 --> 0:05:31.840 more of a marketing campaign, and a marketing campaign made 0:05:31.920 --> 0:05:36.760 up of these gratuitous, insane promises about artificial general intelligence 0:05:37.120 --> 0:05:41.080 or about how AI could run our lives, all kind 0:05:41.080 --> 0:05:43.200 of to hide the fact that most of these models 0:05:43.240 --> 0:05:48.200 are trained on a noxious form of public larceny, stealing 0:05:48.440 --> 0:05:51.560 from thousands or millions of creators to train models to 0:05:51.640 --> 0:05:55.279 do nothing. Training these models, by the way, will not 0:05:55.480 --> 0:05:59.600 give us agi it's not going to give us cognition 0:05:59.680 --> 0:06:02.839 in AI. They are lying about that. I really want 0:06:02.839 --> 0:06:07.560 to be clear, but also want to be clear that, uh, well, 0:06:07.880 --> 0:06:09.800 generative AI is probably not going to do much more 0:06:09.839 --> 0:06:12.159 than it's doing today. I'm making that call right now. 0:06:12.360 --> 0:06:16.400 What's happened in the last year. Nothing but these problems 0:06:16.440 --> 0:06:19.560 are created by the fact that they might be good ideas, 0:06:19.560 --> 0:06:22.320 but they're not trillion dollar ideas, but they're being given 0:06:22.360 --> 0:06:25.680 the funding and the marketing efforts to make them that way, 0:06:25.760 --> 0:06:30.039 even though they're so premature. It's ridiculous and it's just 0:06:30.080 --> 0:06:32.160 a it's a rotten kind of mindset. It is the 0:06:32.240 --> 0:06:35.720 rot economy, and it is the rot com bubble. This 0:06:35.800 --> 0:06:38.719 is the bubble being inflated, pushing concepts to the limelight 0:06:38.760 --> 0:06:42.920 before they're ready, pushing things through to show that companies 0:06:42.920 --> 0:06:45.320 can keep growing, that the tech industry can keep growing. 0:06:45.520 --> 0:06:48.240 And you can see miniature versions of this problem running 0:06:48.240 --> 0:06:51.440 through all of your favorite tech products right now. Google's 0:06:51.480 --> 0:06:54.760 forcing AI and to search, Facebook's constantly changing its algorithms 0:06:54.839 --> 0:06:58.600 and adding AI. Amazon's letting in basically anyone to sell 0:06:58.600 --> 0:07:02.120 anything on Amazon at any time, even if it's clogging 0:07:02.160 --> 0:07:05.840 the Kindle store with AI generated crap. They're all doing 0:07:05.880 --> 0:07:08.480 it because they're desperate to show that they're innovative and 0:07:08.520 --> 0:07:11.520 adding new things and able to express perpetual growth, even 0:07:11.560 --> 0:07:15.400 if doing so makes things worse. Even Apple, who I 0:07:15.520 --> 0:07:18.880 generally like the products of, is doing it too. iOS 0:07:19.000 --> 0:07:21.640 is a complete mess. Go into your settings, there's one 0:07:21.720 --> 0:07:24.880 hundred different things at the top. It will sometimes transsell 0:07:24.960 --> 0:07:27.760 you Apple News. Plus sometimes you get a notification about 0:07:27.760 --> 0:07:30.200 a baseball game that's a nail biter. I had one 0:07:30.280 --> 0:07:32.320 yesterday for the Angels Marlins, and if you're not a 0:07:32.320 --> 0:07:35.400 baseball fan, that's not that exciting a game. It's like 0:07:35.440 --> 0:07:37.960 watching two turds fight in a toilet. Sorry, if I've 0:07:37.960 --> 0:07:41.800 got any Marlins or Angels fans. Back to the tech stuff, though, 0:07:43.320 --> 0:07:46.160 I must be clear that there is a mindset behind this, 0:07:46.240 --> 0:07:48.480 and it is the rot economy and the rot economy's 0:07:48.480 --> 0:07:51.600 growth at all cost mindset. It drives these companies away 0:07:51.640 --> 0:07:55.080 from innovation. It flies in the face of what it 0:07:55.160 --> 0:07:59.280 takes to innovate, which means losing money on ideas that 0:07:59.360 --> 0:08:03.520 actually help people. And it's all happening because these markets 0:08:03.800 --> 0:08:06.320 they reward public companies and the startups that they try 0:08:06.360 --> 0:08:09.160 and acquire for making a number go up rather than 0:08:09.200 --> 0:08:13.320 any kind of consistent, profitable, sustainable, or useful business. And 0:08:13.360 --> 0:08:16.000 it frustrates me and fills me full of angry bio 0:08:16.240 --> 0:08:22.320 because they're all capable of making cool stuff. Amazon made aws, 0:08:22.400 --> 0:08:26.280 Amazon web Services, the foundational thing of all cloud computing. 0:08:27.280 --> 0:08:30.080 Facebook at one point was a very useful product that 0:08:30.120 --> 0:08:32.160 connected people that you loved and you liked and that 0:08:32.200 --> 0:08:34.800 you just met, except they had to make the number 0:08:34.840 --> 0:08:36.920 go up. And I think, by the way, Zuckerberg is 0:08:36.960 --> 0:08:38.559 separate to a lot of these companies because he was 0:08:38.600 --> 0:08:41.200 always kind of evil listen to the Facebook episodes and 0:08:41.240 --> 0:08:45.920 not lying. But really, though all these companies had noble times, 0:08:45.960 --> 0:08:48.880 they had times when they were still doing value extraction, 0:08:48.920 --> 0:08:51.640 where they were still doing some form of conning, where 0:08:51.640 --> 0:08:53.640 they were still doing monopoly plays, but they were at 0:08:53.720 --> 0:08:57.040 least providing something useful. Now they're making things worse because 0:08:57.040 --> 0:08:59.920 they have no more useful ideas or at least you 0:09:00.040 --> 0:09:12.800 ustful and profitable ones. What makes the last few years 0:09:12.840 --> 0:09:16.160 worth of bullshit stupid tech movements different from the previous 0:09:16.160 --> 0:09:19.400 innovations is that when an industry is ready for hypergrowth, 0:09:19.440 --> 0:09:22.040 there's a product that actually exists that will truly change 0:09:22.080 --> 0:09:26.080 people's lives. The promises made by tech executives were at 0:09:26.120 --> 0:09:29.079 one point based on things that one can reasonably believe 0:09:29.080 --> 0:09:32.000 would happen, rather than this kind of weird, erotic fan 0:09:32.040 --> 0:09:35.600 fiction to send a stock number up. Using the first iPhone, 0:09:35.640 --> 0:09:37.839 you could kind of see that you might make video 0:09:37.920 --> 0:09:40.360 calls on it, or take video, or use distinct third 0:09:40.400 --> 0:09:42.440 party apps like you were already doing on a Mac. 0:09:42.760 --> 0:09:45.000 And while Steve Jobs and yes he was an awful person, 0:09:45.080 --> 0:09:48.200 I know, did talk about what's coming next, he did 0:09:48.240 --> 0:09:51.440 so by saying that the iPhone on the initial announcement 0:09:51.679 --> 0:09:53.960 would add three G and amazing things in the future. 0:09:54.400 --> 0:09:56.280 And he did so just before and this was in 0:09:56.320 --> 0:09:59.559 the original iPhone speech, showing the actual real features of 0:09:59.600 --> 0:10:03.040 the first iPhone, things that people actually wanted, like having 0:10:03.080 --> 0:10:06.720 your music on your phone, being able to see what 0:10:06.800 --> 0:10:10.120 voicemails you had versus just calling a number and then 0:10:10.200 --> 0:10:12.160 hitting buttons to skip to the ones you need to 0:10:12.200 --> 0:10:15.440 see or hear in this case. And these promises, they 0:10:15.480 --> 0:10:18.439 were believable, either because they felt like a logical next 0:10:18.480 --> 0:10:21.240 step or because they described features that could be found 0:10:21.280 --> 0:10:25.520 in other competing products. Apple's always been a company of 0:10:25.559 --> 0:10:30.560 iteration rather than forceful, explosive innovation. It doesn't really create 0:10:30.600 --> 0:10:33.560 new categories, but it does refine them. And this trait 0:10:33.679 --> 0:10:36.840 was even referenced in the classic Douglas Copeland novel Microserfs, 0:10:36.840 --> 0:10:39.439 first published in nineteen ninety five, before Tim Cook took over, 0:10:39.520 --> 0:10:42.960 or even the return of Steve Jobs. It didn't make 0:10:43.040 --> 0:10:45.240 the first smart watch, or the first table, or the 0:10:45.280 --> 0:10:48.400 first arm based PC, but Apple did make them good 0:10:48.760 --> 0:10:53.200 and made them practical and useful and sellable. You saw 0:10:53.240 --> 0:10:55.360 these new products and you said, oh, I could do that, 0:10:55.559 --> 0:10:59.079 I could take photos with that. Oh I don't need 0:10:59.120 --> 0:11:01.360 an iPod and phone. I have a phone that does 0:11:01.360 --> 0:11:04.280 two things. I'm not even trying to romanticize the iPhone. 0:11:04.480 --> 0:11:09.520 I'm just describing what basic utility sounds like in a product, 0:11:09.880 --> 0:11:13.240 something that has been lost in the tech industry. Just 0:11:13.240 --> 0:11:17.440 look at Samultman, Sondhar Pashai, and Sachin Adella of Open Ai, 0:11:17.559 --> 0:11:21.680 Google and Microsoft. They seem intent on discussing what AI 0:11:21.880 --> 0:11:24.680 will do, that it will have a monumental impact, that 0:11:24.800 --> 0:11:27.040 it will be a smart person in those everything about 0:11:27.040 --> 0:11:29.360 your life, and yet when they're actually asked about what 0:11:29.400 --> 0:11:32.959 it does today, they just seem to go kind of quiet. 0:11:33.920 --> 0:11:36.199 They start her, they're speechless. And when sach a and 0:11:36.240 --> 0:11:39.280 Adella was actually asked about how he uses AI in 0:11:39.320 --> 0:11:43.160 his day to day work, he said the Microsoft Copilot 0:11:43.160 --> 0:11:48.640 helps him compose emails better. Congratulations, Microsoft, you invented grammarly, 0:11:48.679 --> 0:11:53.240 a product that's existed for fifteen years. Jesus Christ Anyway. 0:11:53.440 --> 0:11:56.360 As an aside, sach In Adella of Microsoft said in 0:11:56.360 --> 0:11:59.760 twenty twenty one that Microsoft was with the metaverse creating 0:11:59.800 --> 0:12:02.839 an I quote here, a new platform and a new 0:12:02.880 --> 0:12:06.600 application type that was similar to how it talked about 0:12:06.640 --> 0:12:09.240 the web and the websites in the early nineties, and 0:12:09.280 --> 0:12:12.160 that he could not overstate how much a breakthrough the 0:12:12.200 --> 0:12:16.480 metaverse was. He would then dump it entirely two years later. 0:12:17.640 --> 0:12:21.600 Two years before that, so in twenty nineteen, Nadella called 0:12:21.640 --> 0:12:26.480 HoloLens two, microsoft's augmented reality glasses, an absolute breakthrough, a 0:12:26.520 --> 0:12:30.079 few months after its demo failed live on stage at 0:12:30.080 --> 0:12:35.280 Microsoft's Bill twenty nineteen conference. And while Microsoft hasn't killed HoloLens, 0:12:35.480 --> 0:12:38.240 it's clear the company's appetite for mixed and virtual reality 0:12:38.840 --> 0:12:42.560 has kind of dampened with HoloLens work as partially impacted 0:12:42.559 --> 0:12:46.080 over the last year's sweeping layoffs at Microsoft and Microsoft 0:12:46.120 --> 0:12:49.439 discontinuing its VR social network, All Space VR and Windows 0:12:49.480 --> 0:12:53.440 Mixed Reality. Where's the breakthrough, Satcha, Satcha, you told me 0:12:53.480 --> 0:12:56.000 this shit was a breakthrough in twenty nineteen. Hey, the 0:12:56.000 --> 0:13:00.760 metaus was a breakthrough? Is everything a breakthrough? Satcha? Anyway, 0:13:01.800 --> 0:13:05.920 every single one of these questionable, weird, stupid products and 0:13:05.960 --> 0:13:10.000 the stupider decisions behind them, it's all an act of desperation, 0:13:10.120 --> 0:13:12.280 an attempt to keep the rot economy going, and the 0:13:12.280 --> 0:13:15.120 growth that all costs fire from going out, stripping crap 0:13:15.160 --> 0:13:17.880 off of the walls and throwing it in, selling shit 0:13:18.040 --> 0:13:20.600 so you can get more oil to throw on the fire. 0:13:20.640 --> 0:13:22.719 You can tell I have done a lot of fires. But seriously, 0:13:23.160 --> 0:13:25.800 this is all desperation to keep a party going that 0:13:26.000 --> 0:13:29.520 ended quite some time ago. There's a finite amount of 0:13:29.559 --> 0:13:32.000 people in the world right now, less of them getting online. 0:13:32.000 --> 0:13:34.240 And while more people are being born, they're going to 0:13:34.240 --> 0:13:36.360 be born into a very different tech industry than the 0:13:36.360 --> 0:13:39.240 one we see today. And there's an even more finite 0:13:39.280 --> 0:13:41.280 amount of those people that will go online at any 0:13:41.280 --> 0:13:44.480 given time, and in turn, even fewer of them that 0:13:44.600 --> 0:13:47.640 might actually want to use a particular service, especially one 0:13:47.679 --> 0:13:52.160 that isn't obvious in why you should bloody use it. Previously, 0:13:52.280 --> 0:13:55.040 these companies were able to anticipate and meet customers' needs 0:13:55.160 --> 0:13:57.800 on both the consumer and enterprise level, in part because 0:13:57.840 --> 0:14:01.839 they actually understood their customers and knew that making their 0:14:01.840 --> 0:14:06.840 customers happy actually made them successful. I believe that behind 0:14:06.880 --> 0:14:09.120 the scenes, many of these companies have been struggling for 0:14:09.240 --> 0:14:11.800 years to find the next big thing, knowing that while 0:14:11.800 --> 0:14:14.120 there might be needs to be made, you know, those horrible, 0:14:14.280 --> 0:14:18.199 nasty customers that always want problems solved. Ugh, those needs 0:14:18.280 --> 0:14:21.200 might not be things that will create double digit revenue 0:14:21.200 --> 0:14:24.000 growth or convince Wall Street that a stock will grow forever. 0:14:25.120 --> 0:14:27.120 Though I can't say for certain. I'd also say the 0:14:27.160 --> 0:14:31.000 ascent of management consultancy types in tech, people like Sheryl Samberg, 0:14:31.080 --> 0:14:34.640 Adam Useerri Sandar Pishai, and Sam Altman, who was adopted 0:14:34.640 --> 0:14:38.000 by the management consultant types. It's a testament to how 0:14:38.080 --> 0:14:41.320 obvious that they're desperate for the next big thing is, 0:14:41.400 --> 0:14:44.400 and how big their failure is to actually adapt to 0:14:44.480 --> 0:14:48.760 customer needs, or how incapable they are of building useful 0:14:48.800 --> 0:14:53.160 things management consultancy people and Sundar and share all by 0:14:53.200 --> 0:14:55.720 the way, they both came from McKinsey, one of the 0:14:55.720 --> 0:14:59.600 worst companies around. They're not built to innovate, they're built 0:14:59.640 --> 0:15:04.440 to grow. Oh, they're built to create business cancer. Now 0:15:04.520 --> 0:15:06.960 you might say that's horrible. But at the same time, 0:15:07.160 --> 0:15:10.160 do you think Facebook's useful? Do you think Google Search 0:15:10.200 --> 0:15:13.360 has got better? Or do you think that management consultancy 0:15:13.400 --> 0:15:15.520 people have seen it and gone number must go up, 0:15:15.600 --> 0:15:17.680 number must go up forever because if number go up, 0:15:17.760 --> 0:15:21.000 money go up, money go up. Good. I know I'm 0:15:21.040 --> 0:15:25.200 being somewhat facetious, but really, look at the tech industry 0:15:25.320 --> 0:15:29.240 right now. Look at it and tell me that this 0:15:29.280 --> 0:15:31.840 is an industry going well, that this is an industry 0:15:31.880 --> 0:15:35.840 building the future. No, right now, the tech industry feels 0:15:35.920 --> 0:15:39.960 like a management consultancy people trying to do PowerPoint presentations 0:15:39.960 --> 0:15:42.200 to customers to say this is going to change your 0:15:42.240 --> 0:15:46.320 life without actually showing them how it will in the product, 0:15:46.800 --> 0:15:48.640 and in the case of Microsoft lying in their Super 0:15:48.640 --> 0:15:51.800 Bowl commercial, or in the case of Samulman and Open 0:15:51.840 --> 0:15:55.640 Eye lying all the time. I mean tons of liars 0:15:55.680 --> 0:15:58.040 at the top of most of capitalism. But really, the 0:15:58.080 --> 0:16:01.360 tech industry is just full of them. But I think 0:16:01.440 --> 0:16:04.000 generative AI is quite special. And what makes it so 0:16:04.120 --> 0:16:06.840 special is it kind of has the hint of utility, 0:16:07.080 --> 0:16:09.720 the scent of a product, and as a result, it 0:16:09.760 --> 0:16:12.440 can be sold to the markets. Is the next big boom, 0:16:12.840 --> 0:16:15.480 the next big thing that justifies hundreds of billions of 0:16:15.480 --> 0:16:19.120 dollars of investment and increased market caps, even if it 0:16:19.200 --> 0:16:23.920 doesn't really do something. Every single company chasing the generative 0:16:23.960 --> 0:16:27.880 AI dragon is hoping that it's the next Amazon Web Services, which, 0:16:27.920 --> 0:16:30.760 as I mentioned, is the ubiquitous cloud product that went 0:16:30.800 --> 0:16:33.960 from a side project of Amazon Store to actually something 0:16:34.000 --> 0:16:37.560 that makes more than it and today it underpins most 0:16:37.600 --> 0:16:39.800 of the Internet. And you want to know why AWS 0:16:39.840 --> 0:16:42.920 does that, It's because it's useful. It's because it actually 0:16:42.960 --> 0:16:45.840 does something. It's actually a thing that has utility. You 0:16:45.840 --> 0:16:48.160 don't need to explain why someone needs a website on 0:16:48.200 --> 0:16:50.880 the Internet, or why they need services to do the 0:16:50.920 --> 0:16:53.240 compute to run an application that runs in the cloud. 0:16:53.440 --> 0:16:58.360 That's pretty bloody obvious. And that's the problem with GENERATIFAI, 0:16:58.520 --> 0:17:00.360 and that's the problem with a lot of things you 0:17:00.400 --> 0:17:03.320 see in the tech industry. Nobody really seems to be 0:17:03.320 --> 0:17:06.960 able to explain why or how generative AI is the 0:17:06.960 --> 0:17:12.240 next big thing, just that it is Chat, GPT, Gemini, Claude, 0:17:12.280 --> 0:17:14.679 all of these large language models. They can do some 0:17:14.760 --> 0:17:17.719 things that are superficially cool. They can generate images, they 0:17:17.760 --> 0:17:21.520 can quickly query databases, albeit with no guarantee they won't 0:17:21.560 --> 0:17:23.920 hallucinate and make up something that isn't true and tell 0:17:23.960 --> 0:17:27.360 you it is. And they can craft poetry. But there's 0:17:27.400 --> 0:17:29.720 no real endearing reason to pick one of them up 0:17:29.760 --> 0:17:33.439 every day and use them. These use cases that they enable. 0:17:33.720 --> 0:17:37.720 They're not really exciting or ubiquitous or world changing. They're 0:17:37.720 --> 0:17:40.639 not anything like what the tech executives are actually selling us. 0:17:40.640 --> 0:17:43.479 And the problem might not be that they're useless, but 0:17:43.520 --> 0:17:47.320 that as a piece of technology, generative AI just isn't 0:17:47.359 --> 0:17:50.879 a hypergrowth market or much of an industry changer, no 0:17:50.960 --> 0:17:54.760 matter how much money you shove into it. Sam Lman 0:17:54.920 --> 0:17:57.440 is not asking Microsoft for a one hundred billion dollars 0:17:57.440 --> 0:18:00.800 supercomputer because generative AI is going to get better. He's 0:18:00.800 --> 0:18:03.199 doing it because what we have today is not a 0:18:03.240 --> 0:18:07.000 world changing product. It's not the boondoggle that the tech 0:18:07.000 --> 0:18:09.639 industry needs it to be, and his only prospect of 0:18:09.680 --> 0:18:13.760 fulfilling these promises is basically a tech industry equivalent of 0:18:13.800 --> 0:18:18.240 the Marshall Plan. Yet without generative AI, what do these 0:18:18.240 --> 0:18:22.199 companies have left? What is the next big thing? For 0:18:22.280 --> 0:18:24.320 the best part of fifteen years, we've assumed that the 0:18:24.359 --> 0:18:27.320 tech industry would always have something up their sleeves. But 0:18:27.359 --> 0:18:30.200 what's becoming apparent is that they might have actually run 0:18:30.240 --> 0:18:33.120 out of ideas. They don't have any big, sexy things 0:18:33.119 --> 0:18:36.640 to sell us. And the disruption that has become associated 0:18:36.680 --> 0:18:41.240 with tech was predicated on there being new markets for 0:18:41.320 --> 0:18:44.560 them to disrupt and ideas in their hands that they 0:18:44.560 --> 0:18:47.520 could actually use to do so. And a paper from 0:18:47.640 --> 0:18:49.800 last year from Nature that kind of worried me too 0:18:50.000 --> 0:18:53.080 positive that the pace of disruptive research is actually slowing, 0:18:53.359 --> 0:18:55.680 And I believe the same thing is actually happening in tech, 0:18:55.720 --> 0:18:59.400 except we're conflating innovation and finding new markets to add 0:18:59.440 --> 0:19:01.439 software and hard where to and we've been doing so 0:19:01.560 --> 0:19:05.560 for twenty years, and the net result of this is 0:19:05.600 --> 0:19:09.760 a kind of innovation stagnation and the rock economy and 0:19:09.800 --> 0:19:12.960 the rock com bubble. A tech industry laser focused on 0:19:13.040 --> 0:19:17.280 finding markets to disrupt rather than actually disrupting anything. Rather 0:19:17.320 --> 0:19:20.800 than actually meeting anyone's needs. Where the biggest venture capital 0:19:20.840 --> 0:19:23.920 investments go into companies that can sell for massive multiples 0:19:23.960 --> 0:19:27.840 rather than sustainable, stable businesses or things that might truly 0:19:27.920 --> 0:19:32.159 change the world. Venture capital is not investing in moonshots. 0:19:32.240 --> 0:19:35.200 They're not putting money into the future. They're putting money 0:19:35.240 --> 0:19:38.560 into the goddamn present. And there are exceptions. I like 0:19:38.640 --> 0:19:41.719 a lot of seed stage investors because they're actually taking 0:19:41.800 --> 0:19:45.240 risks on real companies that are doing new things. However, 0:19:45.280 --> 0:19:47.480 the largest VC firms need to get their heads out 0:19:47.520 --> 0:19:51.600 their asses and actually invest in the future. But really, 0:19:52.280 --> 0:19:55.000 what's so stupid about this is of all these big 0:19:55.040 --> 0:19:57.760 tech companies, before they really mess with their products, they 0:19:57.800 --> 0:20:02.560 were good, sustainable, insane, li profitable businesses. There's no reason 0:20:02.600 --> 0:20:05.600 that Google or Meta or Amazon couldn't build businesses that 0:20:05.640 --> 0:20:10.640 have flat, sustainable growth and really respectable, reliable profitability. They 0:20:10.720 --> 0:20:13.399 just choose not to impart because the markets will punish it, 0:20:13.560 --> 0:20:15.680 and partly because their DNA has been poisoned by the 0:20:15.720 --> 0:20:18.720 rot economy and the demands of the rot economy are 0:20:18.800 --> 0:20:24.720 very simple, more always more. I also think that the 0:20:24.760 --> 0:20:28.120 tech industry, both the venture capitalists funding it and those 0:20:28.200 --> 0:20:31.240 running big tech firms. They've been dominated by people who 0:20:31.240 --> 0:20:35.040 don't build things. The people running VC firms, the people 0:20:35.440 --> 0:20:40.080 running Google, Facebook, and all these Wow. Mark Zuckerberg, I 0:20:40.080 --> 0:20:41.680 guess was a code but he's not doing it anymore. 0:20:42.680 --> 0:20:46.720 They're not actually building products, and they're not coder's even 0:20:46.720 --> 0:20:50.479 Sam Morton's not an engineer. The future isn't being built 0:20:50.680 --> 0:20:53.760 by the people saying what the future is. The future 0:20:53.840 --> 0:20:57.080 is being built by people under the thumb of management 0:20:57.119 --> 0:21:01.359 consultant brains. And I know, oh, I know, I'm being 0:21:01.400 --> 0:21:05.800 a little facetious again, but really, these people aren't speaking 0:21:05.800 --> 0:21:08.119 to people with real products. They're not looking at the 0:21:08.200 --> 0:21:10.960 human condition and saying, let's make this better for money. Now, 0:21:11.000 --> 0:21:12.679 they're saying, how do we drain more blood from the 0:21:12.720 --> 0:21:16.640 consumer until they give up on our website? Well, guess what, asshole? 0:21:16.840 --> 0:21:20.200 They are giving up on it. But this problem, it's 0:21:20.200 --> 0:21:23.320 poisoning the startup industry as well, leaving big tech for 0:21:23.359 --> 0:21:27.000 a second. So, the Rabbit R one and the Humane Pin, 0:21:27.119 --> 0:21:29.040 I'm not sure if you've seen them. The rabbit r 0:21:29.080 --> 0:21:31.800 one is this two hundred dollar orange brick with a 0:21:31.880 --> 0:21:34.320 screen that claimed when you got it that you could 0:21:34.359 --> 0:21:36.359 talk to it and it'd run these apps and it 0:21:36.400 --> 0:21:38.399 cost two hundred dollars, by the way, and the Human 0:21:38.480 --> 0:21:41.000 Pin is this AI powered pin that costs seven hundred 0:21:41.040 --> 0:21:44.960 dollars and it has a little infrared screen that goes 0:21:45.000 --> 0:21:46.680 in your hand except when you use it too much 0:21:46.800 --> 0:21:49.560 of heats anyway, Now that like giving you back. Kind 0:21:49.600 --> 0:21:52.160 of the backstory there. Both of these companies they raised 0:21:52.240 --> 0:21:56.199 incredible sums of capital based on these vague ideas. You know, 0:21:56.240 --> 0:21:59.159 that people felt overwhelmed by their smartphones, or that they 0:21:59.600 --> 0:22:02.320 don't not connected with the real world, things that sound 0:22:02.440 --> 0:22:06.520 nice to investors who don't experience speaking to people. And 0:22:06.560 --> 0:22:10.040 they raised all this money hunt over two hundred billion 0:22:10.080 --> 0:22:13.560 dollars between my believe, to build products that range from 0:22:13.960 --> 0:22:17.760 extremely bad to potentially fraudulent, and they failed to build 0:22:17.800 --> 0:22:21.160 products that anybody actually needed. What they did build were 0:22:21.440 --> 0:22:24.880 very expensive things that answered questions nobody had and solve 0:22:24.960 --> 0:22:29.160 problems that nobody had very poorly. And I'm not sure 0:22:29.160 --> 0:22:33.399 if it was ignorance, ambivalence, or just pure evil, but anyway, 0:22:33.400 --> 0:22:36.000 if I'm honest, these startups, they're only a symptom of 0:22:36.040 --> 0:22:38.639