Speaker 1: Media. Hello, and welcome to this week's Better Offline Monologue.
Speaker 1: I'm your host ed ze Trunk. Now. I'm turning forty
Speaker 1: in a month or so, and at four years young,
Speaker 1: I'm old enough to remember as far back as December eleventh,
Speaker 1: twenty twenty five, when Disney and open Ai reached an
Speaker 1: agreement to bring beloved characters from across Disney's brands to
Speaker 1: sourer open AI's video platform. As part of the deal,
Speaker 1: Disney would and i quote, become a major customer of
Speaker 1: open Ai, use its API to build new products, tools
Speaker 1: and experiences, as well as showing Sora videos in Disney
Speaker 1: Plus and deploy chat GPT for its employees, as well
Speaker 1: as making a one billion dollar equity investment in open Ai.
Speaker 1: Except now, Sora is dead shot in the head by Clammy,
Speaker 1: Sam Altman and open Ai because it cost fifteen million
Speaker 1: dollars or more to run and had everybody making videos
Speaker 1: of Goofy saying gorsh hold fuck anything that moves like
Speaker 1: Frank from Blue Velvet. To be clear, open aye is
Speaker 1: shutting down both Sora the app and access to the
Speaker 1: SAA video model through its API, framing the changes, focusing
Speaker 1: the company on business and enterprise customers, which is a
Speaker 1: euphemism for a product that never had any real business
Speaker 1: model or product market fit other than burning millions of
Speaker 1: dollars of computerday and violating copyright. I think it's also
Speaker 1: completely insane that nobody bothered to check whether Disney had
Speaker 1: ever invested or even talked about investing that billion dollars.
Speaker 1: I went and had a look, and there wasn't a
Speaker 1: damn thing in any of the Disney's most recent quarterly
Speaker 1: or annual reports. I should have checked this myself, but
Speaker 1: it's wild that nobody else did either. There are business
Speaker 1: and tech reporters, there are people that do this full
Speaker 1: I but I also want to take this moment to
Speaker 1: say something for the bottom my heart. I was right.
Speaker 1: I was fucking right. I said it back in October.
Speaker 1: I've said it. I said it back in twenty twenty four.
Speaker 1: SAA was never business. SAURA was never replacing anything. SAURA
Speaker 1: was always unreliable because the hallucination prone, large language model
Speaker 1: bullshit it's built upon. It was never gonna work. Everyone
Speaker 1: who said otherwise is a goddamn rube, and so many
Speaker 1: people were wrong. The app that CNBC said was challenging
Speaker 1: Hollywood and freaking out the movie industry, and The Hollywood
Speaker 1: Reporter would suggest could somehow challenge Pixar and with sam
Speaker 1: when successfully playing Hollywood, and the fucking anklo who should
Speaker 1: be ashamed of themselves said, was Open Ai going to
Speaker 1: war with Hollywood as it shook the industry, and Deadline
Speaker 1: said made Hollywood sow and Boardrooms said was in a
Speaker 1: standoff with Hollywood, and The La Times said was deepening
Speaker 1: a battle between Hollywood and Open AI and igniting a
Speaker 1: firestorm in Hollywood, and Puck said had Hollywood panicking, and
Speaker 1: tech No Lama said was the end of copyright as
Speaker 1: we know it, and Slat said was a case of
Speaker 1: AI crushing Hollywood as it as we've known it, and
Speaker 1: that I swear to God I wrote that right in
Speaker 1: the script. But I'm keeping going anyway. This thing's completely
Speaker 1: dead a little more than five months after everybody claimed
Speaker 1: it was changing everything. You all were wrong, every single
Speaker 1: goddamn wrong, wrong, wrong, wrong, wrong, wrong, on the wrong,
Speaker 1: a sandwich of wrong that you're shoving up your asshole.
Speaker 1: I'm so fucking tired of this. I cannot express how
Speaker 1: angry I am, because it's almost as if everybody making
Speaker 1: these proclamations, was instinctively printing whatever marketing copy had been
Speaker 1: imagined by the AI labs to promote compute intensive vaporware.
Speaker 1: And absolutely nobody is going to apologize to the people
Speaker 1: working in the entertainment industry for scaring the fuck out
Speaker 1: of them with ghost stories for no apparent reason. Every
Speaker 1: single person who blindly repeated that SAURA existed and was
Speaker 1: changing everything should be forced to apologize to their readers.
Speaker 1: I cannot express the sheer amount of panic that spread
Speaker 1: through every single part of the entertainment industry as a
Speaker 1: result of these specious, poorly founded mythologies spread by people
Speaker 1: that didn't give enough of a shit to understand what
Speaker 1: was actually going on. Saura too, was always an act
Speaker 1: of desperation, an attempt to create a marketing cycle to
Speaker 1: prop up a tool that was burning as much as
Speaker 1: fifty million dollars a day. The most of the mainstream
Speaker 1: media bought into because they believe everything Open AI says
Speaker 1: and are willing to extrapolate the destruction of an entire
Speaker 1: industry from a fucking facade driven by a clammy man
Speaker 1: that lies for a living. I am tired of everybody
Speaker 1: scarfing down the slot from these companies. I'm tired of
Speaker 1: the majority of reporters not doing the hard work to
Speaker 1: actually understand what's going on. And good lord, do I
Speaker 1: not have another example? Well? I do, Eh, you get
Speaker 1: what I mean. I spent the last week or so
Speaker 1: trying to work out how many actual data centers got
Speaker 1: built last year and found that despite somewhere between one
Speaker 1: hundred and ninety two hundred and forty gigawats supposed capacity
Speaker 1: being announced, based on my analysis, only three gigawats of
Speaker 1: IT load, which is the GPUs and the associated hardware
Speaker 1: that's being turned on, got built in America in twenty
Speaker 1: twenty five. To explain how bad this number, three gigawatts
Speaker 1: of critical IT hardware is about ninety billion dollars per
Speaker 1: Darling of TD Cohen and in Video sold about one
Speaker 1: hundred and thirty five billion dollars worth of GPUs and
Speaker 1: hardware to America in its last fiscal year. Based on
Speaker 1: the last quarter of sales, which is in the sixty
Speaker 1: two billion dollar range, sixty nine percent of that nice
Speaker 1: is America. It now takes about six months to install
Speaker 1: a single quarters sales worth of GPUs and associated hardware,
Speaker 1: even if you think AI is the biggest and most
Speaker 1: hugest and most special. Boy, what's the fucking point of
Speaker 1: buying these GPUs two to four years in advance, Because
Speaker 1: even if it takes six it takes six months to
Speaker 1: install a single quarters worth of sales. From what I found,
Speaker 1: it's actually taking a lot longer. In some cases. Jensen
Speaker 1: Hwang is announcing a new GPU every year. By the
Speaker 1: time you install your Blackwells, they'll already have Vera Ruben.
Speaker 1: By the time they have Vera Ruben, they'll have something else.
Speaker 1: I don't know, Daphnie from Scooby Doo. They can have
Speaker 1: no These things are the only cool thing that Nvidia
Speaker 1: does is choosing the names of people anyway. And with
Speaker 1: every new generation of these GPUs comes new power requirements
Speaker 1: and rack side While the first generation of Vera Ruben,
Speaker 1: which is the next gen coming out very soon, will
Speaker 1: fit into the current Oberon in video racks and video
Speaker 1: is already teasing it's Kiber racks, which will require even
Speaker 1: more power, even more liquid cooling, which will mean those
Speaker 1: ooh ew ew, those old, stinky, dirty blackwells, You're gonna
Speaker 1: have to throw them right in the trash. No more
Speaker 1: black well for me. Thanks, they've got Verra Rubin in town. Ew.
Speaker 1: You're gonna make me use blackwell? How gross? Ew Jensen
Speaker 1: put those stinky blackwells in the toilet. Ew, you couldn't
Speaker 1: fit in the far too large I've tried yet. Things
Speaker 1: only get worse when you look at the actual construction
Speaker 1: in process per Siteline Climate. Despite over one hundred and
Speaker 1: ninety gigawatts of global capacity that's supposedly in process, with
Speaker 1: sixteen gigwatts that's meant to come online this year, only
Speaker 1: five gigawatts off, it is actually under construction, and under
Speaker 1: constructure can mean everything from a single steel beam to
Speaker 1: a nearly finished buildout. Walk around London some time. You
Speaker 1: should just just look at building projects in London or
Speaker 1: New York. Look at how quickly or not quickly those
Speaker 1: get built. Oh, I don't know. Go look around Stargate
Speaker 1: and all the data centers there. One of the infrastructure
Speaker 1: people from open AI was boasting of the Wisconsin data
Speaker 1: center the other day and he just had a single
Speaker 1: steel beam. I'm not even fucking with you. It's just
Speaker 1: a one beam. And they were like four guys. There's
Speaker 1: three guys working on the beam and another guy walking
Speaker 1: up to it. I love builders, but anyway, in my premium,
Speaker 1: shit in my premium this week, just hit my microphone,
Speaker 1: just going to keep going. I also dug into most
Speaker 1: of the major data center projects that have been announced,
Speaker 1: and then basically every case found that they had either
Speaker 1: barely broken ground, hadn't actually picked the land yet, or
Speaker 1: it stalled entirely, as was the case with fermi supposed
Speaker 1: eleven giga what data center project in Amarillo, Texas, which
Speaker 1: promptly dismissed workers in February after moving forward without permitting
Speaker 1: or funding necessary to actually build the fucking thing. That's
Speaker 1: a public company by the way, for Merick's gone, Oh god,
Speaker 1: it slightly Avengers of assholes. Despite the many, many statements
Speaker 1: the AI is inevitable or unstoppable, the reality is that
Speaker 1: the things aren't getting built, billions of dollars aren't getting sent,
Speaker 1: industries are left undisrupted, and the only people actually benefiting
Speaker 1: are grifters, venture capitalists and banks providing debt to non
Speaker 1: existent data center projects. Look, I believe by the end
Speaker 1: of this era, to quote just Dario one him and
Speaker 1: Kakashi the lone Gunman, these guys are two of the
Speaker 1: best out there and their pseudonymous accounts. This era will
Speaker 1: be remembered as the largest waste of capital in history.
Speaker 1: Most data centers aren't getting built, and those that are
Speaker 1: won't be ready before twenty to twenty seven at best.
Speaker 1: Most AI startups make piddley amounts of revenue and burn
Speaker 1: hundreds of millions of dollars to make single digit millions
Speaker 1: of dollars of revenue, and constantly piss off their users
Speaker 1: by changing rate limits because every single one is subsidized,
Speaker 1: every single one is spending a couple of dollars or
Speaker 1: more per dollar of revenue, and nothing is changing and
Speaker 1: nothing is improving. Fuck off with your whole inferance this
Speaker 1: profitable thing, by the fucking way, to paraphrase my good
Speaker 1: friend Casey Kagawa, who made this point to me over
Speaker 1: Signal fairly recently. Either inference isn't profitable or API cars
Speaker 1: are just a big they're the biggest ripoff ever that
Speaker 1: they could be charging even less than that. Indeed, if
Speaker 1: inference was so profitable, why are they charging a couple
Speaker 1: of bucks for a million dollars worth of input tokens?
Speaker 1: They should be charging pennies. Why are they charging so
Speaker 1: much of it's so profitable take that eighth of dits anyway,
Speaker 1: And for the most part, the media has failed to
Speaker 1: notice all this stuff. I really must be clear how
Speaker 1: shocking this is. I really have read all over the shop.
Speaker 1: I still see people making the Amazon Web Services lost
Speaker 1: a lot of money. Argument, that's about thirty eight billion
Speaker 1: dollars in over a decade that was spent on Amazon
Speaker 1: Web Services. So walk that one bag. Well, yeah, I
Speaker 1: don't know. I still see the same talking points pedaled
Speaker 1: and it's just ridiculous. Big numbers get quoted without a
Speaker 1: second thought. Unrealistic or fantastical timelines are public strad verbatim.
Speaker 1: I'm talking about that. What ten twenty billion dollar nebuis
Speaker 1: deal with meta that just data center doesn't exist, haven't
Speaker 1: even raised the money. And scrutiny appears, by the way,
Speaker 1: to only be reserved for haters or skeptics, of those
Speaker 1: who say fuck too much on a podcast. Well, the
Speaker 1: scrutiny machine over here is just getting started, and you know,
Speaker 1: you just know that I will be absolutely insufferable when
Speaker 1: I'm finally proven rain. Thank you all for listening. Should
Speaker 1: have some fun stuff next week. I'm still working on
Speaker 1: I love you all,