Speaker 1: Alzo Media. Hello and welcome to your first Better Offline
Speaker 1: monologue of twenty twenty six. I'm your host ed Zitron.
Speaker 1: We're back from CES and we've already had a great
Speaker 1: conversation with the wonderful Steve Burke of Games Nexus, and
Speaker 1: this felt like a good time to take stark and
Speaker 1: talk about what I see happening in the year ahead. Also, legitimately,
Speaker 1: thank you for all for listening at CES. It was
Speaker 1: one of the best weeks of my life, and we
Speaker 1: made some amazing stuff and you've all sent wonderful emails
Speaker 1: and such love hearing from you. But let's talk about
Speaker 1: this year. I have a strong gut instinct that this
Speaker 1: is the year of reckonings for the AI bubble. Nothing
Speaker 1: I'm seeing in the news, the markets, or hearing from
Speaker 1: people I talked to behind the scenes suggests that things
Speaker 1: are improving at all. In fact, it kind of feels
Speaker 1: like when your dog takes a shit somewhere in your
Speaker 1: apartment but you can't quite find it. There's that little stink,
Speaker 1: but it's not strong enough to give you an idea
Speaker 1: of where it is. But you know, one day, without fail,
Speaker 1: you're going to a nasty brown delight under your foot
Speaker 1: colorful Simile's aside, though Generative AI is not becoming cheaper,
Speaker 1: more effective, or more efficient in Vidio's new Vira Ruben,
Speaker 1: GPUs are likely to be more expensive than ever, in
Speaker 1: part thanks to the ever increasing price of RAM and
Speaker 1: in part because of its single vendor mod monopoly, which
Speaker 1: allows them to set prices well to stun. And the
Speaker 1: other thing with them as well is they're going to
Speaker 1: allow people to use the same racks from Blackwell, so
Speaker 1: the things you put the GPUs into, but only for
Speaker 1: the beginning of Verra Ruben. Then they're going to move
Speaker 1: to these giant I think they're called Kaiber racks. The
Speaker 1: current ones are called Oberon. Someone will email and correct me,
Speaker 1: but it's one of those two. The new one is
Speaker 1: going to require an entirely new cooling system architecture. It's
Speaker 1: all very good, but on the subject of things that
Speaker 1: are also very good, I believe we're also on the
Speaker 1: verge of the multiple con jobs of the AI bubble
Speaker 1: collapsing too. In July of last year, former open AI
Speaker 1: CTO Mira Marati, who barely appear to be able to
Speaker 1: get out of fucking sentence in every interview. I've seen
Speaker 1: founded Thinking Machines raising two two billion dollars at a
Speaker 1: twelve billion dollar valuation, all while refusing to tell investors
Speaker 1: what product they'd make, or what the business plan was,
Speaker 1: or how they'd make money or anything like that. Naturally,
Speaker 1: investors were like, take my money, please, I need to
Speaker 1: give this to your mirror. I am an idiot, I'm
Speaker 1: a moron, I'm a goofboar. I just love wasting money. Now,
Speaker 1: when this happened, they were able to poach open AISVP
Speaker 1: of Research for Post Training, Barrett Zov, among two other
Speaker 1: staff as I just really can't engineer the excitement to name.
Speaker 1: And then, a few days ago, as reported by a
Speaker 1: friend of the show, Kylie Robinson of Core Memory, Zof
Speaker 1: was fired from Thinking Machines after telling Marati he was
Speaker 1: considering leaving with wiredsmac Zef reporting in a follow up
Speaker 1: that the firing involved Zov sharing confidential information with competitors.
Speaker 1: What confidential information? What possible information could he have had
Speaker 1: about the things they're not building? About the bullshit? Who knows?
Speaker 1: I think she just fired him because she was mad
Speaker 1: that he was leaving. What the fuck is Thinking Machines
Speaker 1: building exactly would have had a single AI thing last
Speaker 1: year for and I quote, controlling every aspect of model
Speaker 1: training and fine tuning or some such bollocks. I realize
Speaker 1: I'm being a little dismissive, but I just do not
Speaker 1: have it in me anymore to feign excitement over every
Speaker 1: single one of these two or three or whatever fraudulent Okay,
Speaker 1: not literally fraudulent. I have no evidence of that. This
Speaker 1: is a libel blah blah blah. It's not fraudulent. It
Speaker 1: just looks like bollocks. I can't be excited about the
Speaker 1: new asshole who raised a billion or two billion dollars
Speaker 1: to do nothing. I don't have it in me anymore.
Speaker 1: I'm not going to read a sentence about post training
Speaker 1: or fine tuning and pretend that means anything. It doesn't
Speaker 1: mean anything anymore. Nothing has changed, nothing is going on.
Speaker 1: Everyone is wasting money, and I can't care about who
Speaker 1: looted billions of dollars from venture capitalists last nor do
Speaker 1: I believe that anything should happen to this venture capitalists
Speaker 1: other than being tard and feathered by the limited partners.
Speaker 1: These people aren't building anything. They're huffing their own farts
Speaker 1: and getting paid tens of billions of dollars to do it.
Speaker 1: I'm sick of here wrying about them, and I think
Speaker 1: this is the year we see this kind of con diet.
Speaker 1: We're long past the point at which generative AI has
Speaker 1: made sense. Bloomberg reported last year that there were one
Speaker 1: hundred and seventy eight point five billion dollars of data
Speaker 1: center deals in the US alone in twenty twenty five,
Speaker 1: and based on my rough analysis, there's less than a
Speaker 1: billion dollars of actual compute revenue outside of hyperscalers who
Speaker 1: are just trying to move it off of their balance
Speaker 1: sheet so their earnings look better. The demand isn't arriving,
Speaker 1: and neither of the products and all of this speculative
Speaker 1: money sloshing around is going to zero. I also want
Speaker 1: to be clearer about something else I keep hearing about.
Speaker 1: If open ai dies, the AI bubble bursts with it.
Speaker 1: Mister Sebastian Malabi of the Council on Foreign Relations had
Speaker 1: a piece in The New York Times a few days
Speaker 1: ago saying that he believed open ai would run out
Speaker 1: of money by July twenty twenty seven, adding that and
Speaker 1: I quote an open ai failure wouldn't be an indictment
Speaker 1: of AI, but merely the end of the most hype
Speaker 1: driven builder of it. He also said that the probable
Speaker 1: result is that open ai would be absorbed by Mike, Microsoft, Amazon,
Speaker 1: or another cash rich behemoth, which I am going to
Speaker 1: sit down and reread a lot of my newsletters because
Speaker 1: I'm pretty sure that's fucking lifted from my work, Like
Speaker 1: open ai being absorbed by Microsoft. I know I fucking
Speaker 1: said it. If you can find it, email me easy
Speaker 1: at better Offline dot com and I will give you
Speaker 1: a big thumbs up in a photo. But I want
Speaker 1: to be clear. In any case, if open ai dies,
Speaker 1: the bubble burst aggressively and brutally. Open ai is the
Speaker 1: biggest brand name in AI. Samultman is the only well
Speaker 1: known founder, and chat gpt is the only AI product
Speaker 1: with any consumer penetration, and no Microsoft and Google renaming
Speaker 1: products doesn't count, nor does Nano Banana. I can't believe
Speaker 1: I nearly got away with saying or thinking that Nano
Speaker 1: Banana for a week. More important, the open ai is
Speaker 1: the only company with any real demand for a compute
Speaker 1: outside of Anthropic, another company that relies on billions of
Speaker 1: dollars of venture capital and subsidies to stop itself from
Speaker 1: falling over and dying. As you can hear them a
Speaker 1: little bit heated on this subject because I'm really really
Speaker 1: sick of hearing this. I'm really sick of hearing things
Speaker 1: from these AI boosters are getting more crazy and more defensive,
Speaker 1: claiming that this is an open AI bubble, not an
Speaker 1: AI bubble. What do you think happens when AI companies
Speaker 1: try and raise money after open ai dies? Do you
Speaker 1: think investors are going to think? You think they're going
Speaker 1: to do the Tobias fun K poly thing from arrested Development,
Speaker 1: where it didn't work for name, it will work for us.
Speaker 1: Now they're going to say, oh shit, oh shit. The
Speaker 1: one company with all the press, all the money, all
Speaker 1: the infrastructure, all the attention, all of the governmental support
Speaker 1: died on its ass. Why would I invest in more
Speaker 1: in this? And I realize venture capitalists are fucking stupid
Speaker 1: at the best of times, but even by this standard,
Speaker 1: I think that they're going to be too scared to
Speaker 1: put the money in. And I don't think anyone else
Speaker 1: is going to be able to justify it either. But
Speaker 1: I do think by the way AI boosters are about
Speaker 1: to get real crazy out there. I think you're going
Speaker 1: to see them say it's an open AI bubble, not
Speaker 1: and a bubble them. We need these investments to beat China.
Speaker 1: Then they're gonna blame people like me AI skeptics. They're
Speaker 1: gonna say luddites destroyed innovation. And if you hear that,
Speaker 1: know that in reality, the people destroying innovation are the
Speaker 1: ones diverting more than half of all venture capital to
Speaker 1: invest in unreliable, unproductive, unsustainable, and unremarkable software in pursuit
Speaker 1: of creating the future of digital slavery. I'm sick of
Speaker 1: these fucking people, but that doesn't mean I won't be
Speaker 1: here to tell you all about their collapse. I'll be
Speaker 1: back next week with a three or four parter. This
Speaker 1: is gonna be a bomb burner. You're gonna love it.
Speaker 1: Zichron out