1 00:00:01,840 --> 00:00:06,520 Speaker 1: All Zone Media. Hello and welcome to this week's Better 2 00:00:06,559 --> 00:00:16,600 Speaker 1: Offline Monologue. I'm your host ed ze Tron, and I've 3 00:00:16,640 --> 00:00:18,520 Speaker 1: heard so many nice things from all of you about 4 00:00:18,600 --> 00:00:20,880 Speaker 1: last week's Haters Guide to AI, and I really couldn't 5 00:00:20,880 --> 00:00:22,680 Speaker 1: be more grateful. It was a labor of love and 6 00:00:22,880 --> 00:00:25,480 Speaker 1: hate in some cases. I guess as we approach what 7 00:00:25,520 --> 00:00:27,920 Speaker 1: I see as the precipice of this hysterical era, we're 8 00:00:27,920 --> 00:00:29,800 Speaker 1: going to start seeing and hearing big tech and big 9 00:00:29,800 --> 00:00:33,320 Speaker 1: model developers make intentionally vague statements with the intentive misleading 10 00:00:33,360 --> 00:00:35,960 Speaker 1: you and the media. And I really want to be clear. 11 00:00:36,120 --> 00:00:37,920 Speaker 1: I'm sorry there's going to be some maths in this, 12 00:00:38,159 --> 00:00:40,360 Speaker 1: but it's necessary for you to know how people are 13 00:00:40,360 --> 00:00:43,599 Speaker 1: trying to swindle you and the media too. So Microsoft 14 00:00:43,680 --> 00:00:45,880 Speaker 1: kicked this off this week with this week's earnings breaking 15 00:00:45,880 --> 00:00:48,559 Speaker 1: out annual revenue from their a Zeo cloud platform when 16 00:00:48,560 --> 00:00:50,440 Speaker 1: they sell the means for people to run applications and 17 00:00:50,520 --> 00:00:53,680 Speaker 1: organizations in the cloud but also bury their AI services, 18 00:00:53,760 --> 00:00:55,600 Speaker 1: and they did this for the first time in history. 19 00:00:56,000 --> 00:00:58,280 Speaker 1: This naturally led people to say that as yours growth, 20 00:00:58,280 --> 00:01:01,080 Speaker 1: which is up thirty four percent twenty twenty four, when 21 00:01:01,120 --> 00:01:04,880 Speaker 1: they didn't disclose it was driven by art official intelligence somehow, 22 00:01:05,000 --> 00:01:08,080 Speaker 1: despite the fact that Microsoft intentionally stopped reporting on their 23 00:01:08,080 --> 00:01:10,839 Speaker 1: own things their AI revenue in January when they said 24 00:01:10,880 --> 00:01:13,680 Speaker 1: they had thirteen billion of annualized revenue, meaning about one 25 00:01:13,680 --> 00:01:17,120 Speaker 1: point eight billion dollars a month, and God, that term 26 00:01:17,120 --> 00:01:19,039 Speaker 1: annualized this is a tricky one. Also, by the way, 27 00:01:19,040 --> 00:01:22,319 Speaker 1: they made over seventy billion dollars on Azure, so thirteen 28 00:01:22,319 --> 00:01:24,479 Speaker 1: billion dollars of annualized revenue is actually not that much. 29 00:01:24,480 --> 00:01:27,240 Speaker 1: But anyway, the term annualized this is a really tricky one. 30 00:01:27,480 --> 00:01:30,240 Speaker 1: When you read or hear someone say annualized revenue, it 31 00:01:30,280 --> 00:01:33,800 Speaker 1: means a particular month multiplied by twelve. However, what they 32 00:01:33,840 --> 00:01:35,959 Speaker 1: want you to think is that annualized means that the 33 00:01:36,000 --> 00:01:38,440 Speaker 1: company in question will make that much money in the year, 34 00:01:38,640 --> 00:01:41,320 Speaker 1: in part because there isn't a single goddamn media outlet 35 00:01:41,360 --> 00:01:44,320 Speaker 1: that seems capable of seeing through this. I should also 36 00:01:44,400 --> 00:01:47,280 Speaker 1: be clear that annualized revenue is a one month snapshot. 37 00:01:47,480 --> 00:01:49,800 Speaker 1: If I sell boxes at one hundred dollars apiece and 38 00:01:49,840 --> 00:01:53,080 Speaker 1: sell three in June, I have thirty six hundred dollars 39 00:01:53,120 --> 00:01:56,560 Speaker 1: in annualized revenue. That's three hundred dollars times twelve, because 40 00:01:56,600 --> 00:01:59,440 Speaker 1: that's a year. But if I only sell a one 41 00:01:59,440 --> 00:02:02,120 Speaker 1: box in j that means I have twelve hundred dollars 42 00:02:02,240 --> 00:02:05,680 Speaker 1: in annualized revenue, which doesn't quite sound so good. My 43 00:02:05,840 --> 00:02:08,520 Speaker 1: June annualized revenues of thirty six hundred dollars make it 44 00:02:08,560 --> 00:02:10,639 Speaker 1: sound like I'll make that much in a year. However, 45 00:02:10,639 --> 00:02:12,520 Speaker 1: if I also tell you that I only sold one 46 00:02:12,560 --> 00:02:15,280 Speaker 1: box and I had twelve hundred dollars of annualized revenues 47 00:02:15,320 --> 00:02:18,840 Speaker 1: based on July, you'd suddenly be more concerned, and quite 48 00:02:18,840 --> 00:02:22,520 Speaker 1: concerned indeed, about the volatility of this box business. In 49 00:02:22,600 --> 00:02:25,720 Speaker 1: simpler terms, annualized revenue is a deliberate attempt to hide 50 00:02:25,800 --> 00:02:30,119 Speaker 1: something or mislead someone. Nowhere has this been more obvious 51 00:02:30,280 --> 00:02:32,640 Speaker 1: than an open AI's recent leak of their twelve billion 52 00:02:32,680 --> 00:02:36,000 Speaker 1: dollars in annualized revenue, which the information who I genuinely 53 00:02:36,040 --> 00:02:39,400 Speaker 1: like and appreciate reported as somehow indicative of open ai 54 00:02:39,560 --> 00:02:41,640 Speaker 1: being on track to make their twelve point seven billion 55 00:02:41,680 --> 00:02:44,720 Speaker 1: dollars in revenue for twenty twenty five. Here's the thing. 56 00:02:45,200 --> 00:02:48,079 Speaker 1: Twelve billion dollars in annualized revenue means one billion dollars 57 00:02:48,080 --> 00:02:51,560 Speaker 1: in revenue in one month, which is genuinely a milestone, 58 00:02:51,919 --> 00:02:54,400 Speaker 1: kind of impressive, at least it would be if open 59 00:02:54,440 --> 00:02:57,280 Speaker 1: ai didn't burn up puts of eight billion dollars this year, 60 00:02:57,639 --> 00:02:59,520 Speaker 1: even though I think they're probably going to burn more 61 00:02:59,520 --> 00:03:02,919 Speaker 1: than that. But anyway, back in May, CNBC reported the 62 00:03:02,960 --> 00:03:05,800 Speaker 1: open ai was up ten billion dollars in annualized revenue, 63 00:03:05,800 --> 00:03:08,560 Speaker 1: meaning eight hundred and thirty three million dollars. And back 64 00:03:08,560 --> 00:03:10,680 Speaker 1: in December twenty twenty four they were at five point 65 00:03:10,720 --> 00:03:14,200 Speaker 1: five billion dollars in annualized revenue. And that's the thing. 66 00:03:14,400 --> 00:03:16,079 Speaker 1: And by the way, five point five works out to 67 00:03:16,080 --> 00:03:18,240 Speaker 1: about four hundred and fifty eight million dollars in the month. 68 00:03:19,040 --> 00:03:21,919 Speaker 1: But that doesn't mean that they're going to hit twelve 69 00:03:21,919 --> 00:03:24,400 Speaker 1: point seven billion dollars. In fact, best case scenario, this 70 00:03:24,440 --> 00:03:27,520 Speaker 1: means that open ai has, by my calculations, made just 71 00:03:27,639 --> 00:03:30,560 Speaker 1: over five billion dollars in total revenue through the end 72 00:03:30,560 --> 00:03:32,720 Speaker 1: of July twenty twenty five. That's in the first seven 73 00:03:32,720 --> 00:03:36,520 Speaker 1: months of the year. So anytime you see annualized revenue 74 00:03:36,560 --> 00:03:39,320 Speaker 1: you should immediately be suspicious of whoever is leaking it. 75 00:03:39,680 --> 00:03:41,880 Speaker 1: Open ai has likely leaked this number as a means 76 00:03:41,920 --> 00:03:44,320 Speaker 1: of making people believe that they'll make twelve billion dollars 77 00:03:44,360 --> 00:03:46,200 Speaker 1: or more. In twenty twenty five, they projected to do 78 00:03:46,320 --> 00:03:49,160 Speaker 1: twelve point seven billion dollars, which would be a remarkable 79 00:03:49,240 --> 00:03:53,040 Speaker 1: number that they're not even halfway towards reaching, despite what 80 00:03:53,280 --> 00:03:57,080 Speaker 1: some people might be reporting. Now another company playing silly 81 00:03:57,080 --> 00:03:59,960 Speaker 1: buggers with di figurers, of course, Anthropic, who have leaked 82 00:04:00,160 --> 00:04:03,240 Speaker 1: so far this year, every single month of every single 83 00:04:03,240 --> 00:04:05,960 Speaker 1: month other than April. It's kind of crazy. And they 84 00:04:06,400 --> 00:04:09,040 Speaker 1: but they started in January when they leaked that they'd 85 00:04:09,080 --> 00:04:11,880 Speaker 1: hit a billion dollars in annualized revenue, and then they 86 00:04:11,920 --> 00:04:14,040 Speaker 1: are one point four billion dollars in February, and then 87 00:04:14,040 --> 00:04:16,719 Speaker 1: two billion dollars annualized in March, and then three billion 88 00:04:16,760 --> 00:04:19,640 Speaker 1: dollars annualized in May, and then four billion dollars annualized 89 00:04:19,680 --> 00:04:22,599 Speaker 1: in June. One might believe this means that Anthropic will 90 00:04:22,600 --> 00:04:25,080 Speaker 1: make four billion dollars this year, but the actual numbers 91 00:04:25,120 --> 00:04:27,160 Speaker 1: work out to the company making no more than one 92 00:04:27,160 --> 00:04:30,279 Speaker 1: point one five billion dollars through the end of June. 93 00:04:30,640 --> 00:04:32,479 Speaker 1: And if you want to check my maths, you can 94 00:04:32,720 --> 00:04:35,400 Speaker 1: billion dollars of ar will be eighty three billion, one 95 00:04:35,440 --> 00:04:38,960 Speaker 1: point four one one six. Two billion would be one 96 00:04:39,000 --> 00:04:42,400 Speaker 1: sixty six. Then May would be three billion annualized, so 97 00:04:42,440 --> 00:04:44,839 Speaker 1: it it'd be two hundred and fifty million, and four 98 00:04:44,880 --> 00:04:47,240 Speaker 1: billion ar would be three hundred and thirty three million. 99 00:04:47,480 --> 00:04:49,839 Speaker 1: I'm saying this with the person that emails me is like, 100 00:04:50,440 --> 00:04:54,840 Speaker 1: what are their numbers? Anyway? These are obfiscations, these are intentional. 101 00:04:55,040 --> 00:04:57,480 Speaker 1: Anthropic has made no more than one point one five 102 00:04:57,520 --> 00:05:01,200 Speaker 1: billion dollars through the end of June. Is not going 103 00:05:01,240 --> 00:05:03,960 Speaker 1: to get them to four billion dollars without something ridiculous. Yeah. 104 00:05:03,960 --> 00:05:07,120 Speaker 1: I saw a Bloomberg reporter, love your ed, but the 105 00:05:07,440 --> 00:05:11,679 Speaker 1: saying maybe they'll hit nine billion dollars in annualized revenue 106 00:05:11,720 --> 00:05:15,200 Speaker 1: this year as an absolute joke. Open Ai barely hit 107 00:05:15,279 --> 00:05:18,440 Speaker 1: then they have all the it's just it's all deliberate 108 00:05:18,440 --> 00:05:20,839 Speaker 1: and it's all intentional. It's also that you kind of 109 00:05:21,600 --> 00:05:24,039 Speaker 1: watch the mouth are not the hands. It's so that 110 00:05:24,080 --> 00:05:27,080 Speaker 1: you don't think too hard, because when you look at 111 00:05:27,080 --> 00:05:29,920 Speaker 1: the actual numbers, open Ai has only made like five 112 00:05:29,960 --> 00:05:33,000 Speaker 1: point five billion dollars this year. That's not They're not 113 00:05:33,120 --> 00:05:35,520 Speaker 1: even to the lofty goals they have. They're not even 114 00:05:35,560 --> 00:05:38,320 Speaker 1: halfway there, and Anthropics are one point one to five billion. 115 00:05:38,560 --> 00:05:41,240 Speaker 1: These are not huge amounts, and they're dwarfed by the 116 00:05:41,240 --> 00:05:43,120 Speaker 1: fact that each I think Open Ai is going to 117 00:05:43,160 --> 00:05:46,240 Speaker 1: burn eight to probably fifteen billion dollars this year and 118 00:05:46,279 --> 00:05:49,000 Speaker 1: that's after revenue, and Anthropic I think they're three to 119 00:05:49,080 --> 00:05:53,200 Speaker 1: five billion dollars. It's an absolute joke. But you, you, 120 00:05:53,360 --> 00:05:55,520 Speaker 1: the listener, I want you to know that all of 121 00:05:55,560 --> 00:05:58,600 Speaker 1: this is intentional, as Anthropic is currently raising around as 122 00:05:58,680 --> 00:06:01,200 Speaker 1: large as five billion dollars from the bone saw capital 123 00:06:01,240 --> 00:06:03,560 Speaker 1: of the world, and the media is helping by obfuscating 124 00:06:03,560 --> 00:06:06,359 Speaker 1: their actual revenue. Opening Eyes doing the same thing. The 125 00:06:06,360 --> 00:06:09,479 Speaker 1: Information reported they're at seven point five billion dollars of 126 00:06:09,520 --> 00:06:12,599 Speaker 1: the remaining well thirty billion that they actually have to raise, 127 00:06:12,640 --> 00:06:16,680 Speaker 1: with soft Bank covering the rest. They're trying to hoodwink people. 128 00:06:17,240 --> 00:06:19,960 Speaker 1: And I want you, the listener to know better. Agree 129 00:06:19,960 --> 00:06:22,360 Speaker 1: with me, disagree with me. I've much rather you knew 130 00:06:22,400 --> 00:06:25,400 Speaker 1: what these terms mean and why they're being used. And yes, 131 00:06:25,520 --> 00:06:28,240 Speaker 1: there's going to be someone who says, annualize there's a 132 00:06:28,240 --> 00:06:31,520 Speaker 1: fine term. People use it ethically, and that's true. You 133 00:06:31,560 --> 00:06:34,960 Speaker 1: can use this term ethically. You can use this to say, yeah, 134 00:06:35,000 --> 00:06:37,160 Speaker 1: if things keep up at this pace, will be at this. 135 00:06:37,680 --> 00:06:40,760 Speaker 1: That's not what these fuckers are doing. They're doing this 136 00:06:40,760 --> 00:06:43,200 Speaker 1: as a means of They're selling it to people that 137 00:06:43,279 --> 00:06:45,600 Speaker 1: aren't going to think about it too hard, so that 138 00:06:45,600 --> 00:06:48,400 Speaker 1: those people don't think about it much more than thinking, oh, 139 00:06:48,520 --> 00:06:51,120 Speaker 1: open AA is going to make so much bloody money. 140 00:06:51,400 --> 00:06:55,360 Speaker 1: Oh when Throbic's going to do that too. And it sucks. 141 00:06:55,560 --> 00:06:59,960 Speaker 1: It sucks because this is being used to make people richer, 142 00:07:00,120 --> 00:07:03,000 Speaker 1: to make Dario Amma Day and Sam Clammy Sam Altman 143 00:07:03,520 --> 00:07:07,320 Speaker 1: more and more money, and it's really sad. It's sad, 144 00:07:07,360 --> 00:07:11,240 Speaker 1: but it's also a sign that things are kind of deteriorating. 145 00:07:11,320 --> 00:07:13,280 Speaker 1: And yes, there are going to be people that say, well, 146 00:07:13,320 --> 00:07:17,200 Speaker 1: the revenue's going up, that means things are going well. Ah. 147 00:07:17,440 --> 00:07:19,600 Speaker 1: In a situation where things are going well, these companies 148 00:07:19,600 --> 00:07:22,200 Speaker 1: would talk about the real revenues. They wouldn't be playing 149 00:07:23,080 --> 00:07:27,600 Speaker 1: weird card games and weird shuffling. Shuffling. Though, now, as 150 00:07:27,640 --> 00:07:29,600 Speaker 1: I'm saying this is forgetting what you call the game 151 00:07:29,640 --> 00:07:31,920 Speaker 1: with the cup on the ball, Someone's going to email 152 00:07:31,960 --> 00:07:34,200 Speaker 1: me and make fun of me for this. I'm stupid. 153 00:07:34,240 --> 00:07:37,000 Speaker 1: You don't get to do that. But in all seriousless 154 00:07:37,040 --> 00:07:39,600 Speaker 1: they're doing tricksy things and they're doing it because they're 155 00:07:39,800 --> 00:07:42,720 Speaker 1: trying to raise money. It's a classics windle, and it 156 00:07:42,760 --> 00:07:45,320 Speaker 1: pisses me off to see because people are going to 157 00:07:45,360 --> 00:07:47,680 Speaker 1: think that this is a victory for the AI boom, 158 00:07:47,880 --> 00:07:50,320 Speaker 1: when in reality they're trying to hide something a little 159 00:07:50,320 --> 00:07:53,280 Speaker 1: more grim than that, which is revenues are nowhere near 160 00:07:53,320 --> 00:07:57,440 Speaker 1: their arrs they wish they were. And indeed, I think 161 00:07:57,480 --> 00:07:59,120 Speaker 1: in the next six to twelve months we're going to 162 00:07:59,160 --> 00:08:02,360 Speaker 1: see this sour or somewhat. I look forward to telling you, 163 00:08:02,400 --> 00:08:04,760 Speaker 1: regardless of what happens, what's actually happening.