Speaker 1: All Zone Media. Hello, Hi, welcome to Better Offline. I'm
Speaker 1: your host ed ze Trunk. For weeks now, I've been
Speaker 1: writing and speaking about what I believe to be an
Speaker 1: inevitable and possibly imminent collapse in generative AI. In the
Speaker 1: last episode, I talked about the early signs of disquire,
Speaker 1: particularly among investors, were growing increasingly uncomfortable about the many
Speaker 1: billions being spent by Microsoft, Google and others to support
Speaker 1: an industry that does not appear to make anyone much
Speaker 1: money and costs so much more than it makes. And
Speaker 1: I believe that this is a moment for the tech
Speaker 1: industry to atone and to learn and to change in
Speaker 1: the wake of what I think is an a one
Speaker 1: hundred billion dollar group psychosis, a big, nasty waste that
Speaker 1: I will now get to in agonizing detail. Generative AI
Speaker 1: was always unsustainable, and it was always dependent on reams
Speaker 1: of training data that necessitated stealing from millions of people.
Speaker 1: With its utility vague and its ubiquity overstated, the media
Speaker 1: and the markets have tolerated the technology that, while not
Speaker 1: inherently bad, was implemented in a way so nefariously and
Speaker 1: wastefully that it necessitated theft billions of dollars in cash
Speaker 1: and the double digit percent increase in Hyperscaler's emissions. The
Speaker 1: desperation for the tech industry to have something new has
Speaker 1: led to such ruinous success, and if this bubble collapses,
Speaker 1: it'll be a result of a shared myopia in both
Speaker 1: big tech dimwitz like satch in Adela and sundarp Isshai
Speaker 1: and Silicon Valley power players like Reid Hoffman, Sam Altman,
Speaker 1: Bryan Chesky and of course Mark Hantreeson. The people propping
Speaker 1: up this bubble no longer experience human problems, and thus
Speaker 1: I don't think they can be trusted anymore to solve them. Ultimately,
Speaker 1: this is a story of waste, ignorance and greed, of
Speaker 1: wasted money and have wasted opportunity, because let's face it,
Speaker 1: a fraction of the money spent by Microsoft alone chasing
Speaker 1: the generative AI bullshit machine could have been spent in
Speaker 1: many other profitable and societally useful ways. And it's a
Speaker 1: story of tech executives that are so desperate to own
Speaker 1: the future, but are so disconnected from actually building it.
Speaker 1: And this arms race is a monument to the lack
Speaker 1: of curiosity rife in the highest ranks of the tech industry.
Speaker 1: They refuse to do the hard work to create, to
Speaker 1: be curious, to be excited about the things they're building
Speaker 1: and the people they're serving, And so they spent billions
Speaker 1: of dollars to eliminate the risk they even might have
Speaker 1: to do any of those things. Ever, again, they just
Speaker 1: wanted the machine to do it for them. Had Sandhar
Speaker 1: Pishai looked at Microsoft's investment in open Ai in twenty
Speaker 1: nineteen and said, nah, no, thanks, which you did with
Speaker 1: the metavers. By the way, it's likely that none of
Speaker 1: this would have happened. But a combined hunger for growth
Speaker 1: and a lack of any natural predators means that big
Speaker 1: tech no longer knows how to make a competitive or
Speaker 1: useful product, and thus they can only see what their
Speaker 1: competitors are doing and say, ah, yeah, yeah, that's what
Speaker 1: it is. That's what we're all doing now. Before the
Speaker 1: AI hype boom, Mark Zuckerberg was once so disconnected from
Speaker 1: Meta's work on AI that he literally had no idea
Speaker 1: what breakthrough Sandar Peshai had complimented him on in a
Speaker 1: meeting they had together mere months before. Meta's own obsession
Speaker 1: with AI truly began, and none of these guys seem
Speaker 1: to have any idea what's going on and why are
Speaker 1: they having these chummy little meetings. These aren't competitors, they're
Speaker 1: co conspirators. They're just people meeting to say, what's the
Speaker 1: latest con we're all jumping on. What's the latest market
Speaker 1: that we're all going to monopolize. I can't wait for
Speaker 1: the monopoly episode. And these companies, they're too large, they
Speaker 1: are too unwieldy, they're too disconnected, and they do too much.
Speaker 1: They lack the focus that makes a truly competitive business,
Speaker 1: and they lack any kind of cohesive culture, the kinds
Speaker 1: that are built on solving real human problems or real
Speaker 1: business problems that humans have. These are not companies built
Speaker 1: for anything other than growth. And none of them, not
Speaker 1: even Apple, have built something truly innovative and life changing
Speaker 1: in the best part of a decade, with the exception
Speaker 1: perhaps of maybe contactless mobile payments, which are actually really cool.
Speaker 1: These companies are run by rot economists, and they have
Speaker 1: these disconnected, chaotic cultures full of these little fiefdoms. We're
Speaker 1: established technologists are rap fuck by management goons when they
Speaker 1: try to make their products better instead of making them
Speaker 1: more money, and the depressing thing is that they really
Speaker 1: don't need to be that way. Seriously, there's a world
Speaker 1: where these companies just make a billion dollars a quarter
Speaker 1: and they don't even have to fire people every time
Speaker 1: they do so. And there's one where these companies actually
Speaker 1: solve real problems too, and then they still make incredibly
Speaker 1: large amounts of money for doing so. The problem is
Speaker 1: they're greedy. They run by greedy idiots, and they're addicted
Speaker 1: to growth and are incapable of doing anything other than
Speaker 1: following what the last guy did. And what's funny is
Speaker 1: this is very Jack Welch from the Shareholder Supremacy. They
Speaker 1: just see a market and like, what if we put
Speaker 1: money in that? Can we take the money from the market.
Speaker 1: That's all they can do. Now. Sundarpishi is a terrible executive,
Speaker 1: but he's a really good Jack Welch clone. And by
Speaker 1: the way, if you don't know who Jack Welch is,
Speaker 1: please go back to the Shareholder Supremacy episode. It's important
Speaker 1: because you really need to see who fucked all this up. Okay,
Speaker 1: so where were we what happens next? Well, there's enough
Speaker 1: money sloshing around right now that open ai probably can
Speaker 1: be bankrolled a little further, and like I've mentioned in
Speaker 1: the previous episode, it'll need to be is it needs
Speaker 1: another five billion dollars, if not ten billion dollars to
Speaker 1: make it to the end of twenty twenty five, That
Speaker 1: very large amount of money's going to have to come
Speaker 1: from somewhere, and I think that they're going to be
Speaker 1: reduced to go into the Kingdom of Saudi Arabia or
Speaker 1: soft bank, or probably taking on private debt, and that
Speaker 1: last one, I'm just really not sure is going to happen.
Speaker 1: And those suitors they're not going to be quite as
Speaker 1: generous with their terms and they won't give them a
Speaker 1: devil's deal like Microsoft did, which, as I previously argued
Speaker 1: across multiple newsletters and podcasts, effectively owns all of open
Speaker 1: AI's research and intellectual property. Someonlman is a terrible deal maker.
Speaker 1: By the way, while the venture capital system theoretically could
Speaker 1: afford to prop up open ai for another year or so,
Speaker 1: they're limited partners. Who are the people funding the vcs.
Speaker 1: They're probably still a little sore from twenty twenty one
Speaker 1: and twenty twenty two, when massive amounts of money went
Speaker 1: into nothing, not to mention the sudden and rapid rise
Speaker 1: and interest rates, and they'll probably bulk at the amounts
Speaker 1: they can need. We're talking multiple, probably ten one hundred
Speaker 1: million dollar checks or two hundred million dollar checks. Open
Speaker 1: ai needs so much more money than the VC system
Speaker 1: is ready to give to one company, and it really
Speaker 1: will only take one person blinking to create a panic
Speaker 1: in both the public and the private markets. Open Ai
Speaker 1: may still be able to raise money, but investors have
Speaker 1: no real path to liquidity as open ai most assuredly
Speaker 1: will not be able to go public, and in the
Speaker 1: process of investing these vcs will likely find out exactly
Speaker 1: how bad things are there. While there is a chance
Speaker 1: we get one more round, kind of a dead cat
Speaker 1: bounce situation, it's honestly a little tough to imagine how
Speaker 1: it keeps going even if open ai raises another ten
Speaker 1: billion dollars. But how does the collapse happen? Well, as
Speaker 1: I said last time, there's the obvious one open ai
Speaker 1: or Anthropic shuts down, but I think that them shutting
Speaker 1: down is very unlikely based on the corporate structure open
Speaker 1: AI or Anthropic collapsing will be more like the character
Speaker 1: dot Ai deal an attempt to hide the ugly mess,
Speaker 1: where a big tech firm absorbs them in and just
Speaker 1: goes there. Now the AI division. You saw a version
Speaker 1: of this, by the way, when Sam got fired from
Speaker 1: open Ai and he was like the head of AI
Speaker 1: at Microsoft for two minutes. But if I had to guess,
Speaker 1: Anthropics most likely home would be with Amazon, which completed
Speaker 1: its four billion dollar investment into the company earlier this
Speaker 1: year and also has a profit share with them. In
Speaker 1: any case where this happens, even if the entity Anthropical
Speaker 1: or open Ai keeps going without the key people in
Speaker 1: power such as Anthropic CEO Dario Omdey going in house
Speaker 1: Amazon or Google again, it doesn't really matter. They will
Speaker 1: eventually die and raising around for a generative AI company
Speaker 1: in this market, it's likely going to be quite difficult,
Speaker 1: if not impossible. The narrative shifted, and the people with
Speaker 1: the money to invest don't really know what they're talking
Speaker 1: about technologically speaking, so they're investing based on how everybody
Speaker 1: else is feeling, what the vibes are in the air,
Speaker 1: what they sniff each other's asses, and they say, oh, fuck,
Speaker 1: is AI good or bad? Now? I don't really know,
Speaker 1: And when we really strip away everything. We strip away
Speaker 1: all of the lies and the marketing, and you just
Speaker 1: get down to incentives and you think, well, they just
Speaker 1: want money, right, If that's all they want, that really
Speaker 1: is just the problem, because fundamentally this tech really isn't
Speaker 1: that exciting. I'm sorry it isn't. Generative AI is not
Speaker 1: the AI from Iron Man. It is not the magical
Speaker 1: future computer. It's a generative AI. That picture of Garfield
Speaker 1: with a gun or Scooby Doo sitting on top of
Speaker 1: a rocket, those are aren't useful. That's not the future.
Speaker 1: That's just image creation. I'm sure some very insufferable freak
Speaker 1: is going to email me after this and be like, wow,
Speaker 1: I'm set up generative AI in all of these ways. Mate.
Speaker 1: I appreciate your time, Thank you for emailing me. I'm
Speaker 1: sure you don't even sound like that. The point I'm
Speaker 1: not making is that this is useless. The point I'm
Speaker 1: making is it is not even in the same galaxy
Speaker 1: of usefulness that it requires to go forward to be
Speaker 1: worth all of this money. And on top of that,
Speaker 1: it's boring. It's so goddamn boring. It's so I am
Speaker 1: so bored. It doesn't even do my boring business stuff.
Speaker 1: I have a pr business in my day job, but
Speaker 1: I would love a dn ky AI to move my
Speaker 1: shit around. It can't even do that. I want it
Speaker 1: to help me, and it won't do it. And if
Speaker 1: you say ed, you're a stupid idiot, You're a moron.
Speaker 1: You have the brain of a bird or a dog
Speaker 1: or a dog bird hybrid. You drool all the time
Speaker 1: because your brain cannot keep your mouth closed. All of
Speaker 1: these things are true, but it's not my job to
Speaker 1: sell Generative AI to myself. It's the companies. And the
Speaker 1: idea of a super smart friend that knows everything about
Speaker 1: me is exciting, don't get me wrong. As is the
Speaker 1: idea of making away drudgery all of my spreadsheets and documents,
Speaker 1: for example. But Generative AI does not do these things,
Speaker 1: putting aside any personal feelings I may have. It has
Speaker 1: not changed my life or even like slightly improved it.
Speaker 1: And I'm a guy who loves using tech, and he
Speaker 1: is willing to put hours hours into finding solutions to
Speaker 1: automate or mitigate very small problems that I only really
Speaker 1: deal with occasionally. I'm not lazy, I'm efficient, at least
Speaker 1: that's what I tell my doctor, and I don't know
Speaker 1: a single person that has meaningfully changed their workflow or
Speaker 1: life as a result of generative AI, outside of being
Speaker 1: able to integrate it to speed up some part of
Speaker 1: their already existing system. I've literally never met or spoken
Speaker 1: to someone other than one guy on Twitter who has
Speaker 1: talked about using this every day in a way that
Speaker 1: truly changes things, and I should. As an aside, I
Speaker 1: do occasionally get someone on Twitter and it's always a
Speaker 1: blue check and they always say, oh, yeah, well, it's
Speaker 1: changed the way our code changy allows me to code
Speaker 1: so much faster. They then get eighteen responses of someone saying,
Speaker 1: I'm an engineer and this is very unstable, and it
Speaker 1: really feels like generative AI is just catnip for the
Speaker 1: truly incurious. I don't want to say lazy, because I
Speaker 1: think everyone is kind of lazy on some level. We
Speaker 1: all want things to be easier, we really do. And
Speaker 1: there is, when it comes to creativity, a degree where
Speaker 1: the problems you face making something are what makes it
Speaker 1: what it is. The struggles I've had writing and reading
Speaker 1: this script are what make me a better orator or
Speaker 1: a better writer. That process is important, but it's hard,
Speaker 1: and it's annoying, and you have to suck a few times,
Speaker 1: you have to write crap, You have to retake things
Speaker 1: three or four times, and your poor editor, Mattasowski sitting
Speaker 1: there going, mate, you've reread that paragraph three times, you
Speaker 1: messed the same word up. But it's fun. This is
Speaker 1: what curiosity is. And I don't think these people have it.
Speaker 1: These people don't want to solve software problems. They want
Speaker 1: to type a thing into a computer, hit enter and
Speaker 1: then the problem is solved, never understanding why they did it.
Speaker 1: And this isn't the same thing as calculators, by the way,
Speaker 1: I'd argue software development as are, but that's a separate thing.
Speaker 1: And ultimately, this whole movement just doesn't even feel real.
Speaker 1: Nothing about it really felt real. It's just a farce.
Speaker 1: It costs so much money, and it's still costing so
Speaker 1: much money today, and the promises of artificial intelligence will
Speaker 1: not be kept through the pursuit of generative AI. As
Speaker 1: generative AI is a dead end technology that has peaked,
Speaker 1: and it costs too much both financially and socially to
Speaker 1: keep it going or to justify its continued existence. There's
Speaker 1: no heroic story here. There are a few people who
Speaker 1: are sincerely cheering for these companies to win, those who,
Speaker 1: of course don't have a tangible financial term banking on
Speaker 1: the value of open AI or they have so one
Speaker 1: of the one hundred different guys claiming the Heaven AI newsletter,
Speaker 1: and let's be honest, nobody really loves this, do they.
Speaker 1: Nobody really uses CHATGBT and has that oh shit moment
Speaker 1: you got when you first use an iPhone, when you're
Speaker 1: first sent a file with Dropbox, that those little times
Speaker 1: when you really fell in love with technology again and again.
Speaker 1: And there's no magic in it. There's no whimsy, there's
Speaker 1: no joy in any of these larger language models, and
Speaker 1: they're not really helping enough people to make it worthwhile.
Speaker 1: I nearly said they're not helping anybody. But there are users,
Speaker 1: there are people who actually care about this. How much
Speaker 1: do they really care? And does any of that outweigh
Speaker 1: the costs and the environmental damage. The answer is no,
Speaker 1: by the way, and their peddlers always demand that we
Speaker 1: just give them another minute as they burn billions of
Speaker 1: dollars to get nowhere. And the general public has known
Speaker 1: the problems and limitations of generative AI for months. I
Speaker 1: constantly get emails from better offline listeners, artists, engineers, teachers, massionists,
Speaker 1: poison makers, journalists, consultants, cleaners, and copy editors, all saying
Speaker 1: the same thing. This all seems like a croc of shit,
Speaker 1: and the outputs are terrible because people who actually make
Speaker 1: things respect the output and the production itself, and they
Speaker 1: can see how bad this stuff is. Generative AI was
Speaker 1: also not peddled as a solution to any problem other
Speaker 1: than tech's lack of a hypergrowth market, and it's the
Speaker 1: kind of bet that only a tech industry devoid of
Speaker 1: natural selection truly builds. None of these big tech firms,
Speaker 1: and I'd argue venture capitalists really take risks anymore because
Speaker 1: they don't want to end up looking stupid, and they
Speaker 1: want to follow each other. And regular people know. They
Speaker 1: know Google is worse, they know Facebook is bordering unusable,
Speaker 1: They know that generative AI does not do anything obviously
Speaker 1: useful at scale, and that these companies have never made
Speaker 1: more money than they're making today as they fuck the
Speaker 1: customer again and again. And I believe we're in the
Speaker 1: beginnings of a true revolt against big tech and their
Speaker 1: rotten little promises, their lucks run out, and these formless
Speaker 1: private equity vehicles dressed up as software companies are no
Speaker 1: longer bred to create new things. We're all sitting and
Speaker 1: staring at innovation's corps, stabbed full of holes by McKinsey
Speaker 1: veterans and slimy con artists, and it's time for men
Speaker 1: like Sandar Pashai and Sachin Adela to atone because their
Speaker 1: big bet looks like a gigantic waste, one so obviously
Speaker 1: rotten from the beginning that they've never been able to
Speaker 1: tell anyone that they never had a plan beyond throw
Speaker 1: money at it and eventually it will do something, or
Speaker 1: we will do this as long as the other guy
Speaker 1: does it too. This is a big, ugly mess, a
Speaker 1: monument to the excess that burned more than two hundred
Speaker 1: billion dollars and allowed equally lazy and uncreative people to
Speaker 1: replace real people with shitty facsimiles that are just good enough.
Speaker 1: But do you want to be more than good enough?
Speaker 1: Do you want to excel in all things as I
Speaker 1: demand of all my listeners, then buy one of the
Speaker 1: following products, which, as usual, will reflect my exact beliefs,
Speaker 1: wants and needs and we're back, and now that I'm back,
Speaker 1: I want to say something to my peers in the media.
Speaker 1: It's time for a fundamental re evaluation of how we
Speaker 1: treat big tech, and it's time to question the promises
Speaker 1: of those who sought to peddle this generative nonsense. It's
Speaker 1: no longer time to ask Mark Zuckerberg about his chain.
Speaker 1: It's time to ask him how long he intends to
Speaker 1: burn tens of billions of dollars on nothing, and why
Speaker 1: the website that made him so many billions of dollars
Speaker 1: is falling apart at the seams, pumped full of content
Speaker 1: created by the big, stupid bullshit machine he's helped popularize.
Speaker 1: It's no longer time to gingerly cool about Sundar pishe Oh,
Speaker 1: he's looking at my smartphone. It's time to ask him
Speaker 1: how Gemini is going to make a profit and what
Speaker 1: it is that it will do, and press him again
Speaker 1: and again and again and again and again until he
Speaker 1: talks about why Google Search is so bad. Now, it's
Speaker 1: no longer time to let Sach and Adela oscillate from
Speaker 1: referendums on capitalism twenty twenty to laying off tens of
Speaker 1: thousands of people in twenty twenty three. It's time to
Speaker 1: ask him if he's prepared to bankroll open AI to
Speaker 1: the tune of thirty billion dollars and refuse to leave
Speaker 1: the conversation without committing to a number. These men have
Speaker 1: burned hundreds of billions of dollars on a machine that
Speaker 1: boils lakes to make the most mediocre version of the past.
Speaker 1: These men are not supporting innovation. They're aggressive forces, too
Speaker 1: scared to piss off the markets to actually change the world,
Speaker 1: domesticated animals that fear no natural predators and thus have
Speaker 1: no hunger for something new. They propped up generative AI
Speaker 1: because their followers rather than leaders that have paid hundreds
Speaker 1: of millions of dollars to empower a nihilistic kind of
Speaker 1: growth capitalism that dresses up monopolies as disruption. They have
Speaker 1: propped up generative AI because building the future is hard
Speaker 1: and expensive and involves taking risks and making sure that
Speaker 1: you have a culture that doesn't expect the answer to
Speaker 1: a question in the fastest amount of time possible. Innovation
Speaker 1: is an efficient. It's lossy. It has indeterminate time scales
Speaker 1: and requires both capital investment and space required for great
Speaker 1: people to think of actual solutions to problems that involve
Speaker 1: them talking to and caring about the lives of real people.
Speaker 1: Fire satch In the Dellar of Microsoft, Fire sund Arpishai
Speaker 1: of Google, and work out a way to fire Mark
Speaker 1: Zuckerberg of Meta. These men are unworthy. They do not
Speaker 1: find any of this exciting or meaningful. They have no curiosity.
Speaker 1: They're private equity guys dressed up as software guys. They
Speaker 1: are con artists. They are running their products into the ground,
Speaker 1: and they're making more money than ever. Big Tech has
Speaker 1: been overcome with narcissism and nihilism, and it must change
Speaker 1: its ways to not eventually face perdition. I am fucking serious.
Speaker 1: Do you think these people have a backup plan? Do
Speaker 1: you think they've burned all of this money on such
Speaker 1: a mediocre and wasteful solution because they've got other better ideas? No,
Speaker 1: they're all out. Big Tech does not have another thing.
Speaker 1: Google doesn't have any ideas. Meta is so out of
Speaker 1: ideas that they change their name to another worse idea,
Speaker 1: one associated with Mark Zuckerberg burning forty five billion dollars
Speaker 1: for no reason. In fact, there's a Yahoo Finance story
Speaker 1: about the fact that all of that money that's allegedly
Speaker 1: going into the metaverse is just organizational loss. It's a
Speaker 1: horribly run place where the management constantly changes. These goddamn people.
Speaker 1: And Amazon, they've never really been in the ideas business.
Speaker 1: They're the founder of a cloud storage cartel with Microsoft,
Speaker 1: Oracle and Google. They work together to set the prices.
Speaker 1: Everyone wins except anyone who isn't them. And big tech
Speaker 1: is lazy because they've all agreed to compete only a
Speaker 1: little bit, never coloring too far out of the lines
Speaker 1: because doing so might expose them to an actual risk,
Speaker 1: like regulation or having to hire people that build new things,
Speaker 1: versus finding increasingly more annoying ways to exploit their current customers.
Speaker 1: And I really am sure that there's a societal shift
Speaker 1: coming against big tech, the natural result of years of
Speaker 1: excess and bullshit of the loudest people in tech trying
Speaker 1: to convince people that a large language model that can
Speaker 1: generate texts and images that kind of suck is basically
Speaker 1: the same thing as an iPhone. I have no idea
Speaker 1: how quickly the shift comes, but it's coming. It's inevitable.
Speaker 1: This lack of big, profitable ideas will eventually lead to
Speaker 1: some sort of reckoning or collapse. In big tech, healthy,
Speaker 1: well run companies, they don't do things like this, let
Speaker 1: alone several different trillion dollar companies all bumbling into each
Speaker 1: other like the Three Stooges, billions of dollars of cash
Speaker 1: falling out of their pockets. It's an absolute disgrace. I
Speaker 1: will say, if the AI bubble really does pop, this
Speaker 1: is a great time to point and laugh. Regular people
Speaker 1: like yourself could see this was bullshit from the beginning.
Speaker 1: Most people find generative AI either briefly interesting or somewhat disgusting,
Speaker 1: and they're capable of seeing that. Stealing the entire Internet
Speaker 1: so you could spend one hundred billion dollars making a
Speaker 1: shitty version of the past is kind of a stupid idea.
Speaker 1: The utility really hasn't been there from the beginning. Describing
Speaker 1: what chat GBT is is actually kind of difficult, and
Speaker 1: any technology that's going to be worth trillions of dollars
Speaker 1: should not have the user saying, wait, what does this
Speaker 1: do exactly? And I really feel like regular people notice this.
Speaker 1: If this was as magical as it was, regular people
Speaker 1: would be lining up to use it. And while it
Speaker 1: has a lot of users. I don't know anyone who's
Speaker 1: fanatical over it other than AI fanatics. It's just very sad.
Speaker 1: But regular people aren't the only ones. And I have
Speaker 1: criticized journalists for missing this, but I want to call
Speaker 1: some people out in a good way. Economists, analysts and
Speaker 1: journalists have been saying this isn't the future, like I said.
Speaker 1: Shira a v Day in March twenty twenty three, mere
Speaker 1: months after chat GPT's launch, said it wasn't magic. For example,
Speaker 1: in the Washington Post, Shearer the Goat, Alex Kantrowitz and
Speaker 1: Douglas Gorman reported in August fifteenth to twenty twenty three
Speaker 1: that chat gpt isn't good enough to take jobs and
Speaker 1: it's unlikely to cause mass layoffs. The hot takes have
Speaker 1: run into reality a little bit early, but you're correct.
Speaker 1: Paris Mark's called the chat GPT revolution another take fantasy
Speaker 1: in July twenty twenty three, and Gary Marcus worried about
Speaker 1: Generative AI being a dud in August twenty twenty three.
Speaker 1: While this is by no means an exhaustive list, it's
Speaker 1: important to note that people have been saying this. People
Speaker 1: with big platforms and the markets chose to ignore them
Speaker 1: as an aside. A year later, when many outlets were
Speaker 1: still tripping over themselves to say that generative AI was
Speaker 1: the future. Sure A Viday of The Washington Post asked,
Speaker 1: if these chatbots are supposed to be magical, why are
Speaker 1: so many of them as dumb as rocks. It's important
Speaker 1: to call out when a national newspaper actually does the
Speaker 1: work that needs to be done to critique the powerful
Speaker 1: good works here, Open invites come on the show. At
Speaker 1: this point, it seems inevitable that the bubble will burst,
Speaker 1: that the acceleration has stopped, that the funding won't be there,
Speaker 1: and that the markets taste for the billions of dollars
Speaker 1: it's going to take to make generative AI. Some indeterminate
Speaker 1: level of better just really isn't there. By all means
Speaker 1: tell me I'm wrong. You certainly do on Twitter, and
Speaker 1: you certainly do on email. And I'd be genuinely intrigued
Speaker 1: to see how open ai wriggles out of this jam,
Speaker 1: especially because it would mean they made a meaningful product
Speaker 1: that makes money when they don't have the chips to
Speaker 1: train GPT five, a model that likely still wouldn't change
Speaker 1: the game enough to matter. I mean, what if they
Speaker 1: have a new architecture, I guess, but I refuse to
Speaker 1: give them credit for something they haven't done yet. And
Speaker 1: in the event that Open Ai or Anthropic is able
Speaker 1: to raise again, we'll see the cycle continue another quarter.
Speaker 1: I'm confident, at which point something crazy would need to
Speaker 1: happen to make any of this worth it. If these
Speaker 1: companies can actually raise, they'll keep the bubble inflated. But
Speaker 1: it really is borrowed time. There's enough money to fund
Speaker 1: them both maybe one more time, and after that, where
Speaker 1: is the profit? Where's this going? And it's really worth
Speaker 1: considering that the narrative is bad and that there is
Speaker 1: very little that anyone can really do to change it
Speaker 1: outside of something truly incredible. These companies can play for time.
Speaker 1: Hope that satch In a Dele and sun A Peshai
Speaker 1: stan pats say that they have great faith in the
Speaker 1: promise of AI, but I really don't think they get
Speaker 1: another series of earnings for big tech like this. In
Speaker 1: many ways, though, this is sam Ortman's greatest gambit, and
Speaker 1: so much lies and Open Eyes back as a result.
Speaker 1: This is the moment we find out if Sam Altman
Speaker 1: has really got it. Whether it's worth agonizing and wringing
Speaker 1: our hands about how scary he is, or whether he's
Speaker 1: just able to hoodwink enough credulous billionaires that have their
Speaker 1: hands well did to eternal money printers. Impress me, Samuel,
Speaker 1: Wake up, Sammy, mister alt men, bring me the technology.
Speaker 1: Show me what you've got, Show me your great works,
Speaker 1: Show me the works you have buried in that non
Speaker 1: profit for profit monstrosity. You've used the trick other visionless
Speaker 1: power brokers into giving you their entire futures for a
Speaker 1: dead end friend best known for an absenteism that raankled
Speaker 1: his peers and some of the startups he was supposed
Speaker 1: to nurture. Show me what you've got, Sam, show us all.
Speaker 1: You're so smart. You allegedly can solve problems in a
Speaker 1: single phone call. Everyone talks about your big brain. What's
Speaker 1: the big play, big guy? You've got maybe six months
Speaker 1: and that's the most general estimate I've got. What is it?
Speaker 1: What's the plan? Wait? What's that? Search? GPT? Search? GPT? Sam?
Speaker 1: You're crazy, You're crazy, mister ortman. There's no way you
Speaker 1: can build a Google Search competitor. Trust me. I know, no, really,
Speaker 1: I worked it out. I spent a few hours looking
Speaker 1: up Google's financial reports over the last decade or so,
Speaker 1: trying to figure out how much the company spends and
Speaker 1: operating costs and capital expenditures just related to search alone.
Speaker 1: Due to the way Google structures it's financials, I had
Speaker 1: to make some guesses, some more informed than others. But
Speaker 1: I reckon it costs Google about thirty billion dollars a
Speaker 1: year to run their search product, and that's not taken
Speaker 1: into account the cost of the generative AI powered search summaries.
Speaker 1: All right, Sam, here we are. So that's thirty billion
Speaker 1: dollars a year to create something that can scale to
Speaker 1: the size of Google Search. And that's just the start
Speaker 1: you with me, Man, things do not get easier. You see,
Speaker 1: you're not just building a Google Search competitor with search
Speaker 1: gpt as. You also have to build the ad take
Speaker 1: infrastructure to actually make money off of it, which you
Speaker 1: are not good at. Okay, but you've got to copy
Speaker 1: features from companies like double Click, which Google acquired in
Speaker 1: two thousand and seven for three point one billion dollars
Speaker 1: and pretty much underpins the whole operation. Or maybe you
Speaker 1: have to build something like AdWords, which Google got when
Speaker 1: it acquired Applied Semantics two thousand and three. You will
Speaker 1: need something like both of these, and that's going to
Speaker 1: cost you, in the best light, in the best day ever,
Speaker 1: about three billion, or you're gonna have to outsource it,
Speaker 1: which will make it worse and less profitable because outsourced
Speaker 1: companies are going to take a cut of your revenue,
Speaker 1: thus reducing your margins, which are already really bad. Then
Speaker 1: you've got to hire experienced ad personnel and use that
Speaker 1: ad tech infrastructure you built. You built that right to
Speaker 1: enter a market. Google will use their entire cartel power
Speaker 1: to kick you out of Wait what was that? Sam? Wait? What? Right? Right?
Speaker 1: You've got to make money, and ideally more of it
Speaker 1: than you spend something. As I've mentioned, you have some
Speaker 1: issues with. Like I said, Google Search costs an absolute
Speaker 1: shit toun to run thirty billion dollars easy, and that's
Speaker 1: with decades of optimization, a coding language that they invented,
Speaker 1: thousands of miles of underground cables, and decades experience in
Speaker 1: doing a thing you're just learning to do, and they
Speaker 1: have PhDs who specialize it. Wh've been at the company decades.
Speaker 1: You did all that? Whoa? Okay? Sam? I'm impressed. You're
Speaker 1: on a roll. You can do this. I believe in you,
Speaker 1: mister Altman. Now just checking, how many AD salespeople do
Speaker 1: you have? What's that? None? You don't have any ad
Speaker 1: salespeople for your search engine, Sam, You're gonna need them.
Speaker 1: Google had over thirty thousand AD salespeople before. It's the
Speaker 1: last round of layoffs. You're not gonna make this thing
Speaker 1: profitable without ads. In fact, I don't think Sam, you're
Speaker 1: gonna make this search product profitable at all. But you
Speaker 1: know what may or may not be profitable. One of
Speaker 1: our advertisers who will soon invade your living room, car,
Speaker 1: or other place you listen to podcasts filling your various
Speaker 1: crevices with commerce. Behold, they're bounty. All right, right, we're back,
Speaker 1: and I'll dispense with the sam Ormond ben so one
Speaker 1: was looking up Google's financials, As I mentioned, I was
Speaker 1: able to make a few educated guesses, and I've got
Speaker 1: a hunch that Google has about a thirty five percent
Speaker 1: profit margin, which is pretty good. But that's with over
Speaker 1: two decades of infrastructure and a near monopoly on the
Speaker 1: search market. Open Ai has none of those things. They
Speaker 1: don't really own their infrastructure at all, as I mentioned,
Speaker 1: and it's going to be relying entirely on GPT for
Speaker 1: the most part, which is insanely power and compute intensive
Speaker 1: and thus cost a lot more. And as I've said
Speaker 1: a billion times already, GPT and other transformer based architecture
Speaker 1: is deeply unprofitable, unsustainable. And that's before you even get
Speaker 1: to the hallucinations, the hallucinations that underpin your search engine.
Speaker 1: You need to be profitable, which isn't profitable. Oh boy,
Speaker 1: this is really bad for them. Assuming the bulk of
Speaker 1: the costs associated with running Google Search comes from the
Speaker 1: vast number of service required to actually power it, it's
Speaker 1: hard to imagine how anything open ai does could even
Speaker 1: ever reach a profit, even if they had the monopoly
Speaker 1: Google has. Now, I'm confident that open ai is trying
Speaker 1: to raise cap or right now on the idea that
Speaker 1: search GPT is able to create a meaningful competitor to
Speaker 1: the most profitable software business ever made, one that Google
Speaker 1: will likely protect with various monopolistic weapons like its treacher
Speaker 1: trove of patents. While the Department of Justice did just
Speaker 1: declare that Google had a monopoly over the search market,
Speaker 1: and I'll get to that in an upcoming episode. It
Speaker 1: will take years for things to move on that front,
Speaker 1: and nothing about this situation fixes any of open AI's problems.
Speaker 1: On top of that, Google spends, as I've previously mentioned,
Speaker 1: billions of dollars on hardware and property. An open ai
Speaker 1: would likely have to build infrastructure that dwarfs even the
Speaker 1: outlays of Generative AI to scale a search engine that
Speaker 1: could handle even hundreds of millions that loan the billions
Speaker 1: of people that use Google Search. It could get Microsoft
Speaker 1: to build it or lease it from the likes of Oracle,
Speaker 1: and Microsoft could probably pay for it too, but that
Speaker 1: would be another massive increase in capital expenditures at a
Speaker 1: time when the markets are waiting for the stuff to
Speaker 1: make money, rather than the companies to spend more money
Speaker 1: on it. And I also should note that Microsoft reason
Speaker 1: he described open ai as a competitor in the search business,
Speaker 1: and it's unlikely to kill bing, which has been profitable
Speaker 1: since twenty sixteen. Let's be honest, though this is all
Speaker 1: fan fection. Open ai isn't competing with Google Search. It
Speaker 1: would cost too much money, and the underlying technology is
Speaker 1: neither good enough nor efficient enough to actually support a
Speaker 1: search engine at scale, and even if it was, is
Speaker 1: it better? Probably not. What about chat? GPT says that
Speaker 1: it's going to be more reliable than Google Search, and God,
Speaker 1: all of this is such a boring fucking face. We're
Speaker 1: not watching startups mess around Silicon Valley experimenting in ways
Speaker 1: to fix weird problems. We're watching big tech outsource their
Speaker 1: research and development costs to one of a few hand
Speaker 1: selected con artists that they'll drop the second that Wall
Speaker 1: Street gets pissy. Why even pretend anymore? Anthropic is propped
Speaker 1: up by Google and Amazon, who invested billions of dollars
Speaker 1: in cloud credits. Microsoft props up open Ai to the
Speaker 1: point that the Nvidia chips crisis affected here because Daddy
Speaker 1: Microsoft was buying them for open Ai to use, and Google, Amazon,
Speaker 1: and Microsoft are all making their own models, to the
Speaker 1: point that Microsoft has already reported, like I said, that
Speaker 1: they see open ai as a competitor. It's just it's
Speaker 1: just also craven. Big tech funded a cloud dependent product
Speaker 1: that costs so much more than anything else in the
Speaker 1: market based on a spacious hype about what artificial intelligence
Speaker 1: could or could not do. They do so as a
Speaker 1: means of selling a new product, one that, while not
Speaker 1: particularly useful, also means that they can charge a lot
Speaker 1: for the cloud compute service it runs on, creating demand
Speaker 1: for a product that pays them money just for existing,
Speaker 1: allowing them to vastly expand their physical data center locations,
Speaker 1: further enforcing their monopolies over the cloud storage industry. Microsoft, Google, Meta,
Speaker 1: and Amazon created a new way to turn money into
Speaker 1: more money investing in a tech that required you to
Speaker 1: pay them all a lot of money for cloud computing
Speaker 1: services to run on. Like I said, the problem, it seems,
Speaker 1: was that none of them were willing to consider a
Speaker 1: world where this stuff never really turned into anything remarkable
Speaker 1: other than in its waste. And a lack of creativity
Speaker 1: in the tallest towers of the valley in Redmond has
Speaker 1: allowed the richest men in the industry to be conned
Speaker 1: by a snake oil machine that loses billions of billions
Speaker 1: of dollars. To be clear, there's nothing wrong on its
Speaker 1: face inherently with generative AI. It does interesting things with documents,
Speaker 1: and I fully believe there'll be some low five version
Speaker 1: of generative AI that plugs around silently once the hyperscalers
Speaker 1: piss off. My problem is that it's so horribly wasteful
Speaker 1: to put all of this money into these large language models,
Speaker 1: the ones that steal everything, that require so much energy
Speaker 1: and create so little in return. Now there reason not
Speaker 1: brought up previously. The whole calculation of open AI needing
Speaker 1: five to ten billion dollars to survive is because I
Speaker 1: wanted to make it clear how expensive them staying in places.
Speaker 1: That is the money they will need to continue building
Speaker 1: the thing they are doing today. They don't have anything
Speaker 1: in reserve. I am confident about it. Maybe they can survive,
Speaker 1: Maybe they can surprise me. Maybe that can happen, But
Speaker 1: I just don't really see it happening. Greg Brockman's gone,
Speaker 1: and I mean, he was just another non technical guy.
Speaker 1: What's going to happen. You think Mirror Marat's is going
Speaker 1: to come up with something, You think Sura is going
Speaker 1: to do it. No, they don't have anything. And I
Speaker 1: realize it's so strange to say this, especially if you're
Speaker 1: a member of the media listening to this. I know
Speaker 1: it's strange to accept this. But what if they're just
Speaker 1: full of shit? What if this is the best they've got?
Speaker 1: How do we deal with this? And I think we
Speaker 1: start by accepting that all of this was completely and
Speaker 1: utterly ridiculous. We live in incredible times. We're at a
Speaker 1: boiling point in the tech industry's history where these sins
Speaker 1: of excess and this total lack of vision of crippled
Speaker 1: big tis ability to make new things. Things have been
Speaker 1: too easy, too comfortable, and too frictionless for too long
Speaker 1: for people like Sundhar Peshai and Sachinidella, and even people
Speaker 1: like Larry Page and Sergey Brin, who are the only
Speaker 1: two people who can fire Sandar from Google. Tech needs
Speaker 1: to go back to creating interesting and cool things and
Speaker 1: having companies run by people that actually care about build
Speaker 1: holding them. Technology is capable of solving real problems, or
Speaker 1: at least it has been in the past and proven
Speaker 1: time and time again how profitable it can be to
Speaker 1: do so, and I believe it can do just fine
Speaker 1: without having four or five companies that do every single
Speaker 1: thing that technology can do at the same time in
Speaker 1: hopes that they can monopolize it. I don't think the
Speaker 1: most powerful people in tech realize how frustrated people are,
Speaker 1: how deeply affected by technology everyone is, even those who
Speaker 1: don't identify as tech nerds or enthusiasts, and I think
Speaker 1: men like Sandhar Peshai and Sachi Nadella are deeply unaware
Speaker 1: of how ready people are for a change, how disgusted
Speaker 1: they are by the crater in quality of the average
Speaker 1: tech product at a time when executives have never been richer.
Speaker 1: Regular consumers know that Google Search sucks. They know that
Speaker 1: Facebook sucks. They know that websites are worse, that they
Speaker 1: visit certain ones and there's eighteen pop ups and your
Speaker 1: phone's really hot. They know that their iPhones are randomly
Speaker 1: trying to make them buy Apple News, and they know
Speaker 1: that there are people responsible. Tim Cook, EDDIQA Apple By
Speaker 1: the way, welcome to come on the show, But guys,
Speaker 1: stop trying to sell me Apple News. I don't want it.
Speaker 1: I don't want any of this Apple shit. Don't make
Speaker 1: me use it unless I have to other than I message.
Speaker 1: But moving on, there are real targets here. There are
Speaker 1: people that need to go to fix things. S Darpishai
Speaker 1: and Sachinidella must go. They are no longer trustworthy stewards
Speaker 1: of the future and have inspired hundreds of billions of
Speaker 1: dollars of waste in the hearts of their equally myopic competitors.
Speaker 1: These men do not care about their customers, they don't
Speaker 1: fear competition, and the government should break every single hyperscala up, Google, Meta, Amazon, Apple, Oracle,
Speaker 1: all of them, and find ways to stop them ever
Speaker 1: growing so large. In the future. Maybe we shouldn't have
Speaker 1: such large tech companies. Maybe we don't need multiple trillion
Speaker 1: dollar juggernauts that do everything in a shitty way. Maybe
Speaker 1: we don't need companies that do online advertising and or
Speaker 1: so provide a platform, because that kind of monopoly leads
Speaker 1: to insane incentives like you're seeing with Google Search and Facebook,
Speaker 1: and we all deserve better, and the way to get
Speaker 1: there is to say the names of those responsible, to
Speaker 1: document their disgraceful acts, and call for accountability again and
Speaker 1: again and again and again until something actually happens and changes.
Speaker 1: And it is changing. The narrative is changing, and soon
Speaker 1: it will shift more aggressively and more violently against big tech.
Speaker 1: And I think this is a great thing for the
Speaker 1: world and ultimately to take industry at large. Now as
Speaker 1: we see the bubble, the AI bubble collapse, and must
Speaker 1: be clear, none of this is a victory lap for me.
Speaker 1: This is not actually, how I wish this went. I
Speaker 1: wish this bubble had burst earlier. It would have caused
Speaker 1: less harm to the environment, to the markets, to the
Speaker 1: freelancers who lose their jobs, to the artists who email
Speaker 1: me every week. It would have wasted less money, taken
Speaker 1: less attention away from the rest of the industry, and
Speaker 1: allowed Sam Wortman to accumulate less money and power. Instead,
Speaker 1: this bubble has been allowed to swell so long it
Speaker 1: will only emphasize how bereft of ideas big tech has become,
Speaker 1: and the consequences are a growing distent against tech from
Speaker 1: the general public. And this era was ultimately the result
Speaker 1: of a lack of fear in the hearts of big
Speaker 1: tech and a deeply held belief that their positions were
Speaker 1: permanent and their customers were trapped. My purpose in documenting
Speaker 1: this in what feels at times like narrating the end
Speaker 1: of the world. I'm not looking to be a pundit
Speaker 1: or a talk in head, or a person who wants
Speaker 1: to be given credit for calling out the bubble, as
Speaker 1: none of these serve you, the customer, the listener, or
Speaker 1: history itself. What I say may be imperfect, but it
Speaker 1: exists to try and give you a clear understanding of
Speaker 1: what's happening. And yes, it's a little emotionally charged and
Speaker 1: very clear in its biases. I believe that the tech
Speaker 1: industry has lost its love and curiosity, and I find
Speaker 1: it disgusting, and the best way to fight back is
Speaker 1: to studiously explain things as they happen from my perspective
Speaker 1: at length, but with I hope a clarity that doesn't
Speaker 1: require a ton of technical knowledge. As things have accelerated,
Speaker 1: I've become a little more introspective about the role of
Speaker 1: my podcas as, my newsletter and my posts. I don't
Speaker 1: have a particularly profound conclusion other than that I believe
Speaker 1: that I have a brevity and clarity about the tech
Speaker 1: industry that many don't. And I also find that I'm
Speaker 1: extremely fast at writing. And I also find this all
Speaker 1: very interesting because I'm a horrible little goblin, and I
Speaker 1: don't talk for nearly two hours or write thousands of
Speaker 1: words because I desperately need the attention, which I do love.
Speaker 1: I do it for the thrill I like covering this stuff,
Speaker 1: and because if I don't say these things out loud,
Speaker 1: the cats in my brain will eventually try and emerge.
Speaker 1: But seriously, though I do these things as I need to.
Speaker 1: This is important to me. Maybe I'm fighting back. Maybe
Speaker 1: I just like creating. I don't really know. This is
Speaker 1: me processing watching an industry I care deeply about get
Speaker 1: ransecked again and again by people who don't seem to
Speaker 1: actually care about technology. The Internet made me who I am,
Speaker 1: connecting me and in many cases, introducing me to the
Speaker 1: people I hold dearest to my heart. It let me
Speaker 1: run a successful PR business despite having a learning disability dyspraxia,
Speaker 1: or as it's called in America, developmental coordinational distort that
Speaker 1: makes it difficult for me to write words with a
Speaker 1: pen and thrive, despite being regularly told in secondary school
Speaker 1: that I wouldn't amount to much any of you listen, then, guy,
Speaker 1: fuck yourself. I believe that there are many, many, many
Speaker 1: people that have been allowed to live better, full and
Speaker 1: more meaningful lives as a result of technology, and I
Speaker 1: believe that the people who built the tools that allowed
Speaker 1: them to do so no longer control the future. And
Speaker 1: that makes me really fucking annoyed. I refuse to watch
Speaker 1: this bullshit happen in silence, and I encourage you, as
Speaker 1: I have before, to fill social media and conversations with
Speaker 1: the names of those responsible. Satch In a Dela of Microsoft,
Speaker 1: Sundar Peshai of Google, Mark Zuckerberg of Meta, Andy Jesse
Speaker 1: of Amazon, Sam Altman of Associated cons Mir Marati CTO
Speaker 1: of Open Ai, and Read Hoffman, the venture capitalist who
Speaker 1: seems to always benefit over the next bullshit machine, all
Speaker 1: responsible for this echoing nihilism that's created the generative AI boom.
Speaker 1: All of these people will be fine, by the way,
Speaker 1: when this collapses. All of these people will just fine.
Speaker 1: Multi billionaires, they will be just fine. But the people
Speaker 1: that won't be are the people they will lay off,
Speaker 1: the people that have invested and lost money in these things,
Speaker 1: the people that may even come to rely on chat
Speaker 1: GPT in some small way, who won't be able to
Speaker 1: afford it when it goes tits up or gets jacked
Speaker 1: up price wise, because that's the only way to make
Speaker 1: it affordable for the company. Or maybe all of this
Speaker 1: just disappears and these customers are left with nothing. But
Speaker 1: sometimes I understand you might feel a little doomed, the
Speaker 1: doomer in you. Someone recently called me a duma, which
Speaker 1: really pissed me off, because I'm not I'm angry, and
Speaker 1: I know some of you might be too. I won't
Speaker 1: say you're angry, that isn't fair, but based on the
Speaker 1: emails again, some of you seem pretty pissed. And I'm
Speaker 1: not speaking for you here, but I'm angry because I
Speaker 1: know that TED can be cooler and better and more interesting,
Speaker 1: that there are real problems of poverty and climate change,
Speaker 1: of the myriad systems that don't connect very well on
Speaker 1: every laptop and phone, That things can be better, problems
Speaker 1: that can be solved, but right now they need to
Speaker 1: put tens of billions and dollars into generative AI. Come on, man,
Speaker 1: we can do better than this. And while there might
Speaker 1: be little you can do to them directly, I encourage
Speaker 1: you to say these names to your friends on social media.
Speaker 1: Prabagar Ragavan, remember him from Google. Tell people all about
Speaker 1: him too. I encourage you to let anybody and everybody
Speaker 1: you know know who's responsible for this, because ultimately what
Speaker 1: may pop the AI bubble is a narrative, and narratives shift,
Speaker 1: and narratives are shifted by word of mouth, and they
Speaker 1: shift because of people like you and like me who
Speaker 1: never shut up. Thank you for listening to better Offline.
Speaker 2: The editor and composer of the Better Offline theme song
Speaker 2: is Matasowski. You can check out more of his music
Speaker 2: and audio projects at Matasowski dot com, M A T
Speaker 2: T O S O W s ki dot com. You
Speaker 2: can email me at easy at Better Offline dot com
Speaker 2: or visit Better Offline dot com to find more podcast
Speaker 2: links and of course, my newsletter. I also really recommend
Speaker 2: you go to chat dot where's youreaed dot at to
Speaker 2: visit the discord, and go to our slash.
Speaker 1: Better Offline to check out our reddit.
Speaker 2: Thank you so much for listening.
Speaker 1: Better Offline is a production of cool Zone Media. For
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