Speaker 1: Alzo Media. Hello and welcome to this week's Better Offline Monologue.
Speaker 1: I'm your host ed ZiT Tron and sorry that there
Speaker 1: hasn't been a monologue for a few weeks. These massive
Speaker 1: episodes have been putting together, took up my time in
Speaker 1: a way that made them a little impractical, and as
Speaker 1: far as the show goes, I know it's been very
Speaker 1: AI focused. I can't even say AI right sometimes. But anyway,
Speaker 1: this is likely going to continue for a while because,
Speaker 1: as you can tell from the news, crazy shit keeps
Speaker 1: happening every day. Every day Sam Altman tells somebody he's
Speaker 1: going to give them a billion dollars. It's all so silly,
Speaker 1: and I do feel like it's not being covered very thoroughly,
Speaker 1: so I'm doing my best to do so. Nevertheless, I
Speaker 1: promise I'm going to find a way to bring in
Speaker 1: more non AI stuff. I'm not really sure how it's
Speaker 1: going to make it in there. I'll do my best,
Speaker 1: and I'm already working on CES twenty twenty six, which
Speaker 1: I think is going to be probably the best tech
Speaker 1: podcasting thing ever. Got some incredible guests Chloe Radcliffe of course,
Speaker 1: Edward Anguiso Junior, David Roth, and yeah, those guests I
Speaker 1: can't quite talk about yet, but they're gonna make you
Speaker 1: really happy, and it's gonna be about more than just AI.
Speaker 1: That being said, next week's episode is likely to be
Speaker 1: AI focused, as I've had a lot of people request
Speaker 1: they do an episode that's a simplified guide to the
Speaker 1: AI bubble, something that they can share with people that
Speaker 1: aren't sticking their head and the technological or financial septic
Speaker 1: tank every day. And look, I think you're gonna love it.
Speaker 1: You can please listen to it anyway. I need the downloads,
Speaker 1: but in all seriousness, I think it's gonna be something,
Speaker 1: and I've been working on it for a few days now.
Speaker 1: That's quite short and sharp, but we'll speak to people
Speaker 1: who are not technical or financial at all. I think
Speaker 1: it'll be great and if not shows free you'll enjoy it.
Speaker 1: But I also do just want to say I really
Speaker 1: appreciate how many of you listen every week. I really
Speaker 1: appreciate your patience with the AI stuff. You seem to
Speaker 1: all really enjoy it. But I do love to hear
Speaker 1: from you whenever I can, so reach out now. Please
Speaker 1: don't be too mean, though I do have a heart,
Speaker 1: But yes, this Week's monologue is somewhat of a big story.
Speaker 1: So two days ago Fortune published a story saying that,
Speaker 1: according to dates from Deutsche Bank, which is a very
Speaker 1: very large bank, that OpenAI subscription growth in Europe has
Speaker 1: stalled and is and I quote flatlining in the major
Speaker 1: European markets over the past four months. To quote Fortune,
Speaker 1: the data was drawn from transactions processed by third party
Speaker 1: financial institutions. Really nailed that word in the UK, Germany, France,
Speaker 1: Italy and Spain, representing fifteen percent of Chat GPT users.
Speaker 1: And if you're wondering, the top software markets in the
Speaker 1: world are US, China, Germany, UK, France, and Italy, and
Speaker 1: then there's Canada and some others. To be clear, this
Speaker 1: specifically refers to people paying for Chat GPT subscriptions the
Speaker 1: twenty buck a month one most likely, and in a
Speaker 1: graph I'll link to in the show notes, you really
Speaker 1: should look at it. Open Ai subscription growth in Europe
Speaker 1: has been pretty rocky from the beginning, dropping from ten
Speaker 1: percent in June twenty twenty three to below zero percent
Speaker 1: in August twenty twenty three, meaning growth to decline only
Speaker 1: to recover slightly well pretty well, I guess the twenty
Speaker 1: percent in December twenty twenty three, then drop again to
Speaker 1: blow zero percent in February twenty twenty four. Otherwise, open
Speaker 1: Ai barely scraped ten percent growth outside of some spikes
Speaker 1: in September twenty twenty four around the launch of their
Speaker 1: Reasoning models which got them to about fifteen percent, the
Speaker 1: launch of their Useless Agent operator in January twenty twenty five,
Speaker 1: which got them somehow to around eighty eighteen percent, and
Speaker 1: then the launch of four Image Generation in March twenty
Speaker 1: twenty five, which by the way was the studio Ghibliwank,
Speaker 1: and that got them back to twenty ten percent, though
Speaker 1: I realized that was a lot of numbers, and like
Speaker 1: I said, the chart is in the episode Notes I swear.
Speaker 1: But in June twenty twenty five, open Ai faced negative
Speaker 1: growth of subscribers in Europe, barely recovering to two to
Speaker 1: three percent in July twenty twenty five, and then back
Speaker 1: to zero percent in August twenty twenty five, which looks
Speaker 1: like they're maybe a mild recovery, coming to around three
Speaker 1: percent in September. Now, while I'm not quite declaring victory
Speaker 1: or blasting not like us, I am having trouble finding
Speaker 1: a way around how bad. I can find no example
Speaker 1: of a successful software revolution that started with high growth
Speaker 1: and tumbled into the abyss in Europe. It didn't happen
Speaker 1: with Facebook, and it certainly didn't happen in Uber's case,
Speaker 1: even though European governments actively tried to reject it, and
Speaker 1: some of them still are. It didn't happen with the smartphone,
Speaker 1: or cloud computing, or really any other software revolution or device.
Speaker 1: They would start from kind of nowhere and then grow,
Speaker 1: and then there'd be wobbles, but they'd keep growing steadily.
Speaker 1: This is a steady decline. And to be clear, this
Speaker 1: has nothing to do with Europe's General Data Protection regulations
Speaker 1: of the GDPR. Robert Evans once told me to spell
Speaker 1: everything out. I've independently confirmed with the European chet GPT
Speaker 1: users that the product is basically identical over there. Europe
Speaker 1: just happens to be rejecting chet GPT. They don't want
Speaker 1: to pay for it. And as you'll see when you
Speaker 1: look at the graph, the boosts that open Ai gets
Speaker 1: from throwing out new products, they're becoming less pronounced each time.
Speaker 1: Other than operator that one kind of surprised me but
Speaker 1: even then eighteen percent growth, and I think it's month
Speaker 1: over month. If it's year over year, they wouldn't be
Speaker 1: a year of year, it's month over month. Now. The GDPR,
Speaker 1: by the way, will make it difficult for open ai
Speaker 1: to launch advertising, which I will add will not be
Speaker 1: the saving grace for this company, because Google and Meta's
Speaker 1: massive advertising revenues come from decades of data and expertise
Speaker 1: in forcing them down customers throats, as well as having
Speaker 1: a very compelling product and thousands of salespeople and also,
Speaker 1: in Google's case, thousands of miles of underground cable and
Speaker 1: under the c cable. I believe as well people that
Speaker 1: are easily scared of suggesting the open AI's data on
Speaker 1: users is rich because they feed so much into it.
Speaker 1: This point makes the assumption that this data is useful
Speaker 1: and that open ai can actually do anything with it,
Speaker 1: despite having absolutely no expertise in selling ads. As a
Speaker 1: reminder perplexity that an AI search engine, you'd think would
Speaker 1: be the perfect place for ads, they made twenty grand,
Speaker 1: twenty thousand dollars selling ads in twenty twenty four. That's bollocks.
Speaker 1: It's terrible. You make more selling dogs. They will watch
Speaker 1: the day to day might be auctioning dogs. Anyway, my
Speaker 1: rambling aside, it's very easy to get scared of this
Speaker 1: company and just think, oh, they have a lot of
Speaker 1: money in you. Even though they lose billions, they'll just
Speaker 1: put ads in and that'll fix everything. I must caution
Speaker 1: you to immediately be a doomer there. I see no
Speaker 1: real evidence that they're going to find another business line
Speaker 1: in mostly evidence by the fact they've never been able
Speaker 1: to find one. And while this isn't declarative proof that
Speaker 1: this company is circling the drain, I don't know how
Speaker 1: else to look at it as anything other than their
Speaker 1: growth story in Europe is dying and they're building a
Speaker 1: goddamn data center in England. I think with n Scale,
Speaker 1: the company that's never built an AI data center in
Speaker 1: their life. To be fair, that's also the case with Crusoe.
Speaker 1: In fact, all of Openay's partners pretty much never built
Speaker 1: a data center of any kind other than crypto ones,
Speaker 1: which are completely different. Also, no one's built a gig
Speaker 1: what data center. Ah, that's going to be a future episode.
Speaker 1: Forgive me. I want to educate you on data centers
Speaker 1: one day, but every time I start thinking about them.
Speaker 1: My brain starts playing that music from kill Bill when
Speaker 1: she looks anyone she's mad at. Someone's going to email
Speaker 1: me and say, Perry Mason Christ. The great thing about
Speaker 1: these monologues is I could just talk about whatever I
Speaker 1: want to. They say I should do this, which is
Speaker 1: what I'm gonna do. But in reality, back to the
Speaker 1: thing we're talking about, it really is hard to read
Speaker 1: this as anything other than air escaping the bubble. It's
Speaker 1: been pissed, I swear to God, and perhaps it's the
Speaker 1: error of smiles beginning. A specter is haunting Silicon Valley,
Speaker 1: the face of the smiling man, and I hope you'll
Speaker 1: join me every week to find out how this shit
Speaker 1: bursts or I don't know, whatever crazy crap Sam Mortman
Speaker 1: promises next