Speaker 1: Zone Media. Hello, and welcome to Better Offline. I'm your
Speaker 1: host ed Zitron. What In the last episode, I walked
Speaker 1: you through how GENERALIFAI has hit its ceiling and how
Speaker 1: big tech has burned billions of dollars chasing a technology
Speaker 1: that really isn't going to give them the returns they
Speaker 1: got from the smartphone and cloud computing revolutions, not that
Speaker 1: that's going.
Speaker 2: To stop them.
Speaker 1: In this episode, I'm going to walk you through the
Speaker 1: potentially massive problems they have ahead, the ones they've created
Speaker 1: by building these massive supercomputers, the ones necessary to capture
Speaker 1: this imaginary demand of this kind of bullshit AI revolution,
Speaker 1: and I'm going to try and guess what might happen next.
Speaker 1: All right, So, the AI boom helped the S and
Speaker 1: P five hundred hit record levels in twenty twenty four,
Speaker 1: largely thanks to chip giant Nvidia, a company that makes
Speaker 1: both the GPUs necessary to train and run generative AI
Speaker 1: and the software architecture behind them, as well as some
Speaker 1: other server parts too. Part of Nvidia's remarkable growth has
Speaker 1: been its ability to capitalize on Kuda architecture, the software
Speaker 1: layer that lets you do complex computing on GPUs rather
Speaker 1: than simply using them to render video games or complex
Speaker 1: three D images. Someone's going to email and say that
Speaker 1: that's partially wrong.
Speaker 2: Just bear with me.
Speaker 1: And of course, one of Nvidia's other things they do
Speaker 1: is continually create new GPUs to sell for tens of
Speaker 1: thousands of dollars to tech companies that want to burn
Speaker 1: billions of dollars on GENERATIVII, which has led Nvidia's stock
Speaker 1: to pop more than one hundred and seventy nine percent
Speaker 1: over the last year. Back in May, in Vidia's CEO
Speaker 1: and professional Carnival Barker Jensen Wang said that the company
Speaker 1: was now and I quote on a one year rhythm
Speaker 1: in AIGPU production with its latest Blackwell GPUs, specifically the
Speaker 1: B one hundred, B two hundred and GBT two hundred
Speaker 1: used of Regenerative AI, supposedly due at the end of
Speaker 1: twenty twenty four, except they're now delayed until at least
Speaker 1: March twenty twenty five. Now, before we go any firm,
Speaker 1: it's worth noting that when I say GPU, I don't
Speaker 1: mean the one you'd find in the gaming PC, but
Speaker 1: a much much larger chip put on a specialized server
Speaker 1: and actually a specialized board as well. With multiple other GPUs,
Speaker 1: all integrated with special case in cooling and networking infrastructure,
Speaker 1: all of which is sold by Nvidia. By the way,
Speaker 1: you can use other things, but as well buy it
Speaker 1: in one place, right, That's their product strategy. In simple terms,
Speaker 1: these are the things necessary to make sure all these
Speaker 1: chips work together efficiently and also stop them from overheating
Speaker 1: because they get extremely hot, and generative AI makes them
Speaker 1: run at full speed all the time.
Speaker 2: Now, the initial.
Speaker 1: Delay of the new Blackwell chips is caused by a
Speaker 1: now fixed design, floor and production. But as I've previously suggested,
Speaker 1: the problem isn't just creating the chips, it's making sure
Speaker 1: they actually work at scale for the jobs they've.
Speaker 2: Been bought for.
Speaker 1: Now what if that wasn't possible a few weeks ago?
Speaker 1: The Information Report and Video is currently grappling with the
Speaker 1: oldest problem in computing, how to cool the fucking things.
Speaker 1: According to their report, and Video has been asking supplies
Speaker 1: to change the design of its three thousand pound seventy
Speaker 1: five GPU server racks several times to overcome these heating problems,
Speaker 1: which the Information calls quote the most complicated design that
Speaker 1: Nvideo had ever come up with. According to the report.
Speaker 1: A few months after revealing the racks, engineers found that
Speaker 1: they didn't work properly even when they use the smaller
Speaker 1: thirty six chip racks, and they've been kind of scrambling
Speaker 1: to fix it ever since.
Speaker 2: While one can dazzle investors with.
Speaker 1: Buzzwords, charts and the term superintelligence, the laws of physics
Speaker 1: are a little bit more of a harsh mistress. And
Speaker 1: if in Video is struggling mere months before the first
Speaker 1: installations to begin, though I've heard some are going out now,
Speaker 1: it's kind of unclear how they practically plan to launch
Speaker 1: this next generation of chips, let alone doing another one
Speaker 1: in a year. The Information reports that these changes have
Speaker 1: been made late in production, which is scaring customers that
Speaker 1: desperately need them now so that their models can continue
Speaker 1: to do something that they will work out later.
Speaker 2: To quote the Information again.
Speaker 1: Secutives at large cloud providers that have ordered the new
Speaker 1: chips said they're concerned that such last minute difficulties might
Speaker 1: push back the timeline for when they can get their
Speaker 1: GPU clusters up and running next year. The fact that
Speaker 1: in video is having such significant difficulties with thermal performance.
Speaker 2: Is very, very bad.
Speaker 1: These chips are very expensive thirty to seventy grand I
Speaker 1: hear and will be running, as I've mentioned, at full speed,
Speaker 1: generating an incredible amount of heat that must be dissipated
Speaker 1: while sat next to anywhere from thirty five to seventy
Speaker 1: one other chips, which will in turn be densely packed
Speaker 1: so that you can cram more servers into a data center.
Speaker 1: New more powerful chips require entirely new methods to rack,
Speaker 1: mount them, operate them, and cool them, and all of
Speaker 1: these parts must operate and sync as overheating GPUs will die.
Speaker 1: And while these units are big, some of their internal
Speaker 1: components and nanometers in size, and unless properly cool their
Speaker 1: circus will start to crumble when roasted by a guy
Speaker 1: typing Garfield with a guarn and a bra into chat GPT,
Speaker 1: which I have never done. Of course, Remember Blackwell is
Speaker 1: supposed to be in videos big thing. It's meant to
Speaker 1: represent a major leap forward in performance. If in Vidia
Speaker 1: doesn't solve its cooling problem, and solve it well, its
Speaker 1: customers will undoubtedly encounter thermal throttling, where the chip reduces
Speaker 1: its speed in order to avoid causing any permanent damage.
Speaker 1: It could eliminate some more all of the performance gains
Speaker 1: obtained from the new architecture a new manufacturing process, despite
Speaker 1: costing much much more, both for the chips itself and
Speaker 1: the housing for them. In Vidio's problem isn't just bringing
Speaker 1: these thermal performance issues under control, but both keeping them
Speaker 1: under control and being able to educate their customers on
Speaker 1: how to do so. In Vidia has, according to the information,
Speaker 1: repeatedly tried to influence its customer server integrations to follow
Speaker 1: its designs because it thinks it will lead to better performance.
Speaker 1: But in this case one has to worry. If in
Speaker 1: Vidia's black Well chips can be reliably cooled, maybe they
Speaker 1: can in videos worked out crazy things in the past,
Speaker 1: and while in video might be able to fix this
Speaker 1: problem in isolation within its racks, it remains to be
Speaker 1: seen how this works at scale as they ship and
Speaker 1: integrate hundreds of thousands of Blackwell GPUs starting in the
Speaker 1: front half of twenty twenty five. Things also get a
Speaker 1: little worse when you realize how these chips are being
Speaker 1: installed in these giant supercomputer data centers, where tens of
Speaker 1: thousands are as many as one hundred thousand of them.
Speaker 1: In the case of Elon Musk's Colossus Data center, which
Speaker 1: is just very funny that that's what it's for.
Speaker 2: It's for GROC on a dying social network.
Speaker 1: But yeah, these GPUs, they're running concert to power generative
Speaker 1: AI models.
Speaker 2: That's all they're really for.
Speaker 1: And The Wall Street Journal reported a few weeks ago
Speaker 1: that building these vast data centers creates entirely new engineering challenges,
Speaker 1: with one expert saying that big tech companies could be
Speaker 1: spending as much of half of their capital expenditures on
Speaker 1: replacing parts that are broken down, in large part because
Speaker 1: these clusters are running on GPUs that are running at
Speaker 1: full speed that need to all be cooled and need
Speaker 1: to be cooled.
Speaker 2: Well.
Speaker 1: Remember the capital expenditures on generative AI and the associated
Speaker 1: infrastructure have gone over two hundred billion dollars in the
Speaker 1: last year. If half of that's dedicated to replacing broken shit.
Speaker 1: What happens when there's no path of profitability in any
Speaker 1: case is fine, they'll work it out well enough to
Speaker 1: keep flogging these things. They've already made billions of dollars
Speaker 1: selling Blackwells. They're sold out for a year, in fact,
Speaker 1: and they'll continue to do so for now. But any
Speaker 1: manufacturing and cooling issues are going to be very costly,
Speaker 1: and even then, at some point somebody has to ask
Speaker 1: the question, why do we need all these GPUs if
Speaker 1: we've reached PKI. Despite the remarkable power of these chips.
Speaker 1: In Vidia's entire enterprise GPU business model centers around the
Speaker 1: idea that throwing more power at these problems will finally
Speaker 1: create some solutions.
Speaker 2: What if that isn't the case?
Speaker 1: Though? So as ever, I'm kind of pissed off. I'm
Speaker 1: pissed off reading this stuff. And it's not just because
Speaker 1: I was saying this months ago. It's because all of
Speaker 1: this money could have gone literally anywhere else. They could
Speaker 1: have done something else, they could have I don't know,
Speaker 1: I'm not running a big tech company, but I would
Speaker 1: have put it into climate stuff or new battery technology.
Speaker 1: Everyone's saying, oh, we'll make our own chips now, Yes,
Speaker 1: see you in a few years, dickhead, Well, you go
Speaker 1: to TSMC and ask if they've got any spare slot.
Speaker 1: I'm sure they've got plenty. I'm sure that you can
Speaker 1: just go and build a chip tomorrow. Sam Moultman talking
Speaker 1: about building his own goddamn chips. What an absolute fast?
Speaker 2: This is?
Speaker 1: This fucking fast? All of this money burned in search
Speaker 1: of a technology that only kind of works on something.
Speaker 1: Sometimes it's just kind of a joke. The tech industry
Speaker 1: is over leverage. They've doubled, they've tripled the kadrupled down
Speaker 1: on generative AI now and this technology does not do
Speaker 1: much more than it did a few months ago, And
Speaker 1: I don't think it's going to do very much more
Speaker 1: in a few months. Every single big tech companies pulled
Speaker 1: tens of billions of dollars into building out these massive
Speaker 1: superclusters with the intent of capturing AI demand. Yet they
Speaker 1: never seem to think whether they were actually building things
Speaker 1: that people wanted or would pay for, or that would
Speaker 1: make the money, or that would help you manity in
Speaker 1: any way, or really anything to do with an outcome
Speaker 1: other than line go up. While some have claimed that
Speaker 1: agents are the next frontier AI, Agents frontier Jesus, Nope,
Speaker 1: keep him, The reality is that agents may be the
Speaker 1: last generative AI product. Multiple large language models and integrations
Speaker 1: bouncing off of each other in attempt to simulate what
Speaker 1: a human might do at a cost that won't be
Speaker 1: sustainable for the majority of businesses. While Anthropics demo of
Speaker 1: its alleged model that can control a few browser windows
Speaker 1: with a prompt might have seemed impressive to credulous people,
Speaker 1: specifically mean casing you. And here these were controlled demos
Speaker 1: which Anthropic added with slow and make lots of mistakes. Hey,
Speaker 1: almost like it's hallucinating. I sure hope they fixed that
Speaker 1: unfixable problem I'd be talking about for months.
Speaker 2: Jesus Christ.
Speaker 1: Even if it does, Anthropic has now successfully replaced an
Speaker 1: entry full data worker position at an indeterminate cost, and
Speaker 1: likely an unprofitable one too. And in many organizations those
Speaker 1: jobs have already been outsourced or automated or start with
Speaker 1: cheap contractors. So the people who are going to lose
Speaker 1: out here are people who are already getting shot on
Speaker 1: by life.
Speaker 2: It really sucks.
Speaker 1: And the obscenity of this mass delusion, it's just nauseating.
Speaker 1: It's a monolith to bad decision making and the herd
Speaker 1: mentality of tech's most powerful people, as well as an
Speaker 1: outright attempt to manipulate the media into believing something was
Speaker 1: possible that never was, and the media bought it, hook
Speaker 1: line and sinker.
Speaker 2: You all bought it.
Speaker 1: Hundreds of billions of dollars have been wasted building giant
Speaker 1: data centers to crunch numbers for software that has no
Speaker 1: real product market fit, or while trying to hammer it
Speaker 1: into various shapes to make it pretend that it's alive, conscious,
Speaker 1: or even fucking useful. There is no path, from what
Speaker 1: I can see, to turning generative AI from what it
Speaker 1: is today into anything resembling a sustainable business. And the
Speaker 1: only path that big tech appeared to have seen or
Speaker 1: thought about was to throw as much money, power and
Speaker 1: data at the problem. An avenue that appeared to be
Speaker 1: and definitely appears to be now a complete dead end,
Speaker 1: and we're still nothing's really come out of this movement.
Speaker 1: I've used a handful of AI products that I found useful,
Speaker 1: and aipower journal, for example, but these are not products
Speaker 1: that one associates with revolutions. They're useful tools that would
Speaker 1: have been a welcome surprised if it didn't require burning
Speaker 1: billions of dollars, blowing past emissions targets, and stealing the
Speaker 1: creative works of millions of people to train them. It's
Speaker 1: just sickening. It's sickening because this did not have to happen.
Speaker 1: Had suned up Ashay seen what Microsoft did with open
Speaker 1: AI and said not for me, mate, That's definitely not
Speaker 1: how he talks. But nevertheless, none of this would have continued.
Speaker 1: You think Microsoft was going to hold this shit up
Speaker 1: on their own. God, No, they have no juice such
Speaker 1: an Adela. He's just a he's a cult leader, something
Speaker 1: I'm going to get into in a later episode. And
Speaker 1: it's just it's all very sad. But if you want
Speaker 1: to cheer yourself up, maybe you could listen to one
Speaker 1: of the following advertisements. And this is a short episode,
Speaker 1: so if they don't put one after this, you might
Speaker 1: just have a short gap between me talking. That's up
Speaker 1: to Matt. MAT's a genius. That's my producer, by the way, Mattasowski. Anyway, ads,
Speaker 1: and we're back. Look, I truly don't know what happens next,
Speaker 1: but I'm going to walk you through what I'm thinking.
Speaker 2: If we're truly at the diminishing.
Speaker 1: Return stage of transformer based models, it's going to be
Speaker 1: extremely difficult to justify buying further iterations of Nvidia GPUs
Speaker 1: past Blackwell, and also I have doubts they're going to
Speaker 1: be able to make a new one every year. The
Speaker 1: entire generative AI movement lives and dies by the idea
Speaker 1: that more compute power and more training data makes these
Speaker 1: things better. And if that's no longer the case, there's
Speaker 1: not really a reason to keep buying bigger and better.
Speaker 1: What's the point even now? What exactly happens when Microsoft
Speaker 1: or Google has racks worth of Blackwell GPUs? What does
Speaker 1: aren't getting better faster? I guess what does faster even mean?
Speaker 1: What does better even mean? Better has yet to me
Speaker 1: in a new product? Better has not seem to be
Speaker 1: measurable by humans just by bullshit benchmarks. This also makes
Speaker 1: the lives of open Ai and Anthropic a little more difficult.
Speaker 1: Sam Altman has grown rich in power for lying about
Speaker 1: how GPT will somehow lead to AGI some conscious computer.
Speaker 1: But at this point, what exactly is open ai meant
Speaker 1: to do? What are they doing? The only way it's
Speaker 1: this company has ever been able to develop new models
Speaker 1: is by throwing masses of compute and training data at them.
Speaker 1: And there are only other choices to start stapling its
Speaker 1: their reasoning model onto the side of their large language model,
Speaker 1: at which point something happens something everyone It's happening something
Speaker 1: that is so good that literally nobody working for open
Speaker 1: aire in the media appears to be able to tell
Speaker 1: you what it is.
Speaker 2: Yeah.
Speaker 1: Putting that aside, open ai is also a terrible business
Speaker 1: that has to burn five billion dollars to make three
Speaker 1: point seven billion dollars, and there's no proof that they're
Speaker 1: able to bring down their costs. The constant thing I
Speaker 1: hear from VC's and AI fantasist is that the chips
Speaker 1: will bring down the cost of inference. Yet I don't
Speaker 1: see that happening. I've yet to see that happening. There's
Speaker 1: cerebrus dinner plate sized chips, but you know what, I
Speaker 1: just don't think that shit's going to scale. And at
Speaker 1: that point you have to wonder do they have like
Speaker 1: where is this going? I know you're listening to an
Speaker 1: episode where I tell you, but still even reading this
Speaker 1: stuff all day, you just look at it too hard
Speaker 1: and you start feeling a little crazy. I've read pretty
Speaker 1: much every article on open ai at this point. I've
Speaker 1: read Microsoft's earnings multiple quarters straight. Same with the rest
Speaker 1: of them. I've read all their blog posts, I've read
Speaker 1: all their shit. They don't have any idea. I'm confident
Speaker 1: that they don't have any idea. It's terrifying and this
Speaker 1: is just this dismal situation where the only other there's
Speaker 1: really only a few options. If I'm honest, you stop now.
Speaker 1: That is the biggest one. You just stop. Someone has
Speaker 1: to admit, Microsoft, Google, They'll never do this. They need
Speaker 1: to go this is not going to scale. We need
Speaker 1: to pair this back or we need to stop it.
Speaker 1: And it will hurt their stock, it will hurt their media.
Speaker 1: But it's the right thing to do for the environment alone,
Speaker 1: but as a sustainable busines. But assuming they don't do that,
Speaker 1: we have another problem, which is the only other option
Speaker 1: they can have is to keep flooring the gas. It
Speaker 1: costs one hundred million dollars to train GPT four to zero,
Speaker 1: and anthropic CEO Dario ami Day estimated a few months
Speaker 1: ago that training future models would cost one billion, if
Speaker 1: not ten billion dollars, with one researcher claiming that training
Speaker 1: open AI's next model, GPT five will cost around a
Speaker 1: billion dollars outside of a miracle.
Speaker 2: We're about to enter an era of desperation in generative AI.
Speaker 1: We're two years in and we have no killer apps,
Speaker 1: no industry defining products other than chat GPT, a product
Speaker 1: that burns billions of doddlers, and nobody.
Speaker 2: Can really describe every episode.
Speaker 1: I'm like, email me, tell me what chat GPT is,
Speaker 1: and I'll get some smart us who sends me three paragraphs. No, no, no, no, no,
Speaker 1: that's not a description, that's an essay. May you actually
Speaker 1: need to tell me what the hell this is? And
Speaker 1: if you can't, you've proven my point in my extremely
Speaker 1: thin and rigged game. Anyway, neither Microsoft, nor Meta, nor Google,
Speaker 1: no Amazon seemed to be able to come up with
Speaker 1: any profitable use cases, let alone one their users actually like,
Speaker 1: Nor have any of the people that have raised billions
Speaker 1: of dollars in venture capital for anything with AI take
Speaker 1: to the side. An investor interest in AI is already cooling.
Speaker 1: According to the information, It's kind of unclear how far
Speaker 1: this fast goes from here, if only because it isn't
Speaker 1: obvious what it is that anybody gets by investing in
Speaker 1: future rounds of open Aianthropic or any of these other
Speaker 1: generative AI companies. At some point, they must make money,
Speaker 1: and the entire dream has been built around the idea
Speaker 1: that all of these GPUs and all of this money
Speaker 1: would eventually spit out something, something revolutionary, something world changing.
Speaker 1: What we have is this clunky, ugly, messy, lasceness, environmentally
Speaker 1: destructive and mediocre.
Speaker 2: Piece of shit.
Speaker 1: Generative AI was a reckless pursuit, one that shows a
Speaker 1: total lack of creativity and sense in the minds of
Speaker 1: big tech in venture capital, one where there was never
Speaker 1: anything really impressive other than the amount of money it
Speaker 1: could burn on the amount of time samal And could
Speaker 1: say something stupid and get quoted for it. I'll be
Speaker 1: honest with you, I don't really know what happens here.
Speaker 1: The future was always one that demanded big tech spend
Speaker 1: more to make even bigger models that would at some
Speaker 1: point become useful, and it isn't happening. In pursuit of
Speaker 1: doing so, big tech invested hundreds of billions of dollars
Speaker 1: into infrastructure specifically to follow one goal and put AI
Speaker 1: front and center of their businesses, claiming it was the
Speaker 1: future without ever checking if it was, if it actually
Speaker 1: did anything useful. And really they, as I've said in
Speaker 1: the rock com bubble a few months ago, they don't
Speaker 1: have anything else. They don't have another growth market, and
Speaker 1: maybe that's why they're shoving all the cash into this,
Speaker 1: because they don't.
Speaker 2: Have it anywhere. Else to put it.
Speaker 1: They don't want to admit they've got nothing else. They
Speaker 1: don't want to admit that their businesses are crumbling under
Speaker 1: scrutiny from antitrust. They don't want to admit their services
Speaker 1: are kind of deteriorating, especially in the case of Meta.
Speaker 1: They don't have anything else. The revenue isn't coming, the
Speaker 1: products aren't coming. Oryan open AI's next model, it will underwhelm,
Speaker 1: as will its competitors model, and at some point, think
Speaker 1: somebody is going to blink in one of the hyperscalers
Speaker 1: and the AI era will end. Almost every single GENERAI
Speaker 1: company that you've heard of is deeply unprofitable, and there
Speaker 1: are very few innovations coming to save them from the
Speaker 1: atrophy of the Foundation model system, which by the way,
Speaker 1: is the main large language models that they're training in
Speaker 1: all of these cases. Now, I've tried to keep my
Speaker 1: emotions in check, but you might you might be able
Speaker 1: to tell that this pisses me off a little. I
Speaker 1: just feel sad and exhausted about it all. I feel
Speaker 1: drained as I look at how many times I've tried
Speaker 1: to warm people. I'm pissed off at the many members
Speaker 1: of the media that failed to push back against the
Speaker 1: over promises and outright lies of people like Sam Altman
Speaker 1: and Dario Ami Day. Warrio ami Day is what I'm
Speaker 1: calling him now. It's not particularly funny ira acurate, but
Speaker 1: it's funny to say for me. And I'm just full
Speaker 1: of dread as I consider the economic ramifications of this
Speaker 1: industry collapsing, as well as the damage it's already done
Speaker 1: to our fucking environment. Once the AI bubble pops, there
Speaker 1: are no hyper growth markets left, which will in turn
Speaker 1: lead to a blood bath in big tech stocks as
Speaker 1: they really that they're out of big ideas to convince
Speaker 1: the street that they're going to grow forever. There are
Speaker 1: some that will boast about being right here, and yes,
Speaker 1: there is some satisfaction in being so, of course, of
Speaker 1: course you take the moment, you do the victory lap.
Speaker 1: Whatever I said a thing, and I was right. I
Speaker 1: don't know if I'm I'm really doing the joker kick
Speaker 1: down the stairs here. I don't know if I'm really
Speaker 1: happy about being right here. I think generative AI is
Speaker 1: a huge waste of money. I think the damage it's
Speaker 1: doing to the environment is disgusting. I think the stealing
Speaker 1: required to make the training data side is disgusting. I
Speaker 1: think all of that ending is good, and I think
Speaker 1: it needs to just to be clear or I sit.
Speaker 1: But you know what, the other problem is that when
Speaker 1: this all falls apart, it's going to be rough. It's
Speaker 1: going to be rough for people in the tech industry,
Speaker 1: and it's going to be rough for the economy. So
Speaker 1: I'm gonna start wrapping up here. I'm gonna read you
Speaker 1: a quote from Bubble Trouble, a piece I wrote in April.
Speaker 1: Hum how do you solve all of these incredibly difficult problems?
Speaker 1: What does open ai or Anthropic do when they run
Speaker 1: out of data and the synthetic data doesn't fill the gap,
Speaker 1: or worse, massively degrades the quality of their outputs. What
Speaker 1: does Sam Moltman do if GPT five, like GPT four,
Speaker 1: doesn't significantly improve its performance and he can't find enough
Speaker 1: compute to make the next step. What do open ai
Speaker 1: and Anthropic do when they realize they'll likely never turn
Speaker 1: a profit. What does Microsoft, gra Amazon or Google do
Speaker 1: if demand never really takes off and they' left with
Speaker 1: billions of dollars of underutilized data centers. What does Nvidia
Speaker 1: do if the demand for its chips drops off a
Speaker 1: cliff as a result. I don't know why more people
Speaker 1: aren't screaming from the rooftops about how unsustainable the AI
Speaker 1: boom is and how impossible some of the challenges are
Speaker 1: that it faces. There is no way to create enough
Speaker 1: training data for these models, and little that we've seen
Speaker 1: so far suggests that generative AI will make anybody but
Speaker 1: Nvidio money. We're reaching the point where physics, things like
Speaker 1: heat and electricity are getting in the way of progressing
Speaker 1: much further, and it's hard to stomach investing more considering
Speaker 1: where we're at right now. Once you cut through the noise,
Speaker 1: it just seems kind of fairly goddamn mediocre. There's no
Speaker 1: iPhone moment coming, I'm afraid, so all right, not gonna
Speaker 1: be too smug, but reading that.
Speaker 2: Back pretty accurate, Pretty good for April.
Speaker 1: I was right then, I'm right now. Generative AI isn't
Speaker 1: a revolution. It's an evolution of a tech industry overtaken
Speaker 1: by growth hungry management consultant freaks that I neither know
Speaker 1: the problems that real people face nor how to fix them.
Speaker 2: It's a waste.
Speaker 1: It's a sickening waste, a monument to the corrupting force
Speaker 1: of growth and a sign that people in power and
Speaker 1: tech no longer work for you, the customer, but for
Speaker 1: venture capitalists and for the markets. I also want to
Speaker 1: be clear that none of these companies seem to have
Speaker 1: ever had a plan. They believed that if they threw
Speaker 1: enough GPUs together, they would turn generative AI with a
Speaker 1: probabilistic model for generating stef either into a sentient computer
Speaker 1: in open AI's case, or into some sort of useful
Speaker 1: product in Microsoft's case. Neither of them are right, And
Speaker 1: I get it. I get some of you that you're like, well,
Speaker 1: this is all a big plan, so they can proliferate
Speaker 1: data centers. This is all a big plans. They can
Speaker 1: steal everything and ship it back to us, so they
Speaker 1: can do this to us. It's much easier and more
Speaker 1: comfortable to look at the world as a series of conspiracies,
Speaker 1: these grand strategies, and that all of these people are powerful,
Speaker 1: which they are, but powerful in a way that is
Speaker 1: kind of the dread hand controlling your everything.
Speaker 2: But honestly, it's.
Speaker 1: Far scarier to see reality for what it is. Extremely
Speaker 1: rich and powerful people that are willing to bed insanely
Speaker 1: large amounts of money on what amounts to a few PDFs.
Speaker 1: In their fucking gut, these people have no plan. This
Speaker 1: is not big takes big plan, or they're excused to
Speaker 1: build more data centers. It's the death throws of twenty
Speaker 1: years of growth or costs thinking, because throwing a bunch
Speaker 1: of money at more servers and more engineers always seem
Speaker 1: to create more.
Speaker 2: Growth in the past.
Speaker 1: In practice, this means that the people in charge and
Speaker 1: the strategies they employ are born not of an interest
Speaker 1: in improving the lives of you their customer, but in
Speaker 1: increasing revenue growth, which means products they create aren't really
Speaker 1: about solving any problem other than what will make somebody
Speaker 1: give me more money, which doesn't necessarily mean provide them
Speaker 1: with a service. Generative AI is the perfect monster of
Speaker 1: the row economy. It's a technology that lacks any real purpose,
Speaker 1: sold as if it could do literally anything, one without
Speaker 1: a real business model or a killer app, proliferated because
Speaker 1: big tech no longer innovates, They clone, and they monopolize. Yes,
Speaker 1: this much money can be this stupid, and yes they
Speaker 1: will burn billions more in pursuit of a non specific
Speaker 1: dream that involves charging you more money and trapping you
Speaker 1: in their ecosystem. But they're out of ideas. This was
Speaker 1: their big thing. If they had anything else, they wouldn't
Speaker 1: have done this.
Speaker 2: They don't. They're kind of screwed.
Speaker 1: I don't know how long it will take for you
Speaker 1: to see how much they're screwed. Could be a year,
Speaker 1: could be two quarters. I honestly don't know. But it
Speaker 1: cannot go on like this. It cannot because at some point,
Speaker 1: burning billions of dollars every month is not going to work.
Speaker 1: At some point, the markets will react, or at some point,
Speaker 1: I don't know, CFO of Microsoft Damian Hood might say, hey,
Speaker 1: we're burning billions of dollars to lose billions of dollars.
Speaker 1: We don't have the customers, these products aren't useful enough,
Speaker 1: or maybe she keeps driving to hell.
Speaker 2: I don't know.
Speaker 1: But the longer it takes, the worse it's going to
Speaker 1: be for the industry and for the markets. I'm not
Speaker 1: trying to be a doom set, just like I wasn't
Speaker 1: trying to be one in March. I believe all of
Speaker 1: this is going nowhere, and that at some point, Google, Microsoft, Meta,
Speaker 1: one of them is going to blink and they're going
Speaker 1: to pull back on the capex. And before then, you're
Speaker 1: going to see a lot of desperate stories about how
Speaker 1: AI gains can be found outside of training you models
Speaker 1: to try and keep the party going despite reality, flicking
Speaker 1: the lights on and off and threatening to call the
Speaker 1: police on them. Really, though, you're going to see so
Speaker 1: much of that. You're going to see people in the
Speaker 1: media who should know better still pumping, still pumping that bag.
Speaker 1: Because it gets back to the conspiracy theory I was
Speaker 1: talking about before it gets back there, because it's so
Speaker 1: much easier to think, Ah, they'll work it out, they're smart.
Speaker 1: I trust them. I trust these people. They're going to
Speaker 1: work out and make Generative AI make so much money.
Speaker 1: It's going to be so profitable. Alw it's going to
Speaker 1: be so good. Because when you don't accept that premise,
Speaker 1: everything you write about it feels like writing about a
Speaker 1: dying person. Oh, anthropic claims it can write in your
Speaker 1: writing style. Now, great, where's anthropic going to be in
Speaker 1: two years? The toilet probably going to need a pretty
Speaker 1: big toilet for all those GPUs. Oh open AI. They
Speaker 1: have this idea, Yeah, their ideas have fucking suck, so
Speaker 1: far and the irony is large. Language models as an
Speaker 1: idea aren't a bad one. The concept is interesting, a word, calculator, sexy, orto, correct,
Speaker 1: whatever you call it. There are meaningful things you could
Speaker 1: build with that, but not at this cost, not like this,
Speaker 1: not this much money. Not stealing from artists, not stealing
Speaker 1: from writers. I don't know if mine have been used,
Speaker 1: but if they have, I got the legal resources to fight,
Speaker 1: and I fucking will. I'm sick of this shit. I'm
Speaker 1: sick of what I see in being done to contractors.
Speaker 1: I'm sick of what I see happening to art directors
Speaker 1: who lose their jobs to some shitthead using day three mini.
Speaker 1: It's grotesque. It's enough to turn your stomach. And as
Speaker 1: we come towards the end of the year, you may
Speaker 1: have at the beginning of the show and been like,
Speaker 1: why Ed is so Why is he so annoyed? I
Speaker 1: think I've done a good job explaining it, but I
Speaker 1: want to end on a good note and look, I
Speaker 1: fear for the future for many reasons, but I always
Speaker 1: have hope because I believe that there are still good
Speaker 1: people in the tech industry, and I love technology. I'm
Speaker 1: going to say every episode that I can, because I
Speaker 1: really do. I love my computer. I love the people
Speaker 1: are fine through it. I love the friends and the
Speaker 1: families loved one I've found through it, and I know
Speaker 1: a lot of you do too. And I want to
Speaker 1: make that clear because none of this is a problem
Speaker 1: with tech as a whole. The people who have taken
Speaker 1: over tech are the problem, the management consultant elite, the
Speaker 1: business people who just want to see growth at all costs.
Speaker 2: But I do have hope.
Speaker 1: I do have hope because of Blue Sky, which is
Speaker 1: a social network that I've posted on for over a
Speaker 1: year that's finally taking route.
Speaker 2: And this isn't an ad.
Speaker 1: This is just somewhere I spend eleven hours a day posting,
Speaker 1: but it feels different.
Speaker 2: It's growing rapidly.
Speaker 1: It's competing with Threads and with Twitter, and they're doing
Speaker 1: someone on an honest product and an open protocol. I'm
Speaker 1: not saying it's the solution for everything. I'm just saying
Speaker 1: solutions are possible. People are building them, people are trying.
Speaker 1: It doesn't have to be like this. The rot economy
Speaker 1: does not have to control the destiny of tech, and
Speaker 1: I think better things can happen.
Speaker 2: It's going to take a while. Things are going to
Speaker 2: blow up.
Speaker 1: I'm scared for this industry for what happens after Generative
Speaker 1: AA collapses, and not just for the initial problem, but
Speaker 1: when they don't have anything else the next quarter. But
Speaker 1: there are other ideas out there. There are other ideas
Speaker 1: of the future that aren't just born out of this shitty,
Speaker 1: scuzzy billionaire mindset from shit heels like Sandar Pashai and
Speaker 1: Sam Ortman and Prabagar Ragavan. And they can and they
Speaker 1: will grow out of the ruins that these people create.
Speaker 1: I want you to have hope. Hope isn't just about
Speaker 1: blindly being optimistic. You can feel hopeful while still being
Speaker 1: pissed off at everything. Hope is about getting up every
Speaker 1: day and being willing to say what you think better
Speaker 1: looks like, what you think a better world could be.
Speaker 1: You don't have to do it at scale. You don't
Speaker 1: have to be an influencer. You don't have to write,
Speaker 1: you don't have to have a tech podcast. You just
Speaker 1: have to talk to your friends. You have to talk
Speaker 1: to the people you know. You have to fight within
Speaker 1: the institutions you are in to find the joy and
Speaker 1: to push out things like generative AI. We can have
Speaker 1: better and you are the beginning of fixing these problems.
Speaker 1: And I actually believe that with enough pushback, these big
Speaker 1: tech companies can change too. I'm not relying on them.
Speaker 1: I hate that I have to use their products, but
Speaker 1: you don't. Perhaps you can find alternatives. I always say
Speaker 1: it's a great day to join blue Sky or use
Speaker 1: Signal proton males apparently great. I'm very much stuck in
Speaker 1: the Gmail ecosystem, which sucks a few decades in there.
Speaker 2: It's tough, is it decades now?
Speaker 1: Either way, It's hard to escape the rot economy whole,
Speaker 1: but there are bits of yourself you can remove from it.
Speaker 2: Please do not give up hope. Please stay angry.
Speaker 1: If you are angry, not telling you to be angry.
Speaker 1: Your indignation is necessary. Your righteous indignation is necessary to
Speaker 1: tell these people to go fucking pounds sand your little changes.
Speaker 1: Those discussions you have with colleagues and friends and loved
Speaker 1: ones about these problems. That knowledge is powerful, and I
Speaker 1: encourage you to talk about these things. The tech industry
Speaker 1: has grown big and strong, telling you you're too stupid
Speaker 1: to understand what they're doing. And unless I'm very much
Speaker 1: mistaken based on the readers and listeners to talk to
Speaker 1: you all get this. I just explained GPUs and server architecture,
Speaker 1: and shit, I think you mostly got it right. I'm
Speaker 1: assuming you did. You keep listening, and that's because this
Speaker 1: stuff isn't that complex. They want you to believe it
Speaker 1: is so that they can stay powerful. But you're a
Speaker 1: lot goddamn smarter than you give yourself credit for. You're
Speaker 1: a lot goddamn stronger than you are too. Don't let
Speaker 1: these people make you feel oppressed. Don't let them make
Speaker 1: you feel weak.
Speaker 2: You are not.
Speaker 1: You are so much more valuable to them than they'll
Speaker 1: ever be to you.
Speaker 2: You have been conned.
Speaker 1: You are the victim, and you will succeed long term.
Speaker 1: Spread the good ideas. Talk about what a good world
Speaker 1: looks like, and thank you for listening. Thank you for
Speaker 1: listening to Better Offline. The editor and composer of the
Speaker 1: Better Offline theme song is Matosowski. You can check out
Speaker 1: more of his music and audio projects at Mattasowski dot
Speaker 1: com m A T T O.
Speaker 2: S O W s ki dot com.
Speaker 1: You can email me at easy at Better offline dot com,
Speaker 1: or visit Better Offline dot com to find more podcast links.
Speaker 2: And of course my newsletter.
Speaker 1: I also really recommend you go to chat dot where's
Speaker 1: youreaed dot at to visit the discord, and go to
Speaker 1: our slash Better Offline to check out our reddit.
Speaker 2: Thank you so much for listening. Better Offline is a
Speaker 2: production of cool Zone Media.
Speaker 1: For more from cool Zone Media, visit our website cool
Speaker 1: Zonemedia dot com, or check us out on the iHeartRadio app,
Speaker 1: Apple Podcasts, or wherever you get your podcasts.