Speaker 1: Cau Zone Media. Hey, folks, it's me Ed, So I'm
Speaker 1: off this week, get my wisdom teeth out finally time.
Speaker 1: But I'm going to rerun this episode the rock com Bubble,
Speaker 1: and I want to be clear that this is two
Speaker 1: years old. It's gonna I am sure at some point.
Speaker 1: I'm like, this is going to end in three quarters,
Speaker 1: which I was. I was wrong about that one. Nevertheless,
Speaker 1: this is an important piece because I think everything about
Speaker 1: the AI bubble comes back to the rock com bubble,
Speaker 1: which is the idea that the big companies they run
Speaker 1: out of hypergrowth ideas they don't have a new smartphone,
Speaker 1: they don't have a new cloud computing. And I think
Speaker 1: this episode is super educational, and yeah, I'm taking a
Speaker 1: week off, so enjoy this. Remember it's from like September
Speaker 1: twenty twenty four. But nevertheless, it's very, very important that
Speaker 1: you listen to this as I think that this is
Speaker 1: going to be kind of formative to the future. Anyway. Enjoy, Hello,
Speaker 1: and welcome to Better Offline. I'm your Hoe stad Ze Tron.
Speaker 1: In the next two episodes, I want to present you
Speaker 1: with a theory about why the tech industry has felt
Speaker 1: so weird for the last few years, and why there
Speaker 1: are so many products that have popped up that don't
Speaker 1: seem to really do anything or be things that people
Speaker 1: have actually asked for. And it comes down to a
Speaker 1: few simple questions, chief of them, what if the next
Speaker 1: big thing in tech is actually years or decades away?
Speaker 1: What if the era of hypergrowth in tech is over now?
Speaker 1: As I've mentioned before, I believe the rot economy is
Speaker 1: to blame for a lot of this. It's a growth
Speaker 1: at all cost mindset that sits at the core of
Speaker 1: pretty much everything I've written or spoken about. It's this
Speaker 1: force that drives businesses to grow bigger rather than better,
Speaker 1: and make products to conquer markets and show growth to
Speaker 1: the public markets, rather than fixing a problem that you
Speaker 1: or I might have or a business might have, or
Speaker 1: provide a necessary service that was nevertheless popular and profitable.
Speaker 1: And the rot economy doesn't feel like any other economic
Speaker 1: period I've seen. It's not like, say, I don't know
Speaker 1: the post two thousand and eight financial crisis or that
Speaker 1: stagnation that lingered afterwards. And what's different was there isn't
Speaker 1: really a single obvious event that started the decline of
Speaker 1: the services we're using all the companies that make them,
Speaker 1: and there's not really like a Layman Brothers crater we
Speaker 1: can point out and say, there you go, that's the thing.
Speaker 1: The closest I can come is kind of FTX, which
Speaker 1: was the big crypto crash, the big massive Ponzi scheme
Speaker 1: that no one really saw coming other than many people
Speaker 1: who were looking behind the scenes. But other than that,
Speaker 1: that was kind of what crashed crypto. And maybe it
Speaker 1: was the end of the zero interest free era where
Speaker 1: interest rates went up and it was harder to get money.
Speaker 1: But it was no one thing you could point out.
Speaker 1: But I do want to try, and I have one
Speaker 1: epoch I think for when the rot economy kind of
Speaker 1: took over, and I'd want to point to the latter
Speaker 1: point of the twenty tens. Think about it, like really
Speaker 1: think about it for a second. Sometime after twenty nineteen,
Speaker 1: the tech industry it cand of lost its sizzle. There
Speaker 1: were new gadgets, there were new apps, new services, but
Speaker 1: tech started to feel iterative rather than innovative. Yet they
Speaker 1: were making more money than ever, and by twenty twenty one,
Speaker 1: even the pretense of any gradual improvement was really dropped.
Speaker 1: It felt like, I don't know, they were trying to
Speaker 1: sell us things that didn't really exist. We were told
Speaker 1: that NFTs would replace physical, tangible collectibles, and that cryptocurrency
Speaker 1: would replace regular money, while also emancipating customers for an
Speaker 1: unstoppable market force like inflation or big tech. Because of
Speaker 1: course cryptocurrency came with it the idea and a mean
Speaker 1: idea of decentralized software, and this was all meant to
Speaker 1: get rid of rent seeking middle men that were taking
Speaker 1: parts of every purchase, despite the very same middle men
Speaker 1: investing in cryptocurrency. Yet the actual services that came out
Speaker 1: of these movements didn't really seem to do anything or
Speaker 1: improve our lives in any meaningful way. And we were
Speaker 1: told at one point that our futures were in the
Speaker 1: meta US and we lived in this massive interconnected called
Speaker 1: New Internet. When we actually got there, it was just
Speaker 1: this really wonky VR virtual reality space that Mark Zuckerberg
Speaker 1: has somehow burned thirty six billion dollars on. It's all
Speaker 1: so weird. And today we're told that we have this
Speaker 1: glorious AI powered future that's just imminent. Yet what we've
Speaker 1: actually got is this unprofitable, unsustainable generative AI that has
Speaker 1: this horrible unastainable problem of hallucination, where it spits out
Speaker 1: incorrect information authoritatively, which, worryingly, Google CEO Sander Pesha has
Speaker 1: said in an interview with The Verge is an inherent
Speaker 1: feature of a technology that he's now plugged into Google Search,
Speaker 1: which means it's generating these horrible answers to queries based
Speaker 1: on the links of a search engine that Sandar Peshai
Speaker 1: has helped decay. It's all just very frustrating, and it's
Speaker 1: also quite useless. Kind of it logical too. And at
Speaker 1: the forefront of this AI boom is Sam Moltman and
Speaker 1: his eighty billion dollar Jugger or open AI, a company
Speaker 1: that claims it's going to build artificial general intelligence, one
Speaker 1: that experiences human like cognition, which is just not possible
Speaker 1: with generative AI. The tech he is selling today is
Speaker 1: not going to give us AGI. I just want to
Speaker 1: be abundantly clear about that. Anytime you read Sam Mortman
Speaker 1: talking about AGI, he is talking about tech the Open
Speaker 1: AI does not have and is not building. They may
Speaker 1: claim they're building it behind the scenes, but they're only
Speaker 1: working on generative AI. And the frustration you hear in
Speaker 1: my voice, you might have felt yourself. You might not have,
Speaker 1: but it's this prevailing sense of you keep telling me
Speaker 1: the future is here, but when I look at what
Speaker 1: the future is, it isn't even close. And the products
Speaker 1: you're selling me aren't actually useful. Let me give you
Speaker 1: another example. Windows laptops will soon integrate an AI high
Speaker 1: powered search feature called Recall that allows you to search
Speaker 1: everything you've ever done on your computer in the last
Speaker 1: three months. And it does so by recording everything, everything
Speaker 1: from the meetings you've been into to the things you've written.
Speaker 1: I should be clear, I don't think anybody actually asked
Speaker 1: for a feature like this, and it's also inherently invasive.
Speaker 1: It directly encroaches on your privacy and your security, and
Speaker 1: it takes screenshots of your machine every few seconds and
Speaker 1: stores them, along with AI generated inferences, in a locally
Speaker 1: held database. This isn't good, and the fact that they're
Speaker 1: not sending anywhere doesn't really make it better. It is,
Speaker 1: in essence, a pre installed screen recorder, the kind of
Speaker 1: thing that hacker might install on a victim's computer, and
Speaker 1: if an attack against access to it, it's obvious how
Speaker 1: catastrophic the ramifications are. Or let's be honest, domestic abuses,
Speaker 1: people at work. There are people who can get on
Speaker 1: your computer, force access by forcing you or just getting
Speaker 1: your password, and they can now see everything you've done.
Speaker 1: Despite this being an inherently AI powered feature. It just
Speaker 1: it can't distinguish between your regular computer usage and say,
Speaker 1: sensitive information passwords, health information, trade secrets, the very obvious
Speaker 1: stuff you would not want your computer recording. It treats,
Speaker 1: I don't know, like an email from your doctor with
Speaker 1: the same level of concern and copying as it would
Speaker 1: like YouTube or a chat conversation. It's just really bad
Speaker 1: and already white hat security researchers they've created a proof
Speaker 1: of concept malware applications that can pull sensitive data obtained
Speaker 1: or generated by Microsoft Recall from your computer and with
Speaker 1: pretty minimal effort, And now the UK's Information Commissioner's Office,
Speaker 1: the nation's privacy watchdog. By the way, they can actually
Speaker 1: do quite steep fines. It's not great. They're now probing
Speaker 1: whether the tech actually presents an unacceptable risk to consumers,
Speaker 1: which as anyone who thinks about it for more than
Speaker 1: twelve seconds or even five can confirm it does. It's
Speaker 1: just very frustrating, and who asked for this, who actually
Speaker 1: asked for this? Now, every major tech company they're integrating
Speaker 1: AI into their products and services. Yeah, underneath the hood,
Speaker 1: the AI they're integrating doesn't actually seem to do anything new,
Speaker 1: or generate a profit or solve anyone's actual needs. Even
Speaker 1: the companies themselves seem incapable of explaining why AI is
Speaker 1: such a big deal. To the point of the Microsoft Super
Speaker 1: Bowl commercial for its AI powered co pilot assistant featured
Speaker 1: multiple things that it cannot do, like generate the code
Speaker 1: for an open world game. When you, by the way,
Speaker 1: you type in the prompt, which on the commercial is
Speaker 1: three D generate the code for an open world three
Speaker 1: D game, and you type that in and it will
Speaker 1: give you a list of things you should do to
Speaker 1: build an open world game. It's so strange, and it's
Speaker 1: so strange how so many of these companies just can't
Speaker 1: really explain why this is the next best thing. They
Speaker 1: just need you to be even And maybe that might
Speaker 1: actually be the problem. For decades, the tech industry and
Speaker 1: its various venture capital funders, they've been remarkably good at
Speaker 1: coming up with both innovative new products and ways to
Speaker 1: turn them into huge new markets For hypergrowth, one hundred
Speaker 1: billion trillion dollar markets that they could then sell in
Speaker 1: to investing companies. Within actual industries, you had search engines,
Speaker 1: digital maps, smartphones and apps, social media, cloud computing, software
Speaker 1: as a service, electro cars, streaming audio and video. And
Speaker 1: also another thing. In the period between like two thousand
Speaker 1: and five and twenty twenty four, we've tripled the amount
Speaker 1: of people on the Internet. It's now over five billion
Speaker 1: people who use it. And that's also another problem I'll
Speaker 1: get to in a little bit. There were obvious meaningful
Speaker 1: markets to move into. Ways to connect people, ways to
Speaker 1: get people content, they wanted algorithms to present it to them,
Speaker 1: ways to sell people, Things that solve problems that they
Speaker 1: had or either for the first time or solving them faster,
Speaker 1: like the transition from physical to digital media, and problems
Speaker 1: that were both important to solve and actually solvable. Teke
Speaker 1: has perpetually succeeded at building things, new things that neatly
Speaker 1: create these new markets, and they've been incentivized by both
Speaker 1: the public and private markets in growing these companies as
Speaker 1: fast and as big as possible to dominate these new markets,
Speaker 1: with the assumption that there would always be more of them.
Speaker 1: More massive, multi billion and multi trillion dollar markets to conquer,
Speaker 1: and it must be clear you should never assume anything.
Speaker 1: Between twenty twenty two and twenty twenty three, only one
Speaker 1: hundred million additional people got online, which is the slowest
Speaker 1: rate of growth in the last eighteen years. And that's
Speaker 1: not because the need to bring connectivity to the masses
Speaker 1: is actually solved. Especially in the global South. It hasn't been.
Speaker 1: And as of the most recent figures from the UN's
Speaker 1: International Telecoms Union shows thirty three percent of the world's population,
Speaker 1: or about two point six billion people, have never actually
Speaker 1: used the Internet. But I have more worrying stuff. I've
Speaker 1: received some data from similar Web that shows that the
Speaker 1: majority of the Internet's top one hundred web properties have
Speaker 1: seen significant declines in traffic since twenty twenty one. In
Speaker 1: the years since the world slowly emerged from lockdown, Google
Speaker 1: dot com has seen the decline of five point three
Speaker 1: percent in web visits, as has YouTube, which lost three
Speaker 1: point eight percent of its traffic, Facebook, which lost a
Speaker 1: remarkable twenty seven point seven percent, Twitter which lost three
Speaker 1: point five percent, Amazon which lost eleven point six percent,
Speaker 1: Twitch dot tv seventeen point five percent lost there. They
Speaker 1: are owned by Amazon. Sadly, Wikipedia, which lost twenty four
Speaker 1: point eight percent of its traffic. And here's the thing
Speaker 1: that really worried me. Porn sites like ex videos twenty
Speaker 1: seven point four percent loss and porn harp seventeen point
Speaker 1: one percent loss. When the pawns down, that's that's when
Speaker 1: you start worrying. Though you might be tempted to dismiss
Speaker 1: this all as a result of life returning to normal
Speaker 1: and the traditional office based environments aren't particularly conducive to
Speaker 1: a crafty mid day wank, you shouldn't. The trend actually
Speaker 1: began earlier, with similar Web data showing the declines starting
Speaker 1: in twenty nineteen. My analysis focus is in twenty twenty
Speaker 1: one to twenty twenty four because that's the one I
Speaker 1: have the most detailed month by month and year by
Speaker 1: year breakdowns for. And by the way, I'm going to
Speaker 1: put in the episode notes links to things so that
Speaker 1: you can all see this. I want you to know
Speaker 1: this date is very worrying. But don't trust me. Trust
Speaker 1: the data from similar Web. When you look at the
Speaker 1: trajectory of the web's most valuable properties on a year
Speaker 1: over year basis, things look quite bleak, with Google which
Speaker 1: lost about point nine percent, YouTube lost about four point
Speaker 1: four percent, Facebook seven point seven percent loss, Twitter six
Speaker 1: point two percent loss, Twitch eleven point nine percent loss,
Speaker 1: and Amazon two point seven one percent loss, all still
Speaker 1: seeing significant de clients. Only a few sites like Reddit,
Speaker 1: which saw a thirty one point three percent growth, TikTok
Speaker 1: eleven point six percent growth, and Instagram nine point nine
Speaker 1: percent growth but trending down every year since twenty nineteen,
Speaker 1: and also LinkedIn up seventeen point nine percent. They're the
Speaker 1: only ones that are really seeing good year over year growth.
Speaker 1: And while it's important to note that these are visits
Speaker 1: rather than active users, and in fairness, this data only
Speaker 1: covers visits made through a browser rather than an app,
Speaker 1: this is still a truly astounding trend that suggests, for
Speaker 1: the most part that the web's largest platforms are seeing
Speaker 1: kind of a digital recession. While there might be revenue
Speaker 1: coming to these companies and they might still be acquiring
Speaker 1: no users, there's really no good way to spin the
Speaker 1: fact that traffic to platforms like Amazon and Google has plateaued,
Speaker 1: then declined, something shifting downwards, and it's been doing so
Speaker 1: since twenty nineteen. Perhaps this explains why platforms like Google
Speaker 1: and Facebook have kept making changes to make each USERG journey,
Speaker 1: create more engagement and make it more profitable to sustain
Speaker 1: growth because fewer people than ever are actually visiting the platforms.
Speaker 1: I believe her at the end of something I called
Speaker 1: the rockcom boom, the tech industry's hypergrowth cycle, where there
Speaker 1: were so many new lands to conquer, so many new
Speaker 1: ways to pile money into, so many new innovative, useful ideas,
Speaker 1: that it felt like every tech company could experience perpetual
Speaker 1: growth just by throwing money at a problem. It also
Speaker 1: explains why so many tech products YouTube, Google, Search, Facebook,
Speaker 1: and so on feel like they're either trapped in amber
Speaker 1: or like they've got tangibly worse, because when you think
Speaker 1: about it, when there's no incentive to improve the things
Speaker 1: you've already built, why would you You should just be
Speaker 1: working on the next big thing or new ways to
Speaker 1: reduce the thing you have right now to keep people
Speaker 1: coming back, Yeah, maybe, but to keep people on the platform,
Speaker 1: sometimes by monopolizing an industry so they have nowhere else
Speaker 1: to go. And that's the thing. All of these come companies, Facebook, Google, Amazon,
Speaker 1: I mean all of them. They've all built themselves on
Speaker 1: this very simple idea that they'd always be a next
Speaker 1: big thing. And I'm not even saying that they won't be,
Speaker 1: but they've assumed, and the problem that they're facing right
Speaker 1: now is that there would always be one around the corner.
Speaker 1: This belief that exponential growth is not just a reasonable
Speaker 1: expectation but a requirement is central to the core of
Speaker 1: the rot in the tech industry. And as these rapacious
Speaker 1: demands run into reality, I'm sorry to say that the
Speaker 1: rockcom bubble is going to deflate. And as we speak,
Speaker 1: the tech industry they're grappling with somewhat of a midlife crisis,
Speaker 1: and they're desperately searching for that next hyper growth market,
Speaker 1: and they're eagerly pushing customers and businesses to adopt this
Speaker 1: technology that nobody actually asked for. They must keep the
Speaker 1: rot economy alive because if they don't, they're gonna they're
Speaker 1: gonna have to face the fact that they've built pretty
Speaker 1: unsustainable businesses. Even though they're profitable, they keep growing. The
Speaker 1: only thing that grows forever is cancer. The raw economy
Speaker 1: and takes growth lust. It isn't new, though venture capital
Speaker 1: has been incentivizing and monetizing rot for over a decade,
Speaker 1: and Mark andrew's An advocated in twenty eleven that we
Speaker 1: should look to expand the number of innovative new software
Speaker 1: companies created rather than constantly questioning their valuations. Yet just
Speaker 1: a year earlier, in March twenty ten, his partner Ben Horowitz,
Speaker 1: he advocated for fat startups, and I'll link to that
Speaker 1: in the notes, saying that you can't save your way
Speaker 1: to winning the market, and that startup purgatory is when
Speaker 1: you don't go bankrupt, but you fail to build the
Speaker 1: number one product in this space and have zero chance
Speaker 1: of becoming a high growth company, which, by the way,
Speaker 1: Horowitz described this as worse than startup hell because you
Speaker 1: are and I quote stuck with the small company, even
Speaker 1: if it's cash flow positive. At the time, this might
Speaker 1: have made sense to them because this mindset made them
Speaker 1: quite rich, even though there's something inherently abnormal about describing
Speaker 1: being a staple profitable company as being an estate that's
Speaker 1: worse than hell. Anyway, I want you to take a
Speaker 1: step back in time with me, though, and think about
Speaker 1: how much has changed in the last ten years, fifteen years.
Speaker 1: Think about it for a second. In twenty ten, it
Speaker 1: felt like we were just making our first steps into
Speaker 1: the digital world. It was still pretty new twenty ten.
Speaker 1: There was no Instacart. There was no Zoom, no Snapchat,
Speaker 1: no Lyft, no Tinder, no Slack, no Snowflake, no door Dash,
Speaker 1: no TikTok, no Discord, no Coinbase, no Robinhood. And there
Speaker 1: wasn't any Venmo or Zel either. Tesla, Facebook, LinkedIn, Airbnb, Uber, Square, Alassian, Octa,
Speaker 1: Mongo dB, work Day, Palo Alto networks, Asana, UiPath, Spotify.
Speaker 1: They hadn't even gone public. Instagram was still independent, it
Speaker 1: wasn't part of Facebook yet, and consumer drones they hadn't reached. Ubiquity,
Speaker 1: voice assistance hadn't even been launched. Full gled networks they
Speaker 1: were brand new, and Amazon Web Services, one of the
Speaker 1: most profitable things in the world, as I'll get to,
Speaker 1: was on course to make six hundred million dollars in
Speaker 1: revenue in twenty ten, which is, by the way, two
Speaker 1: point five percent of the twenty four billion that AWS
Speaker 1: on its own made in the first quarter of twenty
Speaker 1: twenty four. Google and Apples stock prices were worth less
Speaker 1: than a tenth of what they are today, and Nvidia,
Speaker 1: a stock now worth over one thousand dollars traded at
Speaker 1: under three dollars a share. Between two thousand and five
Speaker 1: and twenty eighteen, we saw this incredible surge of innovation
Speaker 1: and tech valuations, and this kind of seemingly unstoppable period
Speaker 1: of growth and big sexy ideas that created big, sexier
Speaker 1: new markets. While applications existed in two thousand and eight,
Speaker 1: Apple's App Store and the perpetual nature of connection that
Speaker 1: we get from smartphones. It consumerized the concept of distinct
Speaker 1: service based apps, as well as the overall concept of
Speaker 1: software ecosystems, which has become a multi trillion dollar philosophical
Speaker 1: and economic force, and it's changed just about everything about
Speaker 1: how we communicate and even do business. It's remarkable and
Speaker 1: also was a new market just sitting there waiting for
Speaker 1: the hardware and software to catch up with it, and
Speaker 1: for someone to come up with the idea, of course,
Speaker 1: connecting people digitally through social media, voice, video, and so on.
Speaker 1: It's been central to the hypergrowth cycle, with innovations like
Speaker 1: connectivity and cloud infrastructure allowing multiple companies to carve out
Speaker 1: these one hundred billion and trillion dollar ecosystems on some level,
Speaker 1: big tech companies could put money through research and development, investment,
Speaker 1: or acquisitions wherever they needed to as a means of
Speaker 1: making the future a reality, and thanks to the fact
Speaker 1: that interest rates were rock bottom and there was a
Speaker 1: lot of private money going into startups, they were never
Speaker 1: really short of cash to do so. One point, hype
Speaker 1: began to outpace innovation, and while there were new ideas,
Speaker 1: the actual fundamental technology required to actually innovate may not
Speaker 1: actually exist, making a lot of these ideas theoretical and
Speaker 1: so far behind the cart that you may as well
Speaker 1: shoot the horse dead. When Mark Zuckerberg renamed Facebook to Meta,
Speaker 1: he told Casey Newton, who by the way, should feel
Speaker 1: nothing but shame for accepting this in good faith, that
Speaker 1: he believed the metaverse was an embodied Internet that was
Speaker 1: a persistent, synchronous environment that would resembles social media but
Speaker 1: also be an environment where you're embodied in it. That's
Speaker 1: a real quote. By the way, This is of course
Speaker 1: total nonsense, a total word salad that will make you
Speaker 1: throw up, conjured up by somebody without any real ideas
Speaker 1: that knows that they won't receive any pushback on them anyway,
Speaker 1: not even from those whose job it is to scrutinize
Speaker 1: the tech industry and ask the difficult questions so that
Speaker 1: people don't buy stupid Anyway, what Zuckerberg had actually built,
Speaker 1: by which for the most part I mean acquired, was
Speaker 1: a half fast virtual world accessed through niche virtual reality
Speaker 1: technology that nobody asked for, that already kind of existed,
Speaker 1: that made people sick, and that Meta couldn't actually build.
Speaker 1: And what Mark Zuckerberg wanted to do was built the
Speaker 1: successor to the mobile Internet in the hopes that quote
Speaker 1: the metaverse would be another hypergrowth industry where people would
Speaker 1: buy land which they didn't, or hang out on mass
Speaker 1: which they didn't, or have meetings which they did not,
Speaker 1: all while sharing data and watching ads served by Meta
Speaker 1: and other companies that Meta could sell ads too. In
Speaker 1: this cynical, horrible version of the future, the Internet, neutral
Speaker 1: standards based and controlled by no single company would be
Speaker 1: transformed into a platform, a feudal system where Meta would
Speaker 1: set the rules an exactor cut from each engagement, interaction
Speaker 1: and transaction. It was quite plainly a power grad the
Speaker 1: likes of which the Internet hasn't seen since the bleak
Speaker 1: days of Internet Explorer six and Active X if you
Speaker 1: don't know what those are. Microsoft has some evil things
Speaker 1: in the past. The tech, however, it was never there.
Speaker 1: Mark Zuckerberg sold everybody on the concept of a Ready
Speaker 1: Player one Metaverus and putting aside for a second that
Speaker 1: Ready Player one is a poorly written dystopia. This vision
Speaker 1: hinges heavily on the idea of technology that completely immerses
Speaker 1: the user and their senses and makes them feel like
Speaker 1: they're actually in a world, which is just insane. It's
Speaker 1: not possible, It's not even close to possible. We're talking
Speaker 1: about full sensory takeover and the ability to traverse the
Speaker 1: digital world somehow without moving. This would be a revolution,
Speaker 1: both in cloud computing because just the raw data would
Speaker 1: be insane, but also immersive technology. Just what was everyone
Speaker 1: doing accepting this idea, And let's be honest, the reality
Speaker 1: was just so much worse. You had these nausea inducing
Speaker 1: headsets that led you into this horrible, clunky, cartoon world.
Speaker 1: It wasn't fun or practical or useful, and tens of
Speaker 1: billions of dollars of R and D costs developing headsets
Speaker 1: that lose money on every sale. It's just insane. By
Speaker 1: the way, Mark Zuckerberg has spent tens of billions of dollars,
Speaker 1: and I realized sometimes people don't like it when I
Speaker 1: get yelly, and I apologize. But where has the thirty
Speaker 1: billion dollars gone? What has Mark Zuckerberg done with it?
Speaker 1: Where is it going? I don't know. I'm not accusing
Speaker 1: anyone of anything, but the whole thing just feels like
Speaker 1: a con. And Zuckerberg's glossy Metaverse video the first one
Speaker 1: he published when they rebranded Facebook to Meta. It was
Speaker 1: significant in quite a few ways. First of all, the
Speaker 1: most disgusting bullshit I've ever seen a tech company put out,
Speaker 1: just complete lies. But it was also a demonstration of
Speaker 1: the company's future ambitions and directions, and it showed exactly
Speaker 1: what they hoped they could build. And had Zuckerberg actually
Speaker 1: done so, I would have said it would have been
Speaker 1: a success, But said success would have been predicated on
Speaker 1: a pace of innovation that we haven't had in for
Speaker 1: a decade or longer. I don't actually know how we
Speaker 1: get to anything close to what Mark Zuckerberg was selling,
Speaker 1: But forty billion dollars later, the Metaverse is just nowhere
Speaker 1: near close to existing. And yet he keeps burning cash
Speaker 1: in the hopes that he can get just one more
Speaker 1: hit of hypergrowth. Man, that's all Mark Zuckerberg needs. Just
Speaker 1: one more hit, brother, Just give me a little more growth.
Speaker 1: I'll be okay. I swear I won't need any in
Speaker 1: the future. Putting that aside, I really think this is
Speaker 1: why Zuckerberg is so full force on generative AI. He
Speaker 1: shoved it into every meta platform now, regardless of whether
Speaker 1: it does anything useful, whether it's doing anything weird, like
Speaker 1: commenting on a parenting group that it has a gifted
Speaker 1: child and telling parents where to take their kids. It's
Speaker 1: just so weird. And it's the same reason that Sun
Speaker 1: Dhar Pashai and Liz Reader forcing generative AI into Google Search,
Speaker 1: even as it misinforms customers and it's recommending people put
Speaker 1: glue on their pizza and eat rocks, and it's claiming
Speaker 1: that Barack Obama is a muzzle, and it's regurgitating stories
Speaker 1: from the Onion as indisputable fact, and it's just it's
Speaker 1: very frustrating. You can hear it in my voice. But
Speaker 1: it all comes down to a simple problem, which is
Speaker 1: the tech industry is getting withdrawal symptoms. They're realizing there
Speaker 1: might not be any massive new markets. They might not
Speaker 1: be another way to create another billion dollar arm of
Speaker 1: a trillion dollar enterprise. And on some level, I believe
Speaker 1: that the industry wide alignment around this unprofitable, unsustainable AI
Speaker 1: tool is just proof that they're getting desperate and that
Speaker 1: some of them might be irredeemably washed. Why else would
Speaker 1: Sam Altman spend most of the time talking about what
Speaker 1: AI might do. Why else would Sam Altman talk so
Speaker 1: often about building artificial general intelligence, a thing that, as
Speaker 1: I have mentioned, is totally and utterly impossible to build
Speaker 1: with any of the generative AI tech his company makes,
Speaker 1: and likely requires kinds of computing that do not exist. Yet.
Speaker 1: It's really frustrating, and the rock com bubble bursting is
Speaker 1: it's going to be nasty for bid Tech. It's going
Speaker 1: to wash out at least one of these companies, and
Speaker 1: it might take years to happen. But the growth trend
Speaker 1: is reversing. Every single one of these companies with a
Speaker 1: few exceptions, I realize, is seeing traffic declines and they're
Speaker 1: not improving. Perhaps they will find new ways, but where
Speaker 1: are they going to find them? What are the things
Speaker 1: they're going to do? What happens when none of this
Speaker 1: stuff actually is the future. What happens when Google Search
Speaker 1: tells someone to actually do something that kills them how
Speaker 1: to clean up a chemical firing correctly, for example. There
Speaker 1: are very real ways that these things are going to
Speaker 1: hurt people. But putting that aside, even if they don't,
Speaker 1: they're not going to make them the kind of money
Speaker 1: and get them the kind of customers that they needed
Speaker 1: to perpetually show perpetual growth. As I said last episode,
Speaker 1: two episodes ago, Facebook is dying and Facebook's dying because
Speaker 1: I actually believe Mark Zuckerberg is quite innovative about one thing,
Speaker 1: which is he can smell blood in the water, except
Speaker 1: now he can smell his I think Mark Zuckerberg realized
Speaker 1: that this was happening many years before everybody else, and
Speaker 1: that's why he pushed the metaverus in twenty twenty one.
Speaker 1: That's why he was talking about Web three and twenty
Speaker 1: twenty one. That was a very very easy year to
Speaker 1: get money, and it was a year when people were
Speaker 1: aggressively buying things, so it was a great time to
Speaker 1: sell new ideas. Also, I think he read Ready Player
Speaker 1: one and they actually liked it, which is so strange.
Speaker 1: But either way, I do think Zuckerberg's an innovator because
Speaker 1: he's realized that the highpergrowth era is over and he's
Speaker 1: really trying to create the next best thing. Now, Notice
Speaker 1: I didn't say something good or something useful. That's just
Speaker 1: not in Zuckerberg's DNA, and it's not in Sundhar Pashai
Speaker 1: or sam Or or satch In Adela's either Microsoft, Amazon, Meta.
Speaker 1: These companies are not innovative anymore because they're no longer
Speaker 1: engineered to be. When the living was free and easy,
Speaker 1: when there were tons of these markets to attack and
Speaker 1: grow and eat and shit out the other way and
Speaker 1: make money from, they just needed a management consultant mindset.
Speaker 1: It was growth at all costs. It was growth all
Speaker 1: the time, because all they had to do was throw
Speaker 1: more money at the problem and they'd always keep growing.
Speaker 1: And to their credit, they have been. But mark my words,
Speaker 1: they're not going to grow forever. And they don't have
Speaker 1: a next trick. They don't have the next one billion
Speaker 1: user product, they don't have the next innovation, and I
Speaker 1: don't think they're going to have it for a long time.
Speaker 1: And this is why all of this stuff feels kind
Speaker 1: of weird. It's why all of this stuff doesn't seem
Speaker 1: to be solving a need that you or I have,
Speaker 1: or that even a business has, And it's why so
Speaker 1: often it feels like they're pleading with us to believe
Speaker 1: that this is the future. Companies that build useful things
Speaker 1: that people need don't need to talk about what they're
Speaker 1: build in the future. You can see it in the
Speaker 1: things they're selling you today. You could see in the
Speaker 1: early days of cloud computing, how you bickered with storage
Speaker 1: like Dropbox or Box might have existed. I was using FTT.
Speaker 1: Thank god for Dropbox, honestly, but seriously, you could see
Speaker 1: why these things were the future. And in the next episode,
Speaker 1: I'm going to walk you through how the tech industries
Speaker 1: promises no longer actually seem to match their ability to
Speaker 1: build things and how this desperation I've been discussing shows
Speaker 1: that were close to the rockcom bubble bursting. Thanks for listening,
Speaker 1: Thank you for listening to Better Offline. The editor and
Speaker 1: composer of the Better Offline theme song is Matasowski. You
Speaker 1: can check out more of his music and audio projects
Speaker 1: at Matasowski dot com m Att w Ski dot com.
Speaker 1: You can email me at easy at Better Offline dot
Speaker 1: com or visit better Offline dot com to find more
Speaker 1: podcast links and of course my newsletter. I also really
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Speaker 1: Offline to check out our reddit. Thank you so much
Speaker 1: for listening. Better Offline is a production of cool Zone Media.
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