Speaker 1: Zone Media. Hello on, Welcome to this week's Better Offline Monologue.
Speaker 1: I'm your host ed Zetron. What it's been a peculiar week.
Speaker 1: Two days ago, Sarah Fryar, chief financial officer of open AI,
Speaker 1: said in a stage at a Wall Street Journal conference
Speaker 1: that an IPO isn't on the cards and foolishly said
Speaker 1: the open AI was and I quote looking for an
Speaker 1: ecosystem of banks, private equity, maybe even governmental and that
Speaker 1: the way governments can come to bear can really drop
Speaker 1: the cost of financing but also increase the loan to value,
Speaker 1: so the amount of debt you can take on top
Speaker 1: of an equity portion. Now, she also, according to Bloomberg,
Speaker 1: hinted at some sort of federal backstop, literal government backing
Speaker 1: for loans for data centers. Very strange. Now, I will
Speaker 1: add this as being completely misreported as open AI demanding
Speaker 1: government funds. Had someone ring me the other night say
Speaker 1: did you hear about this? It's not what happened. To
Speaker 1: be clear, I believe absolutely that Sarah Fryer was throwing
Speaker 1: out the idea to see if governments might buy, only
Speaker 1: to find the entirety of social media and most of
Speaker 1: the mainstream media reacting like Friar had kicked the family dog. Nevertheless,
Speaker 1: I want to be clear that open AI has not
Speaker 1: requested a federal backstop, and that as ever, it appears
Speaker 1: that even the big media outlets do not seem to
Speaker 1: go and listen to the things that people say or check.
Speaker 1: It's ridiculous. This is a huge story if you misreported,
Speaker 1: which is what's happened. Nevertheless, as I said on Blue Sky,
Speaker 1: this is an absolute diva moment for open AI. Oh
Speaker 1: I'm so messy. I can't even afford mid data centers. Please,
Speaker 1: Uncle Sam, I promised to spend one point five trillion
Speaker 1: dollars in the next five years. Oh, I'm so weak
Speaker 1: and powerless in the face of all the promises I made.
Speaker 1: Grow up, wipe your own ass. If regular people promised
Speaker 1: a bunch of people a ton of money that they
Speaker 1: couldn't afford, they be sued, but in prison or have
Speaker 1: their assets reduced to zero. Why do we have to
Speaker 1: do something different for open AI? Anyway, this is not
Speaker 1: going to happen. I've never seen a more aggressive bipartisan
Speaker 1: descent for an idea by everyone from better offline listeners
Speaker 1: in the middle of prying hubcaps off of cars to
Speaker 1: the powerful Dunce coalition led by Matty Iglesias. Everybody fucking
Speaker 1: hates this idea, and if I'm honest, I think everybody
Speaker 1: is sick and tired of AI. What was once a
Speaker 1: market wide consensus that AI was the future has now
Speaker 1: become a cacophony of hand ringing in just about every
Speaker 1: major media outlet. What hasn't helped was a very very
Speaker 1: weird post through a Nvidia's social media account, a single
Speaker 1: image that said, statement from Nvidia CEO Jensen Wang. As
Speaker 1: I have long said, China is nanoseconds behind America in AI,
Speaker 1: it's vital that America wins by wrestling ahead and winning
Speaker 1: developers worldwide. Not really sure what that meant, but this
Speaker 1: was I found after the fact, tied to a statement
Speaker 1: Huang made to the Financial Times that mostly said the
Speaker 1: same thing. But I've got to say, this is the
Speaker 1: weirdest statement I've seen. It's so weird. What do you want, Jensen?
Speaker 1: More developers to developers by GPUs or so wait a second,
Speaker 1: China doesn't have the latest in video GPUs. How are
Speaker 1: they nanoseconds behind America? Surely America should be I don't
Speaker 1: know hours days at Jensen, I don't know why you're
Speaker 1: using words that relate to time as measures of distance.
Speaker 1: But nevertheless, why aren't American companies further ahead when they
Speaker 1: have easy access to Blackwell and soon via Rubin GPUs?
Speaker 1: What exactly do you want us to do? Jensen? What
Speaker 1: is the thing? It's like vague posting, being like I
Speaker 1: really shouldn't be alone right now, you know, I just
Speaker 1: I've had such a bad night. I wish someone would
Speaker 1: text me and tell me they're buying a gpu Hanah. No, man,
Speaker 1: you're the CEO of the largest company on the stock market.
Speaker 1: Do you not have a little more bizaz, little more
Speaker 1: riz rizzless? Jensen, You're rizzless even with those beautiful leather jackets.
Speaker 1: And it's almost as if there isn't a coherent reason
Speaker 1: to buy GPUs or any real progress coming out of
Speaker 1: American AI labs, or really any of them were still though,
Speaker 1: and this was the one that really I think was underreported.
Speaker 1: During Microsoft's last earnings, the company reported a four point
Speaker 1: one billion dollar loss on their thirty two point five
Speaker 1: percent staking open air, meaning that due to the company
Speaker 1: using the equity method for accounting OpenAI lost twelve billion
Speaker 1: dollars in the third quarter of this calendar year. Now,
Speaker 1: open Ai CFO Sarah Fryar said that this was way overestimated.
Speaker 1: And I want to be clear about something. Microsoft's earnings
Speaker 1: are public filings as they are a public company, meaning
Speaker 1: that these are looked over by accountants and lawyers. Why
Speaker 1: is the chief financial officer of open ai disputing these numbers.
Speaker 1: That's extremely goddamn weird. And this isn't the first time
Speaker 1: Sarah Friar has said some weird shit, even in this
Speaker 1: conference appearance, but in general. The other time I saw
Speaker 1: her say that it was thirty five dollars a token
Speaker 1: in the past for open AI's models. Thirty five bucks
Speaker 1: per million tokens doesn't even make sense, but I think
Speaker 1: thirty five bucks per token would mean if they spend
Speaker 1: like trillions of dollars a year. Regardless, you're the CFO
Speaker 1: of open Ai. Shouldn't you know this shit a little
Speaker 1: bit better? Now? Before you email me something about gap
Speaker 1: earnings or accounting. I'm going to include links in the
Speaker 1: show notes because I assure you this loss is directly
Speaker 1: reflective of open Eye's actual losses, and that's really weird.
Speaker 1: By the way. It's really weird. Indeed, and now that
Speaker 1: we know that, we have to ask how bad are
Speaker 1: open aye's actual losses? How much worse are things than
Speaker 1: we know? I assure you this loss is real. I
Speaker 1: trust it. It's been well reported, looked over by actual accountants,
Speaker 1: and a link to a Wall Street Journal piece where
Speaker 1: an actual accountant looked at this and made this statement.
Speaker 1: And I got to ask, what is it that Sarah
Speaker 1: Fryar and Clammy Sammy don't want us to know what
Speaker 1: is going on? The Information reported that in the first
Speaker 1: half of this year, open aye made four point three
Speaker 1: billion dollars of revenue but had a net loss of
Speaker 1: thirteen point five billion dollars. But that's in six months.
Speaker 1: Are those indicative of the real numbers? Has someone been fibbing?
Speaker 1: I trust the Information's reporting, by the way, I fully
Speaker 1: believe them, and I at this point am just concerned
Speaker 1: that we're not getting the full picture. I don't know
Speaker 1: what open ai is sharing to people. I don't know
Speaker 1: how these reporters have got these numbers, But that twelve
Speaker 1: billion dollar loss in a quarter that feels quite dramatic,
Speaker 1: and it feels a lot more than open ai has
Speaker 1: been hinting they're losing. What else? Don't we know what
Speaker 1: else is going on in Open Ai that we are
Speaker 1: not Party two? Hopefully we find out soon. In any case,
Speaker 1: it feels like something came unbuckled this week. Glamuel the
Speaker 1: Smiling Man is watching a specter horned Silicon Valley