Speaker 1: Z media greetms and salutations. I m ed zatrom and
Speaker 1: this is better off limee and you're better off line monologue.
Speaker 2: It's been a funny week for me, went on.
Speaker 1: Bloomberg did an interview cleanly covering the highlights of my
Speaker 1: AI bubble thesis. Didn't say fuck shit or bugger even once.
Speaker 1: A bunch of people loved it. And now everybody is,
Speaker 1: for some reason mysteriously talking about the lack of return
Speaker 1: of investment on AI.
Speaker 2: That's because everything I said has come true.
Speaker 1: Back in September twenty twenty four, I talked about the
Speaker 1: subprime AI crisis and said that when companies adopting LLM
Speaker 1: based services were forced to pay the actual real cost
Speaker 1: of tokens, they'd start to freak the fuck out.
Speaker 2: Now, clam you all, clemanth clammy.
Speaker 1: Sam Ultman himself has added an unfortunate comment in the
Speaker 1: mix purpose There's insider. Ormond said at a recent event
Speaker 1: that ROI had now become a meme, quoting so but
Speaker 1: he's saying, my company spent my entire twenty twenty six
Speaker 1: budget in Q one, Can you make this more efficient?
Speaker 1: Adding that the company was an open AI in this case,
Speaker 1: I mean was exploring other ways to deliver more value
Speaker 1: for less spend. I love how casual he says this too.
Speaker 1: It's like, ah, yeah, you know, just people are blowing
Speaker 1: their entire yearly budgets in a few months.
Speaker 2: But it's fine.
Speaker 1: He also said that at the beginning of twenty twenty six,
Speaker 1: the issue was spend never came up, and people were
Speaker 1: totally happy with the amount they were spending. But now
Speaker 1: AI costs were and I quote a huge issue. Well
Speaker 1: that's probably because open Ai and Anthropic moved their enterprise
Speaker 1: customers from heavily subsidace monthly subscriptions to token based billing
Speaker 1: in Q one twenty twenty six.
Speaker 2: Hmmm, I wonder if it's that. It could be.
Speaker 1: I guess it could be there. But put differently, nobody
Speaker 1: actually paid what AI actually really cost, and now they're
Speaker 1: having to and they're screaming like they stepped on a
Speaker 1: mouse trap. Like Tom and Jerry, They're freaking the fuck out.
Speaker 1: Journalis are freaking out too. Everyone's writing pieces that discussed
Speaker 1: the debate around the return on investment on AI as
Speaker 1: if it's a normal, insane thing that we're four years
Speaker 1: in and still debating whether there's ROI debating whether this
Speaker 1: is all actually worth it? Did anybody fucking check No?
Speaker 1: And it must be clear that these companies cannot, under
Speaker 1: any circumstances slow down. Both open Ai and Anthropic have
Speaker 1: sold investors on a vision that both of them will
Speaker 1: make around two hundred billion dollars in annual revenue.
Speaker 2: Each by the end of the decade.
Speaker 1: Those data centers are being built under the belief that
Speaker 1: they and probably multiple other Anthropic and open Ai sized
Speaker 1: companies will ab exist and be have the money and
Speaker 1: see be able to spend that money on compute. And
Speaker 1: both of them have made a combined one point one
Speaker 1: trillion dollars in compute commitments across Google, Microsoft, Amazon, Oracle, Core, Weave, Cerebrus,
Speaker 1: and even fucking SpaceX. Both companies lose billions and billions
Speaker 1: of dollars. I'd probably sell like tens of billions of
Speaker 1: dollars if I really add the guess. Their only hope
Speaker 1: is to keep growing to such an astoni level that
Speaker 1: midwit investors in the recently lead poison keep feeding them
Speaker 1: cash under the auspices of some sort of theoretical profitability.
Speaker 1: The only way to keep that cong going is to
Speaker 1: keep on growing, and it's become very obvious that both
Speaker 1: companies are bonking their heads against the ceiling of their
Speaker 1: customer spend to make matters worse. Earlier in the week,
Speaker 1: Sam Altman talked to CNBC's David Faber on the subject.
Speaker 1: When asked about these spending problems, he said that he
Speaker 1: assumed that the industry will figure that out pretty quickly.
Speaker 1: Samuel Credenza, methusilla, formaldehyde. Altman, you just raised one hundred
Speaker 1: and twenty billion fucking dollars. You are the AI industry.
Speaker 1: You are the one that's meant to work this out.
Speaker 1: That's your job. You can't be four years into this no,
Speaker 1: it loads refused cash dump and still shrugging your shoulders
Speaker 1: like the Kevin James mean and saying, I'm just a
Speaker 1: little guy. I can't do everything. I'm a birthday boy.
Speaker 1: I'm a little birthday boy. Give me one hundred billion
Speaker 1: dollars because it's my birthday. You cannot do that, Sam Altman,
Speaker 1: you can't do that. That's that's crazy, man. And it's
Speaker 1: very clear that open AI is the quote drill cooked
Speaker 1: on the pit Memphis style. The Q one twenty twenty
Speaker 1: six non gap operating margin was negative one hundred and
Speaker 1: twenty two percent. They lose billions and billions and billions
Speaker 1: of dollars a year, and chat GPT's growth is stalled
Speaker 1: at around nine hundred and five million weekly active users.
Speaker 1: We are approaching the end of this farce, and these
Speaker 1: companies cannot afford to slow down a little, even a little,
Speaker 1: not a touch and as Goldman's sacks. As Jim Cavello
Speaker 1: said in a recent podcast, and I love this quote
Speaker 1: because it's Jim is very smart and he's been ahead
Speaker 1: of this.
Speaker 2: But it's so simple.
Speaker 1: At some point, you've got to make money as you
Speaker 1: make investments in a business, so you can generate returns.
Speaker 1: As people are just quoting that, like, damn, brother, shit,
Speaker 1: why did not think of that?
Speaker 2: Hey, you invest money?
Speaker 1: And I thought you just invested money in businesses because
Speaker 1: it felt good, because it made it made you you
Speaker 1: feel good inside, it made you feel warm and fuzzy.
Speaker 1: I didn't know, what do you mean a return on investment?
Speaker 1: What do you mean she's talking about put money in
Speaker 1: this for a reason you create?
Speaker 2: Jim Cabello, you so crazy.
Speaker 1: But four years in, companies are spending more than ever
Speaker 1: on a product without a clear return on investment.
Speaker 2: It's obvious at this point.
Speaker 1: However, many use cases the mildly mold poisoned people in
Speaker 1: AI dancing around about. No one can seem to actually
Speaker 1: like say what it means or why it matters or indeed,
Speaker 1: even if all of these people claim they're writing all
Speaker 1: their code with AI, what that actually changes. Doesn't make
Speaker 1: the software better, doesn't I'm so close to Tucker Carlson voice.
Speaker 1: Doesn't make the software better, doesn't seem to make anything better.
Speaker 1: It just seems to make our apps worse. But folks,
Speaker 1: we're reaching the end of this era, and I am
Speaker 1: currently working on a massive story, bigger than both of
Speaker 1: my huge exclusives from last year, and one you will
Speaker 1: not want to miss. I am really excited about this.
Speaker 1: Technically there's too but I know one's going to come in.
Speaker 1: One's pretty big, one's ginormous. But before then, I'm taking
Speaker 1: a week off. I'm getting my wisdom teeth out. I
Speaker 1: do need a break, so I'm going to rest up.
Speaker 1: You should rest up too, and keep on laughing at
Speaker 1: these oaths burning billions of dollars on software that doesn't
Speaker 1: have a return on investment.
Speaker 2: Zechra nowt