Speaker 1: Also media, Hello and welcome to Better Offline. I'm, of
Speaker 1: course your host ed zitron. As ever, go to the
Speaker 1: episode notes and buy some merchandise. We have the Beautiful
Speaker 1: challenge coin available until August twenty four. I want to say,
Speaker 1: subscribe to my newsletter or send me a threatening email.
Speaker 1: I love hearing from you all, and I also love
Speaker 1: to see that our subreddit has gone over twelve thousand
Speaker 1: vagabonds and scallywags. I'm so proud of our community. Anyway,
Speaker 1: this week's going to be a fun one and two
Speaker 1: part of plus a special report on GPT five, and
Speaker 1: it's kind of a culmination of the last year and
Speaker 1: a half of work that I've done covering the AI bubble. Now,
Speaker 1: the reason I return to this subject so often is
Speaker 1: because each week I've become more and more convinced that
Speaker 1: the only way the AI bubble ends is well badly.
Speaker 1: Every week I see more and more evidence that this
Speaker 1: is structured in a way that is doomed when not
Speaker 1: even abruptly, but they were going to be abrupt little farts,
Speaker 1: little burps as the bubble begins letting out air, and
Speaker 1: in a way where I see people in innovation as
Speaker 1: the collateral damage in the global financial crisis. The Federal
Speaker 1: Reserve and the US government, as well as other equivalents
Speaker 1: around the world, work to ensure that when a bank
Speaker 1: or hedge FuMB went under or a big insurance company
Speaker 1: became insolvent, the collapse was managed in a way that
Speaker 1: didn't implode the entire financial system. The difference with AI
Speaker 1: is first that it's nowhere here as essential as financial
Speaker 1: services to the global economy and thus unlikely to be
Speaker 1: saved as AIG was in two thousand and eight, but
Speaker 1: also that there's no real way for this to end gracefully,
Speaker 1: just due to the way all of this is happening,
Speaker 1: how it's built. I'll get into it, and all the
Speaker 1: signs are now there, And I have been hesitant to
Speaker 1: make this call the whole time. By the way, where well,
Speaker 1: there's a contagion here, where one precarious company falls, the
Speaker 1: rest eventually tumble, sparking a chain of events that will
Speaker 1: be well, pretty bad. But how does this end? At
Speaker 1: the start of August, we saw no less than three
Speaker 1: different pieces, two in the Wall Street Journal and one
Speaker 1: in the Financial Times, Financial Nacial Times, Who Cares, published
Speaker 1: within the span of one week, all asking the same
Speaker 1: question whether the massive proliferation of data centers is a
Speaker 1: massive bubble, and honestly, since then there have been several more.
Speaker 1: Although these publications at times seem to have taken the
Speaker 1: default position of AI's inevitable value, they've begun to sour
Speaker 1: on the idea that it's going to happen anytime soon.
Speaker 1: To be clear, these are sensible, well respected business newspapers,
Speaker 1: hardly partisan voices from the AI wars. Separately, CNBC reported
Speaker 1: that quirked up three hundred cores and open ai is
Speaker 1: either raised or is about to raise another eight point
Speaker 1: three billion dollars in cash, less than two months since
Speaker 1: it raised ten billion dollars from SoftBank and a selection
Speaker 1: of other venture catital firms. While this sounds ambiguous, this
Speaker 1: reporting only claims that it has secured that funding, not
Speaker 1: that it's received it, which is an important distinction. I've
Speaker 1: pointed out in the past that secured funding often comes
Speaker 1: with its own conditions attached. On toime top of this,
Speaker 1: I should add that there is currently a rumor that
Speaker 1: open ai insiders, so the people working at the company,
Speaker 1: are selling six billion dollars with stock at a five
Speaker 1: hundred billion dollar valuation that's around the price of Netflix.
Speaker 1: This is fucking stupid. It's so stupid, and every time
Speaker 1: I read about it, I feel a little insane. But
Speaker 1: it's also weird that you've got people like soft Bank
Speaker 1: and Dragonea who invested in the eight point through billion
Speaker 1: dollar round, who are also buying the stock. All this
Speaker 1: sounds stinky and I hate to be crude. I hate
Speaker 1: to be too crude here, But where the fuck is
Speaker 1: all this money going. Is open ai just incinerating capital?
Speaker 1: Is it compute? Is it salaries? Is it more compute?
Speaker 1: Is it data centers? Because soft Bank isn't actually building
Speaker 1: anything for stargate It's all okay, I calm down a
Speaker 1: little bit, but it's all getting a little bit silly now.
Speaker 1: The information, which has some of the best sourcing in
Speaker 1: any publication covering the AI bubble, i'd argue, though I've
Speaker 1: taken issues with their reporting in the past, suggested that
Speaker 1: open ai intends to use this money to build data centers,
Speaker 1: possibly the only worst investment it can make than general ivai,
Speaker 1: and it's the one that open ai can't really avoid
Speaker 1: because they're also somehow running out of compute two and
Speaker 1: amongst this already ridiculous situation. Since the issue of open
Speaker 1: Ai and Anthropic's actual revenues, which I wrote about my
Speaker 1: premium newsletter on the first of August Please give Me Money,
Speaker 1: and have roughly estimated to be five point twenty six
Speaker 1: billion dollars in the case of open Ai and one
Speaker 1: point five billion dollars in Anthropic as of July. Now,
Speaker 1: to be clear, there are very different numbers going around.
Speaker 1: Get to in a second. In any case, these estimates
Speaker 1: were made based on both companies predilection for leaking their
Speaker 1: annualized revenue or month times twelve. Now, this extremely annoying
Speaker 1: term annualized or recurring revenue is one that I keep
Speaker 1: bringing up because it's become the de facto wait for
Speaker 1: GENERATIVEAI companies to express their revenue, and both open ai
Speaker 1: and Anthropic leaking them intentionally and doing so in a
Speaker 1: way that suggests that they're not even using the traditional
Speaker 1: ways of calculating them. Because arr isn't in and of
Speaker 1: itself an evil thing, it's fairly stand up within software
Speaker 1: as a service companies, except they run completely different to
Speaker 1: open ai and Anthropic anyway. Open ai leaked on July thirtieth,
Speaker 1: twenty twenty five, that it was at twelve billion dollars
Speaker 1: of annualized revenue, so it earned around eight hundred and
Speaker 1: thirty three million dollars in some sort of thirty day period,
Speaker 1: and then two days later, on August first, twenty twenty five,
Speaker 1: the New York Times reported it was at thirteen billion
Speaker 1: dollars annualized, at one point eight billion dollars of monthly revenue.
Speaker 1: It's taking the pierce a little bit. It's very clear
Speaker 1: open AI is not talking in actual calendar months, at
Speaker 1: which point we can assume they're using like a trailing
Speaker 1: thirty day window, as in the month is just thirty days,
Speaker 1: rather than a calendar month like May or June or July.
Speaker 1: We can, however, declaratively say that it's not saying the
Speaker 1: month of June or the month of July was twelve
Speaker 1: or thirteen billion dollars annualized, because if it was, they
Speaker 1: wouldn't have given two vastly different goddamn numbers in the
Speaker 1: same two day period. It doesn't make any sense. And
Speaker 1: to be clear, while I can't say for certain, I
Speaker 1: believe these leaks are deliberate. Open AI is timing matches
Speaker 1: exactly with the fundraise. Similarly, on Anthropic side, these revenues
Speaker 1: are beginning to get really, really weird. Anthropic went from
Speaker 1: making around seventy two million dollars eight hundred and seventy
Speaker 1: five million dollars annualized in January to four hundred and
Speaker 1: thirty three million dollars in monthly revenue in July, or
Speaker 1: at least it leaked on July first, twenty twenty five
Speaker 1: that it was at four billion annuallyzed to the Information,
Speaker 1: which is three hundred and thirty three million dollars, and
Speaker 1: then claimed it had reached five billion annualized four hundred
Speaker 1: and sixteen million to Bloomberg on July twenty ninth, twenty
Speaker 1: twenty five. I'm so tired of this. Something stinky is happening.
Speaker 1: The people who will not admit something stinky is happening,
Speaker 1: I'm beginning to question their sanity or whether they're just
Speaker 1: inherently corrupt in some way. And you can be corrupt
Speaker 1: without money, you can just do it for your mates. Anyway.
Speaker 1: How did Anthropic get there, I'm guessing it was from
Speaker 1: cranking up prices on Cursor, a product made by a
Speaker 1: company called any Sphere that lets developers generate code using
Speaker 1: Anthropics models and other models, and we've had the confirmation
Speaker 1: that's the case thanks to the Information reporting the one
Speaker 1: point four billion dollars of the annualized revenue from Anthropic.
Speaker 1: It's from its two top customers, so around one hundred
Speaker 1: and sixteen million dollars in a month, and the biggest
Speaker 1: of which is Cursor. Confusingly, the Information also says that
Speaker 1: Anthropics Clad Code is generating nearly four hundred million dollars
Speaker 1: in annualized revenue, roughly doubling from just a few weeks ago.
Speaker 1: Per their report, it's around thirty three million dollars a
Speaker 1: monthly revenue. They really jacked that product up. I need
Speaker 1: to do a whole thing on glored code if I'm honest,
Speaker 1: because that whole thing has become a complete nightmare. They've
Speaker 1: had to completely the weekly rate limits are coming. God,
Speaker 1: what a fucking mess. Every time I think about this
Speaker 1: company get upset. In any case, I think Cursor is
Speaker 1: a huge indicator of the current fragility of the bubble
Speaker 1: and the fact that for most AI startups there's simply
Speaker 1: no way out because being acquired or going public does
Speaker 1: not appear to be a viable route. But before I explain,
Speaker 1: please listen to one of the many stable, normal advertisers
Speaker 1: that gives money to the show, not to me, though
Speaker 1: I don't get the money from the ads. And we're back.
Speaker 1: So how exactly is one AI powered coding environment such
Speaker 1: a load bearing part of the AI trade. We're going
Speaker 1: to be focusing now on both the fact that Cursor
Speaker 1: is a systemic risk to the AI industry, one where
Speaker 1: if it fails, could make every other player that bit
Speaker 1: less secure, and the fact that Cursor is emblematic of
Speaker 1: what makes general if AI companies so paradoxical, where you
Speaker 1: can have bonkers valuations on one hand, but also no
Speaker 1: way for these companies to go public or sell to
Speaker 1: someone else and justified the actual valuation itself. I know
Speaker 1: it sounds a little insane, but I believe that Cursor
Speaker 1: is the weak point of the entire bubble, and I'm
Speaker 1: going to explain why and how this could go. This
Speaker 1: is by no means inevitable, but I cannot work out
Speaker 1: what Cursor does other than this Cursor makes before at
Speaker 1: least the massive changes to its service. Though Tom the
Speaker 1: town over at Newcomer suggests that the revenue is still
Speaker 1: going up. For now, they make about five hundred million
Speaker 1: dollars in annualized revenue around forty two million dollars a month.
Speaker 1: This makes it the single highest earning general IFAI company
Speaker 1: that isn't called AI or Anthropic, and the highest learning
Speaker 1: company built on top of primarily Anthropics models. Its success
Speaker 1: is symbolic to the greater AI movement and just as
Speaker 1: it hit its peak, Anthropic and open Ai to a
Speaker 1: lesser extent, though they seem more interconnected. During GPT five's launch,
Speaker 1: decided to add priority processing in priority service tiers, demanding
Speaker 1: more money upfront and causing Cursor to have to massively
Speaker 1: degrade its service to keep up. I also have a
Speaker 1: premium piece that explains this from a few weeks go
Speaker 1: within a monologue two and it's over at wezered dot app.
Speaker 1: Please give me money to explain In short, curses AI
Speaker 1: powered coding Editor used to have fairly unrestrained access to
Speaker 1: the various models provided by companies like open Ai and Anthropic.
Speaker 1: In mid June, a few weeks after Anthropic introduced priority
Speaker 1: tiers that required enterprise companies to pay upfront and guarantee
Speaker 1: a certain throughput of tokens and increase costs on prompt cashing,
Speaker 1: which is a big part of AI coding. Curse mass
Speaker 1: the change the amount its users could use its product
Speaker 1: and introduce the two hundred dollars a month subscription. As
Speaker 1: an aside to this, Anthropic also competes with Curser's AI
Speaker 1: coding product with Clawed Code, its own service. I've talked
Speaker 1: about it in the past, and I'll talk about it
Speaker 1: some more in this series too. Cursor, as Anthropic's largest client,
Speaker 1: the second being GitHub Copilot, represents a material part of
Speaker 1: its revenue, and its surging popularity meant that it was
Speaker 1: sending more and more revenue to Anthropic. Anthropic use this
Speaker 1: opportunity to raise prices on accessing its models to continue
Speaker 1: providing service at an acceptable level to Cursor's customers by
Speaker 1: introducing priority toier access on May thirtieth, twenty twenty five.
Speaker 1: This has allowed Anthropic to duce its revenues, and due
Speaker 1: to the upfront nature of these contracts, Cursor is locked
Speaker 1: in regardless of how well it does. The net result
Speaker 1: of these cost increases means that Curser's product is less
Speaker 1: attractive to its customers and will thus eventually make it
Speaker 1: less money. At this point, one has to ask, how
Speaker 1: does Cursor survive. Its product isn't profitable and the means
Speaker 1: it used to make the company so successful have become untenable.
Speaker 1: It is guaranteed a certain throughput of tokens per second
Speaker 1: to the major model developers. Chief of the meanthropic. But
Speaker 1: Cursor itself said in the whole Cursor Ultra two hundred
Speaker 1: dollars a month thing that it signed multi year deals
Speaker 1: with multiple cloud providers like open Ai, Xai and Google.
Speaker 1: Cursor's product is now worse by the way. They also
Speaker 1: have made it so the automodel that used to be
Speaker 1: unlimited will now as of September fifteenth, charge a fee.
Speaker 1: It's so fucking funny. I love this shit. It's so
Speaker 1: funny watching this happen. But really, people are going to
Speaker 1: cancel their subscriptions, their annualized revenue will drop, and their
Speaker 1: ability to raise capital will suffer. As a direct result,
Speaker 1: Cursor will, regardless of this drop in revenue, have to
Speaker 1: pay the cloud companies what it owes them as if
Speaker 1: it had the business it used to because it was
Speaker 1: a guaranteed throughput. I've spoken to a few different people,
Speaker 1: including a company with an enterprise contract, either planning to
Speaker 1: cancel or trying to find a way out of their
Speaker 1: agreements with Cursor, and they were planning to do so
Speaker 1: as recently as April. I'm sorry recently as April. I
Speaker 1: mean they were planning to do back in April, before
Speaker 1: this shit happened. I'm not a here, you do understand anyway.
Speaker 1: If Cursor is allowed to die, it will be unable
Speaker 1: to pay a chunk of Anthropic and open AI's revenue,
Speaker 1: and yes, the revenue of people like Xai in Google
Speaker 1: as well. It also brings into question whether it's possible
Speaker 1: to build, putting aside any questions of profitability, a business
Speaker 1: of any kind offering services built on top of generative
Speaker 1: AI models, and in turn bring into doubt the veracity
Speaker 1: of investing in this sector writ large. It will also
Speaker 1: call into question whether any other generativai company is a
Speaker 1: real business. This will naturally lead to the question of
Speaker 1: why we're building all these goddamn data centers. Cursor at
Speaker 1: this point faces two options, die or get acquiet. This
Speaker 1: is not an attack on anyone who works at the company,
Speaker 1: nor anything personal. The unit economics of this business do
Speaker 1: not make sense, and yet on some level. Its existence
Speaker 1: is deeply important to the valley's future. And a large
Speaker 1: chunk of anthropics revenue I should add, and Tom totan
Speaker 1: over it, and Newcomer added something like ten percent of
Speaker 1: anthropics revenue comes from Cursor. This is so bad, but
Speaker 1: I'm gonna humor this. I'm gonna hue in this big time.
Speaker 1: Who would actually acquire Cursor? Maybe open Ai, but they
Speaker 1: couldn't acquire Windsurf for another AI company because they were
Speaker 1: too worried that Microsoft was going to get the somehow
Speaker 1: essential ip of what appears to be one of one
Speaker 1: hundred different AI powered coding environments. They also already trade
Speaker 1: and failed to buy Cursor. And if I'm honest, I
Speaker 1: would not be surprised if Curser would sell.
Speaker 2: Now.
Speaker 1: I don't know if open ai has the money, but
Speaker 1: you know they probably would sell. Honestly, Cursor fucked up
Speaker 1: bad not selling to open Ai. They could have got
Speaker 1: ten billion dollars in Sam Mortman would have had to
Speaker 1: accelerate the funding clause. It would have been so goddamn sick.
Speaker 1: But now the only sick here is Cursor's fragile, plagued
Speaker 1: business model. But how about Anthropic. I don't know about
Speaker 1: that one either. They've already got their own extremely expensive
Speaker 1: coding environment, which I estimated in my premium newsletter loses
Speaker 1: the company one hundred percent to ten thousand percent of
Speaker 1: a subscript subscription per customer. That's like a monthly subscription
Speaker 1: just from us. And they did that a few weeks ago.
Speaker 1: And now Anthropic, as of August twenty eighth, is adding
Speaker 1: weekly limits on accounts, which I believe creates some of
Speaker 1: the most gnarly churn in SaaS history. It's going to
Speaker 1: be quite nice. Also, does Anthropic really want to acquire
Speaker 1: its largest customer also with more money. They're not raising
Speaker 1: five billion dollars to bail out Cursor. Anthropic needs that
Speaker 1: to feed directly into Andy Jesse's ass pocket to keep
Speaker 1: offering increasingly more complex models that never quite seemed good
Speaker 1: enough to make any money. But how about Google? They
Speaker 1: know they just sort of bought Windsurf, but I'll get
Speaker 1: it's a complete mess, and they can't do that again.
Speaker 1: They've already given out the participation trophy multiple billions of
Speaker 1: dollars to investors and founders, so nobody has to get
Speaker 1: embarrassed about this. And then allowed Cognition to pick up
Speaker 1: the scraps of a business that made six point eighty
Speaker 1: three million dollars a month after burning one hundred and
Speaker 1: forty three million of investor capital, and tech runch reports
Speaker 1: that Windsurf was left for about one hundred million dollars
Speaker 1: in cash post acquisition. Tech Crunch also reports that Cognition
Speaker 1: paid about two hundred and fifty million dollars for what
Speaker 1: remained of the company. Google paid like two point something
Speaker 1: billion dollars to just take the founders, and Cognition picked
Speaker 1: up the rest. And this deal, by the way, didn't
Speaker 1: actually pay out the majority of Windsurf's employees. He I'll
Speaker 1: have the links to the links to all of this
Speaker 1: in the notes. This whole deal is real sickly though,
Speaker 1: that the investors got paid out, the founders got paid out,
Speaker 1: the employees got fugged. It really sucks. I'll get into
Speaker 1: it in a bit, but let's go with meta. Here's
Speaker 1: the thing. If I'm Michael Truell, the CEO of Cursor
Speaker 1: of any Sphere, even I am calling Mark Zuckerberg, and
Speaker 1: I'm pretending that I think the only person in the
Speaker 1: world who can usher in superintelligence is the guy who
Speaker 1: burned more than forty five billion dollars on the metaverse
Speaker 1: and believes that not wearing AI glasses in the future
Speaker 1: will be a disadvantage. I would say all manner of
Speaker 1: shit about the future, and that the only way to
Speaker 1: do this was to buy my AI powered coding startup
Speaker 1: that literally cannot afford to exist. I would tell Zuckerberg anything.
Speaker 1: I would be like, mate, I just watched the actual
Speaker 1: star I think you're the people from Stargate. He's never
Speaker 1: gonna watch Stargate. He's just gonna be like, whoa, yeah,
Speaker 1: I've heard that's a TV show. Wow, A great. And
Speaker 1: then you get however much money you need, just twenty
Speaker 1: billion dollars, He'll just pull that out of his pocket.
Speaker 1: He has it. He has twenty billion. He'll just handed
Speaker 1: to you. He's probably got it in is like in
Speaker 1: his safe. Just go and ask mine, how much money
Speaker 1: do you think Mark Zuckerberg's got his safe? Email me,
Speaker 1: email me with the guests. Anyway, This whole can't afford
Speaker 1: to exist thing that really is the problem. These companies
Speaker 1: are all going through the same motions that every company
Speaker 1: before them did. Raise as much money as possible, get
Speaker 1: as big as possible and eventually scale to the point
Speaker 1: of the e fat with enterprise cash. Except the real
Speaker 1: problem is that, just like the Big text New gluttony
Speaker 1: of physical real estate, it's taken on general ifai company
Speaker 1: is a burden with a constant aggressive form of cloud
Speaker 1: damn the endless punishment of the costs for accessing the
Speaker 1: API for general if ai models that always seem to
Speaker 1: get a little bit better, but never in such a
Speaker 1: way that anything really changes other than how much Anthropic
Speaker 1: and open Ai are going to need at the end
Speaker 1: of the month, or they break your startup's legs. I'm
Speaker 1: not even trying to be funny. Anthropic raised its prices
Speaker 1: on curses so severely it broke its already unprofitable business model.
Speaker 1: These products, while also for the most part not producing
Speaker 1: that much revenue, need to be sold with users being
Speaker 1: aware of and or sensitive to the costs of providing them.
Speaker 1: The Cursor's original product was a twenty dollars a month
Speaker 1: service for five hundred fast requests of different models, in
Speaker 1: the same way that accessing clawed code on any subscription
Speaker 1: is either twenty one hundred or two hundred dollars a month.
Speaker 1: Rather than paying per API cores, because these companies also
Speaker 1: products that shield the customer from the actual costs of
Speaker 1: running the services, and those costs could be vast. One article,
Speaker 1: which I'll link to in the spreadsheet, argues that given
Speaker 1: the trajectory of the development of AI models, it's not
Speaker 1: unreasonable to imagine a full time engineer spending one hundred
Speaker 1: thousand dollars in tokens each year per engineer. Just really
Speaker 1: think about that for a second. I'll have the link
Speaker 1: in there. It's fucking stupid. It's so fucking stupid, I
Speaker 1: want to scream. And the irony is that, despite being
Speaker 1: willing to kill these companies by fundamentally changing the terms
Speaker 1: and put in which they access their models, Anthropic is
Speaker 1: also in some way dependent on Cursor, Repler and other
Speaker 1: similar firms continuing to buy tokens at the same rate
Speaker 1: as before, as that consumption is baked into their own
Speaker 1: arr figures, as well as the forward looking revenue projections
Speaker 1: they've given to investors to convince them to give them
Speaker 1: five billion dollars. It is, in some sense of Kobyashi
Speaker 1: maru Anthropic is an existential need to screw over its
Speaker 1: customers by hiking rates and imposing long term commitments, but
Speaker 1: its existence is also in some way predicated on these
Speaker 1: companies continuing to exist. If Cursor and Replit both die,
Speaker 1: that's a significant chunk of anthropics API business gone, and
Speaker 1: may I remind you that significantly overshadows its subscription business,
Speaker 1: making it almost like an inverse of open AI, where
Speaker 1: subscriptions drive the bulk of revenue, also a shitty business model.
Speaker 1: Anthropic's future is wedded to Cursor, and I just don't
Speaker 1: see how Cursor survives, let alone exists or gets subsumed
Speaker 1: by another company in a way that mirrors our acquisitions
Speaker 1: have worked since Ever, if Curser does not sell for
Speaker 1: a healthy amount, I'm talking ten to twenty billion dollars,
Speaker 1: and I mean actually sell, not the founders are hired
Speaker 1: and a strange contractual agreement that pays out investors and
Speaker 1: its assets are sold to Rick from porn Stars. It's pawn.
Speaker 1: By the way, it will prove that no generative AI
Speaker 1: company to this date has actually been successful in reality.
Speaker 1: I expect a Chumley esque deal that helps CEO Michael
Speaker 1: Truell by a Porsche while his staff makes nothing. It's
Speaker 1: Cursor worth ten billion dollars or more. No, no matter
Speaker 1: how good its product may or may not be, it
Speaker 1: is not good enough to be sold at a price
Speaker 1: that doesn't require Cursor to incinerate hundreds of millions of
Speaker 1: dollars with no end in sight. And this ultimately gives
Speaker 1: us a real conundrum. Why aren't generative AI startups selling
Speaker 1: I'll tell you what, though, other people are selling stuff
Speaker 1: and it's time for you to buy it. Listen to
Speaker 1: these ads and let me know what you think at
Speaker 1: my email address, which is Robert Evans app and we're back. So, really, though,
Speaker 1: why are there so few generative AI acquisitions? I know
Speaker 1: you're probably going to assume that there have been a
Speaker 1: ton of them, right, if you've not been obsessively reading
Speaker 1: every single story about that for over a year, you
Speaker 1: might have missed it. Book before we go any further,
Speaker 1: there have been some, but they've been sparse, and they
Speaker 1: often have a weird structure. That's typically the exception, not
Speaker 1: the rule in tech. So here's a real one. AMD
Speaker 1: bought Silo AI, the largest private AI lab in Europe,
Speaker 1: in August twenty twenty four, for six hundred and sixty
Speaker 1: five million dollars, which appears to be the only real
Speaker 1: acquisition in generative AI history and appears to be partially
Speaker 1: based on Silo's use of AMD's GPUs Elsewhere, n Vidio
Speaker 1: bought Octo AI for an estimated two hundred and fifty
Speaker 1: million dollars in September twenty twenty four, after buying Brev
Speaker 1: dot Dev in July twenty twenty four for an undisclosed sum,
Speaker 1: and then Gretel in March twenty twenty five. Gretel, Brev
Speaker 1: dot Dev, Octa AI. Jesus fucking Christ, these names be normal.
Speaker 1: Be normal for one minute. Yeah. In all three cases,
Speaker 1: these products are used to deploy generative AI and not
Speaker 1: products built on top of generative AI or AI models.
Speaker 1: Canva bought generative AI content and research company Leonardo dot
Speaker 1: Ai in July twenty twenty four from this closed sum.
Speaker 1: But that's small frame. Really. The only significant one I've
Speaker 1: seen was on July twenty ninth, twenty twenty five, publicly
Speaker 1: trained did customer service platform Nice buying AI powered customer
Speaker 1: service company Cognigee in a nine hundred and fifty five
Speaker 1: million dollar deal. I hate these names so much. According
Speaker 1: to c X today, Cognitigi expects about eighty five million
Speaker 1: dollars in revenue this year, though nobody appears to be
Speaker 1: talking about how much it costs to make that revenue. However,
Speaker 1: according to some sources, they judged tens of thousands or
Speaker 1: hundreds of thousands of dollars per contract for their AI
Speaker 1: voice agents that can understand and respond to user input
Speaker 1: in a natural way. Great. Great, we've got one real
Speaker 1: deal company built on models acquisition, and it's a company
Speaker 1: that most people have heard of making around seven million
Speaker 1: dollars a month. But let's take a look at the others.
Speaker 1: So you probably remember Inflection AI to Microsoft, which was
Speaker 1: not an acquisition but a six hundred and fifty million
Speaker 1: dollar licensing deal that, according to Fast Company, may be
Speaker 1: more like a billion dollars when you include things like
Speaker 1: how much it paid to Inflection CEO and former DeepMind
Speaker 1: co founded mister Foss Suleiman, who is most famous for
Speaker 1: just being an abusive and horrible guy to work with.
Speaker 1: Here he's pushing a horrifying nine ninety six culture and
Speaker 1: Microsoft two to do what Muster Phi, You fucking prick. Anyway,
Speaker 1: according to Fast Company, the deal involves a license to
Speaker 1: sell Inflections models, a waiver against any employment claims against
Speaker 1: inflection or Microsoft paying off investors in some sort of
Speaker 1: unnamed compensation for employees. Sounds stinky to me, but let's
Speaker 1: look at Twinsurf to Google and of course Cognition, which
Speaker 1: was also not an acquisition. Windsurf c suite went to
Speaker 1: Google for two point four billion dollars, which paid them
Speaker 1: off along with their investors, and then the rest of
Speaker 1: the staff and the product got acquired by Cognition for
Speaker 1: two hundred and fifteen million dollars. According to tech Crunch,
Speaker 1: investors made one point two billion dollars on the deal,
Speaker 1: with Windsurf co founders Van Mahan and Douglas Chen making
Speaker 1: another one point two billion dollars, and it's staff getting
Speaker 1: to start a new job at a different company building
Speaker 1: something else with According to tech Crunch, a large portion
Speaker 1: of Windsurf's approximately two hundred and fifty employees not benefiting
Speaker 1: from the deal as on the side Mahan and Chen
Speaker 1: fucking suck. I fucking hate these guys, absolute loser psychopaths.
Speaker 1: You make one point two billion dollars and you couldn't
Speaker 1: break off a little bit from that, You fucking ah disgusting.
Speaker 1: You can can't crack that two hundred billion. The point two.
Speaker 1: You can take two hundred million dollars, share it with
Speaker 1: the class. You fucking losers, assholes, pieces of shit. Come
Speaker 1: on the show if you want to hear more words
Speaker 1: like that, you fucking assholes. Anyway, let's talk about Ioproducts
Speaker 1: going to open Ai in an all stock acquisition. This
Speaker 1: dealers a fast and it's unclear of open Ai actually
Speaker 1: bought anything six point four billion dollars in stock for what.
Speaker 1: Johnny Ive's weird face staring at you lovingly as he
Speaker 1: says things like I think we should make it look
Speaker 1: like a circle while making a five million dollars a
Speaker 1: year's salary. Get out of here. It's not real money.
Speaker 1: And then, of course this character dot Ai to Google.
Speaker 1: This was also not an acquisition. Google, to quote the
Speaker 1: Wall Street Journal, paid two point seven billion dollars to
Speaker 1: bring back an AI genius who quit in frustration. I
Speaker 1: would not use the term genius. Well, I don't like
Speaker 1: that term. Just to be clear, Shazir was one of
Speaker 1: the authors of the original Attention is All You Need
Speaker 1: paper that began the transformer based large language model era. Nevertheless,
Speaker 1: much like Inflection, Google paid a licensing fee to character
Speaker 1: dot Ai for its models and hired, according to the
Speaker 1: information it's co founders and many of its engineers, creating
Speaker 1: a fund that would pay out vesting shares as in
Speaker 1: the shares you're given when you join a company that
Speaker 1: you accrue over time as you work there until July
Speaker 1: twenty twenty six. Anything after that you fugged. And now,
Speaker 1: outside of one very industry specific acquisition, there just doesn't
Speaker 1: seem to be an investor with the hunger to buy
Speaker 1: a company like Cursor value that nine point nine billion
Speaker 1: dollars or more if they raise another round, And you
Speaker 1: have to ask why. If ai is has promised the
Speaker 1: thing that will radically change our economy and these companies
Speaker 1: are building the tools that will bring about that change,
Speaker 1: why does nobody want to buy them? And in broader terms,
Speaker 1: what does it mean when these companies, those with ten
Speaker 1: billion dollars are, in the case of open Ai, three
Speaker 1: hundred or even five hundred billion dollar valuations. What does
Speaker 1: it mean when they can't be born and can't go public.
Speaker 1: Where does all this go? What happens next? What's the
Speaker 1: plan here? How will venture firms that plow billions of
Speaker 1: dollars into these businesses bring a return for their LPs.
Speaker 1: That's the limited partners who invest in the venture capitalists.
Speaker 1: If there are no IBOs and no real buyouts, Sure
Speaker 1: investors got paid in these deals, but these deals will
Speaker 1: like pulling teeth. These are like if they do enough
Speaker 1: of these, there will, even in this administration, be an
Speaker 1: antitrust thing. Nevertheless, the economic implications of these questions are
Speaker 1: quite frankly terrifying, especially when you consider the importance that
Speaker 1: VC is historically held in building the US tech ecosystem,
Speaker 1: And they raise further questions about the impact of an
Speaker 1: AI bubble on companies that are promising and do have
Speaker 1: a viable business model and a product with a natural fit,
Speaker 1: but won't be able to raise any cash because everyone's
Speaker 1: putting it into fucking AI. But ed great ed? What
Speaker 1: if Cursor turns profitable? Now great awesome? I would believe
Speaker 1: if it was possible, if it ever ever happened, which
Speaker 1: it's not. I'm not even being sarcastic or rude. It's
Speaker 1: just not happened. No company that actually stakes their entire
Speaker 1: product and genera if AI appears to be able to
Speaker 1: make a profit of any kind, glean a company that
Speaker 1: makes the best eight point three million dollars a month,
Speaker 1: one hundred million dollars an anionized revenue, said that it
Speaker 1: had five hundred and fifty million dollars in cash in
Speaker 1: December of last year, then raised one hundred and fifty
Speaker 1: million dollars in June of this year. Where'd the money go?
Speaker 1: Why does a generative search product with revenues that are
Speaker 1: less than a third of the Cincinnati Reds baseball team
Speaker 1: need a half billion dollars to make eight point three
Speaker 1: billion dollar eight point three million dollars a month. Even
Speaker 1: I'm not even saying these companies are unnecessary so much
Speaker 1: as they may very well be impossible to run as
Speaker 1: real bits businesses. This isn't even a qualitative judgment of
Speaker 1: any one generative AI company. I'm just saying if any
Speaker 1: of these were good businesses, they would be either profitable
Speaker 1: or be acquired in actual deals, and there would also
Speaker 1: be good businesses by now it is not early. That
Speaker 1: argument is stupid. The amount of cash that these businesses
Speaker 1: are burning does not suggest that they're rapidly approaching any
Speaker 1: kind of sane burn rate, or we would have heard
Speaker 1: putting aside any kind of skepticism. I have anything you
Speaker 1: may hold against me for what I say or the
Speaker 1: way I say it. I ask you this, where are
Speaker 1: the profitable companies? Why isn't there one outside of the
Speaker 1: companies creating training data or in Nvidia. We're three years
Speaker 1: in and we haven't had one, one one of them,
Speaker 1: one one. We've also had no real exits and no IPOs.
Speaker 1: There's been no course for celebration, no validation of a
Speaker 1: business model through another company deciding it was necessary to
Speaker 1: continue its dominance by raising funds on the public market
Speaker 1: or allowing actual investors thought they may be, to act
Speaker 1: as a determiner of their value. I also will say
Speaker 1: that very few, if not all, of these companies, they
Speaker 1: would all just turn into a pillar of salt if
Speaker 1: you made them fill out on S one, which is
Speaker 1: the document to go public. It's also unclear what the
Speaker 1: addition of windsurfs intellectual property actually adds the cognition, much
Speaker 1: like it's a little unclear what differentiates cognitions so called
Speaker 1: aipowered software engineered Devin from anything else on the market.
Speaker 1: I had Goldman sachs Is paying for it and said
Speaker 1: the stupidest shit I've ever heard, the CNBC that nevertheless
Speaker 1: shows how little it's actually paying for. This is an
Speaker 1: actual quote from an actual human being. We're going to
Speaker 1: start augmenting our workforce with Devin, which is going to
Speaker 1: be like our new employee, who's going to start doing
Speaker 1: stuff on behalf of our developers are gent told CNBC
Speaker 1: initially we will have hundreds of devons, and that might
Speaker 1: go into the thousands depending on the use cases. Hundreds
Speaker 1: of devons could mean hundreds of seats at are very optimistic,
Speaker 1: five hundred users at the highest end possible at five
Speaker 1: hundred dollars a month, and more than likely it's twenty
Speaker 1: dollars a month. If not less. Let's assume that it
Speaker 1: does discount an enterprise scale too, because that always happens.
Speaker 1: It's about two hundred and fifty thousand dollars a month. Wow, Wow,
Speaker 1: three million dollars a year in revenue on a trial
Speaker 1: basis amazing. To be clear, it's probably far fewer seats
Speaker 1: and far fewer dollars a month. I'm nothing if not
Speaker 1: generous with my adversaries. In fact, I can't find a
Speaker 1: shred of evidence that cognition actually makes money, despite currently
Speaker 1: raising three hundred million dollars at a ten billion dollar valuation.
Speaker 1: I can find no information about their revenues beyond one
Speaker 1: comment from the information from July twenty twenty four, when
Speaker 1: Cognition raised at a two billion dollar valuation. Cognitions fund
Speaker 1: raises the latest example of AI startups raising capital sky
Speaker 1: high valuations despite having little or no revenue. Cool In
Speaker 1: a further move, per the Information that is both a
Speaker 1: pale horse and a deeply scummy thing to do, Cognition
Speaker 1: is now laid off thirty people from the Windsurf team
Speaker 1: and is now offering the remaining two hundred buyouts equal
Speaker 1: to nine months of salary, and I assume the end
Speaker 1: of any chance to recruit further stock and Cognition CEO
Speaker 1: Scott Woo said the following in an email, telling Windsurf
Speaker 1: employer is about layoffs and buyouts. We don't believe in
Speaker 1: work life balance building. The future of software engineering is
Speaker 1: a mission we all care so deeply about that we
Speaker 1: couldn't possibly separate the two. We know that not everyone
Speaker 1: who joined Windsurf is signed up to join Cognition, where
Speaker 1: we spent six days at the office in clock eighty
Speaker 1: plus hour weeks. Fuck you man, fuck you. I'm sorry.
Speaker 1: You shouldn't be proud of that, and all that pissed
Speaker 1: vinegar and burning of the midnight oil does not appear
Speaker 1: to have created a product that actually matters. I realized
Speaker 1: that's a little cold. But if you're braying and smacking
Speaker 1: your chest about your hard charging six days a week
Speaker 1: office culture, you should be able to do better than
Speaker 1: We have one publicly known customer and nobody knows our revenue.
Speaker 1: Maybe it's a little simpler. Cognition may be paid two
Speaker 1: hundred and fifty million dollars to acquire Windsurf so that
Speaker 1: you could, after the transaction say that they had eighty
Speaker 1: two million dollars in anualized revenue. If that's the case,
Speaker 1: this is one of the dodgiest, weirdest acquisitions I've seen
Speaker 1: in my life. Two founders getting what like a few
Speaker 1: hundred million dollars between them and their investors, and a
Speaker 1: few of their colleagues moving with them to Google, leaving
Speaker 1: the rest of the staff effectively jobless or in hell
Speaker 1: with little payoff for them time working at Windsurf. I
Speaker 1: can only imagine how it must have felt to go
Speaker 1: from being supposedly acquired by open Ai to this farcical
Speaker 1: rich get rich of bullshit. It also suggests that the
Speaker 1: actual underlying value of Windsurf's IP was around two hundred
Speaker 1: and fifty million dollars. So I ask why exactly is
Speaker 1: Cognition worth ten billion dollars? And why did it have
Speaker 1: to raise three hundred million dollars after raising hundreds of
Speaker 1: millions of dollars? According to Bloomberg in March, where is
Speaker 1: the money going? Also doesn't seem to have revenue in general,
Speaker 1: and Carl Brown of the Internet Bugs revealed the Cognition
Speaker 1: faked the demo of Devin the AI powered software engineer
Speaker 1: last year. And Devon doesn't even rank on swe benchmark,
Speaker 1: the industry standard for model efficacy at coding tasks. Then, nevertheless,
Speaker 1: why here is based entirely on one coding language. Ah,
Speaker 1: we'll get to that another time. At best, Cognition has
Speaker 1: now acquired their own nonprofitable coding environment and the smidgen
Speaker 1: of revenue associated with them. How would Cognition go public?
Speaker 1: What is the actual exit path for Cognition or any
Speaker 1: other generative AI startup? Because really it comes down to
Speaker 1: three things, get acquired, go public, or die. And that
Speaker 1: right there is silicon Valley's own crisis their own housing crisis,
Speaker 1: except instead of condo houses they can't afford with subprime
Speaker 1: adjustable rate mortgages. Venture capitalists have invested in unprofitable, low
Speaker 1: revenue startups with valuations that they can never sell at,
Speaker 1: and like homeowners in the dismal years of two thousand
Speaker 1: and eight and two thousand and nine, they're almost certainly underwater.
Speaker 1: They just haven't realized it. Yeah, Where customers were unable
Speaker 1: to refinance their mortgages to bring their monthly payments down, Generally,
Speaker 1: of AI startups face pressure to continually raise higher and
Speaker 1: higher evaluations to keep up with their costs, with each
Speaker 1: one making it less likely that their company will sell
Speaker 1: to someone else, by which I mean survive. The other
Speaker 1: difference is that in the case of the housing crisis,
Speaker 1: those who were able to hold onto their properties eventually
Speaker 1: saw their acuity recover to pre crash levels. In part
Speaker 1: because housing is essential and because its price is influenced
Speaker 1: just as much by supply and demand as it is
Speaker 1: the ability for people to finance the purchase of properties,
Speaker 1: and when the population increases, so too does the demand
Speaker 1: for housing. A house is a useful thing that you
Speaker 1: could live in with wars and stuff. None of that
Speaker 1: is true with AI. There is a finite amount of investors,
Speaker 1: a finite number of companies, and the finite amount of capital.
Speaker 1: And those companies are only as valuable as the expectations
Speaker 1: their investors have for them, and as the broader sentiment
Speaker 1: towards AI goes as well. Also, I should add, there
Speaker 1: is only there don't appear to be that many business
Speaker 1: models or different ones. There's so many different AI coding environments,
Speaker 1: including ones made by these companies. Amazon has their own one,
Speaker 1: now open Ai has codex. I mean, at some point
Speaker 1: can all of these things last? And who is going
Speaker 1: to buy Cognition? Because the only other opportunity for the
Speaker 1: investors who put money into this company to make money here,
Speaker 1: let alone recoup their initial investment, is for them to
Speaker 1: go public. Do you think Cognition will go public? How
Speaker 1: about Cursor? It's worth nine point nine billion dollars. There
Speaker 1: was a rumor that was also raising an eighteen bigs
Speaker 1: million and twenty billion dollars back in June. Do you
Speaker 1: do you think that Cursor goes public or gets sold?
Speaker 1: I mean maybe maybe one of these cells? Do you
Speaker 1: see perplexity fucking perplexity at evaluation of eighteen plus billion
Speaker 1: dollars selling to another company or going public. The alternative
Speaker 1: has discussed is that perplexity a company, if with fifteen
Speaker 1: million users and around five hundred and fifty million annualized revenue,
Speaker 1: is still making less than half of the revenue. By
Speaker 1: the way of the Cincinnati Reds baseball team, they're going
Speaker 1: to go public. They're going to go public. Just to
Speaker 1: be clear, the Reds make three hundred and twenty five
Speaker 1: million dollars in a year. They're profitable, real money. How
Speaker 1: is Perplexity, which is an inferior business to the Reds?
Speaker 1: How are they meant to do that? They've at this
Speaker 1: point raised over a billion dollars and they lost sixty
Speaker 1: eight million dollars in twenty twenty four and thirty four
Speaker 1: million dollars of revenue by comparison, By the way, the
Speaker 1: Reds are a great business within their income of twenty
Speaker 1: nine million dollars. Or to provide a service that upsets
Speaker 1: and humiliates millions people from Ohio every year for the
Speaker 1: pleasure of America, that's a great business. We should respect
Speaker 1: the red So the Reds should be interviewed by Bloomberg.
Speaker 1: We should have Elie de la Cruz talking every time
Speaker 1: we hear from Sam Mortman. Just put Eli in there.
Speaker 1: He'd be way more interesting and also works harder and
Speaker 1: provides greater value as a business leader. Anyway, putting aside
Speaker 1: the reds, what exactly is it that Perplexity could offer
Speaker 1: to the public markets as a stock or to an acquirer.
Speaker 1: Apple considered acquiring them back in June. But Apple tends
Speaker 1: to acquire companies that wants to integrate into their core business,
Speaker 1: as was the case with Siri, which makes me think
Speaker 1: that Perplexity leaked that information about a deal that was
Speaker 1: never really serious. Hell, Meta also talked about acquiring them too,
Speaker 1: and again I would assume that Perplexity leaked. That isn't
Speaker 1: it weird by the way that two different companies talked
Speaker 1: about buying Perplexity but neither of them did so. CEO
Speaker 1: Ara vince Rivenas said in July that he wanted to
Speaker 1: remain independent, which is a weird thing to say after
Speaker 1: talking to two giant, multi trillion dollar market cap tech
Speaker 1: films about selling them to them, Like you see, to
Speaker 1: not want to stay independent, why would you have the
Speaker 1: conversation if you're you're just getting intel bullshit. It's almost
Speaker 1: as if nobody wants to buy Perplexity, or that really
Speaker 1: they don't want to buy any of these sham companies,
Speaker 1: which I know sounds mean. But if you're worth tens
Speaker 1: of billions or a billion dollars or anything over like
Speaker 1: five hundred million dollars and you can't make more than
Speaker 1: a bottom tier baseball team in fucking Ohio, you're neither
Speaker 1: innovative nor deserving of said valuation. But really, my pissiness
Speaker 1: and baseball comparisons aside, what exactly is the plan for
Speaker 1: these goddamn companies. They don't make enough money to survive
Speaker 1: without a continuous slow of venture capital, and they don't
Speaker 1: seem to make impressive sums of money even when allowed
Speaker 1: to burn as much as they'd like. These companies are
Speaker 1: not being forced to live frugally, or at least have
Speaker 1: yet to be made to, perhaps because they have all
Speaker 1: actively engaged as at spending as much money as possible
Speaker 1: and perceived of finding an idea that makes more money
Speaker 1: than it loses. This is not a rational nor reasonable
Speaker 1: way to proceed. Yes, there are startups that can justify
Speaker 1: burning capital. Yes there are companies that have burned hundreds
Speaker 1: of millions of dollars to find their business models, or
Speaker 1: billions in the case of Uber. But none of these
Speaker 1: companies are like those companies in the GENERATIVEAI space. GENERALFAI
Speaker 1: businesses don't have the same economics, nor do they have
Speaker 1: the same total addressable markets. Now, if you're gonna say
Speaker 1: Amazon Web Services, there's a three part episode The Hater's
Speaker 1: Guide to the AI Bubble that explains that, in detail,
Speaker 1: I do voices, I have sources. You need to go
Speaker 1: and listen to that. I'm fucking tired of hearing people
Speaker 1: about this one. What about Uber? What about Aws? Yeah?
Speaker 1: You got shit? That's all you've got. You certainly don't
Speaker 1: have a company to point to. These startups are their
Speaker 1: VC firm, subprime mortgages, overstuffed valuations, with no exit route
Speaker 1: and no clear example of how to sell them or
Speaker 1: who to sell them to. The closest they've got is
Speaker 1: using GENERATIVEAI startups as beauty pageants for guys wearing Patagonia,
Speaker 1: finding ways to pretend that the guy who runs an
Speaker 1: AI startup sorry AI lab, is some sort of mysterious
Speaker 1: genius versus just another founder and just another bubble with
Speaker 1: just another overstuffed valuation. The literal only liquidity mechanism outside
Speaker 1: of cognike that Generative AI has had so far is
Speaker 1: selling AI talent to big tech a premium. Nobody has
Speaker 1: gone or is going public, and if they're not going public,
Speaker 1: the only route for these companies is to either become profitable,
Speaker 1: which they haven't, or sell to somebody, which they're not.
Speaker 1: But I'd be dancing around the real reason they won't
Speaker 1: sell because fundamentally, generative AI does not let companies build
Speaker 1: something new. Anyone that builds a generative AI product is
Speaker 1: ultimately just prompting the model, albeit increasingly or complex ways,
Speaker 1: at the scale of something like claud Code or though
Speaker 1: anthropic as the advantage of being one of the main
Speaker 1: veins of their infrastructure, or of course cursor. This means
Speaker 1: that the generative AI company owns very few unique things
Speaker 1: beyond their talent and will forever be at the mercy
Speaker 1: of any and all decisions that their model provider makes,
Speaker 1: such as increasing prices or creating competing products. I know
Speaker 1: it sounds ludicrous, but this is the reality of these companies.
Speaker 1: While there are some companies that have some unique training
Speaker 1: and models and such. None of them seem to be
Speaker 1: building interesting or unique products. Is a result if your
Speaker 1: argument is that these things takes time? How long? No? Really,
Speaker 1: so many of you have said this is what happens.
Speaker 1: They burn a lot of money, they grow, and then
Speaker 1: and then what you stop? Sure because the next thing
Speaker 1: you say is term profitable by getting enterprise customers. Nobody
Speaker 1: can do the first part, and for you can do
Speaker 1: the second part in anything approaching a consistent fashion. But really,
Speaker 1: how long should we give them? Three years? Perplexity has
Speaker 1: had three years and a billion dollars. It doesn't seem
Speaker 1: to be close to profitable. How long does Perplexity deserve
Speaker 1: exactly four years? Five years an eternity. Every single example
Speaker 1: of a company that's burned a lot of money and
Speaker 1: then not done so in the end has been a
Speaker 1: company with a physical thing or connections to the real world,
Speaker 1: with the exception of Facebook, which has never had the
Speaker 1: kind of cash burning monstrusity that General fai Is or
Speaker 1: Meta has now created for no reason. There has never
Speaker 1: been a software company that has just chewed through hundreds
Speaker 1: of millions or billions of dollars and then suddenly become
Speaker 1: profitable magically, mostly because the magical valuations of software have
Speaker 1: been in their ability to transcend infrastructure once unit economics
Speaker 1: in the sales of software like my Microsoft Office or
Speaker 1: providing access to Instagram do not require the most powerful
Speaker 1: graphics processing units run full tilt at all times, and
Speaker 1: those are products that people like and want to use
Speaker 1: every day, even though both of them seem to be
Speaker 1: getting worse every minute. I get people saying that these
Speaker 1: companies are in the growth stage, but when all of
Speaker 1: them are unprofitable, and even the unprofitable ones outside of
Speaker 1: open Ai and Anthropic aren't really making much money. Come on,
Speaker 1: this isn't anything like any boom that leads to something
Speaker 1: good or you saul or profitable, and it's because the
Speaker 1: economics do not make sense. And that's before we get
Speaker 1: into open Ai and Anthropic in the next episode. Thank
Speaker 1: you for listening to Better Offline.
Speaker 2: The editor and composer of the Better Offline theme song
Speaker 2: is Matasowski. You can check out more of his music
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