Make Fun Of Them, Pt. 2

these charlatans. We don't have to be mean or rude or harsh. We just have to say, what does that mean? Or what exactly do you mean? This is the pro tech position. It's not about being a hater or a cynic or whatever. It's an essential quality control mechanism that's

been sorely lacking, especially in the AI bubble. The problem is that bullshit is a scarily effective mechanism by the shameless and the cynical, and it's managed to bamboos for so many, especially in the media, where the job is, at least in theory, to do the exact opposite of not reasonably and saying, oh this sounds good to me mate.

Let's say the media, not the actually good people who I mentioned by naming the last episode, but slavish lickspills like Kevin Ruce and Casey new and actually want these companies to build powerful AI and believe they're smart enough to do so. Say that somehow, looking at their decaying finances, the lack of revenue, the lack of growth, and the remarkable lack of use cases, they still come out of it and say, sure, I think they're going to do this.

The problem with bullshit like the Della's Words Seller Buffet and Altman's whatever the fuck he does is that it allows people, ostensibly smart, reasonable people to reach these conclusions without having to answer the silly little question of how, how, how how they're going to do it. Why haven't they done it yet? Why three years in are we still aren'table to describe what it is that chat GPT actually does and why we need it so badly? Take away how much money open ai makes for us, second, and

indeed how much it loses. Does this product actually inspire anything in you? What is it that's actually magical about this other than the fact case so you get to hang around lots of parties and you too, Kevin Kevy boy, you get to hang around a lot of parties with a bunch of people sniff in their own farts, like that one episode of South Park with the priuses. And on a business level, what is it that I'm meant

to be impressed by? Exactly? Open ai has allegedly hit ten billion dollars in annualized revenue, essentially the biggest month that can find multiplied by twelve, which is it's not actually that much really, considering that open ai is the most prominent software company in the world, with the biggest brand, and with the attention of the entirety of the world's media.

Open ai allegedly has five hundred million weekly active users on chat gpt and by the last count, only fifteen point five million paying subscribers, an absolutely putrid conversion rate, even before you realize that the actual conversion rate would be monthly active subscribers. That's how any real software come He actually defines its metrics by the fucking way. Why am I meant to be impressed? Why? Because chat gpt

grew fast. It literally had more pr and more marketing and more attention and more opportunities to sell to more people. Than any company has ever had in the history of anything. Every single industry has been told to think about AI for three fucking years, and they've been told to do

so because of a company called open Ai. There isn't a single goddamn product since Google or Facebook that has had this level of media pressure, and both of those companies launched without the massive amount of media and social media that we have today. Having literally everybody talking about your product all the time for years is pretty useful. Why isn't this company making more money? And why are

we taking any of these people? Seriously? Mark Zuckerberg paid fourteen point three billion dollars to invest forty nine percent in but really to acquire Scale Ai, an AI data company, as a means of hiring its CEO, Alexander Wang to run his superintelligence team, and has been offering random Open air Eye employees one hundred million dollars to join Meta.

And they also, by the way, thought about buying both AI search company Perplexity and general iv AI video company Runway, And they even tried to buy open ai co foundery Suits Caves pre product thirty two billion dollar valuation company Save Superintelligence, settling instead to hire its CEO and his venture fund. I just want to be clear superintelligence refers to a fictional concept. These people they may as well be saying they're gonna hunt and kill the fucking tooth Fairy.

I feel like I'm going insane hundreds of millions, billions of dollars put into an idea that's fictional. It's like they're trying to make the Ninja turtles happen. Are they going to capture Santa Claus. Are they finally going to kill Slender Man? Are they going to find the Marrio brothers? Are we going to stop the Cooper Sam Altman? Is Mark Zuckerberg going to kill who is the bad guy from Sacrifice? Anyway, we'll get back to that later when

you put aside the big number. These are the actions of a desperate dim wit with a failing product trying to buy his way to make generative AI into super intelligence. And by the way, just want to make it clear, the chief AI scientist, Yan Lakun they callin Yan Lacum, says it isn't going to work. Generative AI isn't going to make super intelligence market. Mark, You're going to listen to the people you fucking hired and just jack off and give people too much money. I'll take a hundred

million dollars mate, while you're out there. But by assuming that there's some sort of grand strategy behind these moves beyond, if we get enough smart people together, something will happening. The media helps boost the powerfuls messaging and buoy their stock valuations. You are not educating anybody by humoring these goofballs. In fact, the right way to approach this would be

to ask meta a very simple question. Why why does a multi trillion dollar market cap company with a near monopoly overall social media spend billions of dollars in what appears to be a totally irresponsible way? No, no, no, no need to do that, No need to think these these big thoughts that might make people uncomfortable. No no, no, we just need like ten or fifteen different articles suggesting that Mark Zuckerberger is a genius and we're watching him

be a genius. Anyway, putting that aside, what exactly is the impressive part of generative AI again, I'm coming back to this the fucking code. Enough about the code. I'm tired of hearing about the code as where to god, you people think that being a software engineer is only fucking coding, and it's fine if you ship mediocre code. Is it bad? Code? Can't bring down entire organizations? What is it you think a software engineer does? Is all they do code? If you think the answer is yes,

you are wrong. Human beings may make mistakes in writing code, but at least they know what a mistake looks like, which a generative AI does not. Because a generative AI doesn't know what anything is or anything at all, because it is a probabilistic model. Congratulations, you've made another way way in which software engineers can automate parts of their jobs. Stop being so fucking excited about the idea that people

are going to lose their livelihoods. It's not and founded on absolutely nothing other than your adulation for the powerful. These models are dangerous and chaotic, built with little intention of regard for the future, just like the rest of big text products. Chat GPT would have been a much smaller deal if Google had any interest in tending Google Search into a product that truly answered the query, as opposed to generating more of them to show more impressions

to advertisers. A nuance search engine that could look at a user's query and spit out a series of websites that might help answer a question, rather than just summarizing a few of them for an answer, or just giving you a series of SEO articles. And if you ever need proof that Google just doesn't know how to fucking innovate anymore, really look at those AI summaries. It's a product that both misunderstands search and why people use chat

GPT as a search replacement in the first place. While open AI may summarize stuff to give an answer, it at least gives something approximating an answer answer, rather than a summary that feels like an absent tee parent trying to get rid of you and then throwing twenty bucks at you and the hopes you'll leave them alone. And even when it does answer shit, it does so in this very peculiar way and gets very obvious things wrong.

I looked at the pricing for Claude the Anthropic. I looked up for what the price of claud code was, and it was like, yeah, sixty dollars. There's no sixty dollars plan that I could find on Anthropic, maybe one of the team's plans. Anyway, Google Search makes them like

one hundred billion dollars a year. It's fucking insane. If Google Search truly evolved, chat GPT wouldn't really matter, because the idea of a machine that can theoretically answer a question is kind of why people use Google in the fucking first place. Why doesn't the state of Google dominate tech news just like how random ketamine fuel tweets from me long Musk do. Why aren't we collectively repulsed by Google as a company, and why aren't we collectively repulsed

by open Ai? No matter how big chat GPT is, the fact that there's a product out there with hundreds of millions of users that constantly gets answers wrong is genuinely worrying for society. And that's before you get to the environmental damage. The fact it's trained its models on hundreds of millions of people's art and writing, and now I don't know the fact that it loses over it loses like billions of it's probably more like twelve billion

dollars a year. It's planning to lose over one hundred billion dollars a year before becoming profitable, and it can't even they can't even explain how it become profitable. I'm trying to calm down, all right, I'm trying. I don't even I don't write in here to get pissed off. It's just when I think about it too much. Starting the music from Kill Bill anyway, But why are we

not more horrified? Why are we not more forlorn that this is where hundreds of billions of dollars are being forced The most prominent company in the tech industry is an unstable monolith with a vague product that can only make ten billion dollars a year in revenue, not profit, as the very fabric of its existence is shoved down the throat of every executive the world at once. Also, if it's not fed by the way twenty to forty billion dollars a year, it will die. Give me a

fucking break. I don't know. I sound pretty ornery. I get accused of being a hater or missing the grand mystery of this bullshit every few minutes by somebody with an AI avatar of a guy who looks like he's been banned from multiple branches are best Buy. I understand there are things that people do with large language models. I am aware, but none of it matters because the way they're being discussed is like we're two steps away from digitally replacing hundreds of millions of people's jobs. The

reality is far simpler. We have an industry that has spent nearly half a trillion dollars between its capital expenditures and venture capital funding to create an industry with the combined revenue of the fucking smart watch industry. What I'm talking about isn't inflammatory. In fact, it's far more deeply rooted in reality than those claiming the open ayes building the future or Kevin Ruce walking up on stage dressed

like a fucking ring master. Anyone, if you're a listener who is at the hard Fork Live show, email me. Please email me and tell me what that was about. And if you don't know what I'm talking about, Kevin Rouse dress like a fucking circus ring master, this podcast shameful, man, shameful, Take a shower, take a walk, go outside, mate. But look like I said, what I'm saying sounds inflammatory, but

it's not. If we add up the combined capital expenditures and projected AI revenues of the big four hyperscalers, we end up with roughly three hundred and twenty seven billion dollars in capital expenditures and only eighteen billion dollars in revenue. And that's not profit, by the way, I really do mean it. That's less than the projective revenue of the global smartwatch industry. But then someone smashes through my door and they go, ooh, what about open Ai. I've talked

about this so much. So what open ai makes twelve point seven billion dollars this year but they lose like ten fourteen billion dollars. What does that mean to you? Exactly? What do you what are you gonna say the cost of inference is coming down? No? No, if you are someone who's saying the cost of inference is coming down, I need you to stop. You are wrong. You are wrong. You are wrong. I hate hearing this because you are so wrong. No, the cost that people are being charged

is going down. We have no firm data on the actual costs of inference because the companies don't want to talk about it. And yes, they will absolutely lower prices to compete with other companies. The Information just reported the open Ai was doing this to compete with Microsoft a couple weeks back, and fucking open Ai reduced the price of their O through Reasoning Model one focused on code by eighty percent to compete with Claude four Opusmax, just

that any of you could fucking look at. I know I'm getting mad at people who probably don't listen to the podcast, but one day they will. I'll make them anyway. Even if we add open AI's revenue to the part, we're at about thirty point seven billion dollars. If we had the supposed one billion in revenue from training data startup search three hundred billion dollars in annualized revenue from churing.

We optimistically assume that Perplexity will have one hundred million arr up than thirty four million in twenty twenty four, but they lost sixty four million, and say they make one hundred million in twenty twenty five, and assume that any sphere which makes cursor that their five hundred million dollar run rate stays consistent through twenty twenty five, even though they just had to completely change their pricing, because because open ai and Anthropic joked on the prices, we

are at carry the two about thirty two point seven billion. Hmm. That's not good. But I'm not being fair, am I. I include many of the names from the Information's Generator AI database. I'm stubborn, so I made a point of adding them all up and ended up with a total of less than thirty nine billion dollars of total revenue in the entire generator of AI industry. Jesus fucking Christ, Fuck God, damn it. This this is what we've been doing for three years. If you're missed, blanket fan, this

is my Kodak printer moment. Why why did you do it?

According to the Information Generative, AI companies have raised more than eighteen point eight billion dollars in the first quarter of twenty twenty five, after Vis's invested twenty one billion dollars in Q four twenty twenty four and four billion dollars in Q three twenty twenty four, for grand total of forty three point eight billion, or a total of three hundred and seventy point eight billion dollars of investment and capital expenditures for an industry that, despite being the

single most talked about thing on the planet, cannot even create a tenth of the dollars it requires to make it function. These companies are predominantly unprofitable, perpetually searching for product market fit and even when they find it seeming capable of generating revenue numbers that remotely justify their valuations.

And if I'm honest, I think the truly radical position here is the one taken by most tech reporters that would rather take the lazy position of well, Uber lost a lot of money than think for two seconds about whether we're all being sold a line of shit. What we're watching is a mountain of waste perpetuated by the least charming failed sons of our generation. Nobody should be giving sach In the Della or Sam Ortman a glossy profile.

They should be asking direct, brutal questions, much like Joanna's Stern just did of Craig Federighi, who had absolutely fucking nothing to share about why Apple Intelligence sucked because he's never been pushed like this. Put aside the money for a second, to be honest, These men are pathetic, unimpressive, uninventive, and dreadfully, dreadfully boring anthropics Warrio Ama Day and Open

Ai is Clammy. Sam Mortman a farmer in common with televangelist Joe Olstein than the level out with Steve Jobs or any number of people that have actually invented things, and I know about Steve Jobs. And they got that way because we took them seriously instead of saying, wait, what do you mean? What do you mean? What does that mean? To a single one of their wrongheaded o fish and dim witted hype ERPs, it's boring. I'm terribly

horribly bored. And if you're interested in this ship, I'm genuinely curious why, especially if you're a reporter, because right now, the innovation happening in AI is at best further mutations of the software as a service business model, providing far less value than previous innovations that are calamitous cost reasoning models don't even reason. It's proven by an Apple paper released a few weeks ago, and agents as a sceptu

fucked because large language models are inherently unreliable. And yes, a study out of fucking Salesforce found that agents began to break down when given multi step tasks, such as any task that you'd want to have an agent automating. But but, but but but I have one radical suggestion, let's start making fun of them. Let's start making fun of these people. They're not charming, they're not building anything they've scootered long a massing billions of dollars, promising the

world and delivering you a hell is shit. They deserve our derision or at the very least, our deep unerring suspicion, if not for what they've done, for what they've not done. Sam Ltman is nowhere near delivering a functioning agent, let alone anything approaching intelligence, and really only has one skill making other companies risk a bunch of money on this

you bid fucking ideas. No, really, he convinced Oracle to buy forty billion dollars of then video chips to put in the Abilene takes a Stargate data center, despite the fact that the Stargate organization is yet to be formed, as reported by The Information, SoftBank and Microsoft pay for all of open AI's bills, and the media does his marketing for him. Open Ai is, as I have said before, a banana republic. It requires the media and the markets

to make up why it should exist. It requires other companies to pump it full of money and build its infrastructure, and it doesn't even make products that matter. While Sam Altman constantly talks about all the other exciting shit that people will build that never seems to get built. You can keep honking off about how it will build the API that will power the future. But if that's the case, where's the fucking future? Exactly where is it? What am

I looking at here? Where's the economic activity? Where's the productivity? The return sucked? The costs are too high? Why am I the radical person saying this? This entire situation is goddamn ridiculous and incomparable waste, even if it's somehow went to the green. For the horrendous amount of capital and generative AI to make sense, the industry would have to have more revenue than the smartphone and enterprise SaaS market combined, rather than less than half of the mobile gaming industry.

Sacha Nadella, sam Orman, Wario Ammada, Tim Cook, Andy Jesse. They deserve to be laughed at, mocked, or at least very heavily interrogated because their combined might has produced no exciting or interesting products outside of, at best, what will amount to a productivity upgrade for integrated development environments and faster ways to throw out code that may or may

not be reliable. These things aren't nothing, but they're nowhere near the something that we've been promised, So I put it to you, dear listener, why are we taking them seriously? What is there to take seriously other than their ability to force stuff on people and make money doing so. And I want to ask you a question, how do they manage to keep doing this? They always seem to find new growth every single quarter, every single quarter, without fail.

Is it because they keep coming up with ideas? Or is it because they keep coming up with new ideas to get more money a vastly different choice that involves increasing the products or making them worse so that they can show you more ads. My positions aren't radical, and if you believe they are, your deverence to power disgusts me. In any case, I want to end this episode with something a little more inspirational, because I believe things can

change when regular people feel stronger and more capable. I want you to know that you are fully capable of understanding all of this. I don't care if you think you're not a numbers person or you don't really get business. I don't have a single iota of economics training, and everything you've ever heard me say or read me right has been something I've had to learn, and I really mean that I was a lay person right up until the time I learned the stuff, and I be kind

of stuff, knowah, just like you can be. The tech industry, the finance industry, the entire mechanisms of capital want you to believe that everything they do is magical and complex, when it's all far more obvious than you believe. You don't have to understand the entire fundamentals of finance to know how venture capital works. They buy percentages of come copanies at evaluation that they hope is much lower than the company would be worth in the future when they

sell or go public. You don't need to be technical to know that large language models generate a response based on billions of pieces of training data and by guessing at what the next bit of text or thing might be in a line should be based on based on

what they've seen in the model previously. These people love to say things like ah, but didn't see and present some anecdote, when no anecdote will ever defeat the basics of your business does not make enough money, the software does not do the things you claim it's meant to, and you have no path to profitability. They can yamor

at you. All they want about lots of people using CHATGPT, but that doesn't change the fact that chat GPT just isn't that revolutionary, and their only play here is to make you feel stupid, rather than actually showing you why it's so fucking revolutionary. This is the argument of a

manipulator and a coward, and you're above such things. You don't really have to be a specialist in anything to pry this shit apart, which is why so much of my work is either engaging to those who learn something from it or frustrating to those that intentionally deceive others. By god boy goog heipespiel bullshit. I will sit here and explain every fucking part of this horrid chain of freaks, and I'll break it down into whatever pieces it takes to educate as many people as I have to to

make things change. I need to be clear about something I'm nobody. I started writing my news later with three hundred subscribers and no other reason than the fact that I wanted to and I was depressed. And guess what, four years later, I've nearly sixty five thousand subscribers, an award winning podcast, and people actually pay me for shit. I have no economics training, no special access, no deep sources, just the ability to look at things that are happening,

and then I say stuff. I taught myself everything I know about this industry, and there is nothing stopping you from doing the same. I was convinced I was stupid until about two years ago. Now, if my honesty might have been last year, I felt other the majority of my life, convinced by people that I'm incapable or unwelcome, And as such, I've become more articulate and confident in

who I am and what I believe in. And I've noticed that the only people that seek to degrade or suppress are those of weak minds and wills, business idiots in different forms and flavors. I've learned to accept who I am, that I'm not like most people, and people conflate my passion and vigor with anger or hate, but what they're experiencing is somebody different who deeply resents what

the powerful have done to the computer. And while I complain about the state of the media, what I've seen in the last year is that there are many many people like me, readers, listeners, and peers that resent things in the same way I conflated different with being alone, and I couldn't have been more wrong. For those of you that don't wish to lick the boots of the people fucking up every tech product, the tent is large,

it's a big club, and you're absolutely in it. A better tech industry is one where the people writing about it hold it accountable, pushing it towards creating the experiences and connectivity that truly change the world, rather than repeating and reinforcing the status quo. Don't watch the mouth, watch the hands. These companies will tell you that they're amazing as many times as they want, but you don't need

to prove that they do. I don't care if you tell a single human soul about my work, but if it helps you understand these people, better to teach other people. Now, these tech executives, they may seem more powerful, but they've built the rot economy and a combination of anonymity in

a play cant press. But pressure against them starts with you and those you know, understanding how those businesses work, and trusting that you can understand because you absolutely fucking can millions of people understanding how these people run their companies now poorly they've built their stuff software will stop people like sunned up as Shy from being able to

quietly burn Google Search to the ground. People like Sam Wultman are gambling that you're easily confused, easily defeated, and incurious when you could be writing thousands of words on a newsletter or speaking for hours on a podcast that you never ever really edit for like Brevity, or perhaps you go on a site no you ever hear Killer be Killed, Great metal badge, you'd give them a lesson anyway.

I know it sounds smaller and like your role is even smaller than that, But the reason they've grown so rapaciously is driven by the sense that the work they do is some sort of black magic. I mean, it's actually really fucking stupid, boring finance stabled into a tech industry that's run out of ideas. You are more than capable of understanding this entire world, including the technology along with the finances that ultimately decide what technology gets made next.

These people have got rich and famous and escaped all blame by casting themselves as somehow above us. But if I'm honest, I've never looked down on somebody quite as much as I do the current gaggle of management consultant fucks that have driven Silicon Valley into the ground. You're actually smarter than them. You can learn all of this, and I'm here to help you every fucking week. Thank you for your time, Thank you for listening to Better Offline.

The editor and composer of the Better Offline theme song is Matasowski. You can check out more of his music and audio projects at Matasowski dot com, M A T T O. S O w Ski dot com. You can email me at easy at Better Offline dot com or visit Better Offline dot com to find more podcast link and of course my newsletter. I also really recommend you go to chat dot Where's youoead dot at to visit the discord, and go to our slash Better Offline to check out our reddit. Thank you so much for listening.

Better Offline is a production of cool Zone Media. For more from cool Zone Media, visit our website cool Zonemedia dot com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.