Monologue: AI Is Making The Tech Industry Weak

I love doing this job too much anyway. Earlier in this week, I ran a newsletter that I'll likely be turning into a few episodes about how few data centers are actually getting built, and found that the vast majority of those that broke ground in twenty twenty three and

twenty twenty four are yet to be completed. My working theory is now that barely any capacity is coming online, and that's why Anthropic had to buy up all three hundred megawats of Elon Musk's Colusus one data center capacity, because there are no other options out there other than the guy who said that Anthropic was misanthroopic and evil, an embarrassing insult when you could just say that Dario Amma Day sounds like he's doing Elizabeth Holmes's Steve Jobs voice.

In any case, I think we're in the good old fashioned bullshit phase of the bubble. I know some of you will say, but data centers are getting built, But what you mean is that data centers are under construction. They are not, for the most part, being finished. Across every Microsoft data center announced since twenty twenty three, I found two Fairwater, Wisconsin and Atlanta, that were anything close to complete, and despite Microsoft saying that they're both operational,

they're actually both stuck on the initial phases. I think there's some capacity online, but even then I'm not really sure. I saw an article in the local newspaper saying that Fairwall, Wisconsin wasn't even working. Now. Microsoft has also claim that it brought on a gigawatt of capacity in each of the last two quarters, and I think it's using a different definition of capacity than operational data centers. It's weird.

It's fucking strange. I'm sorry. I know I meant to be articulate and talk about economics and some shape, but I'm just I'm kind of tired of it. We're four years in and even the largest companies in the world still describe their return on investment like the the fucking Riddler. How much capacity do you have, Satya? Why don't we know, why don't we know how much you actually made on ai? Why are you still using run rate? This is strange.

What's going on? About to fall into Tucker Carlson voice there, But nonetheless, for my article, I actually reached out to Microsoft to confirm these things, and they said they get back to me last Monday, and then they just stopped replying. That's generally what people do when they're hiding something, and I'm tired of that too. I'm tired of the fact that these companies won't just give me a straight answer, or you a straight answer, or their investors a straight answer.

It's frustrating. And I know you're frustrated too, dear listener, and I know you keep asking when this shit ends. I truly don't know at this point, and I'll explain. The obfuscative finances of these firms are so thoroughly mangled that it's hard to tell a fanthropic thirty billion dollars in the bank or thirty dollars. It's fundamentally impossible to understand how much money open ai actually makes, because both I and the Information have now published very different numbers.

Mine are much lower, billions lower. For twenty twenty five. I mean I don't have the final quarter, and I will say that I can speak to mine with complete certainty. Is these are the kind of financials that are borderline impossible to lie about, unlike investor documents, which usually well are full of them. Now, I want to be clear,

I am not even accusing open ai of lying. I'm sure whatever it's handed over to investors has more asterisks on it than Cubert reading mind comp I'm sure it says that these are non gap numbers generally accepted accounting principles, which means that they could be any number of different versions of Ebittenstein's monster. It's hard to tell how much open ai is spending, which makes it harder to tell how much money it needs or when it might run

out a bit. If open ai closes this entire one hundred and twenty two two billion dollar round in VideA and soft Bank are paying in three monthly chunks like a fucking Klana plan, and Amazon's thirty five billion dollars contingent on either IPO or Agi. Open air will have if they successfully do this, would have raised over one hundred and sixty billion dollars in the space of a year. And even if it doesn't, it will have raised then I seem spent most of around seventy billion dollars or

more in the space of a year. That's so much money. Where's it gone? Wherever has it gone? Sammy? Do you think they know? Do you think any of these people know? Do you think they really know how their finances are doing? Because according to open Ai CFO Sarah Fisher, they are and I quote the Wall Street Journal here, not ready for the scrutiny that comes with being a public company. It's pretty worrying to me considering how much money mister Ortman is now on the hook for and how much

money he's taken in. Similarly, his equally damp friend, mister Warrio amade of Anthropic is now raising at a scale unheard of other than when it just happened with open Ai, by which I mean that if it's rounds with Google and Amazon fully close, Anthropic will have raised over one hundred billion dollars in the space of a year. And again it doesn't seem to want to go public. Why not, mister Amiday? What do you have to hide? What's going on?

And now mister Amaday is out raising another fifty billion dollars that must close in twenty four hours. No wait, sorry, that was a few weeks ago. Now, I mean it's thirty billion to fifty billion dollars that might close by the end of the month. And yes, that is the order of the events. And again, no one, no one seems to think this is strange. No one in the media seems to seem to think this is strange. No

one seems to be concerned about this at all. I'm actually kind of deeply worried about all of this because these companies may go public, and if they go public, well they're going to lose everyone's money if they invest. But if they don't go public, it's still a bunch of money that's gone into them that's just potentially gone nowhere. Anyway, this is kind of exciting, I'll admit it's kind of exciting.

That's a bizarre thing to say. I know, it's strange to suggest that this might be an exciting thing because the stakes have been raised so much that eventually one or more of us is going to be proven correct. It's going to be me or the boosters. And if the boosters are right here, this is crazy. I don't think they're right at all. Gone to my head. I think Anthropic is doing some sort of very bizarre accounting,

likely taking in API payments paid in advance. To explain, I think it's possible they are counting an organization paying its tokens upfront, say fifty million dollars that's likely to last twelve months, and acting is if that's a month of actual revenue, versus accounting for it spread out over twelve months, artificially inflating the run rate by a factor of over one thousand percent. To explain, AR is just

month times twelve. So if they say, if fifty million dollars is meant to be spread over twelve months, counting it in a single month and multiplying, that's kind of bullshit. I don't know for certain if this is what's happening, but pre selling tokens and using it to drive up AURR is a way It makes sense. And also it is not the first time this has happened. There are plenty of startups that have done this bullshit in the past, some of them in the dot com bubble. I find

the alternative a little ridiculous. Anthropic CFO Krishna Rao said, on March sixth, twenty twenty six, that Anthropic had made five billion dollars in lifetime revenue. He said, exceeding, but if it was much higher than that, he would have said a different number. If that's the case, Anthropics suddenly grew its business were a few hundred million dollars in January to a few billion dollars a month in April. This is, on an accounting basis, a step change in complexity.

It's a step change in customers scale. Anthropic must have had to hire and scale at a speed that defies all logic to keep up. They've been handling so much fucking cash in their brand new at this Also, Krishna raw the CFO, got interviewed recently on one of the many Booster podcasts where they just sit there and let you say what you want for an hour, and he said that the largest user of tokens in Anthropic is their tax person. That's the one person I would never

let use. In all of them, I would slap their hands if I saw them using claud I'd be very worried. But Krishna seems very excited about this. He's talking about how all of this is speeding up all of their all of our accounting. And I must be clear, when you're handling billions of dollars very suddenly coming in, you don't want to rush the fucking accounting, Krishna. You need

to calm your fucking jaws a little bit. Fucking just it's so ridiculous, and it's ridiculous that I am somehow unique in the way I cover this, that I am unique in my scrutiny. I don't know why, am I mean? I do. It's much easier to not scrutinize these companies and just applaud whenever you see a big number. But I think it's letting down listeners and readers across the board to not approach this and replace of scrutiny, even if you think this will work out, even if you

believe AI will be the biggest most you just thing. Ever, I think it's a detriment to your listeners and readers to not approach this with a high degree of skepticism and scrutiny because this is so much money. And here's the thing, maybe Christna's being asked, maybe there are at thirty billion, fifty billion, whoever knows there are, And it's just this amazing business, or maybe it just isn't that big, or the business isn't that good. Maybe that's what it is.

Do you think do you think that that I would be very shocked if Anthropic grew from making a couple hundred million dollars in one November last year to four billion dollars in April. I'd be really fucking shocked. And I think that there is a if that is how. It's because of the largest papig ai psychosis in the world, which you'll get to in a bit. But I've had some people recently say that I am not talking about

the tech enough, and I want to explain why. And it's the fact that four years into this, I'm just not sure what it is everybody's excited about. What are the big AI applications that they're changing my life? Every two days Anthropic releases some sort of new harness product for finance, law or medicine or accountancy, leading to someone stopped crashing based on the theoretical damage that Anthropics product could cause without anybody actually trying it or verifying what

it does, or even explaining why it fucking maps? What is it that I am meant to be excited about. What is it that I'm meant to be impressed by? But ultimately, the reason that anthropics releasing so much stuff is it's flak. It's meant to be an impossible to pass blob of different things that create the gestalt of an indomitable company that can do anything because the markets and the media don't bother check. We hear about everybody using this shit day in day out. Why has nothing changed?

What a business is doing differently? How are they different? What is different? What is it that llms are actually doing? These should not be difficult to complex questions to answer, but nobody seems to be able to give me an

answer with any real clarity or specificity. Every time they do, it's a weird dance involving someone saying I now get a summary of some stuff from my open claw, or of course some sort of multi agent coding fiasco that never actually ends with functional or impressive software or anything being shipped faster and look on the coding stuff. I'm sorry, I'm just not that impressed. I speak regularly with very talented software engineers, and their reaction is it's kind of cool.

I guess it's not anywhere here as good as people say, or This allows bad software engineers to do impressions of functional software engineers, which creates material risk to the stability, functionality, and security of software because people trust these people who cannot do their jobs, which has begun to decay across the board across the entire tech industry with the rise

of AI coding tools. It sounds like LLM coding is a very inefficient way to sometimes speed up some things in a way that also creates a culture of overwork and either constant bullshit detection or something I call the engineer's torpor, a state where your senses are dulled and you stop giving as much of a shit into a ship breaks and you realize your eight concurrent agents are burning three hundred dollars a day of tokens and have written two and a half million lines of functional, yet

brittle software designed with no intent or purpose. Like an apartment where the rooms vary in size and the number of bedrooms and the toilets are different, with varying finishings and the plumbings different room to room. I guess people could live there, but it would be a paid in the ass to run and get worse the more people

that moved in. The more agency you give a coding model, the less you understand what it is you're building, no matter how intently you prompted, or how many agents you throw it in, and how weird little tweaks you make to your clawed MD file. The more that you don't build, the less that it makes sense to make. Matters worse. The more you hand over, the more rusty you're going to be at writing code. The shit isn't good enough, it's not getting good enough, and it cannot be trusted.

And my evidence is that a lot of software is just kind of fucking broken all over the shop in ways that's so common that we're entirely numb to it. We are tolerant of our ship being broken or terribly designed. It was a problem before LLMS, and it's got worse since. Let me give you some examples. Sometimes my iPhone will randomly show a black scream of the pinwheel. It just resets. It's fine, it'll even keep playing my music. It's happened

every iPhone for years. It sometimes it doesn't happen for months. Sometimes it happens multiple times a week. Sometimes apps just arbitrarily slow down my phone isn't hot or anything. They just slow to a crawl on Chrome when I load certain websites like tech Crunch. For some reason, my two year old MacBook Pro sixteen inch with Ultra M three core or what have you. And I said, well, look, actually,

while we're live on airs. See I have sixty four gigabytes of RAM and this shit slows down because some ad cookies it doesn't like. Insane. A lot of popular video games crash regularly. The Maden franchises looked like total shit for years and is getting worse each time. The menus are incredibly slow, the Google docs, iPhone and iPad apps are so unstable I want to take away their car keys, on top of having some of the most vexing design decisions across the board, almost as if they

don't know how to make things right anymore. And let's talk about all those organizations burning what ten, twenty, thirty percent or more of their headcount on tokens. This is a sickness. It is a psychosis. The amounts of money being spent are genuinely disgusting. Any company that spends anything more than five percent on their headcount on tokens is a fucking Mark, Your businesses are not getting better. Your

CEOs have ai psycho. The more they speak to the machine that tells them they're the smartest, sexiest boy in the room, the more they'll be convinced that you must join them. They do not see this as annihilating money for effectively no reason. They see it as praying to a soulless, non existent god, a non spiritual god made up of more annoying math, requiring the largest amount of infrastructure spent on anything ever. It fucking sick. It is

just fucking sucks. I'm not correcting that, but you'll just have to deal with that. Okay, this is what happens when every boss is a fucking business idiot who doesn't actually do any work. What do you think Mark Zuckerberg does all day? But he walks into it, walks up to the mirror. Sometimes she looks down at his willy and goes, what are you? What do you do? What

are you for? What is your concept? Or he walks into rooms and bumbles in there and he says we need to do more on the exponential, and then some wretched worm tongue like figure like boss or Adam Mursky oinks in Skar walks at one of two thousand different Vice presidents to spread his nasty, vague ideas, whatever they

might actually be. If you're lucky, you might even get to deal with one of five different dysfunctional AI divisions with different ultraovs that you have to placate as Mark Zuckerberg does something with AI that seems to change every fucking week. Not to worry the Wall Street Jonal or cover it anyway. And I think that this is how a lot of Silicon Valley and a lot of businesses are being run. I think that's how Jack Dawsey acts about It's how Uber's run. Think of an app you're

using right now that's anything other than okay? Do you love any app? Does anything work great for you? I like Flighty Flight, He's a good app. That's one. Even the Apple Notes app I use constantly doesn't sink right at random for no reason and has a bunch of random shit come up whenever I choose the menu. Everything's a fucking mess. Nothing is smooth or easy. I have to log into something every four minutes. I have to

give somebody a two FA token every six minute. Sometimes Google just logs me out of shit for no reason. Sometimes my email client loses its access to Outlook or Gmail, and sometimes my password system hasn't saved a password and I have to reset my password. I have to go to my email and there's three fucking emails from a pizza place I visited in New Jersey fifteen years ago. And by the way, if you fucking email me and tell me, get one password, get bit worn, and get

fuck you fuck off. It's so sickening that everyone thinks that there is some panacea. Oh, my app works for me. Apps do not work consistently across the board. That is a unilateral truth. One password works well for one hundred people and doesn't work well for fifty others. I've seen it with my own fucking eyes. Same with last password, same with bitworn. The state of these fucking companies is

dog shit. And I know I'm going to get emails from people saying Bitwarden works, I pay for bitworn, don't like it. Bay fucking works. It's a bit better than one password. But it's like, which of these do I trust? Now? What's being saved? Where I'm sick of it. I'm absolutely sick of it. Apologies for getting heated. I know it's atypical of this show for me to rant. Now, I want to speak to if any LM coding people. The real code jock is that if you use it a

bit of work. I don't care. But the people who think that this is truly the most amazing thing to any LLLM coding folks actually use software, it stinks. It's bloated,

it's counterintuitive, it's slow, it's inefficient. The ten or more tracking cookies and one hundred APIs you connect to every two seconds, for some reason, have created a sludge that is making every single experience on the computer worse, doing varying degrees of k fame to impress another dickhead with two million dollars in RSUs doesn't make up for the fact that the current state of software is fucking sad and ugly across the board. Do you think the modern

state of software is good? And do you think the insecure, bug ridden slop fest of openclaw is a good representative of your industry's future. You should be burning it to the ground. You should be killing open Claw. It's destroying the fabric of software. Lllms make shitty code. I don't care how it makes you feel. And I think it's made a select few people genuinely mentally ill in a way that we're yet to account for. And I don't

mean random people. I mean prominent vcs and CEOs and a lot of software engineers were obsessed with this stuff who have now been irredeemably proven to be insane gullible marks. And we do not talk enough about how insane this

all is. Eight hundred billion dollars more than that spent by Microsoft, Google, Amazon and Meta on AI so far, and for what a tech industry that has unilaterally increased its expenses across the board to varying degrees for a return on investment that's nearly impossible to actually explain, and impossible to explain in clear terms like does it make more money than ispent? It's not profitable. The state of

software is arguably worse. Most products try and make you use an AI feature with questionable utility or efficacy, and some organizations actively ostracize you if you fail to use it because their CEOs have AI psychosis because their models told them they were brilliant. Every time somebody explains AI's economic value, they sound like they just got caught committing a crime and they're trying to lie their way out of it. Why does open a I need all this money.

Why does Anthropic need all this money? What justification is there for any of this expenditure. I know some people want to come up with a conspiratorial reason that all of this is. Oh, it's a super secret government military thing and Trump's going to bail it out. It's all a secret government. It's all built for government, government, government, government, It's all a secret Trump conspiracy. No, stow it stop.

That's not what this is. That is a comfortable way to feel smart or in control of a situation you have no control over. It is a doom saying philosophy that allows you to avoid the hard intellectual work of actually thinking of what happens when bad things happen. And it also avoids the intellectual exercise of accepting that these are a bunch of men who do not really know how to do business and are self involved cowards that

only know how to follow each other. I realize it's easier to look at the world as dark, scary and say, wow, it's all a big secret plan and this is all government spying. Already happening way before LMS. Oh, it's all a big data gathering. It's all a big surveillance thing already happening way before LMS. LMS aren't even particularly useful

for it. I'm sure there's some uses, but come on, Doing that makes you feel like you're smart, It makes you feel like you're ahead of the game, when in reality, the world is dark. It is scary, but it's also directionless and full of followers and cowards and people that don't know what they're fucking doing that will spend over a trillion dollars on data centers for an AI industry that does not have a future. It's a dark and scary world we live in when the mainstream media has

moved away from reality. But it's a reality I live in. It's the reality you live in. But don't give these people credit. Don't give these people credit or a strategy that does not exist. In the end, you need to just ask simple obvious questions. Open AI have to become profitable at some point. How will they do so? When will they do so? Nobody has an answer, which is entirely inexcusable. For the most annoying, expensive, destructive, and wasteful bubble in history. Zitron out