Monologue: The Year Ahead

and such love hearing from you. But let's talk about this year. I have a strong gut instinct that this is the year of reckonings for the AI bubble. Nothing I'm seeing in the news, the markets, or hearing from people I talked to behind the scenes suggests that things are improving at all. In fact, it kind of feels like when your dog takes a shit somewhere in your apartment but you can't quite find it. There's that little stink, but it's not strong enough to give you an idea

of where it is. But you know, one day, without fail, you're going to a nasty brown delight under your foot colorful Simile's aside, though Generative AI is not becoming cheaper, more effective, or more efficient in Vidio's new Vira Ruben, GPUs are likely to be more expensive than ever, in part thanks to the ever increasing price of RAM and in part because of its single vendor mod monopoly, which

allows them to set prices well to stun. And the other thing with them as well is they're going to allow people to use the same racks from Blackwell, so the things you put the GPUs into, but only for the beginning of Verra Ruben. Then they're going to move to these giant I think they're called Kaiber racks. The current ones are called Oberon. Someone will email and correct me, but it's one of those two. The new one is

going to require an entirely new cooling system architecture. It's all very good, but on the subject of things that are also very good, I believe we're also on the verge of the multiple con jobs of the AI bubble collapsing too. In July of last year, former open AI CTO Mira Marati, who barely appear to be able to

get out of fucking sentence in every interview. I've seen founded Thinking Machines raising two two billion dollars at a twelve billion dollar valuation, all while refusing to tell investors what product they'd make, or what the business plan was, or how they'd make money or anything like that. Naturally, investors were like, take my money, please, I need to give this to your mirror. I am an idiot, I'm

a moron, I'm a goofboar. I just love wasting money. Now, when this happened, they were able to poach open AISVP of Research for Post Training, Barrett Zov, among two other staff as I just really can't engineer the excitement to name.

And then, a few days ago, as reported by a friend of the show, Kylie Robinson of Core Memory, Zof was fired from Thinking Machines after telling Marati he was considering leaving with wiredsmac Zef reporting in a follow up that the firing involved Zov sharing confidential information with competitors. What confidential information? What possible information could he have had about the things they're not building? About the bullshit? Who knows? I think she just fired him because she was mad

that he was leaving. What the fuck is Thinking Machines building exactly would have had a single AI thing last year for and I quote, controlling every aspect of model training and fine tuning or some such bollocks. I realize I'm being a little dismissive, but I just do not have it in me anymore to feign excitement over every single one of these two or three or whatever fraudulent Okay, not literally fraudulent. I have no evidence of that. This is a libel blah blah blah. It's not fraudulent. It

just looks like bollocks. I can't be excited about the new asshole who raised a billion or two billion dollars to do nothing. I don't have it in me anymore. I'm not going to read a sentence about post training or fine tuning and pretend that means anything. It doesn't mean anything anymore. Nothing has changed, nothing is going on.

Everyone is wasting money, and I can't care about who looted billions of dollars from venture capitalists last nor do I believe that anything should happen to this venture capitalists other than being tard and feathered by the limited partners. These people aren't building anything. They're huffing their own farts and getting paid tens of billions of dollars to do it. I'm sick of here wrying about them, and I think this is the year we see this kind of con diet.

We're long past the point at which generative AI has made sense. Bloomberg reported last year that there were one hundred and seventy eight point five billion dollars of data center deals in the US alone in twenty twenty five, and based on my rough analysis, there's less than a billion dollars of actual compute revenue outside of hyperscalers who are just trying to move it off of their balance

sheet so their earnings look better. The demand isn't arriving, and neither of the products and all of this speculative money sloshing around is going to zero. I also want to be clearer about something else I keep hearing about. If open ai dies, the AI bubble bursts with it.

Mister Sebastian Malabi of the Council on Foreign Relations had a piece in The New York Times a few days ago saying that he believed open ai would run out of money by July twenty twenty seven, adding that and I quote an open ai failure wouldn't be an indictment of AI, but merely the end of the most hype

driven builder of it. He also said that the probable result is that open ai would be absorbed by Mike, Microsoft, Amazon, or another cash rich behemoth, which I am going to sit down and reread a lot of my newsletters because I'm pretty sure that's fucking lifted from my work, Like open ai being absorbed by Microsoft. I know I fucking said it. If you can find it, email me easy at better Offline dot com and I will give you a big thumbs up in a photo. But I want

to be clear. In any case, if open ai dies, the bubble burst aggressively and brutally. Open ai is the biggest brand name in AI. Samultman is the only well known founder, and chat gpt is the only AI product with any consumer penetration, and no Microsoft and Google renaming products doesn't count, nor does Nano Banana. I can't believe I nearly got away with saying or thinking that Nano

Banana for a week. More important, the open ai is the only company with any real demand for a compute outside of Anthropic, another company that relies on billions of dollars of venture capital and subsidies to stop itself from falling over and dying. As you can hear them a little bit heated on this subject because I'm really really

sick of hearing this. I'm really sick of hearing things from these AI boosters are getting more crazy and more defensive, claiming that this is an open AI bubble, not an AI bubble. What do you think happens when AI companies try and raise money after open ai dies? Do you think investors are going to think? You think they're going to do the Tobias fun K poly thing from arrested Development, where it didn't work for name, it will work for us.

Now they're going to say, oh shit, oh shit. The one company with all the press, all the money, all the infrastructure, all the attention, all of the governmental support died on its ass. Why would I invest in more in this? And I realize venture capitalists are fucking stupid at the best of times, but even by this standard, I think that they're going to be too scared to put the money in. And I don't think anyone else

is going to be able to justify it either. But I do think by the way AI boosters are about to get real crazy out there. I think you're going to see them say it's an open AI bubble, not and a bubble them. We need these investments to beat China. Then they're gonna blame people like me AI skeptics. They're

gonna say luddites destroyed innovation. And if you hear that, know that in reality, the people destroying innovation are the ones diverting more than half of all venture capital to invest in unreliable, unproductive, unsustainable, and unremarkable software in pursuit of creating the future of digital slavery. I'm sick of these fucking people, but that doesn't mean I won't be here to tell you all about their collapse. I'll be back next week with a three or four parter. This

is gonna be a bomb burner. You're gonna love it. Zichron out