AI Is Worse Than The Dot Com Bubble: Part One

0:00This is an iHeart Podcast. Guaranteed Human.

0:32aka neurolinguistic programming. Is it a self-help miracle? A shady hypnosis scam? Or both? Listen to Mind Games on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts, then add supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. Learn how podcasting can help your business. Call 844-844-iHeart. Hey, it's Joel. and Matt from HowToMoney. If your New Year's resolution is to finally get your finances in shape, we've got your back.

1:07Prices, they're still high, and the economy is all over the place. But 2026 is the year for you to get intentional and make real progress. That's right. Yeah, each week we break down what's happening with your money, the most important issues to focus on, and the small moves that make a big difference. Kick off the year with confidence. Listen to HowToMoney on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. This is Dr. Jesse Mills, host of the Mailroom Podcast. Each January, men promise to get stronger, work harder, and fix what's broken. But what if the real work isn't physical at all?

1:41I sat down with psychologist Dr. Steve Poulter to unpack shame, anxiety, and the emotional pain men were never taught how to name. Part of the way through the valley of despair is realizing this has happened, and you have to make a choice whether you're going to stay in it or move forward. Our two-part conversation is available now. Listen to The Mailroom on the iHeartRadio app, Apple Podcasts, or wherever you get your favorite shows.

2:05CallZone Media Hi, I'm Ed Zitron, and this is Better Offline.

2:20Better Offline Welcome to Dotcom Week. I hope you enjoyed my chat with Matt Rozov to kick it off. Today is the first of a four-part special about why I think the AI bubble is that much worse than the dot-com bubble. So, for almost five years, I've put out a newsletter or article basically every week that addresses the underlying financial rot at the heart of the tech industry, whether it be the outright corruption of the crypto industry, the bullshit of the metaverse, or the AI bubble that I won't shut up about. It's been some of the most challenging work I've ever done. I've been forced to learn accountancy, economics, and the names of at least 10 different guys I'd gladly see under a with a.

3:00I'm not an accountant, forensic or otherwise. I'm not a banker or a financial analyst. I've never worked as a venture capitalist or a hedge fund, or at a hedge fund, I guess that would be. I'm just a guy with a laptop and a microphone. But I think I've picked up a great deal of knowledge in the last few years, and the clarity of starting from a position of, oh God, what does that mean, actually allowed me to see things in a way that many haven't. Which is why I'm so utterly horrified when I hear people flippantly say that the AI bubble will work out fine because it's just like the dot-com bubble.

3:32While there are similarities, I need to be clear that I think the AI bubble is far, far worse and the calamity that follows will be far more destructive. Let's review. The dot-com bubble actually had two elements. The stable, sensible tech companies that actually made money, and then the likes of Pets.com and Webvan, both ideas that would eventually find margin-positive existence in the form of Chewy and Instacart. I'd also add the telecommunications companies onto the side of this as well, but technically they weren't making the websites, they were just building the internet. What buried these companies was their obsession with growth and a rush to take them public.

4:04The idea of ordering pet food or groceries online was one that would have made a lot more sense if more people were connected to the internet or had faster connections. In the year 2000, only about 52 % of Americans were online, and well, both Webvan and Pets.com were losing$2 for every dollar of revenue. I don't know, that shit didn't make any sense, and it wouldn't have even if we had high-speed internet. But I think by the middle of the 2000s, we only had most people on, at best, 400 kilobits per second. So we're talking websites that took time to load. Anyway, the economics also didn't make sense.

4:37Now, the AI bubble differs insofar as that what we would have once considered stable, sensible tech companies are acting irrationally, having doubled, or in the case of Microsoft, tripled the amount of hardware, known as PP &E, that they operate in just a couple of years, with no signs of slowing down. These companies are racking up debt, entering into multi-decade-long lease agreements, and have accumulated so much hardware that the depreciation will erode any profitability for the short-term, medium-term future. For example, Microsoft went from having around$88 billion in PP &E, that's property, plants, and equipment, which is where the GPUs are, by the way, in the beginning of 2023, to a remarkable$230 billion in PP &E as of its last quarter.

5:20And depreciation, by the way, is not a cash expense. They've already bought the GPUs and the servers and the like. What it does, however, is sit there, because they spread it out over five to six years, I think it's five and a half from Microsoft, they spread it out so it eats into that net income side. So instead of taking the immediate upfront hit they spread it out so this means that each quarter from here until fucking eternity at this point microsoft is going to be taking billions of dollars of depreciation charges now while the dot-com bubble was wasteful it didn't involve the largest and most well-respected tech firms in the world accruing hundreds of billions of dollars of gpus that were obsolete a year or so after being installed it also didn't involve billions in operational expenses or acres of data centers.

6:06In fact, there's really no comparison. Fiber doesn't compare at all. The scale of the fiber, we'll get to it, but I just want to be clear that fiber is also something that you can use on many things. Fiber is something that another company could come up and run with. AI GPUs are extremely limited in their outcomes. I've been over this before, not going to repeat myself. Perhaps I'll do a more in-depth episode on that in the future. But look, in many ways, I fear the AI bubble is going to be worse than the dot-com bubble. It's going to make it look small. And we are already seeing some worrying signs.

6:40Now, let's start somewhere simple, though. Layoffs. Fun fact, even during the dot-com bubble, Microsoft barely had any layoffs, with the company growing its headcount even as the tech industry around it was consumed in flames. The biggest round of firings I could find during the 1998 to 2008 period was between August 2024 in January 2025, when it canned 76 members of its Xbox group, as well as 157 test engineers whose jobs were offshore to India. That gives you a grand total of 233 people. For comparison, Microsoft laid off 6 ,000 people in May of last year, or 3 % of its global workforce. Now, that's not to say that people at other companies were equally fortunate.

7:22In 2001, some microsystems culled 90 % of its workforce, or 3 ,900 jobs. That was the first of many at that particular company. In 2001, the telecommunications sector cut, and I'm not shitting you here, 317 ,777 roles, with the computer industry second ranked for that year, shitting 153 ,952 positions. Similarly, Amazon saw its stock tumble in January 2000 when it was discovered that it laid off 150 people, 2 % of its workforce at the time, and would lay off another 1 ,300 a year later, or 15 % of its workforce. Now, that, by the way, sounds like a lot. And also, I think it's adorable back when the stock market cared when companies did layoffs.

8:07They don't today. And Amazon, indeed, is a very different company today, going from a fledgling digital bookseller to one of the largest retailers and cloud storage providers in the world, and a very profitable one on that. Yet this week, Amazon laid off another 14 ,000 people, 10 % of its corporate workforce, around three months after laying off 14 ,000 more people in October 2025. Why? Well, it's two things. First, it's the scourge of Jack Welch. Go and listen to the shareholder supremacy from 2024 if you like that one. And the idea that laying people off, well, it boosts profits, which Wall Street loves now.

8:43Secondly, it's because Amazon is buying billions of dollars of GPUs, both from NVIDIA and directly from TSMC for its Tranium custom chips. That is TSMC, Taiwan Semiconductor Manufacturing Corporation. they they build basically every chip and amazon or they build them internally using a company called annapurna labs it's a whole thing it doesn't really mean much they're not as good as nvidia's gpus but nevertheless they keep fucking that chicken and this is a massive burden on its earnings these chips have their costs spread out like i mentioned as a depreciation charge dragging down the profits that amazon can report on its earnings in the process while this isn't a problem when you buy one or two or ten gpus it becomes one when you have punch the thousands of the fuckers.

9:34New year, new goals, and in this economy, a better money plan is more necessary than ever. I am Matt. And I'm Joel. We are from the How to Money podcast, and every week we help you to spend smarter, save more, and make sense of what's going on out there. If you want 2026 to be the year you finally feel in control of your money, we're here to give you the tools and advice to help you make it happen. Listen to How to Money on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. What if mind control is real? If you could control the behavior of anybody around you, what kind of life would you have?

10:08Can you hypnotically persuade someone to buy a car? When you look at your car, you're going to become overwhelmed with such good feelings. Can you hypnotize someone into sleeping with you? I gave her some suggestions to be sexually aroused. Can you get someone to join your cult? NLP was used on me to access my subconscious. NLP, aka Neuro Linguistic Programming, is a blend of hypnosis, linguistics, and psychology. Fans say it's like finally getting a user manual for your brain. It's about engineering consciousness. Mind Games is the story of NLP. its crazy cast of disciples and the fake doctor who invented it at a new age commune and sold it to guys in suits.

10:50He stood trial for murder and got acquitted. The biggest mind game of all? NLP might actually work. This is wild. Listen to Mind Games on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Hey there, this is Dr. Jesse Mills, director of the men's clinic at UCLA Health and host of the Mailroom podcast. Each January, guys everywhere make the same resolutions. Get stronger, work harder, fix what's broken. But what if the real work isn't physical at all? To kick off the new year, I sat down with Dr. Steve Poulter, a psychologist with over 30 years experience helping men unpack shame, anxiety, and emotional pain they were never taught to name.

11:32In a powerful two-part conversation, we discuss why men aren't emotionally bulletproof, why shame hides in plain site and how real strength comes from listening to yourself and to others. Guys who are toxic, they're immature, or they've got something they just haven't resolved. Once that gets resolved, then there comes empathy as in compassion. If you want this to be the year you stop powering through pain and start understanding what's underneath, listen to The Mailroom on the iHeartRadio app, Apple Podcasts, or wherever you get your favorite shows. A new year doesn't mean erasing who you were.

12:08It means honoring what you've survived and choosing how you want to grow. It means giving ourselves permission to feel what we've been holding and knowing that it's okay to ask for help. I'm Mike Della Rocha, host of Sacred Lessons. This podcast is a space for men to talk openly about mental health, grief, relationships, and the patterns we inherit, but don't have to repeat. Here, we slow down. We listen. We learn how vulnerability becomes strength and how healing happens in community, not in isolation. If you're ready to let go of what no longer serves you and step into the year with clarity, compassion, and purpose, Sacred Lessons is your companion on your healing journey.

12:55Listen to Sacred Lessons with Mike De La Rocha on America's number one podcast network, iHeart. follow sacred lessons with mike de la rocha and start listening on the free iheart radio app today

13:09amazon had 16.7 billion dollars of depreciation charges on its last earnings that's a great deal i think their net revenue was like 22 to 24 billion dollars not great in simpler terms today's layoffs are happening not because the companies are in trouble but because they want to boost their profits at a time when AI services aren't providing a profit and I don't think they ever will. Nevertheless, these layoffs are a sign of something. That these companies know that revenue growth isn't keeping pace with their ruinous expenditures. The only jobs that AI is taking are those that the hyperscaler cuts to keep paying for its existence.

13:45In any case, people really need to recognize that the dot-com bubble wasn't some small event that could be casually waved off and other things that happen tell the story of what might before anyone left in or invested in the tech industry when it does. In 2001, VC funds raised 63 % less than the previous year, and the amount of money going to startups, not just technology companies, dropped by slightly more. Then there's the stock market. If you held stocks in a company like Pets.com worth at its highest of relatively modest$400 million, or WebVam with a peak market cap of$8 billion, you were completely fucking screwed.

14:21Those companies went to zero, or near enough. Even those who invested in established firms like Microsoft and Sun faced their own haircuts, with Microsoft's share price dropping from a high of$120 to as little as$40, adjusted for the two stock splits that happened in 1999 and 2003. It would take around 17 years for Microsoft to reach its original dot-com bubble highs. The fact is, the dot-com bubble fucked a lot of people. The tech sector's share of employment wouldn't surpass the levels of the bubble era until 2015. In practice, this meant that newly graduated software engineers couldn't find much work, and what work they could find offered stagnant wages that didn't keep pace with inflation.

15:02That's the thing about the dot-com bubble. We like to think of it as something that happened around the turn of the millennium, but in practice, it took until 2004 for the contraction in the tech jobs market to finally bottom out. Existing workers face threats, not simply from economic related cutbacks, making the company do the same with the resources they already have, but also from outsourcing, which grew exponentially in popularity in the early 2000s. This, incidentally, was around the time that China entered the World Trade Organization, meaning that in addition to cuts in the service-related sector of the economy, a lot of high-tech manufacturing jobs went out the door too.

15:38The point I'm making is that the dot-com bubble was bad and that the second-order effects, the things that didn't get as many headlines or as much pop culture weight, were really, truly gruesome. now there's a great line from the big short i always find myself returning to it's when ben rickett the retired finance guy who came back in from the cold in order to help brownfield capital short the mortgage market castigates the two young founders for celebrating what would be the trade of the century if we're right people lose homes people lose jobs people lose retirement savings people lose pensions you know what i hate about fucking banking it reduces people to numbers here's a number every one percent unemployment goes up 40 000 people die did you know that It's so fucking easy to talk about this period with statistical data, to talk about layoffs in abstract terms like tens of thousands or hundreds of thousands of jobs, or to say how the stock market contracted, but things would work out okay, that everybody would be fine in the future, and thus, the fuck-ups today would be okay.

16:34I need to be clear that anybody who traded into the dot-com bubble got washed out and similarly anybody who believed story after story about the eternal growth from telecommunications or web startups lost almost everything if not everything they put in anybody who worked for Enron the people that didn't know about the illegal bullshit happening lost every cent of their stock-based pension unemployment swelled to a peak of 6.3 percent in June 2003 and the Nasdaq lost nearly 80 % of its value from its peak in the year 2000. Anyone saying that this is just like the dot-com bubble as some sort of defense of the reckless monstrous expenditures of the AI bubble is trying to find rationalizations for irrational reckless actions.

17:14These are likely privileged people who did fine at the time or have found ways to look back at a time of incredible suffering and believe that because things are better today that all of it was worthwhile. It wasn't. I know that the fiber build-out led to something, and I'll get to that in a future episode, I promise. But just because that happened doesn't make any of this worth it. All of the wasted money in that time could have been spread out over a more thoughtful period. It wasn't, and people suffered as a result. I'm going to talk about this more next episode. Thank you for listening.

17:54Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matt Ossowski. You can check out more of his music and audio projects at mattosowski.com. M-A-T-T-O-S-O-W-S-K-I dot com. You can email me at ez at betteroffline.com or visit betteroffline.com to find more podcast links and of course my newsletter. I also really recommend you go to chat.wheresyoured.at to visit the Discord and go to r slash betteroffline 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, coolzonemedia.com or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

18:59What if mind control is real? If you could control the behavior of anybody around you, what kind of life would you have? Can you hypnotically persuade someone to buy a car? When you look at your car, you're going to become overwhelmed with such good feelings. Can you hypnotize someone into sleeping with you? I gave her some suggestions to be sexually aroused. Can you get someone to join your cult? NLP was used on me to access my subconscious. Mind Games, a new podcast exploring NLP, aka neurolinguistic programming. Is it a self-help miracle, a shady hypnosis scam, or both? Listen to Mind Games on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

19:39Hey, it's Joel and Matt from HowToMoney. If your New Year's resolution is to finally get your finances in shape, we've got your back. Prices, they're still high, and the economy is all over the place. But 2026 is the year for you to get intentional and make real progress. That's right. Yeah, each week we break down what's happening with your money, the most important issues to focus on, and the small moves that make a big difference. Kick off the year with confidence. Listen to How to Money on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

20:35Our two-part conversation is available now. Listen to The Mailroom on the iHeartRadio app, Apple Podcasts, or wherever you get your favorite shows. A new year doesn't ask us to become someone new. It invites us back home to ourselves. I'm Mike Della Rocha, host of Sacred Lessons, a space for men to pause, reflect, and heal. This year, we're talking honestly about mental health, relationships, and the patterns we're ready to release. If you're looking for clarity, connection, and healthier ways to show up in your life, Sacred Lessons is here for you. Listen to Sacred Lessons with Mike Delaroach on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

21:13This is an iHeart Podcast. Guaranteed human.