I'm Mad As Hell, And I'm Not Gonna Take It Anymore

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2:25I'm mad as hell and I'm not going to take it anymore.

2:36Better Offline. Welcome to Better Offline, I'm your host Ed Zitron. Now this is the second part of a two-part series about how OpenAI's stupid bloody growth myth has conned the entire media ecosystem, forcing people who really should know better to repeat absolutely insane things as though they're actually perfectly reasonable. Now, if you haven't already listened to the last episode and come back, just go. Just go. I'll need you to listen to it. Otherwise, let's talk about why this bubble actually inflated. And I realize I did a monologue about this, but it's so obvious that I needed to do a longer episode.

3:12But let's start simple. The term artificial intelligence is bastardized to the point it effectively means nothing and everything at the same time. When people hear AI, they think of an autonomous intelligence that can do things for them, and generative AI can do things for you, like generate an image or a text from a simple prompt. As a result, it's easy to manipulate people who don't know much about tech or even try it in the first place into believing that this will naturally progress from it can create a bunch of text for me that I have to write for my job just by me typing in a prompt to it can do my job for me just by typing in a prompt.

3:45Basically everything you've read about the future of AI extrapolates generative AI's ability to sort of generate something a human would make and turns it into a it can do whatever a human can do, all because some tech in the past has sometimes been bad at the beginning and linearly improved as time drags on. This illogical thinking underpins the entire generative AI boom, because we found out exactly how many people do not know what the fuck they're talking about, and are willing to believe the last semi-intelligent person that they talked to. Generative AI is kind of a remarkable car, a just good enough version of human expression to get it past the gatekeepers in finance and the media, knowing that neither will apply a second gear of critical thinking beyond, huh, guess we're doing AI now.

4:26The expectation that generative AI will transform into this much more powerful version requires you to first ignore its existing limitations, believing it to be more capable than it is, and also ignore the fact that these models have yet to show meaningful improvement over the past few years, unless you're looking at, of course, the benchmarks that they are built specifically to pass. They still hallucinate. They're still ungodly expensive to run. They're still unreliable, and they still don't really do that much. Worse still, ChatGPT's growth has galvanized these people into believing that this is a legitimate, meaningful movement, rather than the most successful public relation campaign of all time.

5:01Think of it like this. And some of you really don't like this argument, like, something couldn't be this big just because of the media. It really could. If almost every single media outlet talked about one thing, this thing being generative AI, and that one thing was available from one company, OpenAI, wouldn't it look exactly how things look today? You've got OpenAI with hundreds of millions of monthly active users, and then a bunch of other companies, including big tech firms with multi-trillion dollar market caps, with somewhere between 10 and 69 million monthly active users. And I don't count Gemini because they're cheating.

5:31You can't slap it on Google Assistant. That's unfair. What we're seeing here is one company taking most of the users and money available, and doing so because the media fucking helped them. People aren't amazed by ChatGPT. They're curious. They're curious about why the media won't shut up about it. And we have to realize and recognize and accept that part of the reason this bubble was inflated was the failure of Google search. Everyone I talk to that uses ChatGPT regularly uses it as either a way to generate shitty limericks or as a replacement for Google search, a product that Google has deliberately made worse as a means of increasing profits.

6:05Listen to our award-winning episode, The Man That Destroyed Google Search. I'm going to say that forever. And by the way, that's absolutely what you should listen to. It's Webby Award winning, the best business episode. We won it, folks. Anyway, I hate to say this. I really don't like saying this. I don't like to give it to them. But ChatGPT, if I'm honest, is better at processing search strings than Google Search, which is not so much a sign that ChatGPT is good at something as it is that Google has stopped innovating in any meaningful way. Over time, Google Search should have become something that was able to interpret searches into kind of like a perfect result, which would require the company to improve how it processes your requests.

6:41It should be how Google used to feel, magical. Instead, Google search has become dramatically worse, mostly because the company's incentives changed from help people find something on the web to funnel as much traffic and show as many ad impressions as possible on google.com. It does little annoying things like ignoring random words in the search string, even though those words were there for a reason, and Google doesn't know better than you what you want. Ideally, though, they should when it comes to a search product. That's ideally what you get someone to search something for you. You want them to bring back the best thing.

7:14And by this point, Google search should have been far more magical, more capable of taking a dimwitted question and turning it into a great answer with said answer being a result from the internet, right? Note that nothing I'm saying here is actually about generating a result. It's about processing a user's query and presenting an answer. The very foundation of computing and the thing that Google at one point was the best in the world at doing. Thanks to Propagar Raghavan, the former head of ads that led a coup to become the head of search, Google has pulled away from being the meaningful source of information on the internet.

7:43It really is actually quite sad when you think about it. And I'd argue that ChatGPT filled the void left by Google Search by doing the thing that people wanted Google Search to do, answer a question, even if the user isn't really sure how to ask it. Google Search has become clunky and messy, putting the burden of using the service on the user rather than helping fill the gap between a query and an answer in any meaningful way. Google's AI summaries don't even try to do what ChatGPT does. They just generate summaries based on search results and say, uh, mate, is this what you want? I don't fucking know.

8:16I only make, I only make like$10 billion a quarter. Give me a fucking break. But one note on Google's AI summaries, they're designed to answer a question rather than provide a right answer. There's a distinction that needs to be made here because it speaks to the underlying utility of search itself. One good illustration came earlier this week when someone noticed that you could ask Google to explain the meaning of a completely made-up phrase, and it would dutifully obey you. Two dry frogs in a situation, Google said, referred to a group of people in an awkward or difficult social situation. Not every insect has a mortgage, Google claimed, is a humorous way of explaining that not everything is as it seems.

8:50But my favorite is, um, sorry, I haven't read this back since I wrote, um, Big Winky on the Skillet Bowl is apparently a slang term that refers to a piece of bread with an egg in the middle. Very funny, sure, but is it useful? No. And it's also really cool that this company just makes billions of dollars off of this. With all its data and all its talent, Google has put out the laziest version of an LLM on top of its questionably functional search product as a means of impressing shareholders. And I'd like to say the results speak for themselves. Now, I must be clear, none of this is to say that ChatGPT is good.

9:26Like, it really isn't. It's just better at understanding a user's request than Google search. Yes, I fundamentally believe, by the way, that 500 million people a week could be using ChatGPT as some sort of search replacement. And no, no, I do not believe that's a functional business model, in part because if it was ChatGPT, OpenAI, they'd have a functional business. And to be clear, that's a load-bearing because I know that 500 million people aren't using ChatGPT as a search replacement. It's hypothetical. We actually don't know, and we cannot trust what comes out of them. Not that they share.

10:00It's not just that OpenAI is a shambles of a company. It appears that Google's ability to turn search into such a big business was because it held a monopoly on search, search advertising, and pretty much the entire online ads industry. And if it was a truly competitive market, and Google wasn't allowed to be vertically integrated with the entire digital advertising apparatus of the web, it would likely be making much less revenue per user. And that's bad if your Google replacement costs many, many, many, many, many more times more money than Google to run. As an aside, by the way, if you're wondering, no, OpenAI cannot just create a Google search competitor.

10:33Search GPT will be a significantly more expensive product to run at Google's scale than ChatGPT, both infrastructurally and the cost of revenue itself, with OpenAI being forced to create this massive advertising arm that does not exist. And by the way, another great critique I get is like, OpenAI can just hire a bunch of ads people. Why do you think there hasn't been another competitor to search? You realize that there are lots of other companies with lots of other money that could just do this, and indeed they've tried. Why do you think that hasn't worked? Is it because of the monopoly? It's because of the monopoly.

11:06It's because of the monopoly. Look, people love the chat GPT interface. It's the box where you can type in one thing, get another thing out, because it resembles how everybody has always wanted Google search to work. Does it work? Well, who knows? But people feel like they're getting more out of him.

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13:17Get started risk-free at greenlight.com slash iHeart. But before I go any further, I'd like to talk to you about AGI, artificial general intelligence. Artificial bloody general intelligence, the conscious computer that does not exist and is entirely fictional. and this two-part by the way has been a break from my usual onerous tortured punished and analysis and it's because i needed to have a little fun i think you've kind of heard that in the episode i'm like a little flexible i'm all all like limber and excited and it also comes from a place of frustration none of this ai stuff has ever felt substantive or real because the actual things that you can do with generative ai never seem to come close to the things that people at sam altman and wario amade seem to be promising nor do they come close to the bullshit like people casey newton and kevin roose are peddling none of this ever resembled artificial general intelligence and if i'm honest very little of it seems to even suggest it's a functional industry and when cynical plants like kevin roose of the times bumble around asking theoretical questions such as do you think that there's a 50 chance or higher that agi defined as an ai system that outperforms human experts.

14:27Eventually, all cognitive tasks will be built before 2030. I think when we're reading people saying that, and that was Kevin Roos at some little AI panel thing surrounded by just venture capitalists and the senior officials of Anthropic, when you've got the lead columnist of the Times saying this, we should all be terrified. We should be terrified, but not of AGI, but that the lead tech columnist at the New York Times appears to have an undiagnosed concussion. Roos' logic, as with Casey Newton's, is based on the idea that he's talked to a bunch of people that say, yeah, yeah, mate, AGI is right around the corner, rather than any kind of like tangible proof or evidence, just line going up.

15:06Do you see it? The line's going up. Which line is it? Get out of my house. Look, I will say, I've been a little mean on Kevin Roos. I've been saying that he's written the worst shit about artificial intelligence that he is a credulous buffoon or at worst a cynical plan that he kevin roos at the new york times is regularly pushing things like nfts and crypto and getting basic things wrong like the helium piece in which helium lied about their about their customers uh i've said that kevin roos regularly says things that don't make any sense and he has indeed written the worst tech criticism out there criticism being the wrong word take analysis out there and i want to just say that I've been wrong.

15:47I've been wrong the entire time. What I should have said is that he's written the worst stuff yet. And I should have said that because he's recently published one of the dumbest fucking things I've read in my life and I can't wait to tell you about it. His most egregious example of credulousness came in late April when he published this thinly veiled puff piece about what to do if AI models become conscious in the future. Now this piece, this piece is possibly the dumbest tech piece I've read in my life. I really mean this. I've read some dog shit. I've gone on Telegram groups for the smallest ICOs you've seen in your life.

16:19I'm doing the Rutger Hauer speech from Blade Runner right now. The things I've seen with your eyes, different speech, I realize. This piece from the New York Times is called, If AI Systems Become Conscious, Should They Have Rights? And the subhead is, As Artificial Intelligence Systems Become Smarter, One AI Company is Trying to Figure Out What to Do If They Become Conscious. I'm going to give you exactly one guess what company he's talking about. And here's a clue. It's the company Casey Newton's boyfriend works at. That's right, it's Anthropic. Kevin Roos interviewed two people, both employed by Anthropic, with one holding the genuinely hilarious job description of AI welfare researcher, who said nakedly insane things like, there's only a small chance, maybe 15 % or so, that Claude or another AI system is conscious.

17:04And it seems that if you find yourself in a situation of bringing some new class of being into existence, dot dot dot, then it seems quite prudent to at least be asking questions about whether that system might have its own kinds of experiences. Well, I'm experiencing brain damage reading this article out. And what makes this article so appalling is that Roos acknowledges that this shit is seen by most level-headed people as utterly fantastical. He describes the concept of AI consciousness as a taboo subject and that many critics will see this as crazy talk, but doesn't bother to speak to any actual critics.

17:37He does, however, speculate on the motives of said critics, saying that they might object to an AI company's study and consciousness in the first place, because it might create incentives to train their systems to act more sentient than they actually are. Yeah, Kevin, wouldn't it be really bad if a generative AI company deliberately did something to convince someone that their systems were sentient? You know, someone really credulous who would accept whatever narrative said AI company was pushing, such as that they created a special job just in case AI was sentient. Genuine question, Kevin. When you walk past the mirror, do you start barking at it because you see another guy?

18:10Anyway, nothing about anything that OpenAI or Anthropic is building or shipping suggests that we are anywhere near any kind of autonomous computing. They've used the concept of AI safety and now AI welfare as a marketing term to convince people that their expensive, wasteful software will somehow become conscious because they're having discussions about what to do if it does so. And anyone, literally any reporter accepting this at face value is doing their readers a disservice and embarrassing themselves in the process. If AI safety advocates cared about, I don't know, safety or AI, they'd have cared about the environmental impact or the fact that these models train using stolen material or the fact that these models don't really deliver on their promises.

18:49And if they did, it would shock the labor market and it would hurt millions, if not billions of people. And we don't have anywhere near the social safety network to support the ones we have right now, let alone in this completely fictional future. These companies do not care about your safety, and they don't have any way to get to AGI. They're full of shit, and it's time to stop being honest that you don't have any proof that they do anything that they say they will. Also, by the way, I think the bubble might actually be bursting. Yeah, remember in August of last year, I was talking about the pale horses of the AI apocalypse.

19:21Well, one of the major warning signs that the bubble was bursting was big tech firms would be reducing their capital expenditures. And this is a call I've made quite a few times, and there was one in alarming clarity from April 4th, 2024. And I'm going to quote myself here. While I hope I'm wrong, the calamity I fear is one where the massive overinvestment in data centers is met with a lack of meaningful growth or profit, leading to the markets turning on the major cloud players that stake their future on unproven generative AI. If businesses don't adopt AI at scale, not experimentally, but at the core of their operations, the revenue is simply not there to sustain the hype.

19:55And once the market turns, it will turn hard, demanding efficiency and cutbacks that will lead to tens of thousands of job cuts. Well, we're about to find out if I'm right. On April 21st, Yahoo Finance reported that analyst Josh Beck said that Amazon's generative AI revenue for Amazon Web Services would be$5 billion. $5 billion this year. A remarkably small sum that is not profit, by the way, and also a drop in the bucket compared to Amazon's projected 105 billion dollars in capital expenditures in 2025 it's 78.2 billion dollars in expenditures in 2024 or it's 48.4 billion dollars in 2023 and is that really fucking it are you fucking kidding me are you fucking kidding me i have had jack holes for years telling me this was the next big money driver five billion dollars five billion goddamn are you fucking kidding you'd make more money auctioning dogs this is a disgrace and if you're wondering yes all of this is for ai all of that capex from the yahoo finance article the wonderful laura bratton wrote well this is a quote by the way from the article ceo andy jassy said in february that the vast majority of its this year's 100 billion dollars in capital investments from the tech giant will go towards building out artificial intelligence capacity for its cloud segment amazon web services aws well shit i bet investors are gonna love this better save some money andy what's that what's Andy?

21:14What? Oh, you're saving money already. How? Oh, shit. Oh, uh-oh. A report from Wells Fargo analysts published at the end of April called Data Centers, AWS Goes on Pause, says that Amazon has paused a portion of its leasing discussions on the co-location side. And while it's not clear the magnitude of the pause, the positioning is similar to what analysts have heard recently from Microsoft, that they are digesting aggressive recent lease-up deals pulling back from a pipeline of LOIs or SQQs. Now, some arsehole is going to say LOIs and SQQs aren't a big deal, but they are. They are. Go listen to the PowerCut episodes.

21:48Go listen. Go back and listen to them right now. Get off my... How'd you get in my house? Anyway, digesting in this case refers to when hyperscalers sit with their current capacity for a minute, and Wells Fargo adds that these periods typically last 6 to 12 months, though they can be much shorter. It's not obvious how much capacity Amazon is walking away from, but they're walking away from capacity. It's happening.

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24:42But what if it wasn't just Amazon? Another report from a friend of the podcast read, People I email occasionally asking for a PDF. Of course, referring to analyst TD Cohen put out a report last week that, while titled in a way that suggested there wasn't a pullback at all, actually said that there was. It was called like, Hyperscala Demand is Up. Let's take a look at one damning quote. Relative to the hyperscaler demand backdrop at PCC, which is a conference hyperscaler demand has moderated a bit, driven by the Microsoft pullback and to a lesser extent Amazon discussed later, particularly in Europe, there has been a broader moderation in the urgency and speed with which the hyperscalers are looking to take down capacity.