Make Fun Of Them, Pt. 2

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2:38Now, in the last episode, we talked about an unfortunate affliction affecting people in tech where they're prone to spouting these inane, meaningless platitudes. And then the other affliction affecting people in the tech media where they nod along and say, huh, makes sense to me. The thing is, if we actually care about tech, it's upon us to actually challenge 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.

3:13The problem is that bullshit is a scarily effective mechanism by the shameless and the cynical. And it's managed to bamboozle so many, especially in the media, where the job is, at least in theory, to do the exact opposite of nodding reasonably and saying, oh, that sounds good to me, mate. Let's say the media, not the actually good people who I mentioned by name in the last episode, but slavish lickspittles like Kevin, Roos, and Casey Newton 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.

3:50The problem with bullshit, like Nadella's word salad 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 are they going to do it? Why haven't they done it yet? Why three years in are we still unable to describe what it is that chat GPT actually does and why we need it so badly. Take away how much money OpenAI makes for a 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 Casey you get to hang around lots of parties and you too Kevin, Kevi boy, you get to hang around a lot of parties with a bunch of people sniffing their own farts like that one episode of South Park with the Priuses.

4:36And on a business level, what is it that I'm meant to be impressed by exactly? OpenAI has allegedly hit$10 billion in annualized revenue, essentially the biggest month it can find multiplied by 12, which is, it's not actually that much really, considering that OpenAI 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. OpenAI allegedly has 500 million weekly active users on ChatGPT and by the last count only 15.5 million paying subscribers. An absolutely putrid conversion rate even before you realize that the actual conversion rate would be monthly active subscribers.

5:15That's how any real software company actually defines its metrics by the fucking way. Why am I meant to be impressed? Why? Because ChatGPT 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 OpenAI. 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.

5:51Having 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$14.3 billion to invest 49 % 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 OpenAI employees$100 billion to join Meta. And they also, by the way, thought about buying both AI search company Perplexity and generative AI video company Runway. And they even tried to buy OpenAI co-founder Yasutsu Kaveh's pre-product$32 billion valuation company, Safe Superintelligence, settling instead to hire its CEO and his venture fund.

6:39I just want to be clear. Superintelligence refers to a fictional concept. These people, they may as well be saying they're going to 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 mario brothers are we going to stop the koopas sam altman is mark zuckerberg going to kill who was the bad guy from sacrifice anyway we'll get back to that later when you put aside the big numbers these are the actions of a desperate dimwit with failing product trying to buy his way to make generative AI into super intelligence.

7:25And by the way, just want to make it clear, the chief AI scientist, Jan LeCoum, they call him Jan LeCoum, says it isn't going to work. Generative AI isn't going to make super intelligence. Marky Mark, you're going to listen to the people you fucking hired who 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 powerful's messaging and boy 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.

8:15No, 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 10 or 15 different articles suggesting that Mark Zuckerberg 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. I swear to God you people think that being a software engineer is only fucking coding, and it's fine if you ship mediocre code, as if bad code can't bring down entire organizations.

8:48What 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 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 nasty and founded on absolutely nothing other than your adulation for the powerful.

9:21These models are dangerous and chaotic, built with little intention or regard for the future, just like the rest of big tech's products. ChatGPT would have been a much smaller deal if Google had any interest in turning Google Search into a product that truly answered a query, as opposed to generating more of them to show more impressions to advertisers. A nuanced 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.

9:56It's a product that both misunderstands search and why people use ChatGPT as a search replacement in the first place. While OpenAI may summarize stuff to give an answer, it at least gives something approximating an answer answer rather than a summary that feels like an absentee parent trying to get rid of you and then throwing 20 bucks at you in 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 up the pricing for Claude, the Anthropic. I looked up for what the price of Claude Code was and it was like yeah$60.

10:29There's no$60 plan that I could find on Anthropic. Maybe one of the team's plans? Anyway Google search makes them like a hundred billion dollars a year. It's fucking insane.

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13:09I can't recommend them enough. I've heard great things from businesses using them. And as a customer, never upset to see them in a store. Square keeps up so you don't have to slow down. Get everything you need to run and grow your business without any long-term commitments. And why wait? Right now, you can get up to$200 off Square hardware at square.com slash go slash better offline. That's S-Q-U-A-R-E dot com slash G-O slash better offline. Run your business smarter with Square. Get started today. 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 used google in the fucking first place why doesn't the state of google dominate tech news just like how random ketamine fueled tweets from elon musk do why aren't we collectively repulsed by google as a company and why aren't we collectively repulse by open AI?

14:08No matter how big ChatGPT 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 I don't know, the fact that it loses over, you know, it loses like billions of dollars, probably more like$12 billion a year. It's planning to lose over$100 billion 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 start hearing the music 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$10 billion a year in revenue, not profit, as the very fabric of its existence is shoved down the throat of every executive in the world at once.

15:13Also, if it's not fed, by the way, $20 to$40 billion 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 of 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 billions of people's jobs. The reality is far simpler.

15:43We 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 smartwatch industry. What I'm talking about isn't inflammatory. In fact, it's far more deeply rooted in reality than those claiming that open ai is building the future or kevin roos walking up on stage dressed like a fucking ringmaster anyone if you're a listener who was 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 roos dressed like a fucking circus ringmaster his 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 327 billion dollars in capital expenditures and only 18 billion dollars in revenue and that's not profit by the way i really do mean it that's less than the projected revenue of the global smartwatch industry but then someone smashes through my door and they go what about open AI?

16:53I've talked about this so much. So what? Open AI makes$12.7 billion this year, but they lose like$10,$14 billion. What does that mean to you exactly? What are you going to 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.

17:32The information just reported that OpenAI was doing this to compete with Microsoft a couple weeks back and fucking OpenAI reduced the price of their O3 reasoning model, one focused on code, by 80 % to compete with Claude 4 Opus Max. Just thought 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 OpenAI's revenue to the pot, we're at about$30.7 billion. If we add the supposed$1 billion in revenue from training data startup surge,$300 million in annualized revenue from Turing, we optimistically assume that perplexity we'll have 100 million ARR up from 34 million in 2024 but they lost 64 million and say they make 100 million in 2025 and assume that any sphere which makes cursor that their 500 million dollar run rate stays consistent through 2025 even though they just had to completely change their pricing because because open ai and anthropic chugged on prices we are at carry the two about 32.7 billion hmm that's not good but i'm not being fair am i i didn't include many of the names from the informations generative ai database i'm stubborn so i made a point of adding them all up and ended up with a total of less than 39 billion dollars of total revenue in the entire generative ai industry jesus fucking christ fuck god damn it this this is what we've been doing for three years if you're a mr plinkett fan this is my kodak printer moment why why did you do that according to the information generative ai companies have raised more than 18.8 billion dollars in the first quarter of 2025 after vcs invested 21 billion dollars in q4 2024 and 4 billion dollars in q3 2024 for a grand total of 43.8 billion or a total of 370.8 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.

19:39These companies are predominantly unprofitable, perpetually searching for product market fit, and even when they find it seem incapable 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 ways perpetuated by the least charming fail-sons of our generation. Nobody should be giving Satchin Nadella or Sam Altman a glossy profile.

20:08They should be asking direct, brutal questions, much like Joanna 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 Wario Amadei and OpenAI's Clammy Sam Altman are far more in common with televangelist Joe Olsteen 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?

20:43What does that mean? To a single one of their wrongheaded oafish and dimwitted hype burps. It's boring. I'm terribly, horribly bored. And if you're interested in this shit, 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 at a calamitous cost. Reasoning models don't even reason is proven by an Apple paper released a few weeks ago, and agents as a concept are fucked because large language models are inherently unreliable.

21:15And 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 automate.

22:00We'll be right back. about my cancer at the age of 45. Anything with cancer, you just think death sentence. In this episode, we'll explore the science behind detection, along with the practical steps men can take to protect their health. Listen to Health Discovered on America's number one podcast network, iHeart. Open your free iHeart app, search Health Discovered and start listening. So today's show is brought to you with support from Square, who I really love. They offer quick payment processing, really easy to use terminals. Everything spins up really quickly. Every store I use them in, I don't really think about the experience, which is exactly what I want from any kind of tech.

22:40The loyalty programs work really easily. They're over at Court Street Grocers, S &P, Van Leeuwen Ice Cream. They're just a very easy to use and straightforward piece of tech. I can't recommend them enough. I've heard great things from businesses using them. And as a customer, never upset to see them in a store. Square keeps up so you don't have to slow down. Get everything you need to run and grow your business without any long-term commitments. And why wait? Right now, you can get up to$200 off Square hardware at square.com slash go slash better offline. That's S-Q-U-A-R-E dot com slash G-O slash better offline.

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24:00but 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 scooted along amassing billions of dollars promising the world and delivering you a hill of shit they deserve our derision or at the very least our deep unerring suspicion if not for what they've done but for what they've not done sam orman 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 his stupid fucking ideas.

24:32No, really. He convinced Oracle to buy$40 billion of NVIDIA chips to put in the Abilene, Texas 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 OpenAI's bills and the media does his marketing for him. OpenAI 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.

25:06You 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 returns suck, the costs are too high. Why am I the radical person saying this? This entire situation is goddamn ridiculous, an incomparable waste, even if it somehow went to the green. For the horrendous amounts of capital in 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.

25:42Satya Nadella, Sam Altman, Wario Amadei, Tim Cook, Andy Jassy, 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?

26:16And 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 prices of products or making them worse so they can show you more ads? My positions aren't radical. And if you believe they are, your deference 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.

26:49I 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 write 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. Then I became a stuff knower, 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.