Monologue: Meta Admits It Bought Too Many GPUs

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0:37CallZone Media. Greetings, greetums, hello, and salutations. I'm Ed Zitron, and this is your Better Offline monologue for the week.

0:50Better Offline. Earlier this week, Bloomberg reported, and I quote, that Meta is developing plans for a cloud infrastructure business that will sell access to its AI computing power and models. A few weeks after CEO Mark Zuckerberg said at its annual shareholders meeting that he thought that Meta had a use for its compute, but it could sell it if it didn't. I genuinely love that he said that. It's like, I think I spent$100 billion for a good reason. Don't know yet, though. And there's no other sensible way, at least, to interpret this news other than that Meta is admitting that it overbuilt its GPU capacity.

1:26After five different reorganizations of its AI team, a$14 billion acquisition of scale AI for no imaginable reason, multiple versions of their loathsome pervert glasses, and celebrity-faced AI chatbots that have led an old man with dementia to his death. I'm not kidding, I'll link you to that great Jeff Horwitz piece from Reuters. In reality, Meta never had any reason to get into AI, other than the fact that Zuckerberg is a directionless oaf that can never be fired from the company, surrounded by loathsome yes-men like Boz, Adam Mursky, and Javier Olivan, who cater to his every whim and say yes to any idea no matter how goddamn stupid they are.

2:02Every time I hear from somebody at Meta, they vibrate with sadness and despair, lost in a company that exists as a large social experiment to try and conjure up more ad revenue for a platform designed to engage far more than build any meaningful connections. AI bulls and the recently concussed argue that this is actually a smart move, because now Meta can monetize its AI capex, the kind of ridiculous thing you say when you, like big tech, are fundamentally out of ideas and horribly desperate. Meta is doing this because Meta has no idea what to do other than to try something, anything, to make some money out of these god damn GPUs.

2:39The real question is who Meta will sell to and how much it will sell. Epoch estimates that it has around 1.61 gigawatts of total capacity as of the fourth quarter of 2025, and if that's the case, it's invariable that it gets snapped up by that Anthropic or OpenAI. And by the way, when that happens, we're at the top, we're done, wrap this bad boy up. And if it doesn't do that, I'm not sure what the demand looks like outside of those two companies, who I estimate take up anywhere from 70 % to 85 % of all global AI compute. Meanwhile, the information reports that NVIDIA is offering, and I quote, financial backstops to young cloud providers that rent its GPUs in exchange for a share of their revenues, a euphemism for literally paying their customers to buy their stuff.

3:21This is a direct admission that NVIDIA doesn't see there's a diverse or rigorous demand for AI compute, and that the only way that these horrible little Neo clouds can ever run a business renting out GPUs is by letting them latch onto the side of NVIDIA like a parasite. It's blatantly obvious that demand doesn't exist at scale for AI compute, and that the only real customers are two bulbous fail-sons, anthropic and open AI, that lose tens of billions of dollars a year with no path to profitability. This is not a real industry, but a reflection of the desperation and directionlessness of a tech industry that's run out of hyper-growth ideas after giving up on investing at the seed stage and chasing out those who actually build real things.

4:01This industry deserves the punishment that's coming for it. The debt-fueled hyperscaler CapEx no-IT loads refused cash dump has pumped a global stock market and left the world invested in an impossible payoff of trillions of dollars of revenue, well, that will never exist. Everybody involved in inflating this bubble should be ashamed of themselves. Everybody who refused to heed my warnings in favor of the mythologies of Amazon Web Services and Uber should know that they are partly to blame for the chaos that will follow. This was blatantly obvious years ago. It was obvious before I started this show.

4:35It's been so obvious for so long. I've got better at this. I've got more nuanced in my arguments, but my arguments have stayed the same. There is no business model in generative AI. There is no way of serving inference at scale in a way that is consistently profitable. And people will argue about this and people will have the little natterings on their various blogs. I won't read them. I've got stuff to do. Sorry. but the truth is that everything i'm saying has been coming true i've been trying to warn people all of you i know i'm speaking to an audience that kind of gets it already all of you have been sticking with me and i love it i was just on cnbc did a great hit there i'll link to it in the notes hate to link to twitter but it's one of the only places i can actually upload it without it going dmc aid but i think you're really going to like that interview and the fact that the mainstream is finally opening up to these stories is a sign that we're wrapping this up and they're trying to kind of layer on the news and layer on the stories that say, hey, we didn't fall behind this, we're on this, and good on them for doing it, albeit a little too late.

5:37In fact, I think all of the kind of bubble discussion is too little too late. And now Clammy, Clammy, Clamatha, Clamuel, Clamantha, we love Clamuel, we don't like Clamantha, he wants to give 5 % of OpenAI to the US government, I assume, in exchange for money. And I know some of you are going to say that's a lineup to a bailout. No, it isn't. It'll require congressional approval. And this is at a time when AI is one of the least popular things in the world with voters. And also, no one wants to give$40 billion to goddamn Sam Altman. All signs to this, all signs point to this, I mean, blowing up sometime, I think, in the next six months.

6:16And I feel like I've been saying that for about six months, but we're seeing the desperation start, and we're hearing these conversations happen. I think things are going to get weird. Things are going to get very weird. And next week, we've got a great joint episode with the Trash Future crew talking about Masayoshi Sun's goose-filled shareholder speech and the collapse of the AI hype cycle. You're going to love it. I promise. Thanks for listening. Zitron out.

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