Monologue: Silicon Valley is A Cargo Cult

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2:40Hello and welcome to this week's Better Offline monologue. I'm your host, Ed Zetron.

2:49Better Offline. It's gonna be a double monologue week. After last week's dramatic exclusive, I've been slammed with interviews and personal life stuff that made it feel like I was being hit in the head with a pool noodle 24-7. Feeling a lot better now, but nevertheless, this is where I need to focus myself. I've also been enjoying a lot of the responses to my exclusive about OpenAI's 2024 and 2025 financials. now some have been mighty confident about inference being profitable due to a 7.5 billion cost of revenue on 13.07 billion dollars in revenue but overlooked my reporting from last year verified by the financial times by the way that showed open ai spent 8.67 billion dollars specifically on inference in the first nine months of 2025 it's very very clear that open ai moved around numbers to make things look better than they are and i believe that inference costs are being dumped into sales and marketing.

3:45How else can you explain how a company spends more than 43 % of its revenue,$5.73 billion, on sales and marketing, more than the Coca-Cola Corporation, which has three ad agencies and a vast web of different print, digital, and physical ad spend? I think they do some influence to things as well. Honestly, if the Diet Coke corporation wants to get in touch, please do. Nevertheless, Microsoft also had$500 million of sales and marketing spend too via OpenAI. What do you think that is? OpenAI spending$500 million on sales and marketing through Microsoft? Or is it them itemizing promotional spend or the inference from free users as a sales and marketing cost?

4:25Now, if you disagree, and I'm sure some of you do, please explain in any detail, any level of detail really, how OpenAI has spent$5.67 billion on sales and marketing otherwise. Its first major advertising campaign was in September 2025. If it's spending, let's say,$250 ,000 a year on its 500 sales staff, that's still only$125 million. Unless OpenAI is one of the single largest accounts in digital advertising, and speaking with people all over the shop, I don't think that's true, I think it's far more likely that there are actual costs being hidden. And this is the kind of thing a company does when it has utter loathing for its investors, the media, and the general public.

5:06A brazen attempt to bury costs to make things look better for an audience that's directly incentivized to take any shred of proof that things are okay. Nowhere is this more obvious than in the FT's story, and I'm specifically referring to a quote, where a source familiar with the matter suggested that somehow OpenAI only lost$8 billion in 2025, rather than the$20.9 billion it actually lost. Accountancy voodoo doesn't work on me, Clamuel. I'm better than that. But this comment, in my opinion, was not actually meant for the readers of the FT, but for the larger AI cargo cult. As I wrote in my free newsletter this week, Silicon Valley, as exemplified by the AI bubble, has abandoned its supposed principles of rationality and meritocracy, and now more closely resembles a cargo cult, desperate to recreate bygone eras of growth.

5:55Open AI and Anthropic are not interested in operating with honesty or integrity, nor are they particularly concerned with building real companies. They lose billions of dollars, they always have and they always will. Nothing changes that. They must keep the mythology of their companies going so they can keep raising money in perpetuity until someone works out how to build a real company. not that that'll happen but nevertheless the things that they say they exist to feed the tech media and ai boosters symbolic proof that the great prophecy that open ai and anthropic will grow and be the biggest companies in the world they'll be profitable and ai will be the next big thing well they need that they they need you to believe these things so the great prophecy will come true it must come true don't you understand if it doesn't come true well wario amaday can't be an elder statesman forever and this is why both companies have used annualized run rates and never really address the profitability question outside of Dario Amadei's stylized facts.

6:50Because they know that Silicon Valley is a monoculture, dominated by people who don't interact with society outside of Sand Hill Road, who they believe are gullible enough to accept and promote any rationalization that confirms their beliefs, or indeed the great prophecy. And I mean, they've been completely right so far. The AI industry doesn't feel the need to prove itself because it has complete contempt for its customers, the media, and the markets, believing they'll slurp up whatever slop they get and take it as proof that that great prophecy, my friends, will come true, and all of us, all of us will be purified.

7:25And why wouldn't they? The media has accepted basically every single narrative the AI industry has created. AI boosters will accept effectively any proof that things are going well, and will actively attack and ostracize any non-believers. And if I'm honest, there are members of the media who do this too and if you're listening i'm not scared you only make me stronger you only make my posts longer too but really this is how it all works this is how it's worked with ai it's how they tried to make crypto in the metaverse work but it really worked with ai because llms too do that kind of cargo cultish evidence generation oh it could potentially replace software engineers because it can burp out some code oh it can look at my taxes and say stuff that means it can do my taxes just enough symbology to push this bullshit through for an indeterminate end let's be honest it's not going to be a government bailout I've covered that in a previous monologue go back and listen to it I'm not repeating myself but this is Silicon Valley and Silicon Valley stands for rugged individualism rationality and meritocracy unless of course everybody in Silicon Valley agrees that an idea is good at which point all that bullshit goes out the window any singular piece of information that even slightly rings positive is proof of the grand prophecy of growth that ai promises and chosen are those who take said proof and cursed are those who question it you dare to report on open ai's actual revenues no non-believer help with him it's we're going to put him in the wicker man we're going to put the man with the revenues in the wicker man except this is this is more like that yeah i guess this would be the wicker man except i'm not like had a sexless british policeman and more on that later i'll go deeper down the wicked man hole nevertheless this is silicon valley now silicon valley is just a cult it's a cargo cult where everyone's trying to shuffle shit around put things in the right order to try and usher in the next steve jobs or the next bill gates you ever notice as well that that's all they talk about it's always the guys it's never the product you also ever notice that all of these extremely well-paid AI guys like Noam Shazir who got bought he left Google and got bought for 2.7 billion dollars by Google to go back to Google then went to OpenAI a month ago what what do you think he did at Google what do you think Barrett Zoff who left OpenAI to went to thinking machines and he came back to OpenAI now he's left OpenAI what do you think he's done and that Andre Carpathie he just went to Anthropic and he wasn't doing anything for two years isn't it weird that Andrei Karpathy, one of the co-founders of OpenAI, formerly of Tesla, he sat around for two years and really didn't do anything.

10:04He had that Eureka Labs education startup. Nothing happened with that. It's almost as if the valley moves around different forms of symbology, hoping that when they're in the right place, the next era of growth will begin. And doing this allows them to get away from the horrible fact that they're out of hyper-growth ideas, that they don't have the people who have the ideas anymore. The original iPhone was created by a competing team, Tony Fidel and John Forstall, I believe, the software and hardware teams coming together and actually building something. People with real industrial expertise. The Valley now is just, I don't know, trading different kinds of AI scientists and mathematicians in the hopes that one of them can usher in the digital god.

10:47It's fucking depressing. It's depressing, and make no mistake, it will lead Silicon Valley to its ruin. Faith can't fill your belly. Or cover$1.1 trillion in spending commitments. Or magic up the more than$2 trillion in revenue that big tech needs to make AI worth it by 2030. I don't think it can pay Larry Ellison's bills either. In fact, faith can't really do much other than create speculative wealth. And speculative wealth can't pay for everything forever. I'll catch you on Friday. This has been Better Offline, and I've been Ed Zitron.

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