Monologue: We Live Inside A Dream, But Who Is The Dreamer?

0:00This is an iHeart Podcast. Guaranteed human. Amazon Health AI presents Painful Thoughts. Why did I search the internet for answers to my cold sore problem? Now I'm stuck down a rabbit hole filled with images of alarmingly graphic sores in various stages of ooze. I can clear my search history, but I can never unsee that. Don't go down the rabbit hole. Amazon Health AI gets you the right care fast. Healthcare just got less painful. Ask yourself, what are your best people spending their time on right now? Expense reports, receipt chasing, month-end close that takes weeks. You become what you spend on, and that's not what you're building toward.

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2:11Hello and welcome to this week's Better Offline Monologue. I'm your host, Ed Zetron.

2:24Meta Online.

2:54which was below estimates. Cash flow also deteriorated to a little under$800 million. And I must be clear how strange it is watching these companies do this. Meta used to just print money. They used to have tons of free cash flow. But this dedication to AI is questionable and wasteful. And the market is pissed, mostly because Meta has yet to show any proof that spending over$200 billion in capex did anything for the company. Conversely, Microsoft's stock is ripping because it beat on analyst estimates across the board, with its Azure cloud platform hitting$100 billion in revenue for the fiscal year that just ended.

3:28And to be clear, Microsoft's fiscal year, 2026, started on July 1st, 2025. Annoying. So annoying. I hate it. But that's the ballgame. What's funny is that neither company actually proved that AI is paying off, outside of brainless analysts and captured business and tech media reading between the lines and saying, ooh, AI's paying off big time. Last quarter, Microsoft disclosed its AI run rate, month times 12, which was$37 billion, about$3 billion a month, and then simply chose not to report the figure at all in this quarter. I assume because the number was lower, but that doesn't matter to anyone covering earnings.

4:04Put the AI hype in the bag. No thinking. Only number go up, please. No thinking at all. We cannot think here. It's not like people are going to buy Microsoft stock because of this. I'll also add that nobody seems to want to discuss that Microsoft Azure's largest customer, and likely the vast majority of its growth, is OpenAI, an unprofitable, unsustainable company that accounted for, per my own reporting, 69 % of all year-over-year growth of Microsoft's cloud in calendar year 2025. Microsoft's cloud revenue mysteriously seems to grow every quarter, with OpenAI's increasing spend on AI compute, a fact mentioned in exactly zero of the stories I read about earnings, and god damn did I look.

4:47The inflation of the AI bubble was only made possible by the continued unwillingness of the media to actually explain or even try to understand what's going on. Microsoft's growth was immediately credited to its AI bets paying off, ignoring both OpenAI's compute spend and the massive Microsoft 365 price increases that hit on July 1st, because it's convenient and rewarding to coddle the powerful and celebrate their supposed victories rather than actually seeking the truth. And what's funny is people are going to say, well, OpenAI is their bet paying off. Is it? Is it when it's a venture capital-backed company, when Microsoft has had to sink over$13 billion into the company, when there were reports in 2025 that that compute was served at cost?

5:29How much is their investment as the zero credits? Who knows? Nobody bothers to look. No one bothers to ask. The analysts on these calls should not have jobs. They do not exist to protect investors. They exist to perpetuate hype cycles. And what's actually happening to this company is pretty simple. As OpenAI's largest provider of AI compute, Azure revenue growth will continue to spike as long as venture capital continues to funnel cash to clammy Sam Altman. Microsoft has not found some magic AI money cheat, it has not unlocked incredible value for its Microsoft 365 Copilot subscribers, and it's not got some secret sauce.

6:06While 365 Copilot subscriptions increased by 10 million in this quarter, keep in mind that Microsoft regularly discounts or simply adds it for free to pump these numbers up. We're far past the point in the AI bubble where naked deception is necessary because the media is more than willing to keep filling in the blanks at the preference of the companies. Keep in mind that a mere 24 hours before Meta's horror show earnings that the Wall Street Journal and New York Times both ran separate stories about Mark Zuckerberg wanting superintelligence for all, a vacuous statement that exists only to get an irrelevant company attention and to paper over its meaningless and wasteful AI play.

6:41What superintelligence, smock you're building fucking large language models who cares who fucking cares none of this actually connects to what the models do i feel like i'm going insane and just just look at the coverage around nvidia's potential backstop of 250 billion dollars in compute spend on the still theoretical 10 gigawatt data center in ohio that a soft bank subsidiary wants to build for open ai not once in any of the stories did i read a single thing about how open ai can't afford that spend that debt markets are becoming exhausted with ai loans that sp energy has never built a data center before and that none of this makes any financial sense no need put the ai hype in the bag no thinking only growth number go up no need to think at all just run story numbers are big we love number again and again and again the media fails investors and the general public through either a misplaced attachment to fictional objectivity, or a desperation to appeal to the powerful.

7:38It doesn't really matter which one is true, because they both have the same effect, creating the appearance that any of this is possible in a way that only benefits the rich and powerful.

7:58Hey everyone, it's Cal Penn. I'm the host of Earsay, the audible and iHeart audiobook club. This week on the podcast, I am sitting down with Ray Porter, the narrator of Andy Weir's audiobook Project Hail Mary, massive sci-fi adventure about survival and science, and what happens when you wake up alone very far from earth. I really had to make a decision because I caught myself getting that frog in my throat and starting to get teary as I'm narrating some of these sections. And it's like, okay, yo, yo, yo, is this indulgent? And I really thought about it. I was like, no, at this point, it would kind of be betraying the trust the author and the listener have in telling this story if I don't go through it.

8:42But there's places in this book that deeply emotionally affected me, and I left it on the mic. That's great. Because it served the story. People will say like, oh my God, I cried at the end. It's like, yeah, dude, me too. Listen to Earsay, the Audible and iHeart Audiobook Club on the iHeartRadio app or wherever you get your podcasts. If your best finance people are doing expense reports, chasing receipts, or spending time on month-end clothes, it's time to get Brex AF, a gentic finance that eliminates that work before it starts. Learn more at brex.com slash AF. Aging is real, and so are the benefits of new Vital Proteins Collagen Sparkling Water, because around the age of 30, your body needs backup to keep your collagen up.

9:27So get your daily glow up, now in three fresh flavors, strawberry blossom lemon lime and blood orange improved skin health in as little as 30 days thanks to collagen peptides cheers to that so you can stay vital stay you visit vitalproteins.com to learn more and where to buy these statements have not evaluated by the food administration this product is not intended to diagnose treat you or prevent any disease amazon health ai presents painful thoughts i um i can't stop scratching my downtown yeah but i'm not itching to go downtown and tell a receptionist I'm here to talk about my downtown. Some things you'd rather type than say out loud.

10:07There's no question too embarrassing for Amazon Health AI. Chat your symptoms and get virtual care 24-7. Healthcare just got less painful.

10:21And what's incredibly frustrating is it's now, for the most part, commonly held consensus that we're in a bubble. Yet the media continues to write about this stuff as if that isn't the case, glazing every single impossible deal or blatant act of circular financing, salivating over every bizarre new model drop or supposed achievement without ever really explaining why it matters, and gooning over every obtuse statement that Sam Altman makes. We're not in the singularity, you fucking arsehole. And this is because we live on some level in an entirely imaginary and manufactured reality, at least when the media is concerned.

10:55Hyperscalers have spent over a trillion dollars in AI capex and have across the board refuse to give us hard numbers about its return on investment. OpenAI and Anthropik are unprofitable, unsustainable, and will need over a trillion dollars of funding in the next four years because they've made over a trillion dollars of commitments that neither of them can afford without a near infinite sum of venture capital. AI data centers are getting built at a snail's pace, and debt to build them is becoming more and more expensive with core weave hitting goat c level credit spreads trading from 8.3 percent to 9.3 percent above u.s treasuries which is way higher than the average junk bond meaning that investors are valuing them like the company is a very real chance of death and you'll notice that this isn't really something but you'll notice that the spreads are being covered people think oh that's strange oh that doesn't look good oh wonder what that's about what it's about is that the bond market is screaming, Corweave might die.

11:52Corweave might die. And if Corweave dies, every neocloud dies. Iron dies, Nebius dies, N-Scale dies, Lambda dies, all of them die. And even if I might be wrong, which I'm not, I really am quite confident on this, the fact that this is not even a discussed point across the media is a sign that no one really gives a fuck about any investors, the public, anyone who might get tied up in this. It's a sign that no one's thinking about this too hard, either through a dramatic ignorance or just a lack of giving a shit about anything. Yet the irony of all these blaring warning signs is that it's impossible for most of the media to take them to their logical endpoint, as doing so would mean accepting that we live in an era of outright insanity.

12:34To acknowledge OpenAI's financial condition is to acknowledge that the largest customer of Azure might die, and that a large chunk of Microsoft revenue growth is a fiction created by venture capital. To acknowledge CoreWeave's condition is to acknowledge that a company pumped up by most of the media is going to explode. To acknowledge that Anthropic is basically the same company and in the same financial position as OpenAI is to accept that Google Cloud and Amazon Web Services are as inflated as Microsoft Azure. And to acknowledge these things would require the media to acknowledge that they ignored basically every warning sign right up until the end.

13:06I can imagine that the bubble will burst and there will be outlets that will attempt to pretend that they were ahead of it, but those people don't realize how detailed my notes are and how unflinching I'll be in publishing them. I will. I will be doing so. I will be publishing everything. I know everyone who pumped this up. I know what everyone did. I know how many times they ignored the warning signs, and I can see the articles where they helped pump this bubble up. And I'm not going to get too personal i'm just going to publish the fucking articles i'm going to point i'm going to say it was obvious then why didn't you do something and the answer is they didn't give a shit either they didn't give a shit enough to learn or it maybe they aren't and it's much worse if they understood and they just chose to ignore it if the answer is well the largest companies in the world wouldn't make such a mistake you're just very very gullible i guess i don't know i hope that someone learns after this, I don't think they will.

14:06I'm really going to try. I'm really going to try and explain how people got this wrong. I feel like I've been trying. And the bile you can hear, the poison in my voice, comes from a place of, it's funny, people say, oh, he's just a former PR person. He doesn't know anything about finance. The only thing that it takes to become a financial expert is to become an expert in finance, to sit down and learn. Where's everyone else? You can fuck it. I'm using the same shit as everyone else. You just learn to read. And I don't know why more people don't do it but the answer is it's a lot of work and you don't really have to do it when your editor's pro ai but you can just do whatever you want i know some journalists listen and hopefully i'm not talking about you hopefully you made the effort i really hope you did and i must be clear i'll probably mostly be coming after outlets rather than people directly that would be mean but at the same time please god when this explodes journalists listening to this please fucking try harder or i don't know try trying harder beforehand and if you think you are pushing back, if you truly think you are pushing back, by all means, reach out and find out if you actually are.

15:05By all means, email me, signal me, you have my information, ezitron.76, and ask me directly. Because pretty much if you have to ask, you're probably not. And if you think you are already, I don't know, have you talked about CoreWeave? Have you talked about OpenAI running out of money? Or when you did so, did you talk about it saying, yeah, OpenAI isn't profitable yet, but you know, companies take a while to get profitable, and Uber lost a lot of money and aws lost a lot of money if that's what you're thinking you are wrong you are wrong you are misleading your readers you're misleading the general public and you should be kind of fucking ashamed of yourself i'm i'm sorry to be so merciless right now but i am sick and tired of watching these cycles and i know how many people are going to get washed out for a real preview of that go and look at the korean stock market right now and the many stories of people talking about fucking killing themselves that is the real consequence of bubbles that is the real thing that happens and everyone trying to downplay this is responsible for people like that suffering and eventually american and british and other investors too it's sickening and until something changes we're all going to live in a paradoxical media environment that simultaneously publishes proof point after proof point after proof point that this is financially unstable all while saying that ai is going to be the biggest most hugest thing in history right up until the bottom falls out open ai collapses data centers get cancelled call weave shits its pants and everything falls apart at which point they'll throw up their hands and say wow how'd that all happen it happened because we live in an era where responsibility often correlates with cowardice those who have the most power to critique the powerful choose instead to jerk their shit from first principles helping them create fantastical mediated realities that enrich the already rich and fuck over retail investors at scale.

16:52It darkens my heart when I think about it. It really pisses me off because you can already see what's going to happen. You can already see that the people invested in the markets are going to get washed out. And then there's the widespread problems caused by all of these private credit funds sinking money into data centers that will never get built, will never provide the yield, and will fuck over anyone who is unfortunate to have insurance annuities or pension funds involved in this bullshit. Next week, I'll have Ed Elson back on to talk about tech earnings and continue to fight to give you as clear a picture of reality as possible, even as we battle to leave one created by and for the powerful.

17:30Thank you for listening.

17:39Ask yourself, what are your best people spending their time on right now? Expense reports, receipt chasing, month-end close that takes weeks. You become what you spend on, and that's not what you're building toward. Brex is the intelligent finance platform that eliminates that work before it starts. AI agents that handle the manual stuff automatically, so your team can spend their time on what actually compounds. It's time to get Brex AF. Learn more at brex.com slash AF. The Hulu original series Furious is now streaming on Hulu and Hulu on Disney+. Starring Emmy Rossum as Alice Black, Furious follows a rookie FBI agent on the hunt for Catherine, played by Lola Petticrew, a mysterious and calculating female serial killer.

18:25While Alice upholds justice, Catherine kills for it, terrorizing the rich and powerful men of New York in her pursuit of vengeance. With secrets that change everything, Alice discovers there's a thin line between Hunter and Prey. Watch the Hulu original series, Furious. Now streaming on Hulu and Hulu on Disney Plus for bundle subscribers. Terms apply. And now, another appliance triumph from our friends at Grand Appliance. With three kids, I'm always cramming the washer full. So when we needed a new laundry set, I asked the experts at Grand Appliance for a big capacity washer with a dryer that could keep up.

19:01They recommended Electrolux, and we love it. Advanced cleaning features with a massive dryer that gets everything dried the first time? Yes, please! Sounds like another perfect match from the Grand Team. Shop GrandAppliance.com Hey everyone, it's Cal Penn. I'm inviting you to join the best-sounding book club you've ever heard with my podcast, Earsay, the Audible and iHeart Audiobook Club. Every episode, I nerd out with amazing guests and dive into the best new audiobooks available on Audible. It's the book club for your ears. Listen to Earsay, the Audible and iHeart Audiobook Club on the iHeartRadio app or wherever you get your podcasts.

19:47This is an iHeart Podcast. Guaranteed human.