Radio Better Offline: Edward Ongweso Jr. & Allison Morrow

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2:34Hello and welcome to Better Offline. I'm your host, Ed Zitron.

2:45Better Offline. And we are recording here in beautiful New York City. And I have a wonderful pair of guests today. I have, of course, Alison Morrow from CNN Nightcap Newsletter and Edward Ongueso Jr., the hater himself, from the Tech Bubble Newsletter. Thank you so much for joining me today. Great to be here as always. Thanks for having us. So I think we should start with exactly what we were just talking about. The OpenAI claims that they have worked out what causes hallucinations. Alison, do you want to go over this? I should have read the paper a bit more carefully, but I can, you know, the highlights were getting digested yesterday on X and Blue Sky.

3:22And it seems like it's kind of the test taking problem of when you encourage students when they're taking standardized tests, and you don't know the answer, you guess. And that's exactly how these models are trained. And you don't get a point if you say, I don't know. So you come up with something. And the models are meant to keep guessing until they get something close to right. So that's why you get a lot of nonsense and hallucinations. And OpenAI, at least in their reading of it, says, oh, this is a simple solution. We'll just encourage the models to understand better when it's like a binary question and when you can say, I don't know the answer to that.

4:05So we'll see. I read the paper, albeit not today, because my brain just immediately read it as marketing copy. just put that replaced it with another anime theme song i i went through it i was like okay so it's going to encourage them to say i don't know this feels like a very flat view of what hallucinations are though because hallucinations as people know them authoritatively stating something that isn't true but hallucinations in like a coding model are it will just say yeah i did that when it didn't but it's a very common you go into the cursor and the clawed code forums you can see this or subreddits at least and it's not that they say something that's true they don't know that something's not true also so they might say they don't know and it's just very silly because they claim that they're going to fix this problem with this solution but they've done years and hundreds of millions of dollars of reinforcement learning do they unreinfor do they reinforce it more so that i don't know i'm tired of these companies going to be completely honest i realize this is kind of cliche for the show but it's the fact that these things get written up as very serious things versus saying you guys still haven't worked this out it's kind of frustrating to me and they don't seem to be the models aren't getting better diminishing returns and all that but this is the best they've got i mean does this kind of uh thrust fee like you know do you guys feel like it's downstream of the attempts by some of these firms to say oh actually like if we dial back uh the sycophancy you know then we'll be able to have a much more engaging consumer product we'll be able to have it hallucinate less, you know, and do psychosis less, you know, do they feel linked in that way?

5:42Does it just feel like a, you know, maybe another dead end? I feel like it's just them trying to work shit out and trying to, like, this also feels like a very rudimentary answer that they probably already had. It doesn't, anytime someone comes up with an idea that I can, that's technical, I'm like, okay, mate, you cannot be cooking with gas. This is, this cannot be that good an idea. And the thing is, the sycovancy problem, I don't think is solvable, through solving hallucinations. The problem is it should stop. It needs to just, it should not say I don't understand. It should say, no, actually you sound like you think I'm God King and that you are God King and that as God Kings together, we will destroy the world.

6:18Yeah, I mean, which in my case is true. Do you think like the emphasis or the attempt to overcorrect on that is leading them to go down solutions where they think, oh, like if we just go back this and that, then we'll stop it. Yes, yes. Actually, I think that that's right because they have the, I don't know if you saw the Attorney General, attorneys general from Delaware and California sent a letter to OpenAI last week saying, hey, look, you need to fix these safety protocols. You need to actually have them because what you have right now doesn't work and we will block your nonprofit. Otherwise, I was really happy to read that right up until the bit they say, we wish you well with your quest for AI dominance.

6:52I'm just like, these are the fucking people protecting us from the... They're like, no, it's great. You want to dominate everyone with AI. It's just you drove some people to a murder suicide situation. And wasn't that part of the problem with GPT-5 is they tried to dial back the sycophancy and then it took away the character and like the humanness that people had gotten attached to in GPT-4 and earlier models. And like it all seems to come back to OpenAI doesn't realize that what it's selling often is like a companion and a therapist. And it doesn't – it reminds me of like Q-tips. You're not supposed to put them in your ear, right?

7:30But that's all anyone uses Q-tips for. I was going to say, you're not meant to do that. Of course not. But that's how the consumer has chosen to use this product. And they're saying, well, we don't condone that. We don't think it's the best use of our product. And we know better than the consumer, of course. I think it's one abstraction higher, which is I don't think they know what ChatGPT is. I don't, I did, an AI booster piece came out last week, but it was, I had this whole thing where it was, it's so, they don't describe what ChatGPT does, if you go on the website, like, it's like, yeah, it analyzes data and it's brainstorming and charts and stuff, the agent does things too, please buy it, and then you try and like actually look for any use cases and there's nothing.

8:15i think that they're just guessing but my favorite thing i'm seeing my favorite thing is that now people are like gpt4o isn't the same because they brought it back and now people are just freaking out people like no it's not the same it's different somehow it's honest i honestly don't know if it's true i just think that they've entered gamer mode this is just what game this is how gamers react it's like the gun isn't the same it's literally the same code no you've changed something you've changed i know and it's what happens when you release an imprecise glazing bot onto the world it's also really funny how literally any of these companies could have been open ai there doesn't seem to be anything special about this company at all anymore or ever well you know i i mean not everybody can lose as much money as open ai you know that feels very special or have the connection to masayoshi son you know oh my god i haven't heard from masayoshi son in a minute we haven't had an announcement of him claiming tomorrow tomorrow he's gonna be i like that he bought a fox he bought a fox count lab an old foxconn lab to turn into an ai server building place in like ohio i think it is it's like mate what are you doing man are you okay someone needs to check in on massive we need to hold space for masayoshi's son yeah bring him on i have asked him i have genuinely emailed softbanks pr and i've emailed anthropics pr for dario i haven't heard back from either i assume there's an email issue because there's no other reason they wouldn't come on this show it's just it now i what's fun to watch though is considering how many times we've had like ai bubble conversations on here everyone seems to be kind of waking up to it it's kind of fun must be clear everyone here was early on this alison you were actually very early you've been early on every night as early as you ed no i give you credit you're one of like the three people who when the metaverse was happening was actually calling it out.

10:06So it's good to see and hear, but also insane that it's still going. That's what I don't, like this OpenAI 115 billion burn by 2028, I think it is. I don't understand how people keep publishing this and being like, and that will happen. I will say to my relief, the metaverse went away quickly because when it first was announced and I wrote a piece just being like, what? What is that? What? and then like everything about it seemed really dumb in every iteration coming after and so i was like okay i wasn't crazy but with ai and i know you can relate to this i feel crazy because the the lack of utility is still there and like the absurdity of the investment is still there um and it does seem like that's why i wrote about the vibe shift like it has been like going in ed tron's favor in the last few weeks fucking vindication finally but it's it's funny as well because even with that this open ai story comes out and people are still like yeah they're gonna burn 115 billion dollars um people reported about a month ago that they're gonna spend 30 billion dollars a year on oracles starting 2028 how how how i just that's what i don't understand how these articles keep coming out and i understand that reporters have to report the news and things they have discovered i get it but can no one just be like and no one has any idea where this money is coming from no one 30 billion dollars a fucking year from oracle for servers that are yet to be built and all of this like don't need to worry about the fact that the servers aren't actually built and abilene texas is not finished and the money doesn't exist and it isn't obvious how oracle affords it they will have to take on debt to build this and crusoe and primary digital infrastructure have already done that and i mean other than that it could happen any day I just wonder if the media is actually not prepared for this.

11:54And I don't mean in a conspiratorial way. I mean just in a, is the media actually set up for companies just lying or just projecting? I mean, I feel like it reminds me of kind of the relationship that maybe art critics or, you know, art coverage might have to the medium where there's not an inherent antagonism or skepticism of claims that are being offered. and an assumption of good faith that continually gets betrayed or punished, but gets carried on with over and over and over again. I feel like the AI bubble discussions that we're seeing, part of me also feels like they are going to disappear the second we start to see some of the firms maybe announce some favorable metrics, even though, as we've been talking about for a long time, revenues are not there, profits are not there.

12:44The burn is only increasing. right and there's no way forward uh in the short term or you know that i can think of where these companies start to actually do the things that they're claiming they're going to be doing with transforming the world but i can see a scenario where you know someone has a favorable quarter for adoption even though you know we just i just saw yesterday apollo global management was talking about how large firms are actually scaling back ai adoption which already wasn't even providing returns and was hurting productivity in the first place, right? It's - and it's really weird as well, because there was that MIT study where it's like they said 95 % of generative AI integrations don't have any return on investment.

13:24There are some people critiquing that number, but something that comes out of that study that I really like was it was saying that enterprise adoption is high, but the actual transformation is low, because this shit doesn't work. And it's so strange. And I think that the only reason that things won't immediately unravel with a good quarter is because the media has chosen to follow a direction now they've you've got the when you've got the atlantic the goddamn atlantic publishing a story saying yeah it turns out that ai isn't really doing much but it's holding up our economy it's like holy shit the atlantic's willing to admit something that happened happened i didn't even know this was in there i thought that they just wrote up whatever was emailed to them by and don't Hold your breath.

14:06They just published Mike Salana. Yeah, actually, I retract all my statements. I think with the media, I see it in political reporting, in business reporting, in tech. There's a deference to authority that I think American media but all media have an issue with. And I think that sort of speaks to the underlying economics of being in media right now where there's a general chill both economically and politically. Reporters are worried about their bylines being out there and getting stuff wrong. And I'm not saying that that's an excuse, but I do think that is an institutional mindset that has taken root, especially in the last 10 years.

14:50Oh, for sure. It's just become like really hard to be a journalist and to do it right. Right. But you are starting to see that MIT report was so important because it caused people on Wall Street, authority figures, to say, hmm, I don't know about this. And then that got a lot of mainstream financial media to kind of like do that questioning headline about AI that they maybe wouldn't have done six months ago. I do like that there's a rumor about the next deep seek model doing agents. They're not going to, but even just like if that comes out and they even claim they can i think that might have a market panic just because they'll be like ah china i mean yeah i mean that's that i actually think there's something to that right because you know we did agents here i didn't do shit for sales for us um really the market did the market even really there's actually central claim and a wonderful story from this information um open ai in their in their whole projections through 2029 they've reduced the amount of money they make from agents by 26 billion why i want anyway so but but yeah it's like the this deep seek thing could inspire people to get scared horribly because no one actually believes that agents exist because they don't yeah but they think they do but they will but they won't it's this i i don't think i've ever actually see anything like this in tech i'm going to be honest it's worse than crypto even worse than just the general general ai thing is this concept of agents though because i saw some fucking thing about some one political blog saying that donald trump would do some sort of act he would do the i forget the exact thing but it would be an act that would make ai copyright holders just hand shit over to ai due to us needing to beat china and it mentioned within the like yeah the um growing agentic capabilities of ai it's just what the fuck is that i've never seen a tech thing in my life that has not existed like this and people talk about it like it's real and i think also it's interesting to see the more it doesn't manifest, the more some of the recommendations to make them happen just sound more and more like these are also things that might somehow bend the cost curve in our direction.

16:54Maybe we should make the internet unusable to anything other than some of these programs, right? And I'm curious which one is going to give out first, like the really savvy ability a lot of these firms have had in spinning sputtering or spinning a crisis that might drain the markets or deter investors into, oh, actually, we just need even more capital, similar to what they did with DeepSeek. The solution is even more compute-intensive models. Whether they're going to be able to do that faster than people wising up and saying, you know, maybe we shouldn't misallocate trillions of dollars of capital over the next few years towards this.

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21:10and listen now.

21:16I think the thing is, okay, they already steal everything. Well, okay, we need to give them as much money as possible. We've already done that. Are we just going to do this forever? Because even if we do this forever, nothing's going to change. Even if I'm completely wrong and OpenAI keeps going another five years. Okay, so we're just going to annihilate $115 billion. There are no more things here. Like, their projections, OpenAI's projections from the information, their chart i don't even need to show you this because this is just fan fiction at this point there is in 2026 starting there is this growth of this orange thing that is other revenue who knows what it is i don't know open ai doesn't seem to and that's really important because they're going to make what looks like several billion dollars from this next year what the fuck is going every time i look at this company i feel a little more insane because they've now lowered their expectations of selling their access to their models by five billion dollars over the next few years what even is open ai at this point is it just a wrap have they become a wrapper company of their own models they're no better than cursor it's just it's so weird and i realize i'm kind of going in circles at this point but it's i even the metaverse even crypto even crypto functioned it was bad it's still bad it is bad cloud software but it still did the thing AI doesn't even seem to be doing it and they need more money to prove that it can't do it and actually they don't have enough right now but they're going to need even more.

22:46I don't even know how people are still taking this seriously because on top of that, did you hear about the Microsoft negotiations over the non-profit? I've been hearing reports. Well, they're delaying it to next year. They need to convert by the end of the year otherwise SoftBank comes their round in half and everyone's just like, yeah, it'll be fine, mate. We'll work it out. What the fuck? Have either of you ever – I know, Ed, you covered Uber a lot. I don't even think the economics match with that either. No. I mean, it's interesting because I think Uber's strategy, central strategy from the beginning was we have a few existing playbooks that we need to reference.

23:25You know, the Koch deregulation of the taxi industry in the 90s, as well as deregulatory campaigns that they led in Seattle and historic campaigns in San Francisco. there's a lot that we can reference and if we can figure out a way to bootstrap ourselves onto the model and onto those previous histories of deregulation while delaying scrutiny long enough for economics to actually you know get to a profitable place we'll get there which is what they did right um but even then i mean i feel like from the beginning as much as i hated a lot the coverage of uber for years the people who were always correct about it were like the labor reporters who had actually who you know if you spend time talking to the drivers that will lead you to be a little bit more interested in the you know what can justify the suffering yeah behind this and then you almost always will see uh that there's no act at that point there were no way the unit economics worked unless you subsidize everything yeah i feel like similarly there's something going on with with artificial intelligence firms in the global ai value chain where If you start with a labor analysis and you look at invisible workers or ghost workers that are integral.

24:42The Kenyan people training the models. Yeah, or labeling or any labor that's out of sight, out of mind. Starting there and going up, it becomes hard to ask, okay, how are we supposed to allocate all this capital towards a model that as it is right now is cutting all these corners for costs. and is still burning tens and tens and tens of billions of dollars and is asking for trillions of dollars more. But I don't know. I mean, part of my fear is that they are successful in the way that Uber was, where if you get enough buy-in from military industrial comp, well, in AI's case, if you get enough buy-in from military industrial complex, if you get enough buy-in from social programs and interfacing them and helping cut them or redirect traffic through them, if you get enough buy-in from other tech firms, If you get rents from other startups that need to use and get access to your product.

25:35And also, if you graft yourself onto everybody's daily interactions, daily lives, the way they interface with the internet, can you actually make it work? Which is also another way to say, like, what if you just become a massive parasite? The funny and grim thing is, is AI is a terrible parasite. It's not good at it. It doesn't like, because Uber's success came from being able to graft itself on through utility. and subsidized pricing that meant that everyone used it. And also cabs kind of fucking sucked. Yeah, I mean, yeah, they sucked. And also transit in most cities sucks. And it's only gotten worse.

26:09The inherent colonialism of most technology applies. Very good from Karen Howe, of course, Empire of AI, Empires of AI. Did an episode, great book. But in this one, it's kind of shit colonialism as well because they haven't found a way to actually exploit in a way that's profitable. They haven't found a way to use human beings because the fundamental thing they want to do it's kind of like if uber sometimes you got in the car and you got out at the wrong place and i don't mean in like in a different country or you you got into the car and it just exploded sometimes i sound like i'm joking but it really is that bad and on top of it it's not replacing labor and it's also not the kind of tech that can replace labor so they're i it's my grand theory that they're just playing the hits they're just they're trying In the same way that you just eloquently put, Uber played the hits of, here's how we did deregulation, here's how we did growth, and this is how software grew in the past.

27:00I think that AI is trying to do the same thing, and it's bad at it. It's like watching a new class of dipshit try and do what the more evil dipshits of the past did and fail. In fact, these lobbying groups, lobbying for AI, I hear a lot of people saying, oh, they're lobbying, they're lobbying. It's like, what for? Oh, no, they're going to build data centers everywhere. They already do. They're going to steal from it. They already do. They're trying to replace it. They're already trying. Everything that everyone's scared of, they already can do, other than the doing part. They can't do any of that.

27:32Sorry, I just remembered as well yesterday, trying to read that, because I went on the ChatGPT Pro subreddit, because I hate myself. And I was trying to find someone who'd used the agent, and every post was someone saying, anyone ever used the agent? You got any tips? And everyone's just, it doesn't fucking work. It's broken. Actually, here's a good question. So, Alison, Ed, can you think of a company that's ever released something just completely broken before? Because the metaverse kind of worked. It wasn't what they were promising, but it worked. It was a virtual world-ish. I mean, the pharmaceutical industry has a nice long history of putting out quasi-effective drugs that have all kinds of consequences.

28:12And I can't remember who skeeted about this a few weeks ago. So it was after one of the, you know, it's become such a genre of the journalism right now about AI, about like this man became delusional and had a psychotic episode because of his ChatGPT relationship. And it was one of those going around and someone skeeted about how if this was coming from a pharmaceutical company, it would be recalled immediately. There are real regulations in place that could actually claw that back and help save people's lives. But there are no regulations around AI. So we get Chachi PT gods and spiritual awakenings and all these psychotic episodes.

28:50I do think that that stuff is going to genuinely be its downfall, though, because right now it's burning more money than anyone's ever burnt before. And the most common use case people can talk about is, yeah, it drove that guy insane. That guy went crazy. There are children who are just horrifying killing themselves because of this thing. That's what it's getting known for. And otherwise, it's like, yeah, your most annoying friend loves this. because that really it's the you love them but they're like i learned about all this and chat jbt it's like you didn't well you know on on that part of also part of my a fear i have is i think similar to how when firms were rolling out uh facial recognition surveillance and insisting that we need biometric surveillance to help keep city safe community safe products safe one angle that people used to attack it was well you know like the racial bias of these things will allow them to um you know misidentify uh black or brown people more often than not and they might get arrested they might get targeted by the police in one way or another um and that is why we should get rid of the technology versus we should get rid of the technology and i think like i'm curious you know how it's gonna go the concern about it inducing psychosis or inducing suicides because um i could see a scenario easily where they patch together something that looks like a fix and it's not until later a year or two or three after there's much after people are much more dependent uh that other harms come to the foreground whereas we lose something out i think not to say or marginalize the fact that it has immense social costs or harm here, but it does in some ways remind me of the way in which that debate over facial recognition went.

30:43And then they solved, with quotation marks, the racial bias problem. And now people have more or less accepted that facial recognition is okay, actually, as long as it's not racist. And that's the thing. It's people, I didn't say this as a white bloke, but it's like, people really underplay how endemic that racism is within all algorithms you know compass which is like this very very old algorithm for being like it's basically minority report yeah both in the reference to the thing and it reports on minorities in that it says yeah this this person will likely offend again and that should be and it isn't a unilateral the judge has to take it but what a surprise it's often used to them black people to the the jail systems because it's heavily biased against them and yeah i somewhat fear llm's doing similar uh they're probably already doing and i think that every algorithmic system is inherently racist there's not enough people running them who actually fucking try it's inherently biased against women i think there's also i wish i had this in front of you but there's also something about how like more there are more fans of generative AI who are male than female.

31:53It's just... But do you think it's possible that they'll try to say, oh, we can solve for the psychosis problem, and then that will undermine a large angle of the criticism? How do you solve it? Because it is probably a small-scale problem. We actually don't know, and it's not that these companies know or will tell us. But nevertheless, each one is so horrifying. it's just this is horror like the story in the wall street journal uh julie jargon another person there who wrote that where it was like a murder suicide an actual son of sam altman situation which is fucking terrifying that this is happening i don't know if you can completely solve that because all it takes is one popping up again for them to go fuck and it's also not just a chat gpt problem there's this woman on tiktok who uh she has been saying what claude has been telling her and it's like oh this is giving me psychic visions i think it is it's also an alt the ultimate grifter tool it's just it's that's why i think it's taken off so much on social media as well it's a tool that naturally fits into the grifter's toolbox i think that i actually have similar fears that they will try and find ways to hand wave away from this if it was the only problem yeah but they have so many problems they have so many problems at this point but i do also think that people need to remember how racism in algorithms is fairly it's in all of them i mean the you remember microsoft connect which literally couldn't see black people which was a joke in the show better off ted if anyone watched that's a great show it's just it's insane the i mean it sadly it's very obvious why this keeps happening it's because the people are predominantly white and male and it's just they can't really and also you can't really fix this stuff without intentionally building the data, which would require them to spend money on something they don't care about.

33:43And they don't really understand what they're doing when they go in to tweak these models. They don't know how overcorrecting or undercorrecting they're being. So they kind of have to just try and then put it out in the world and then wait for something bad to happen. It's funny. It's not funny. It's extremely sad in that journal story that you referenced, which I read twice because I was like horrified. And also the reporting was incredible. It was really, and they said it as this appears to be the first instance of a murder resulting. Like we've seen suicides, but like this is a murder suicide.