Are AI's Economics Unsustainable? — With Ed Zitron

27:07So better does not mean, actually, it might be Darren Asimoglu from MIT who said it was in the same Goldman report. But it's like, better does not mean more capabilities. It does not mean that these models now can do a new thing. even reasoning what happened there what i mean it allowed some more it helped with some coding things sure but and there was some growth but it's to what end what can we do now what is the new thing and i think that's the craziest thing i don't i don't know what i meant to be i'm a i love new crap i knew i love gizmos and gadgets and all that shit i if there was a way that chat gpt could do something for me i would make it do it just because i'm like cool this is why i love technology jail of doing things.

27:48What's new? What's new? And if the argument is, look, it's improved coding by XYZ. Awesome. Describe it in that term. Describe it in the terms of boring software as a service or cloud compute. Talk about it like you talk about Docker. Talk about it like virtualization. Talk about it like a technology that's a branch off. Don't talk about it like it's replacing everyone forever always because it isn't doing it. So I, by the way, you're completely right with the VCs. They're doing exactly what they've always done, which is make a bunch of bets, talk them up, see when you get in, like see what happens.

28:20Because that's venture capital. That's it. That's the root of it. I'm not defending it either, but it's, they're not doing anything different. The problem is, is that we're in hysteria. We really are. We're in a hysteria. I had someone tell me, a source tell me that there are, it's very rare that venture capitalists see the books, the actual accounts, and they almost never see the code base. That's wild. It's fucking crazy, man. And it only gets worse because as deals get more popular, it's like, you don't want to do it? I've got five more assholes over here who will. So, which is the mark of a classic bubble.

28:56So it's like, nothing about what I'm writing or saying comes from a place where I'm like, this is something that I've walked into and said, this sucks, I hate it. Because when ChatGPT came out, I dicked around with it for hours and hours trying to find out why everyone was so excited. so excited everyone was so excited i'm like okay so it can generate crappy text like this is like this is the most like 20 like 19 year old at college asked text no wonder it can replace college students who aren't taught to write it writes like them in the same kind of bland intro body conclusion way okay not a business but the actual use cases of this stuff have never emerged they've never emerged the reason that we keep hearing about agents but never about what agents can do is because the most common feature of agents is that they fail there was a salesforce paper that came out fairly recently that said i think that they just categorically break down on multi-step processes like they only complete like 30 something percent of them multi-step processes by the way referring to tasks in general could you think of just one thing but they failed at a remarkable amount of one step ones you're you're answering the question about what happens when the models get better.

30:07It's that they don't... They're not getting better. But this is... Well, I think... You're saying also when. Look, let's go step by step, right? If the models get better, then they'll be able to handle these multi-step processes in a way that they can't today because they are brittle. If my grandmother had wheels, she'd be a bicycle. Okay, I hear what you're saying, but like I said, so you're... Let's circle back to the question I asked you at the beginning of this conversation, which is like, you're pretty confident that there's no more improvement. Because I asked you about improvement and you said there's no such thing as improvement or we can't feel improvement.

30:41But now you're saying improvement is over. I'm saying that improvement is a metric that they have gamed with the benchmarks. So this is interesting with the benchmark side of things. I really think that they're useful in some ways, but they're not the be-all end-all. And it's weird to talk about, and I'm sure you have a response to this, it's weird to talk about the vibes of the models. But let's do it. But I do think that you can, with GPT-03 from OpenAI, it's definitely the vibes are better than GPT-4. It just feels like it's able to do more. I tried 03 out the other day. I took a photo of a thing I had hung up, and I said, how much space from the bottom of that photo, of that picture, the poster, to the floor?

31:27It took four minutes. It wrote multiple Python scripts to give me the wrong answer. Well, this is why, I mean, it is interesting that, and this is why I think people are talking about how they're going to be good at some things and not good at others. Okay. And there'll be some capabilities where they're going to be quite effective and some like the one you... And the thing is, that's a reasonable position. If that was how this industry had been solved... But they're not selling it that way. Yeah, exactly. No, I really want to say this. Except Sundar Pichai is from Google talking about jagged intelligence, but I think...

31:54Oh, God. Jack off intelligence. Fuck. I find that so disgusting. Okay. That man last year, he lied about what agents can do. It was during IO. He said, oh, yeah, you're going to have an agent that will be able to, like, do a full shoe return with the thing with your email. And I went, and that was theoretical. What the? Why? I can't go and lie to the bank. Why can he lie to the market? It's just. I think, though, getting back to the point, because I think it's important to say it. If they were selling this as, yeah, this is kind of unreliable but interesting tech. And we're expecting it to. There are some things it can't do.

32:28There's some things you shouldn't rely on. It's very clear about that. I wouldn't hate it. If it was just like, this is what I, until you get to the stealing from everyone and the horrible environmental stuff, and then it gets even worse again. But putting that aside, if this was being sold as like an experimental branch or even just a industrial use of cloud compute, okay, I wouldn't judge them for that. I judge them for everything else, but they're not selling it this way. You've got Andy Jassy claiming, oh yeah, we're going to replace an indeterminate amount of people at an indeterminate time in some way or somehow.

33:00I'm not really sure how, but it's going to happen, and it's on the front page of fucking TechMeme. It's insane. The idea that TechMeme had Sam Altman's gentle singularity. We should be calling 911 and doing a welfare check on that man. That thing was fucking insane. If I said that, they would check me for a concussion. Some of the things, Sam Altman suggested that we'll have data centers that could build themselves. Just, that's the thing. That is the real distance, because you've got what large language models can do. And as far as them getting better, better how? They'll increase those percentages.

33:33There is a very clear, and Gary Marcus was just on talking about this, there's a very clear gap between what a large language model can do and what it needs to do to be reliable. And that gap, I think, is much larger than people realize. It's the classic problem with all AI, with self-driving cars even, where it's like it's not the fact that it can't do some things well. It's that it can't reliably do anything. self-driving cars require someone watching them on all times just in case you can't do that with chat gpt is too many of people so it's just this interesting industry-wide cognitive dissonance i guess it's insane it drive when i when i talk about this stuff it makes me genuinely worried how many people have been taken by it you brought up this statement by andy jesse by now it'll be a few weeks old about how he wants to replace uh he thought he wants to well oh he wants to replace people with AI or believe so that it will be a people replacement and I think that is enough so I've talked we talked about search and coding I think the thing that's been unspoken so far is that when it comes to the valuations for a lot of these companies they're going to need to have to replace full-time employees or at least the work that a full-time employee does in order to be successful.

34:47Agreed. And people either want completely autonomous, or they want Jarvis. They want to be able to say, I need you to look up, blah, blah, blah. Okay, give you an example. Manus. Is it Manus? Manus? Manus, yeah. It should be Manus. I asked Manus to look up every article written about me in the last two years. It could be a list of links in the spreadsheet. And I'd probably guess like a hundred of them is what the actual number. Eleven minutes later, and like a ton of Python. These motherfuckers could love Python. It gives me 11 links. Right. I tell it you missed a few. Gives me another 9 after another 10 minutes, I think it was.

35:24Is this replacing? Who is this replacing? Because it's not even replacing offshoring, which I think is what companies really will plan to do. They just want to ship people overseas and get cheap labor. It's always been the case. Google loves it. People will talk to at Google. They're saying, yeah, they're just getting rid of people and replacing them with contractors in India or in other countries in the Global South as well. It's very strange what's happening. I think that I'm actually shocked that so many reporters are still saying agent with a straight face because what job is being replaced?

35:56Coders? No, sorry, it's not. You've got companies firing people and claiming AI, but notice that none of these big sexy Kevin Roos stories about replacing people actually include a single fucking person replaced. Now, Christopher Mims had a story in the Wall Street journal about a year ago, a really good one, where it was artists, art directors, and copy editors who had been replaced with AI. But the real story was they had been replaced with shittier versions of their product. Their process was not replaced. Their job was not replaced. They were basically contractors rejected by idiot, business idiots, as I call them, people that don't really understand the process of their work.

36:33And it's fucking tragic, but there are some jobs that will get replaced. And not as many as they're saying by people who are assholes who don't respect their customers who want to do a shitty job and always will. And they would have found another way to do it. They would have gone on 99designs. They would have gone on Fiverr. They would have found cheap labor to do the labor that they don't respect. But there is right now, and I don't think there's going to be, any replacement of labor at the scale that they're discussing. My evidence is nobody's bloody done it. You have all the king's horses and all the king's men.

37:05You have Google. You have Apple. You have Salesforce. You have ServiceNow. You have all these companies who could not talk about AI more if they tried. Where is the agent? Because if they did this, if they actually were doing the thing they're claiming, they'd be making tens of billions of dollars extra. They'd be making an absolute shit ton. The information reported a few months ago that Salesforce does not expect any growth from AI this year. That is absolutely bonkers for a company that's rebranded and i paraphrase here as an agent first company it feels like the most egregious lie i have ever seen told in business history just completely obscene and people are lapping it up and it's insane well i think with this software as a service companies uh there's so much broken in sass today that you can put ai in there potentially and like paper up some of the problems with like systems talking to each other and trying to synthesize information that you have in your systems to make sense of it because it's spread all over the place and takes hours to pull reports so that's a possibility uh and maybe that's economically valuable your argument is that their systems are so poorly designed they can't put ai in them yet no my my argument is that speaking of broken products that ai fixes they might be the most broken of all products yeah with an opportunity for ai there fully agree and also if anyone was going to make money off of it though one of the companies it's not like a situation where one company is ahead of everyone else open ai isn't ahead of everyone else other than scale and i would argue they got that because literally every single media outlet has been talking about ai for three years and when they talk about ai they say chat gpt it is the world's best marketing campaign ever sam altman is a genius for that and he's also like a business idiot whisperer he can talk to guys that run companies that don't know how their companies work and just be like yeah we're gonna replace everyone it's going to take two minutes it's going to be the best thing donald trump it sounds like trump yeah no he really is like he lists he's like the soft-spoken trump but he it's just it's so strange when i get kind of animated about it because when you start talking about it i'm not even saying anything i'm saying some objective statements to be fair but when you just say like they haven't done this yet they haven't done this yet there really isn't evidence they can do it Like, really, there isn't.

39:24They don't have, it's not like they have a whiz-bang moment. Like, Waymo is imperfect, but you can get in a car in San Francisco and it will drive you around. And you could do that a few years ago in very controlled spaces, but we don't even have a controlled space where an agent's doing something really cool. And I think the closest they're going to get is, like, an agent that can do purchasing on a platform. And I think that that's just because they'll connect APIs to APIs. We're not, that doesn't feel terribly far away, but that's also not a trillion dollar industry. Ed, are you potentially underrating the bureaucracy part of this and the fact that big organizations, which this could help, they move slow, there's bureaucracy, there's approvals, there's owners of different groups.

40:12It's tough for them to do anything. So maybe it's a people problem and not as much a technology problem. Maybe it is, as you would put it, a business idiot problem. um by that if it was not everywhere and no one had done it if it if it was a few people were i i understand the argument it's like if there were a few people that had done this and like they'd done a ramshackle one but it was kind of working it's like oh that would be cool would it it's still like if someone was doing it in a smaller situation i don't know wouldn't open ai be doing it like if just real blunt wouldn't anthropic be doing it wario amaday's out there saying oh yeah we're going to replace like what 10 to 20 unemployment 50 percent of i don't think he said did he say unemployment he did i know that he said 50 percent of uh entry-level white-collar jobs 10 to 20 unemployment as a result of this if i'm wrong i'm wrong i apologize but the 50 thing was on alice morrow from cnn has the best piece on yeah yeah we actually read that on the show afterwards she is very good possibly the best living business journalist she's absolutely fucking incredible so the thing is wouldn't open ai have these agents if they could do this wouldn't they be doing this indeed someone once made an argument to me online that i actually found quite compelling which is why would you sell agi if you made it why would if you could make an agent sure you could sell it to everyone but you could just run an incredibly profitable business with like nobody the one person billion dollar company wario amaday's been promising everyone next year next year oh sorry it's in 2026 with the chip from broadcom that's another thing with stargate of course the stargate in the uae um also the device from joanie i've that's also coming all of this is going to happen in what six to 12 months i can't wait for the future but the thing is where is where's the beef where's the thing where's the money even but the money isn't there the product isn't there And anyone putting this to people who love AI, quote unquote, where's the thing?

42:07Why are you actually excited about it? Not what could it do? What does it do today that even makes you? And if the answer is, wow, it's kind of like a living encyclopedia. Okay. Can I give you a different answer to that? And this is, again, this is, we've been talking a lot about use cases. I do want to spend a little time talking about the business of these companies. But I think it's worth bringing up one use case we haven't brought up yet, which is companionship. That is the number one use case, I think, surprisingly. Is it? There was an HBR article that pointed that out. Was that a rank? I thought that was just a list.

42:42I didn't know it was a ranking. No, it was a ranking. And it became number one. And it's clear. Man, that is not a business, though. It is clear. Well, people are becoming friends with these bots. Sure. They're paying for them. Absolutely. It seems, and I'm not a big fan of the fact that people are replacing. Oh, I don't love it at all. They're using friends with AI friends, but they're doing it. Oh, it's a sign of something wrong. It is a, we are a decentralized society. We do not have the shared spaces where we regularly meet people. Tons of people remote working, which is great, but non-walkable cities means that people aren't meeting people regularly.

43:14Yeah, that is a use case. We don't know the scale of it. If I had to actually guess, I think the majority of people using ChatGPT are using it like Google search. I'm deadly serious. I think that there is a growing amount of people using it. and I think it's a deeply unsafe technology. I also think that is one of the most easily commoditized businesses in the world. To make AI friends or AI search? I think, well, kind of both, but really AI companions feels like something that ChatGPT, again, because they are all over the place, all their use cases, it's something that they're getting because they are the biggest name said to everyone at all times.

43:48It's something that can be replaced by any number of other things. Hey, did you read the story about Meta and how you can have John Cena sext your child? Oh, man, you didn't. No, there was a story, Jeff Horwitz. No, I did read that. Jeff Horwitz, the goat himself, the Wall Street Journal, where you could have pedophile conversations with Meta's AI. So people are using Meta. Wait, was it actual pedophile? You could explicitly have it have, you could say you were underage and it would have a conversation with you. I think they've closed the gap now. It's a great story. Incredible journalism by Jeff.

44:20But it's like, yeah, people are using this and people are likely using it in sick ways and it's disgusting. And hey, imagine if we'd have regulated tech. Imagine if we'd ever done that, if we had like an EPA for tech, if there was any restraints on these companies. But no, there aren't because what if we didn't have growth forever? But nevertheless, it's a use case. But what does that use case prove exactly other than this can do that and people are somewhat easily fooled? It's the same. The use case that Jeff Horowitz brings up in the Wall Street Journal is not one that I think is going to be a common one.

44:55No, but companionship. But companionship is. Wait, you don't think that a horny teenager would try and talk to one of these things about sex? I hope that the labs build the secrets. I hope, no, I genuinely mean this. I'm rooting for Meta and everyone to stop this. They need to, it's fucking horrifying. But yeah, that's a use case. Is it a business? Is it not something that can be easy? I would argue that if they get friendship right, it is a great business. because of who is they in this case and how big how big could that be i think could be a big one i mean again this is not this is not the direction i'm rooting for the technology to go into but if you have ai that replaces a friend for you or is your companion you would easily i mean pay 20 a month i think that would that would be an easy subscription to charge but let's get into the business thing though because i posted this earlier and i mentioned it earlier for this to be as big it would need to be size of the software is that because of the funding sorry you said it's It's because of the investment in infrastructure.

45:54It would have to be bigger than the smartphone market, so$450 ,000 ,000 ,000 ,000 a year, bigger than the enterprise software. We can take that side if we just focus on the consumer use cases. For that to happen, this business would have to... For OpenAI, I think they've estimated they're going to... It's these wank, just total nonsense. I think they've said like$126 billion of revenue a year by 2029, something like that. And just to be clear, Netflix made about$39 billion in subscriptions last year, and Spotify made$16 billion. So you're telling me that whatever this market is, is going to be bigger than both of those doubled.

46:30Is that the plan? No, I'm not saying you here. I'm just saying open in. No, I want to answer this question because I'm the one that threw it out there. Look, I think that we are inevitably going to see some of the funding that's gone into this industry go to zero or very low, without a doubt. Yeah. Some maybe, I mean, if you take it in aggregate, we'll see if it pays off. Some will win, I think, but many will lose. What does winning mean, though? I mean, they'll get their investment back. Oh, okay. Yeah, that worked out for scale. Scales investors pretty well. Right, exactly. So there will be a big exit.

47:00I think OpenAI will IPO at a certain point. I think that that is an astonishing leap of logic. Well, because you want to talk about the structure and the fact that they may never be able to leave the nonprofit side. Do you think that these horrifying books are going to look good to the markets? There is nothing in the markets that looks like this dog. A company that loses$5 billion by spending$9 billion. I don't know. I mean, CoreWeave is up like an insane amount since its IPO because people are interested in a story. That's cool. They don't lose anywhere near as much as OpenAI. They're 81 billion.

47:39Coreweave itself, which is literally just an infrastructure company that sort of resells NVIDIA chips. Does it? Well, you tell me. $81 billion market cap. And since their IPO, they're up 325%. Absolutely wild. So they have a very small float, by the way, most of which is owned by like NVIDIA and Magnetar. Right. So Coreweave will probably raise another$10 billion by selling another share sale. They can plug away for a few years, but what happens if the AI bubble bursts, if growth slows? CoreWeave is a business heavily built on GPUs, on raising money based on... Here's an interesting question. Is it round-tripping when NVIDIA sells GPUs to a company that they own part of, that they own part of the stock in, that they have a$1.3 billion Project Osprey cloud deal with?

48:29is it round-tripping if they sell them the GPUs that CoreWeave then takes the GPUs, raises money from institutional investors based on the value of those GPUs, and then uses that money to buy more GPUs from NVIDIA? I don't know. Maybe if we had a government to look into that. But fundamentally, CoreWeave and OpenAI are even more insane businesses. CoreWeave owns stuff. They have actual buildings. Now, I don't think that they're ever going to scale, and I do think that that dog will die, and I will dance. Mostly because people think that stock valuations actually change anything about my argument, which that article really drove me in mouth of madness.

49:07The reason why I brought it up is you said, is the market going to read the books about OpenAI? But let me finish, though. But I'm just saying that the market can go with a story. It can, but OpenAI has no assets, really. Microsoft owns their IPO. Sorry, their IPO. Their intellectual property. they own their they open ai owns no infrastructure they have their staff they have the research wait microsoft also has that they have the exclusive right to sell no wait microsoft can also sell their models they don't own stargate they don't own the gpus within any of the servers in fact they don't even make enough i've referred to them as a banana republic because they require in exterior money to come in constantly because when you look at what open ai is they don't own very much of anything.

49:54They own part of CoreWeave. They had about$350 million worth of CoreWeave stock. That's fun. By the way, OpenAI's deal with CoreWeave is pretty much the only way that CoreWeave can raise more money. So I hope nothing happens with OpenAI. That's the thing. OpenAI is an asset-light business with research and IP that's owned by another company. They don't have much to trade other than their name. And their name is insanely strong. They really do. But as a company, they would have to, at IPO, expose themselves in a way that they never want to. Because they would have to say all of the material deficiencies within the company.

50:30They would have to list the genuine risks, and the risks would be every single thing I'm saying. They would say that CallWeave had to amend their S1 to add the counterparty credit risk from OpenAI. Because OpenAI, if they stop paying CallWeave, CallWeave doesn't get a bunch of their revenue. OpenAI starts paying CoreWeave in October 2025, just as CoreWeave's second loan, DDT-L2, starts requiring them to pay probably more than OpenAI will be paying them. This is the systemic risk I'm talking about. 500 million user consumer product. That loses them money. That converts horribly. All right, I want to talk about that.

51:04Let's take a break and we'll be back talking a little bit more about the infrastructure costs of OpenAI and what ChatGPT is underneath the hood. We'll be back right after this. Shape the future of enterprise AI with Agency. A-G-N-T-C-Y. Now an open source Linux Foundation project, Agency is leading the way in establishing trusted identity and access management for the Internet of Agents, the collaboration layer that ensures AI agents can securely discover, connect, and work across any framework. With Agency, your organization gains open, standardized tools and seamless integration, including robust identity management to be able to identify, authenticate, and interact across any platform.

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53:12This content is not investment advice and trading crypto involves risk. The Gemini credit card cannot be used to make gambling related purchases. And we're back here on Big Technology Podcast with Ed Zitron. He is the host of the Better Offline Podcast. You could also get his newsletter at where'syouredat. What's the domain name? Where's your ed.at. Where's your ed.at. Great domain name. I know. So let's talk a little bit about the money that OpenAI loses. And so I've been listening to your podcast. And whenever someone brings up this argument that they will learn how to deliver what they have today more efficiently, your next line is something like, I will squash you like a bug.

53:52or I will compact you like a cube in a car compactor. Yeah, yeah, exactly. That's accurate. So do that to me, Ed, because, I mean, the stuff is without a doubt getting cheaper to run. Why do you say without a doubt? Because if you look at the... I mean, you could just look at the way that they're... Oh, shoot, now you got me. No, but that's the thing. If you look at what the price that they're selling this stuff at, it's lower. That doesn't mean a goddamn thing, man. Well, what about... Okay, so now let's... so here i am in the trash compactor but but i mean if you think of you don't think so do you deny that there's any algorithmic efficiency being had within these i'm sure i'm trying but the one public you think that this is sustainable they had um they were selling so gpt4 open ai's gpt4 was three cents per 1000 tokens yeah prompt tokens oh four mini is uh it's a what is it a dollar 10 per million tokens it's much cheaper okay so you think that they're just losing more money as opposed to becoming more efficient and maybe there's some calculation where they're losing less money but they're still losing money there have been i'm going to get a little out of my depth here because i'm going to talk about model architecture but there have been architectural innovations that have made it cheaper to run these models like the mixture of experts When you say these models, which are you referring to?

55:14I mean, you could talk about big foundational models. Okay, but we're talking specifically about OpenAI. OpenAI. So I think they do use, I mean, let's just talk about the mixture of experts model, right? So instead of lighting up the whole model to get an answer, they will channel your query into the area where they think the model can answer. I mean, the folks who built DeepSeek, it seems like that was a big part of the way that they were able to make it cheaper. Right. Why do you think, okay, I shouldn't really be asking the question. It's your podcast. With DeepSeek, isn't it weird that we didn't really see any efficiency gains discussed by a single one of the model companies, that none of them even seem to do the same thing other than perplexity releasing like a 1776 version of R1 without the Tiananmen Square thing?

56:02Just one of the, Aravind Srin, he's like, he is so, so lame. Okay, you brought this up a couple of times. Just let it out about perplexity. What don't you like about them? Well, first of all, they're an insanely badly run company. They did like 35 million. They lost, I forget exactly how much they lost, but they did refunds or discounts of like$30 million. They're literally giving money away to make people use it. And even then they only have like 50 million users. I also think that as a CEO, Aravind just goes and says shit that is just annoying. He just, he could be. I'm surprised that you're saying that you want him to behave better.

56:38it's not i want him to behave better i wish he'd just be more direct about what perplexity can do but every fucking few weeks he did this whole touchdown dance after the google search trial and then nothing else he's not it doesn't feel like he's trying to create a competitor to google it feels like he's making a silicon valley hero story out of himself and it's boring and lame and it's a bad business give it up okay that means i don't mean like shut down the company but he's good at raising money, I guess. But back to the model thing and the efficiency thing. Yes, they are losing money because just a real easy one, they would be saying if they weren't.

57:15You think that Sam Altman, if they had managed to make this profitable, would not go out there and tell everyone? He absolutely would. Also, he'd be telling investors immediately. One of the great reports of the information, I quote them a lot because they're doing some of the best tech journalism out there. Richard Porter? It might have been Anissa Gardizi or Stephanie Palazzo. There's John Victor over there. He's excellent. And, oh, fuck, who's the home? He's going to come with Corey Weinberg. He's done some excellent work on Corey. There's also a new person there who I'm forgetting. Okay. That's a good number.

57:44No, but, like, they've got, like, a really excellent team. But where was I? You would get leaks that say that they've gone profitable, and that would be. Well, I don't think they want to go profitable. They're just trying to, at least at the moment, most startups at this stage don't want to be profitable. Open AI stage? I think so. Unlike the equivalent of like series D or E, that's absolutely when you go profitable. Okay, so again, let me just... And then they need to go public. I'm going to bring up their side of it, just for sake of the argument. I think what they're trying to do is get this technology in the hands of as many people as possible.

58:16And they understand that it's a more capital intensive technology than most others. And? And so therefore they're not profitable. So that they... But I don't think there is... Is there a magic profit button they're going to hit? No, that's what I was going to bring up. I don't think there is a switch that they could flip today and be profitable and deliver the same quality of models. Could they just switch ChatGPT to GPT-4 and potentially be profitable? Maybe. Sam Altman has suggested that they would take away the model selector months ago. He likes to say stuff and then just they disappear. He gets the articles, nothing happens.

58:50Very good for Sammy. it's the thing is i think that what's happened is everyone thought about a year and a half ago that this was going to change it was going to because there was that big jump from gpt3 to gpt4 to gpt40 there was the multimodal side it was like a oh this is really interesting the voice mode was interesting it's like oh i can extrapolate from here that we made this big ass leap so in six months we're going to be here and then six months after that except it's like in six months We're going to be... here and then maybe we're here and another city. For listeners, Ed is doing the very incremental improvement.

59:26Doing like a very small hand movement. So that's the thing. I think that they're all wrapped up in it. And yeah, OpenAI is absolutely trying to get as many users as possible. The problem is, if you're losing money on each one, and also their conversion rate, here's my favorite OpenAI stat. Well, more of a question I always ask, which is, why do they not show monthly active users? They talk weekly. And the reason is, because if you compared what their real monthly active users would be, 500 million weekly, so i'm gonna guess 700 million monthly divided by the 15.5 million customers that pay for it that's a dog's doo-doo of a conversion rate that is so bad so you're saying that they're giving the lower number that's more active because they don't want to make it seem like very few can they don't want to they don't want the conversion rate out there they don't want people to say oh you have a conversion i can't do math very well uh me and me and chat gpt share a problem um it's yeah just throw a number out no but be very confident about it ed two percentage like a really yeah bullshit conversion rate for the most notable company in the most notable industry with all the press and all the marketing that's the conversion rate that's bad man it means that they can't work out and no one else can work out what the hell to sell this on indeed sam orman loves to say oh yeah i can't wait to see what you build with it mate what are you building with it you're the fucking owner and they want their api business it sounds like also weirdly anthropic is doing better on api but they're selling more a larger percentage of their business is api but they still lost like 5.2 billion dollars last year it's completely insane but it's it's just so strange because you can have something this big that fails you can have something this big and when i say fail I don't mean chat GPT goes down and everything and all the people in the building get thrown out.

1:01:21It would be somewhat messy and I can go into that at some point. But I think that we are in a moment of mass delusion where no one really wants to talk about these numbers because when you talk about them, they're scary. And here's why. Okay. Magnificent Seven stocks make up about 35 % of the US stock market. 19 % of that is made up by NVIDIA. NVIDIA's revenue, I believe, is like high 80s based on GPU sales. Data center revenue in the last earnings from NVIDIA was below analyst expectations. No one really wanted to write about that one because NVIDIA is pretty much holding up the stock market on some level.

1:02:01It is every time NVIDIA earnings come around, there is some story on like, take him from Barron says, I love NVIDIA. And then everyone else says, I hope that this is good it really is like i hope that this is good i think you're right about that and the reason nvidia is making all the money is that everyone's agreeing to buy gpus today and so a couple weeks later from this obviously amazon said something that they're using the someone it might have been anthropic forgive me if i'm wrong but they're using 500 000 tranium gpus their own what happens if tranium takes a meaningful chunk out of amazon's spend with nvidia that's a chunk of revenue gone What happens if Microsoft's data center pullback means that they eventually finish, because I'm assuming that they are retrofitting Blackwell chips into their previous servers.

1:02:49I would humor that argument. OpenAI is if Abilene, Texas goes well, which I don't know if it will, that's$40 billion of revenue once for NVIDIA. We are basically saying that NVIDIA will continue growing, because it's not like NVIDIA could just keep doing this well. The market requires growth forever. NVIDIA, we are saying that within the next year or two, NVIDIA will be making$100 or more billion in GPU sales. And the year after that, it will be$120,$150, a quarter. That's, I'm the crazy one for suggesting that's bad. And this is all dependent on one thing, the continued purchase of GPUs for generative AI.

1:03:31What happens if that's not the case? what happens if i don't know there's say the efficiency gains are there say that happens say that google there's they mentioned that one h100 can one run one of their gemini models i forget which what if that is how they scale wouldn't that mean they need less gpus so put aside all of the gains and the growth nvidia is just holding everyone up and the capital expenditures from the rest of the Magnificent Seven is holding NVIDIA up. What happens? What happens? What happens? The market goes tits up. Do you think the market will go, yeah, well, they're not buying the GPUs and NVIDIA is doing badly, but we still love AI.

1:04:12Fuck no. They're going to say, what did we spend all this money on? I'm going under the bed. I'm going to find the pornography you've been looking at. You're all in trouble because people don't like tech right now. People are pissed at the tech industry. And this is all vibes, man. Because when you look at the numbers, numbers are bad. So yeah, long and short of it is, the reason I am alarmist about this is these numbers are alarming. And I am shocked and actually kind of disgusted at some people in the media for not being more alarmed. Because if things progress in the way, and I really think it will in this way, people's pensions, retirements are going to be fucked.

1:04:50So much lies on this. Retail investors make up a large chunk of the buying for NVIDIA as well recently as well. It's so worrying. and the growth from AI isn't there either. These companies are not making shit tons of money. Microsoft, two quarters straight, said they would tell you their ARR for AI. They think it was one quarter, they said 10 billion, ARR, which is month times 12. Next quarter, they said 13 billion. Next quarter, they just didn't bring it up. Probably because the growth rate's flat. What are we doing, man? I think that you're right that a lot of this trade is predicated on scale working.

1:05:26and that is a lie that is a risk because i mean what we're hearing from the tech companies is that we're they're getting diminishing returns from scale and like in terms of making these models bigger building up the gpu clusters training them with more data like it's not data as well that's true that's true and i think maybe that's why you see the scale acquisition from at meta insane yes because it's from one of the most like top of the market bullshit $14 billion for Alexander Wang, a labor abuser at scale. I mean, lowercase s there. And on top of that, basically cutting off the fuel supply for multiple companies for training data at a time they're running out.

1:06:05Well, it's interesting because a lot of those companies are cutting it off on their own. But yeah, you're right. OpenAI was moving away. You're right. But Google was their biggest customer and they pulled away. But I think just going back to the scaling thing, everybody is now admitting that there are diminishing returns for making these models bigger. Uh, and I think we're really going to hit a point where they're going to say, do I need, if I'm, you know, okay, I'm just buying this month, you know, billions and billions more NVIDIA chips to make my model a little bit better. Um, do I need to be doing that?

1:06:36Like just to go back to a conversation that I had a couple of weeks ago or now month plus, um, with Sergey Brin, where he said he thinks that the improvement is going to largely be algorithmic uh of these models meaning not by adding um more gpus and data by like actually changing the algorithms inside these models to make them better right things like reasoning okay i'm just saying that like right now within let's just talk about it uh right now within these tech companies there is a consideration that maybe scale scaling up these models isn't what's going and get them there. And then there is that risk to NVIDIA.

1:07:15And if that goes down, then it could be a problem. It will go down. Like that's the thing. At some point, putting aside my feelings about AI, at some point, there will not be enough space. There will not be enough space for these GPUs. There will be not enough space on the earth to fill with them. There will eventually not be a need to, are you saying that micro, because the assumption here that this keeps going is that NVIDIA either comes up with a completely like the ruben for example are we meant to believe that everyone who's just getting blackwell when ruben comes out is going to go yep i definitely need that is that that is the gamble and it's just it's kind of scary because whether or not ai succeeds because also the growth isn't there the software sales aren't there even if they made the software sales profitable tomorrow the actual revenue is really piss poor like it's not that much even if open ai was profitable.

1:08:08Okay, they're the biggest AI company. Cool. Are they going to 100 billion a year? Bullshit. No. And also, if they made it profitable, someone else would, and they would get price fucked. It's just, it's such a brittle industry. There's never been anything of this scale this bad within tech. You can say the fiber boom, but no, you didn't have every single software company selling a fiber solution. You did every consumer, because you didn't have apps back then in the same way but you didn't have notepad and microsoft word trying to sell you fiber or saying the new glory of fiber is here partly because of the society we lived in at the time but it's like this is bonkers the argument that the nvidia's would make it would be that eventually ai use is going to be so intense that you'll actually need more gpus to fulfill that demand fascinating what i jensen huang i give him credit he's got great leather jackets sounds like horrible to work with but why do you think horrible to work with the reports like there have been multiple multiple reports of it like he's an aggressive ceo it's probably worse it's probably better but he's an aggressive fucking ceo and he humiliated someone at ces there was someone at ces sound guy and called him out by name in front of everyone disgusting you have you have a bazillion dollars you should be you should be happy to be there but he'll never be happy he wants to sell more gpus it's it's frustrating though i understand but also what's jensen hong meant to do is go up on stage be like yeah we're fucked we're gonna people are eventually not gonna buy these i should let you know as the see no he's not gonna say that he's gonna say yeah well there will always be he's done it before he'll do it again that's the nvidia will be fine long term they're actually positioned because they make real things and jensen hong is a pretty good ceo they have actual innovation there.

1:09:55They have tons of different layers to the company, the actual value creation. They have the monopoly on the consumer graphics market. They do make good stuff. There's a lot of problems with their consumer hardware right now. Sorry, consumer graphics hardware right now. There's where basically they've killed the mid market. That sucks, but still a business that sells things and owns things. The rest of them right now, I think it's more likely that at some point they go, why are we doing this? This is so annoying. This is so annoying. It's so costly. i think sachin at dala is also really tired of sam altman from everything i've heard based on by which i mean red i'm not like it's sourced with them i wish i'll fly on the wall in those everything that's been reported journals done some really good reporting on this has basically said that that relationship is frayed because i think sam altman thought he had more power than he does and redmond you're against the ultra monopolist you're against like the og the michael jordan of monopolies like they beat the antitrust claims with ms dos and windows you i know we're going to talk about this at some point but the conversation that's only the conversation the story about the whole uh threat of antitrust from open ai oh just just bring it up now now that you've brought it yeah it's it's just been on my mind ever since i read the story so right now open ai in this wonky thing is trying to convert part of itself into a for-profit entity with control from the non-profit board which sam altman's still on but whatever part of that conversion requires microsoft to say okay and microsoft says okay well we'll convert in exactly the way right now 49 of shares and we'll continue having your ip and up until you get agi which is no um and we also get to sell your models exclusively and we have all your research too sounds great to us and sam altman said no actually you should get 33 3%.

1:11:45You shouldn't be able to have access to our IP after a certain point. Also, the Windsurf acquisition. I don't know if that's ever going to happen because Microsoft is, according to the journalist, Berbergen over there. Apparently, the Windsurf acquisition has become a major problem because OpenAI is saying, well, we can't give you the IP from them. You compete with them with Copilot. Microsoft says, actually, our contract says you have to. And the line in the article is like, Microsoft gave the blessing for the Windsurf acquisition under the current terms. It's just like, yeah, of course they did.

1:12:16And the thing is, OpenAI has allegedly hinted at, by which I mean leaked to the journal, I assume. I don't have any interior knowledge there. That they were considering an antitrust action against Microsoft for some reason. People sign away their First Amendment rights and NDAs all the time. Like, people make contracts to give away their rights all the time. It's not anti-competitive because you don't like a contract. Also, even if they failed it today, good luck seeing that shit in front of a judge for three years. you don't have that kind of time the fact that they're saying that suggests that things are desperate because understandably microsoft said oh also my um open ai wants to reduce microsoft's revenue share it's like i put it in a monologue i recorded today as like being in a hostage situation putting a gun to your own head and saying if you don't give me what i want i'll give you the hostage and kill myself because it is it's like microsoft the only reason microsoft would agree to these terms is because of reputational damage because sam altman believes he is the most popular, well-liked, special boy in the world.

1:13:16And I think he believes that Microsoft would just roll over. And Microsoft said, why? Why should we bother? We don't have to do that. And sure, they could work it out. There's every chance that Microsoft just goes, oh, fuck it, I don't care. But also, why would they? Why would they? Why would they do that? What possible value? Indeed, now it would be a reputational harm to Microsoft. It would suggest that Microsoft can't negotiate. And then the information had another story today where, and so a couple weeks ago, where it was saying that OpenAI has been undercutting Microsoft in deals selling their models and undercutting their enterprise subscription deals.

1:13:55And just making a deal with Google, by the way. Oh, the Google, well, oh my God, are you talking about the Google Compute deal? This is my favorite deal ever signed. Okay, here's how the Google deal works. OpenAI is contracting Google for Cloud Compute. Google is contracting CoreWeave to serve that compute. why would open ai not just hire call wave well i'm i assume google needs to add some revenue even if they're probably just losing but it's the most strange situation i've ever heard just i feel like we need more tech analysts who just look at the absurdity of all this because it is absurd but no so within this situation you've got open ai competing with microsoft to sell their own models and undercutting them microsoft provides all their infrastructure sure microsoft probably fears some anti-competitive action if they start taking measures against OpenAI, but Microsoft never...

1:14:45I don't think that Microsoft has to provide them the discounted, like, a quarter of the price as your costs, which they, at least as recently as last year, are providing them. I don't think Microsoft has to give them any of the things they have to. OpenAI signed a dogshit deal, a really bad deal, that made sense at the time because I assumed that they thought this would do something different than it did. Now they're in a price war, and what OpenAI is doing, the undercutting thing that's a michael jordan sorry michael jordan the michael jordan of monopolies i should say that's a microsoft move a microsoft move just go yeah we're just gonna lower the prices until you die you can't do that when you lose billions of dollars a year dickhead you've got microsoft does that because they have the ability to just go we will pay ourselves using our monopoly over business software we will use it over our monopoly over azure and one of the three companies that really makes meaningful cloud revenue like that's the thing microsoft can bankroll that crap.

1:15:39OpenAI can't. And on top of that, if OpenAI does an antitrust action, I think I mentioned it earlier, 2 ,000 people in Microsoft's legal department, 2 ,000 people, you've got a small arm, you've got more people working legal at Microsoft than work at OpenAI, all told. It's just brazen. And I think that, I think it could, there is a chance. I'm not saying it's for sure, but Microsoft could kill OpenAI because they need to, by the end of the year, OpenAI must convert to a for-profit entity, or SoftBank does not have to give them more than$20 billion total. SoftBank's already given them$10 billion.

1:16:14Another problem, another, just this is a small one. I'm sure this is easily going to be solved. SoftBank, to give OpenAI that money, and to buy Ampere for, I think,$6 billion or something, they had to get a one-year$15 billion convertible, bridge loan, even. And they had to go to 21 banks. 21 of them. Hurt their credit rating? Yeah. I think that there was a threat, like there was a story, there was a consideration of hurting their credit rating. I don't think it's happened yet. And on top of that, SoftBank does not have the money to do the next$30 billion. They don't have it. They would have to raise more money.

1:16:52Now, another story that went out where it was saying that now they're going to the Sauds and they're going to Reliance, I think, in India. And it's like, you don't go and do the Sauds unless things are not looking good. And SoftBank is, so if they raise another$30 billion, SoftBank will only be providing$20 billion of that. So$10 billion will be syndicated. So OpenAI, on top of SoftBank, having to do all of this gumph to make this happen, to find money that they don't have, they will have to raise$10 billion, one of the largest private rounds of all time. And if they succeed, they will have to do it again and again and again and again and again.

1:17:29Because OpenAI will be, according to their own projections, burning money until 2029-2030 when Stargate, which will somehow exist, which will also require another$19 billion in SoftBank that they don't have, once that happens, they will go profitable somehow. It's just really strange that this is considered a, like, an outlier position versus arguably one of the least stable financial situations in history, and perhaps not tantamount to the subprime mortgage crisis, because that was so clearly, like when you saw the fundament of it, I don't think that if this, I am not an expert in mortgage security, so forgive me, but I can't imagine it would have happened in the same way if it happened today, just because there was more access to information.

1:18:15But in that case, we just had millions of consumers with loans they couldn't pay off. That was bigger and would have more widespread damage because there were people losing their houses and then it fucked the economy. i don't think this is going to be super far off when it happens because of the mag 7 problem in my video and what's holding it up is one company that burns billions of dollars their sugar daddy out in japan run by masayoshi son who is well known for losing money and making really bad investments by the way another question all the reporters talking about the three billion dollars a year in agents that softbank was going to buy where's the fucking reporting on that absolutely the egregious, almost as egregious as people claiming OpenAI had closed the$40 billion round.

1:18:56They didn't do that. They ain't got the money. No one's got the money. Why is OpenAI raising money for a round that they claim was... It's just, it frustrates me because people will get hurt. So let me ask, what is the best argument against the claims that you're making? Have you heard one? Honestly, I would love to. It very much is if a frog had wings, it could fly it's like if they get better sure if they manage to make this much much cheaper and they end up working at a thing that could sell really well sure can i ask you you run a pr firm that's your core business what do you mean but that's what brings in the most revenue um with easy pr no it's i mean it's spread across the businesses wait okay as in like as in like media and a pr i mean how do you as someone who owns a pr from decide that this is i'm just curious this is not like a lot of my business is working with journalists okay to pitch clients to them right and i stay away from ai stuff like i i don't work with i worked with a consumer tv company i didn't write about anything like that for obvious reasons the thing is a lot of my business is talking to journalists journalists want to be presented stuff that matters to them that comes from a person who's considered and read their work the fact is i consider and read their work all the time it's what i've done for like 10 15 fucking years i've been doing this business like it's the same thing except i started writing and yeah um i fairly well demonstrated that i understand what i'm talking about in the writing i do and i also firewall that very precisely so it hasn't hurt the pr firm then no okay no and in fact the client clients kind of like it like they appreciate the fact that i can elucidate that i understand business and it's one of those things where yeah it is at some point the media stuff will probably take it over but i'm just i'm having a great time doing all of it but on top of that when it comes to doing pr and doing media relations so much what pr people don't have is basic knowledge and i do pride myself on knowing what i'm fucking talking about and it helps and it's great and also there are street firewalls ces is a great example so i had a client at ces at the time i would pitch them for the show pitch a journalist to come on my show beforehand before i pitched them the client because i didn't want any possible situation where they thought for even a second even though i don't think they'd think this that them saying no to my client right anything to do with the show and it and there were there were people that said no to stuff who came on the show and it was fine who gives a shit like it's like they they are separate entities and my clients are very respectful of that as well can we just take a moment of levity because the way I first found out about what you do was when, speaking of CES, I think you told a bunch of people that you would meet them at Up Dog.

1:21:44They would say, what's Up Dog? And you would say, nothing much. Oh, that was so much fun. They were so pissed. You got them good. You pants someone. No, that was great as well. What happened there? So what it was, was I was, I had was heading back to England, I think it was a few days before I headed back and I was getting spammed. And it's like, I'm not, I went to CES because I think I had a blog at some point that got me in the media system. They screen light you automatically. So I said, okay, um, I'm just going to respond to these people who have not, and none of these people have considered who I was for a second because they just spam me.

1:22:20So I'd respond with like, can you send me more info on Updog? And they'd be like, what's up, dog? I'm like, nothing much. What's up with you? most of them didn't respond some responded i can't believe you do this i can't this is so unprofessional one of my favorite tweets of me was like oh making fun of your piss you're a real douchebag i have that tweet somewhere it's so funny because it's like look if someone got me like that i'd be like oh fuck like it's like yesterday i said to my dear friend casey kagawa i said to him um yeah i've hit this number of paying subs they said you'll never eat all those and I got so pissed at him because it was such a good dunk because he was suggesting I was talking about sub sandwiches.

1:22:57Not a great joke, but he got me good. If you get done with a funny joke in a professional scenario, you should enjoy the fact that you're not having to talk about business for a second. I don't judge anyone who failed for that. You're a fucking PR person emailing a bazillion people. Laugh with me. We're all having a good time or you should be. Apparently a major agency that was sent a company-wide email saying, warning, Ed Zitron, which is really funny. And that was your screen name for a while. It was. Was it? Good call back. Real OG fan. No, it's, yeah, that was really, it was really funny. I meant no harm with it.

1:23:30And I think anyone who took it, anyone who took offense to that, go outside. Let me ask you this to end. I mean, we have listeners here, I think, that believe in the power of AI, are working in it, are implementing it, are building it. And some that are concerned about it, worried about it, and really are curious about the business side of things. and sometimes those people overlap uh you build a sizable audience among people who are really concerned about this and i think that every time we do a show about like the downsides of ai people grab onto it i mean even with the gary marcus show like there are people that will like go in the comments on youtube months afterwards and be like this helped me like sort of have come down from all the ai-based fear i didn't know like that yesterday so what do you think why do you think people are so concerned about this technology and why do you think the criticism of it resonates the way that it does i think there's a few things i think one is the most obvious which is i think anyone would be afraid of someone taking their job i think it's a natural thing of the thing i have someone might take it and when you have the entire media and most public companies saying i can't wait to replace humans you mean nothing to me yeah that's scary people when you have ezra klein and kevin roos saying agi is just around the corner baby and it's going to change everything now it's that they never say how uh that's very scary and this is not saying people are stupid or uninformed the average person does not have my very special stupid mind where i'm like i must learn all the numbers and most people don't have the time to sit down they have jobs they have families they have things to do more fun things i imagine so they see the fucking news and they get scared and then i think there's a layer deeper where tons of people realize that something is being they're being told a lie that they go and use chat gpt and they go okay this search is better my friend talks to it like a therapist which is worrying but they keep describing they referring to big companies sam altman as the next big thing the power of ai but when a regular person looks at they go this isn't this isn't what they're saying but everywhere saying it is and their bosses are saying ai's and everything and i think that people feel this cognitive dissonance and they feel it profoundly it's the same way they felt about the metaverse it's the same way they felt about crypto ar vr all of these things but none none of those were this pungent and you've really just seen companies so horny for the idea of replacing people they're so excited they shouldn't you as a ceo unless you care more about your shareholders and growth which is andy jassy's an nba as are all of them i think i think all of them other than mark zuckerberg have nbas now all the major big tech ceos i don't know if jensen does anyway um wait let's let's get this right so i think tim cook does satan adela sunday pishai he worked mackenzie okay and jassy i even think the guy who replaced andy jassy at aws as an nba um okay pretty sure i'm correct on those if i'm if i'm wrong score me um but people realize that there's a disconnection by from what's being told and yet they are very clearly seeing how lascivious people are around the idea of replacing them so they have this dual offense of you haven't even built the future yet but you're doing the touchdown dance and you're so proud of the fact you replaced me.

1:26:56You're so excited to replace a real person. Mark Zuckerberg wants you to have fake friends. Sam Altman wants you to have fake coders. And then they see that the outputs are kind of shit. They see that it doesn't really replace people. It replaces an aspect of labor and a small aspect of labor in exactly the same way that bad bosses mistreat their employees, do not value their labor. I had this thing I wrote called The Era of the Business Idiot, did a three-part episode on it. And my principal thing is, I believe throughout most power structures, there are people that do not understand work, that do not want to do work, and exist as a kind of ultra middle manager.

1:27:33I think Sam Altman is their antichrist, which sounds dramatic, but hear me out. Sam Altman is the single most gifted business idiot whisperer of all time. He convinced, look at what he's done. I think he's reprehensible, a real scumbag, but I cannot, I cannot ignore the work he's doing. Just, he convinced fucking Oracle to do all these chips. He convinced Masayoshi-san, Satya Nadella. Of course he's confident that he can con Microsoft. I think he's wrong because he's done it before. He convinced everybody that Generative AI was the future without really proving it. Someone else did that work for him.

1:28:08Someone else built ChatGPT. How many of the people who built ChatGPT is still there? Ilya Sutsukeva, respect to the guy for just doing his own scam. Miramarati, same deal. I get a Stephen Levy piece being like, yeah, they're going to build an AI thing. and everyone's like, oh my god, oh my god. And then on top of all of this, you have this bullshit about AGI, the most fictional of all fictional concepts. I've said this a few times. It's like having a bunch of billionaires saying they're going to hunt and capture Santa Claus. We are closer to the Ninja Turtles. I'm deadly fucking serious. I've talked to biologists.

1:28:42That's about as firm as Sam Orman can get with AGI too because that's the thing. You have all these people hearing that there's going to be this conscious computer and they're fucking scared of that of course they are even though it's a complete lie even though it's a forcehood because Kevin Roos was at a dinner party with some other credulous people you don't like Kevin Roos I think Kevin Roos was very good at his job and he has now gone anti-remote work pro-metaverse, pro-NFT the pudgy penguins, Colin, was disgusting what was that? he joined a penguin NFT club that was the article There was the healing one as well.

1:29:19I will say, and I think it's important to note, unlike crypto, metaverse, AI feels different to me. It is different. It seems far more useful. There are more products. There are more actual... Indeed, when this bubble started, I pushed back on people and said, it's just like crypto, it's just like metaverse, because there was a thing here. Right. Was it as big as people said? No, but the egregious lie with the metaverse was like, we've made a VR space, this is worth$100 bazillion now. but with Roos he did an article at Helium a crypto company and then Matt Bender I believe over at Mashable he got outplayed by Mashable man actually Bender's amazing tons of great people anyway with Roos he did this story where it was like yeah Helium works with Lime and Salesforce turns out they didn't turns out they didn't Matt Bender went and asked and they went no we didn't Kevin Roos added by saying skeptics have suggested or critics have suggested that this wasn't the case.

1:30:17It's like, motherfucker, come on. I don't like Kevin Roos because he has this amazing power. He has this huge audience. And he chooses to support the powerful. He did a story about an AI welfare guy, an AI welfare guy being added to Anthropic. Just a Ninja Turtles expert. We will find the ooze. The ooze is here. By talking about - I thought that was an interesting story. I thought it was fucking stupid because it didn't discuss the welfare of AI. If you discuss the welfare of AGI, if we have a conscious computer you are describing a slave if this thing has consciousness you now have issues of personage are you open to the idea that it could be i think it could be possible in 30 50 i think we are you're just now saying you're open to this idea i'm open to the idea in the same way that i'm open to the idea of teenage mutant ninja turtles in the sense that if we got the use that could do it agi we do not have evidence it's possible we don't understand how humans think.

1:31:12How the fuck are we meant to create it in a computer? But say we do, and this is the dirty part of the conversation no one wants to have. Say they succeed. Are you saying that this conscious being that Microsoft owns, by the way, Microsoft owns this conscious being with intelligence and consciousness and a personality, are you saying we wouldn't let that free? Because what you were describing there would be a slave. Yeah, it should not be the goal. And no, but that's what they're thinking. Now, they could say, oh, we'll do it, but we'll make it so its consciousness just focuses on doing whatever Salesforce wants.

1:31:48Still a slave. This is the thing. I genuinely would have respected Kevin had he done that thing and then had a really agonized discussion, which is genuinely interesting, saying, what would be the ethical ramifications of owning a conscious thing? Fascinating. But doesn't that story that the labs are thinking about this kick off that conversation? Like, I don't think that you can expect. I'm Wario Amadei. I have decided that I'm never calling him his real name. Dario. I'm sorry, Dario. I am him. I am trying to work out reasons for people to invest in me in the future. I think I could probably give, let's call it a million dollar salary, probably a couple mil more in stock.

1:32:30I'll make a new guy. A new guy will come in and his thing will be AI welfare. What does that mean? what if it's life we can do a google doc back for karen howe's empires of ai does an excellent job of discussing how many of these people's fart in a glass and sniff it because they have jobs there where they just say i'm gonna what if this happens what if this happens it's a marketing spend and it worked it worked on a guy who it's worked on before kevin roost did an article recently about a company claiming that they were going to replace workers you know what they hadn't done even created the environment they do it in kevin can do good journalism he's done really good the young money he did it's great like like there's actual things casey newton's the same way like they're good journalists they could do good journalism they could even do if they were optimists they could engage in actual optimism there'd be interesting thing the welfare story is a great example man having a conversation in the times about what's considered human or not why have they not been doing that elsewhere?

1:33:29Anyway, it's just, it's this frustrating thing where ultimately the people that suffer will be the people who depend on the markets for their pensions. The markets do eventually affect the workforce. And on top of this, the other thing is that we've got major people in the media hot and heavy over the idea of replacing people. Hot and heavy, they're excited. I think that's disgraceful on top of it. Who are you fighting for? Who are you writing for? It isn't clear. All right. I think you and I will disagree on Kevin Roos and on some other things, but I am glad that we've had this discussion. Me too.

1:34:08I don't agree with everything you've said. I think it was good that we had a conversation where we brought some of this out there, tested it. And I think the one thing I'll say is I leave open the space that you're right. And I think that is why I think you have a very interesting perspective on this. And I think that's why it was important for us to have this conversation. I'm really happy to be. And we've talked a good amount about this. Yes, we have. And like, I'm really excited to be here. Thank you for having me. Definitely. Well, thank you for coming, folks. If you're interested in the podcast, it's Better Offline.

1:34:39The newsletter is wheresyoured.at. And it's also the still alive and kicking EZPR.com. All right, everybody. Thank you, Ed. Thank you. Thank you for watching or listening. And we'll see you next time on Big Technology Podcast. Thank you.