The PR Guy Who Says the AI Boom Is a Bust

19:46Peter Kafka:Yes. So the fact that NVIDIA has an unsustainable growth rate or a valuation that's too high, that seems like a problem for people who work at NVIDIA, own NVIDIA stock. It would be if it wasn't such a large part of the S &P 500, seven to eight percent of it, the Magnificent 7, so the other six companies, Tesla, Google, Meta, Microsoft, Apple, Amazon, good Lord, I should remember those off the top of my head. The Magnificent 7 is 35 % of the value of the US stock market. NVIDIA is 7 % to 8%. They are the largest company on the stock market. This is going to be bad for everyone. Pretty much everyone's 401ks are going to be partially in the Magnificent 7.

20:29Tesla is a much smaller part of the market, but on top of that, Now, large amounts of private equity are not being shoved on propping up Tesla. You've got, I think I read something, it was$50 billion at least per quarter for the last three quarters.

20:45Peter Kafka:So this is more than just your 401k is directly connected to this because you're either a direct investor or you're an investor through an index stock. This is where you get to the subprime part, right? That there's contagion and that there's lots of parts of the economy that are tied to this. The subprime thing was specifically referring to one part of the AI thing. I don't think that this is like the subprime mortgage crisis because that was so tied up. I think that this would be not as bad as the great financial crisis, but that doesn't mean it will be good. It just means that we're not going to see a bunch of people evicted.

21:15We're not seeing millions of people who got houses. That was horrifying. This is much more like the telecommunications bubble. It's basically the last dot-com bubble. It's telecoms plus startups. But the difference is that when all of those startups died during the dot-com bubble, there was a bunch of useful hardware because it was pre-Amazon Web Services. It was before you had kind of ubiquitous cloud storage and such. There was some utility and you could buy Aeron chairs at a discount. And you could buy actual servers.

21:42Peter Kafka:There was a ton of money that got incinerated. Oh, for sure. But what I'm saying is there were people that built their own servers because they had to. There was no aid. There was a useful propagation of talent and stuff that went somewhere. I'm not saying it was good. I would argue that the result of the tech bubble was a lot of people lost a lot of money. But in general, whether it's the actual servers, but I think more broadly, the propagation of technology. Yes. Overall net positive. You and I are doing this work today on the Internet. That was all good. And so we got the valuations wrong.

22:15Peter Kafka:Most people bet on the wrong horses. It's kind of capitalism, right? So if we table the economic part for a second and move on to the tech, it seems to me we could very easily have a replay of the dot-com bubble where a lot of the things that we thought were going to be successful companies aren't, but the technology in various forms continues to be useful for years and years in the future. I have been a big AI skeptic for years, and over the last couple years, as ChatGPT has blown up, periodically I'd go to it and ask it to write a biography of me. And it would start off correctly. And then, you know, within a paragraph, start lying dramatically.

22:55Peter Kafka:It doesn't do that anymore. Okay, fine, whatever. That's not that. But what I am finding now is that it's, I find it genuinely useful for my work. And even if I wasn't doing that, it's just a much better. Where is it useful in your work? I'll get to that in a second, but it's a much better Google. It's much better than Google at Googling. so if it only if it stops there if it never gets any better than it is today and it's just better at finding things on the internet for you than anything else that exists today that seems like a big deal no not really no it's just because that's a commoditized thing at this point now it's funny that google can't seem to work this out but i and there's a real irony in that one of the reasons it's better at google than google is that google has allowed this sort of ecosystem to build up where everyone creates terrible web pages that are meant to be read by robots not humans.

23:45Peter Kafka:And so the good information is buried in there. And so what ChatGPT is really doing is taking out all the cruft and assembling it better than Google can do. To an extent, it's... The thing is, I have this grander theory that I actually think all of ChatGPT was created, the whole situation was created in 2020 with Prabhagar Raghavan, the man who destroyed Google. I've heard this one. Let's just table that for a second. No, no, we can table it. But I'm saying that Google stopped focusing on making search better. They stopped innovating in search. So search decayed. So chat GPT being slightly better.

24:15And I don't think you can put this all at the foot of one engineer. I'm not saying, oh, no, no, no, no. I'm saying the wider Google thing of them giving up on making search better. Putting aside propaganda, I'm just saying that the idea of Google kind of giving up is why this happened. If search had innovated, do you think that everyone would be as important?

24:32Peter Kafka:Or again, it's a classic innovator's dilemma, right? You've built this thing. It mints money. It does really well. you're less incented to go and make major changes to it and someone can come up and do a better job of the thing you were doing. They made major changes over the years. They just made it worse. They added, they kind of blurred the line with ads. But putting that aside, what ChatGPT has done may be, I don't agree that it's a great search engine, but is it better than Google? I don't know. Point is - I used it this weekend to help me figure out which anchor products to buy. and I would have had a very difficult time figuring out which, it was Anchor and some other stuff, I have an old car and I have a new phone and I needed to get a dongle that would connect the two.

25:14Peter Kafka:Okay. And again, this is not a big problem, but it would solve the problem for me. It helped me figure it out. It would have, I don't know how I would have done it on the web, honestly. Google should have done this for you. I fully agree. That's valuable to me. I would pay for it. Is it that valuable though? because remember, Google is, you know this as well as anyone, Google is not profitable because they're a great search engine. It's because they own how to sell the ads, how to buy the ads, how to place the ads, the search engine for the ads. It's the monopoly that makes it so profitable. It isn't the fact that it is better at search.

25:47It used to be that it was really good.

25:49Peter Kafka:It delivers really good results for advertisers. Yes, exactly. Because you're telling it, I'm interested in this and advertisers can bid on it. And you'll notice that nobody is making ads on this. perplexed he had$20 ,000 of ad revenue last year. But on the technological level, okay, let's, I don't know if I agree it's better, but let's say it was a better Google search. Let's say it just replaces Google. But does it replace Google on a revenue basis? Because that's the thing. No one has succeeded in replacing Google. Microsoft couldn't do it. And I realized that Microsoft are the McKinsey Mr.

26:23Peter Kafka:Beans of the market. But let's just say it becomes a better way to retrieve information on the Internet than anything else that exists. And maybe it won't have as good a money making machine attached to it as Google does. But there's still inherent value, a lot of values. Some people will pay a lot of money for it. Some people will be fine paying next to nothing or just getting free crappy version. We always have those sort of dispersions. Again, that's a fraction of what we've been promised it will do. but it's still meaningful. Sure. And that's if we stop, if we just stop making it better today.

26:58So on top of the fact that it also hallucinates bad results and this still happens to this day and you'll notice that this problem is everywhere. It's on Google, it's on Bing, it's on ChatGPT, call it, what have you. And is OpenAI themselves have said they can't solve hallucinations. They're part of the whole thing. Okay, it's a better search engine. Point to the company making money off of that. I don't even mean a profit. But I mean, making real revenue off of that. And you can't really look, you can't really perplex these 150 million ARRs. What's that?

27:29Peter Kafka:Well, yeah, let's just focus on the clear leader right now, which is ChatGPT, right? Right. I mean, I don't know why we're ever talking about perplexity, but let's say that all of the - The reason I mentioned them is they are an actual dyed-in-the-wool AI search company. But no one's using them. That's kind of my point. No, no, but there's one clear leader. So let's just focus on ChatGPT. Okay, we'll focus on ChatGPT then. Let's say everything else falls away. were left with OpenAI slash ChatGPT. Sure. That seems like they will have built something very valuable. How valuable, though? Because that's the thing.

28:01How? Because do they need all these data centers? Are you saying we shut all that? Like, what is the end result here? Because I know you want to remove the economics, and I understand, but Google is a money printer. It survives because of that. It is also not run on large language models, which are incredibly expensive. So OpenAI has created a better search.

28:23Peter Kafka:Okay, great. It has monetary value, and you're saying it won't ever be enough to justify its valuation or even maybe cover its costs. Yes. That's what you've boiled down to. Fundamentally, I believe so. Yes. And I don't think that there is a way out of it. I don't even know how they will put ads within ChatGPT. Like, I'm sure that they will work out something, but how you do ad placement algorithmically, because that's the only way you scale it, it's going to be a bloody difficult nut to crack. And then all of the ad budget at first is going to be experimental as they kind of prove it. The fact that no one has really succeeded in this otherwise is not a good sign.

28:57But on top of that, OK, great. You built a search engine.

29:00Peter Kafka:I mean, we also have a second example of a hugely a huge Internet company that has made printing money from ads. Right. And that's Meta. Yes. And yes, you've given it a bunch of information about yourself. But really, it's sort of tether. It's tying together what everyone does on the web, which is a lot of different stuff from different places. Again, made a very, very valuable tool for advertisers to reach people. And again, maybe that doesn't work for OpenAI. Maybe, you know, maybe the ad component isn't as valuable, but also there's a lot of enterprise value. Maybe people like me are paying money for it.

29:36Peter Kafka:But there's no enterprise value. Like the thing is, they've not had, they're not doing well selling to the enterprise. No one is because the enterprise needs replicability. SaaS is run on either brainwashing executives, to quote Nick Suresh, or it's run on replicability and real actual dollars. Replicability meaning? As in, you can trust it to do the same thing more than once. Not that you have to keep buying it over and over. Oh, no, that is a big part of it, but not what I was referring to. You can consistently say what it's 2 plus 2 and it says 4. You can consistently say what it will do. And that's actually the whole ballgame, really.

30:09You can't, even if it does the same thing right 99 times, which it won't, that one time, if you're allowing it to, I don't know, help with anything to do with your code, it's probably not great. And the more complex the code you put into a reasoning model, the more it's going to hallucinate on the back end. The point is, every time you try and make AI do the thing they've been hyping, it fucks up. When you try and make, you say, oh, it's going to refactor a whole code base. That is the one, you know, 100 % it's going to fuck something up. Because reasoning models hallucinate the more that they have to reason.

30:42It's just, this is all out there. And you say, I understand why. You say, oh, well, over time, there'll be victors. The problem is with all the money that OpenAI is stacking on top, even if their goal was to eventually become just a mediocre startup, it's too much on top of them now. They promised over a trillion dollars. It's ridiculous. So you look at the tech and it's already mediocre. And they've already made it. And clammy, clammy, Sammy, he's made all these promises. He's made all of these promises about what it can do. And each month, it feels like he has to go, well, when I said AGI, what I meant was software.

31:15When I say software, I mean it kind of does sound like, okay, it doesn't really do stuff, but you can search on it and people really like it. I heard someone solve a physics problem the other day. I'm not going to tell you who, because it's just, I actually think that there is something about the AI moment that is just the hubris of everything in Silicon Valley at once. The overspending, the hero worship, the kind of almost passive belief of whatever the chosen one whenever there is a chosen one in a period of tech you know we believe anything he says even when it's egregiously silly and what sucks is if they'd have come out of this in what 20 2022 and said and we're very clear like here are the limitations this is experimental even if it went viral being very clear clear to say like hey, we can't trust it to do this.

32:02Like, we have to be, and trying not to scale at this ridiculous rate, maybe it would be a different story. But from the beginning, it was this, once the virality hit with chat GPT, it ran away with it. You had all that coverage claiming that GPT-4 ordered the Tosk Rabbit. It never did that.

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34:59Peter Kafka:I think there's two different things going on, right? There's a hype cycle and people moving in herds and that's Silicon Valley, but it's also just the world, right? Sure. That's that, was it MIT studies? 95 % companies who put this stuff in can't figure out what they're doing. That doesn't surprise me. Like you just, if you, and in businesses, you sort of know like, oh, this is the new thing we have to do. We've been told we have to do it. We'll go buy it. We're not sure why we're doing it. Again, there's parallels to the dot-com boom where everyone had to have a website. And software as a service has done this for years.

35:32Peter Kafka:Right. So there's that. But again, I think that's just humans behaving as humans do. And the other is, is there actual utility? And maybe it's not as promised and maybe it can't do task X or Y, but it definitely has value, I think. I am finding it like help. It is helping me. It's helping me find stuff. I use it to bounce ideas off. I know what's going on. I know that it's not reasoning. I know that it's spitting out basically a Mad Libs at me. But more often than not, it's useful. I'm also finding, you know, frequently where the limits are. Like it never wants to tell me it doesn't know. So it'll never, you know, if it doesn't have access to a Bloomberg article, it won't tell me that.

36:12Peter Kafka:It'll just tell me what other people are saying about the article and present it as it's. But these are sort of things that I, as I'm playing with it, I'm figuring out, all right, well, I won't use it for that. I'll use it for this. There's real utility. If you took my chat GPT away from me today, would my life get worse? It'd probably be okay. But I use it. I like it. Right. And there's nothing wrong with it. I'm not saying that there are not people like you. if that was how it was sold. It was like this kind of cutesy knowledge engine, whatever you call it. If this was how it was being put out there and everyone's saying, yeah, we've got a knowledge engine thing, it would almost be inoffensive.

36:45But it's not being sold how you're saying. And that MIT study had a really interesting line that people don't like talking about, where there was one line where it said, enterprise AI adoption is high, disruption is low. Because the thing is, it's not being sold as you're describing. How you're describing it is how you're finding it useful. And I've heard multiple people say that. Fine. It's being sold as this panacea of everything. It is the new iPhone. Actually, LLM's got set up to fail because it's the new iPhone plus the new enterprise SaaS plus the new Amazon web services. But everyone, everyone gets in on this.

37:18Like I said, it's this egregious hubris moment where everyone believed one thing could change everything. And it sucks because to your point, yeah, every single cycle, Everyone goes, well, what's our metaverse strategy? We're going to put blockchain in this? But I've never seen them jump whole hog into this. This because this gave everyone so there was an API. There's an office. There's a subscription you can add to your Microsoft 365 account. You can get your credit card out and really pretend as a CEO you're doing something with this. So we've had that moment now. And when you say, oh, it's not as good at other things, it doesn't really have scaled enterprise functionality.

37:56Microsoft has moved on from open AI models to Anthropic because it can't generate bloody Excel spreadsheets. It can't generate PowerPoints. The one thing you'd think this does, and it can't do it. The coding LLMs, that debate is going on and on. You've got some people who claim it's the future. You've got misreporting at scale saying it's replacing coders. But when you actually talk to people using this, even the excited ones are saying, yeah, I have to keep an eye on it. I have to look at it and vibe coding is a lie as well but that's the thing if it was being sold as the thing you were talking about that'd be one thing, what it's being sold as is myth, it's mythology it's what this could do and it's been what this could do for three years and we're still at the could do stage when will it do and it won't because we are at the limits we're at the scaling limits, we've been at them for a while we've hit the diminishing returns period of training, we're at the wall and it's not I don't know.

38:54I don't think OpenAI will back off this. I don't think that they're going to, the ethical thing for them to do, which they'd never do ever, no one's ever done this, is to say, okay, let's cool our jets a bit. No, they're in fact saying, no, we need more jets. More jets, rocket, fuel now.

39:08Peter Kafka:So let's move off the, because we're not really having a debate, we're kind of having a debate about the utility of this stuff. I actually think we're kind of on the same page. Well, yeah, I mean, I'm getting more out of it than you are. And as far as I'm deeply worried about our economy being based on this thing, and I'm also worried about the data centers to me seem like a real problem because they're only going into places that have no other economy and they're also going to go away. I'm still not making money. But let's table that. We've tabled too many things. Have we, because again, you make this argument, people can hear you make this argument all the time.

39:46Peter Kafka:Have we done a good job of summing up your argument? data center thing is important. So the big myth is that there is an industry selling AI compute. From my calculations, outside of Microsoft, Meta, Amazon, and OpenAI, there's less than a billion dollars of revenue in compute. We have hundreds of billions of dollars of private data centers being built, theoretically. We have Meta creating a special purpose vehicle, Enron-style baby, of an off-balance sheet data center deal. We have all of these data centers being built for nothing. There is, outside of hyperscalers, moving stuff off their balance sheet.

40:21We have all of these things being built. And we have private equity up the wazoo.

40:26Peter Kafka:When Mark Zuckerberg tells Donald Trump, we're investing 50 billion in Louisiana or whatever. Yeah. Even assuming that is correct, that money goes where? So this is the crazy thing. I don't know if it's the Louisiana one, but Meta and Blue Owl Digital, who also, I believe, are behind Crusoe's thing in Abilene for OpenAI, They are doing a special purpose vehicle where Meta and then will put money into this thing. Selling, I think they sell bonds to fund it. Meta will own the SPV, but also pay a lease on the data center once it's built. I guess I was getting at, they're going to put up a warehouse.

41:02Peter Kafka:Yes, full of chips. Full of chips. So some people will be paid money to build the warehouse. Correct. And some people, a much smaller number, will be paid to sort of walk around with flashlights and make sure the air conditioning is on. And then most of the value, right, goes to NVIDIA, whoever's selling the hardware. Yes. And$26 billion or$24 billion is the deal. So it sounds like this is a giant economic development project for Louisiana or wherever, but it's really very little the money is going there. In fact, I was talking to a state regulator a few weeks ago. It's very much the West stealing from the South.

41:36It's just filling up the South full of GPUs with revenue. A bunch of jobs aren't going there, not for the construction and not for the, because data centers are not superhuman heavy. And that's the thing. These things are being sold as this massive jobs creator and economic, and it's no, it's just, it is helping private equity sink a bunch of money into something they can never lose. But I really want to make this simple. AI data centers do not make money. They lose a bunch of money. GPUs die from what I can read at best in three years. How does any of this work out if there are no customers too?

42:09How this work? Also private equity traditionally moves on from assets. Who are they going to sell them to? No one wants to buy. Everyone's building data centers. They take two and a half years per gigawatt. What's happening? We're building a bunch of data centers for no reason. We'll be right back, but first a word from a sponsor.

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44:54Peter Kafka:And we're back. You have made an abbreviated version of your argument. Yes. How is making that argument going for you in the wider world? Who is responding positively to you? Who's paying attention? Who has responded in a way that's made you rethink any of your arguments? So something I have generally, I have really close to my mate, Kegawa, for example, Matt Hughes, my editor. I have plenty of people who push back on my arguments constantly. Like it's, I want that to happen. I want to make fundamentally sound arguments. I would say a year ago, people thought me mad. Because I wrote OpenAI, how does OpenAI survive back in June 2024?

45:36And that was the big economic one of like, hey, they're losing 5 billion. That's not good. And I would say in the months after that, I had a lot of people saying, you're overreacting. These companies are going to take off. It's going to be amazing. Edge, you're crazy. Now people are saying, and I would say DeepSeek was kind of it, but really it was a few months ago. It was the Chinese. Yeah, in January. Well, it wasn't even knockoff. It was just, it cost less to train the model. And it actually ended up costing way less. But regardless, it was really a few months ago with the haters guide to the AI bubble that people were like, oh crap, he's right.

46:11Paul Kudrosky, I think, was the guy. He was the one that broke it because he had this great story. It was something like AI data center development added more economic growth than all the consumer spending combined in the first half of this year. Once that happened, people started to listen. But I have a really diverse listener and reader base of regular people who are nothing to do with tech, very technical people, and a growing amount of finance people. I hear a good amount from private equity firms and hedge funds and stuff just saying, like, I read this. This is nice. And over time, it's gone from them sending me a few messages here and there being like, I don't know.

46:47But, you know, what is the economic opportunity if this works to now saying, oh, God, this reminds me of Nortel. I don't like Nortel. Please don't remind me of Lucent.

46:55Peter Kafka:Because part of me was wondering is like if you're hitting a chord, one, just because there's always going to people who want to hear that the thing that seems big is actually small. Right. There's always an interest in that. There is obviously a swell of anti-corporatism. Right. That manifests in a lot of ways, some of which are not good, some of which are maybe healthy. But you're saying it's not just people who are reflexively against big tech or big companies or even money. It's people who have an interest in technology and money are paying attention to you. Are you making money making this argument?

47:30Well, I'm paid by our help radio and I have a premium newsletter for your podcast. Yes. And I have a premium newsletter, which is doing pretty well. Got a good amount. Not a sub stack, a ghost. Ghost. But I have the free newsletter and a premium one I do weekly now. And the thing is, I know I definitely have people who are like, yeah, I'm anti-corporate. Yeah, I don't like the tech companies. Absolutely. But my fundamental analysis is deep. It's not like I'm just going out and saying, fuck these companies, which I am. I am pulling apart the arguments in deep financial analysis, deep comparison.

48:01I think I can remember roughly what every information headline that has mentioned OpenAI's revenue or Anthropics revenue at this point. I go very deep in this stuff. And so people are attracted to it because I think some of them are learning finance through it, which is scary. I'm certainly learning finance while doing this because I have no economics training. But people are attracted to the fact that I go deep in a way that I don't think many people do. I think people would love to read more analysts if analysts did this stuff. I realize more readable with an 18 ,000 word blog is kind of ridiculous, but I write in a style that's more approachable.

48:36Provocative and sweary. And entertaining. I mean, but it's also how I talk. And telling a story, yep. But it's not an act.

48:42Peter Kafka:It's just how it comes out my mouth. The podcast is good because you've got the English accent. Oh, yeah. Americans love sex. So there's a podcast, there's a paid newsletter. Can you build out other parts of this business? Do you want to build out other parts of this business? Could you be a private consultant in addition to doing this public facing stuff? Yeah, probably. I mean, I've had people that have given me like consultancy gigs, like just talking to them. But within the small few I've done, I don't, I speak exactly the same way. There's no bad handling with that. And honestly, that's been the big difference with the corporate people that I talked to last year.

49:19They didn't want to hear this. I did a panel in front of some people and I was talking shit on AI and they were really not, they were not happy to hear it. You could tell that they were like, who's this guy? More recently, I did one and they were open to it and they were actually alarmed, but in a thank God you told me way rather than they get out of my house way. But I think that consultancy could be part of it, but I just really love writing. I really, really, really enjoy this. I enjoy doing broadcasts. So I really have fun doing it. It means a lot to me.

49:48Peter Kafka:You have a PR business. I do. You mentioned several times. That's still a business. It is. You're still running it. So between how much of your time are you spending doing PR? Still the majority of my time doing the firmware. But I firewall it off. I don't cover the same subjects. Do you imagine that at some point PR goes away and this becomes full time for you? Writing and talking and thinking? I really enjoy the writing. I am having more. I can't tell you how happy I am. I really love doing this. It feels like what I was born to do. And it makes me, I just genuinely like love doing it. I would love to do it.

50:20I would love to write multiple paid newsletters a week.

50:23Peter Kafka:And this flamethrower, truth teller persona, which is also you. How does that work in the PR world? Do you have clients who are like, that's great that you're out talking shit about AI, but let's remember you need, I need you to help me do this task that I've hired you for. Or, by the way, I'm not going to hire you because I don't like that you're so out there and I don't want Ed, the brand, to represent me. I want a public relations agency to represent me. Honestly, across the board with clients, they like it. Because I fireworks, I'm not covering the things I write about because that would be horrible.

51:03You don't do any? No, I've done AI stuff in the past, but it's not like foundation model companies. I keep the fuck away. Like, not that I think the open AI or Anthropic is calling, but I do not work with big tech. I don't work with AI model companies. Like, it's just would not. Because you won't take it or they're not, it's not an offer. I won't take it. Like, it's just, it would be hell. Okay. But the thing is, I do love the writing so much and I love the PR stuff. And also clients want the truth. They don't want to be caught. Yes, you get the occasional one that wants to be coddled, but they want to know what's actually happening in real life.

51:39Peter Kafka:And so presumably there's a lot of people who hear this from you and go, not the guy I want to work with. But you're saying there's others who say, absolutely, this breaks through the clutter. I like all that. This is an important thing. There's really actually two parts. One is the broken heart romantic thing. I don't do this because I'm like, I'm going to be a contrarian. I'm going to be nasty. No, I do it because I'm pissed off at the way they've fucked up the computer. But the second thing is, I know my shit. If I was just a contrarian, just went, I hate this with this really base level analysis, that would suck.

52:11But I know what I'm talking about. I take great pains to go in depth. Because otherwise, you can't be this acerbic. You can't be this critical without being able to actually play. Because otherwise, you're just an asshole. You're just going up being mad. No, I have fundamental reasons I think OpenAI is a wretched company. I really do. and it's an economic one. It's the promises made. It's the culture. There are real tangible things. And yeah, I'm sure there are people that haven't worked with me.

52:39Peter Kafka:If you are right about the moment we're in, when does the reckoning show up? So I think it could be very soon. So we're in October right now. This is when OpenAI is meant to start paying CoreWeave. CoreWeave, I could spend an hour talking about. I won't. They're a NeoCloud. Big customer is OpenAI Microsoft. CoreWeave is built on debt. If anything goes wrong with that money, such as CoreWeave not building the capacity, CoreWeave could die, anything financially with any of these companies, any of the stories bubbling up that they're running low on capital, having trouble raising, any worries about the future that rattle NVIDIA, because it really is going to be - You think this could crack within this calendar year?

53:17Maybe. The thing is, you don't know what's going to come out, because the one thing I'll tell you from the leaks about financials is these companies run terribly. And if it cracks financially,

53:27Peter Kafka:Yes. Where do you think we are in a year? All the tech is gone or we end up with remnants of some useful tech? I think when open AI collapses, which I do think would happen, and it could take years, they could just be a PO box suing people. Co-pilot will be chat GPT and it will be this neutered ultra safe one. You're not going to be able to have saucy conversations with these things because they're so expensive to run when they just condense these operations, when they stop treating them as money burners and they try and make them somewhat affordable. They're just going to be restricted. And with a few searches a day, perhaps you'll be able to pay.

54:05I think the coding LLMs go away. I don't know if it's in a year, but they're so expensive to run. You're going to just see a few of them die. And then it's just going to be a consolidation and a slow lowering of the abilities of these things and a slow raising of prices to the point that they'll be out there if you've got enough money, if you're willing to pay. But it really, it depends on how egregious the moment is that scares everyone. But there will be one, there's going to be something with money, probably, that says, okay, everyone shits their pants. It could be one of the AI stars.

54:40Peter Kafka:If you are right, what is your reward for being prescient and out there and saying, I told you so? I'm reaping the rewards right now. I'm deadly serious when I say I love doing this so much. I mean, I get to smoke a big cigar and I post some memes. I'll have some fun with that. But the payoff is the fact that I have built a case of written half a million words in the last two years, probably more than that, actually. I get to tell the full story, which is great. And yeah, there'll probably be some attention. I already have a functional business out of this. I think everyone wants a big satisfying, oh, you're going to do this and that.

55:14After I'm done with them, I'm looking into other companies too. There are other companies that have, like Microsoft, for example. Oh, I've got some looking at Microsoft to do.

55:22Peter Kafka:I will probably... You have an unending list of companies and technologies that you can poke at and undercover. And also there's things that we don't know about yet that will be a big deal five years from now because people will get excited about them. It's the nature of the beast. And you will do the same thing then. I also want to... And I have been teaching regular people about finance stuff. Like I get a lot of emails every day with people saying, I don't know anything, but I've learned all this. It's really cool. That alone is really rewarding. I'll have a big prime rib. That's probably what I'll do.

55:52The thing is, I'm a simple man. I enjoy the things I do. And I really get to, I think that people may think that, oh, this is a flash and a pan moment. I'm trying to do this. The fame, I'm genuinely having the time of my life doing this. So it's like, I'll keep doing more of it. And I'll probably have made, I'll have more subscribers. So I'll be able to keep doing it, which is really fun. I really do. I cannot say enough how like I'm genuinely feel so lucky to do this every day. It's so much fun. And I get to talk with my, I'm doing a show tomorrow with David Roth, Victoria Song from The Verge, David Rothman Defecta and Edward Ongoeso Jr.

56:24I get to do a podcast with them for an hour. I get to do a podcast, cool podcast with my friends. I get to talk about the thing that I'm most passionate about. Let's plug your show in your newsletter before we leave. Just betteroffline.com for everything. Where's your red hats, the newsletter. Do you want to hire Ed to do your PR? EasyPR.com. And yeah, we're nearly at 80 ,000 free and paid subscribers combined.

56:43Peter Kafka:Pretty great. Maybe you'll be running CBS News one day. Yeah. Wow. Let's table that conversation. If only. Keep tabling. Ed Zitron, thanks for coming on. Thank you for having me. Thanks again to Ed Zitron. Thanks to my producer, Charlotte Silver. Thanks to our advertisers. Thanks to you guys. See you next week.

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