The Man Who Calls BS On AI: AI Is The World’s Greatest SCAM, And They All Know It! | Ed Zitron

Tech critic Ed Zitron exposes the AI bubble, why OpenAI and Anthropic are burning billions, the fake AI boom, and why the crash could wipe out the ENTIRE economy! Ed Zitron is a British AI critic and one of the most cited voices warning that the AI industry is one giant bubble. He hosts the 'Better Offline' podcast, reaching over a million monthly downloads, and writes the newsletter 'Where's Your Ed At'. He is the founder and CEO of the PR firm EZPR, and is currently writing his upcoming book, 'Why Everything Stopped Working'. He explains: ■ Why he believes generative AI is a “con” ■ The real reason OpenAI and Anthropic can't turn a profit ■ Why data centers could leave a $500 billion debt bomb ■ Why superintelligence is a myth sold by tech billionaires ■ Why AI won't take your job, no matter what CEOs promise Chapters 00:00:00 Intro 00:02:15 AI Is A Con 00:05:55 How Much Power Data Centres Really Need 00:07:42 Is Widespread AI Adoption Manipulation Or Do People Actually Like Using It? 00:11:40 The Actual Cost Of AI And How Tokens Actually Work 00:15:49 Is The Spending Of AI Companies Justifiable? 00:19:47 Will The Rate Of Improvement Of AI Go Up, Like Previous Innovations? 00:24:03 How Bad Are AI Mistakes? 00:26:34 Comparing Human Error To AI Hallucinations 00:31:11 If The Output Is The Same, Does It Matter If Humans Or AI Created It? 00:33:58 Can We Trust AI Like We Trust Humans? 00:38:17 Would People Use AI If They Paid The Honest Cost? 00:42:15 How Does The AI Bubble Compare To The Dot-Com Bubble? 00:47:22 Does AI Demand Match The Cost And Risk Of Data Centres? 00:52:26 Is AI Making Websites Like Google Worse? 00:58:26 Ads 01:00:30 Is AI Job Disruption A Lie? 01:10:02 Could Your Narrative Be Helping AI Companies? 01:14:02 How Dangerous Is AI Cyberhacking 01:17:10 Is The AI Industry Creating Economic Growth? 01:18:53 How Would The US Beat China In The AI Race? 01:19:33 Is Robotics A Threat To Jobs? 01:23:03 What Do You Think About Agentic AI? 01:24:43 Is The Adoption Of AI The Same As The Rise Of The Internet? 01:27:46 The Overhype Of AI 01:30:03 What Do You Use Generative AI For? 01:33:21 Has AI Gotten More Intelligent? 01:34:09 Will AI Start To Do More Jobs As It Gets More Capable? 01:36:07 What Does The Future Look Like As AI Grows? 01:38:08 You Don't Think People's Workflows Have Been Transformed By AI? 01:40:21 Will All AI Be Powered By Data Centres? 01:43:20 Ads 01:44:34 Is Overspending On AI Due To Demand Or Something Else? 01:54:44 Tech CEOs Rebuttal 01:56:54 What Would It Take For You To Change Your Mind About AI? 02:00:12 Are AI Systems Already Blackmailing? 02:07:51 Are We In An AI Bubble And What Happens When It Pops? 02:12:48 The Tech Depression Is Coming 02:18:30 What Should The Public Do? 02:21:07 Why Do You Have A Bone To Pick With AI CEOs? 02:24:29 What Should We Be Doing To Improve Our Relationships And Social Connection? Follow Ed Zitron: Linktree: https://link.thediaryofaceo.com/C6fKrVK Better Offline: https://link.thediaryofaceo.com/A9awRDM X: https://link.thediaryofaceo.com/GTr0z7R Where's Your Ed At Newsletter: https://link.thediaryofaceo.com/CZ3JLap You can get $10 off your first year of Where's Your Ed At Premium, here: https://link.thediaryofaceo.com/91LBdmi The Diary Of A CEO: ◼ Join DOAC circle here - https://doaccircle.com/ ◼ Buy The Diary Of A CEO book here - https://link.thediaryofaceo.com/BWjLTZK ◼ Shop The Diary Of A CEO collection: https://thediary.com/collections/shop ◼ Get email updates - https://link.thediaryofaceo.com/5IB1H6E ◼ Follow Steven - https://link.thediaryofaceo.com/AGU9QP4 Sponsors: Fiverr - https://fiverr.com/diary and get 10% off your first order when you use code DIARY Saily - Download from the app store and use code DOAC at checkout for 15% off. For more details: https://saily.com/doac ⛵

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  I think generative AI is at its heart con. And seeing these ultra-rich, ultra-powerful people. Life through their [__] teeth turns my stomach.

• 0:08Steven Bartlett?

  The word con is a strong word.

• 0:09Speaker 00

  Well, what do you call something where from the very beginning they've sold it in the terms of magic? But it's just a half-assery machine. They are misleading the entire world.

• 0:18Steven Bartlett?

  You are the first person that I've spoken to that has that opinion.

• 0:20Speaker 00

  Well, the fact that this is happening is insane and the fact it's not a scandal is insane. And I've been in the tech industry for 16 years now and I love technology and I'm enthusiastic about it. But I don't like being misled. And this is the largest non-consensual push of technology in history.

• 0:36Steven Bartlett?

  So we're going to play a game, Ed. I have the things that you consider to be myths about the AI industry.

• 0:42Speaker 00

  Let's play it. The AI industry is creating enormous economic growth. No, it's not. All of these companies run at a horrifying loss. OpenAI lost $20.9 billion last year. None of these people can just say, yeah, we're on the path to making this profitable because they can't.

• 0:55Steven Bartlett?

  Next one.

• 0:56Speaker 00

  AI will replace all human jobs. That just isn't happening and there's no economic data to support it. Next, the United States need to spend trillions to beat China in the AI race. What's the race to do for us to constantly piss our pants worrying about China? But people keep saying, what if these models fall into the wrong hands? They're already in the wrong hands. Mark Zuckerberg, Sam Altman, Dario Amade.

• 1:16Steven Bartlett?

  Mark Zuckerberg says, we'll continue to invest aggressively in infrastructure to meet the demand.

• 1:20Speaker 00

  God met as a monstrosity. Makes me think of Shrek with Lord Farquhar. Some of you may die, but that's a risk I'm willing to accept. If only these people gave a fuck about poverty or actual problems in the world versus are we buying enough GPUs?

• 1:33Steven Bartlett?

  If this continues, what does the future look like?

• 1:37Speaker 00

  Fuck.

• 1:41Steven Bartlett?

  Guys, I've got a favor to ask before this episode begins. The algorithm, if you follow a show, will deliver you the best episodes from that show very prominently in your feed. So when we have our best episodes on this show, the most shared episodes, the most rated episodes, I would love you to know. And the simple way for you to know that is to hit that follow button. But also, it's a simple, easy, free thing that you can do to help us make this show better. And I would be hugely grateful if you could take a minute on the app you're listening to this on right now and hit that follow button. Thank you so, so, so much.

• 2:15Steven Bartlett?

  Ed Zitron.

• 2:18Steven Bartlett?

  There are a number of things that you believe that a lot of other people don't believe.

• 2:21Speaker 00

  Right.

• 2:22Steven Bartlett?

  You have, I think, a couple of controversial opinions and opinions that are in contrast to the other guests that I've sat here with. What exactly are those opinions, Ed?

• 2:33Speaker 00

  I think generative AI is at its heart con. I don't think it is sold as honest software. I think that they overstate both what it can do, what it will do, and the underlying financials to the point that they are misleading the entire world. And they're actively exploiting the weaknesses in journalism, in our economies, and indeed within the responsible parties with sell-side analysts, governments and all over the shop.

• 2:57Steven Bartlett?

  The word con is a strong word.

• 2:59Speaker 00

  Yeah, I mean, what do you call something where from the very beginning they've sold it in the terms of magic? As this thing that will replace all jobs, that will cure cancers, all of these things. And when you look at it, it's boring cloud software that's extremely expensive and unprofitable and also unreliable at its core.

• 3:17Steven Bartlett?

  People will be asking, where are you drawing from in terms of your references, your personal experiences, where were you educated, what you study, what you write about, what you do, Ed?

• 3:24Speaker 00

  So that's the funny thing is people say, he's not going to finance experience, he's not going to tech. I've been in the tech industry 15, 16 years now. NPR, but still had practical experience and I love technology and I'm enthusiastic about it. And this thing just comes along that everyone is telling me is the best thing since sliced bread. It can't even do the basics, it can't even do search. Well, whenever you ask an AI person, well, what's your setup? They describe this Peewee's Playhouse thing of like, well, you've got a harness here and you've got to use the right prompt. Well, you don't want to use that prompt. You want to use this prompt here with this model, but don't use this model for the beginning. But at the end, you're going to want to use this model. And this is meant to be artificial intelligence. It's meant to be smart. It's meant to be autonomous. It's meant to be something that you set and forget.

• 4:06Steven Bartlett?

  We have the sort of six leading AI companies on the table here. Anthropic, Amazon, Nvidia, Microsoft, OpenAI, Google. You're saying that their fundamental business model is a con.

• 4:17Speaker 00

  Well, their revenues are not really coming from AI. Up until fairly recently, none of their revenues were coming from AI, like dribbles a bit. Right now, 70% of all AI revenues across those three companies are from OpenAI and Anthropic. Two unprofitable, unsustainable companies that literally cannot afford to exist without these very same companies giving them money. Amazon sent $50 billion to OpenAI this year. They sent $5 billion to Anthropic. Google sent $10 billion to Anthropic. And in the next three and a half years, OpenAI and Anthropic, based on actual sell-side analysts' evaluations, their estimates, the inform whether stock is going to go up or down after earnings. They are expecting 400 or more billion dollars of revenue.

• 5:01Speaker 00

  30 or something percent of cloud growth just from these two unprofitable companies that will need to be given the money from somewhere. And on top of that, these companies have such low respect for the average investor, for the analysts, for everyone really, that they don't even disclose their AI revenues. The few times they deign us worthy, they use something called a run rate, an annualized run rate, which means, well, nothing, they never define it. It can mean month times 12, it can mean month times 13, it can mean last four weeks times 13. It's different every time and they never define it. And then they sometimes just don't mention it. So you've got this big thing that is meant to be the biggest, most influential change to software ever. And whenever you ask them about it, when you say, what, how much are you making from this? They go, oh, I couldn't possibly say, I'm too shy.

• 5:46Speaker 00

  These are public companies, or at least the ones that aren't Anthropic and OpenAI. When they have good news, they'll tell you. And when they don't tell you something, well, that actually speaks volumes.

• 5:55Steven Bartlett?

  Have you used these tools?

• 5:57Speaker 00

  Yes.

• 5:57Steven Bartlett?

  AI tools, Gemini, Anthropic, ChatGPT, et cetera. And you found no value in them?

• 6:02Speaker 00

  There's some value, but it's not, they've spent over a trillion dollars in capex.

• 6:07Steven Bartlett?

  What does capex mean?

• 6:08Speaker 00

  Capital expenditures. So when you are a business and you have operating expenses like electricity, for example, those come right off immediately. Capital expenditures are long-term investments that are theoretically one-off, so a data center or indeed the GPUs you put inside an AI data center.

• 6:23Steven Bartlett?

  Okay, so you've got a data center.

• 6:24Speaker 00

  Mm-hmm.

• 6:25Steven Bartlett?

  And then you have these GPUs which are like computer chips.

• 6:28Speaker 00

  So AI GPUs are much bigger, much more power-intensive, they take a bunch of high-bandwidth memory. And they, because of how many of them you need, you need thousands of them, tens of thousands, hundreds of thousands in some case, you need a bunch of power. So an example, OpenAI and Oracle are building a data center in Texas, in Abilene, Texas, 1.2 gigawatts, called Stargate Abilene. Within that, with each one of the eight buildings, there'll be 50,000 Nvidia GB200 GPUs. So City of Bristol takes about 780, 800 megawatts of power a year, right? Well, Stargate Abilene is condensing more power than that, 1.2 gigawatts, into a space around 1,172 times smaller.

• 7:12Speaker 00

  City of Bristol is about 1.2 billion square feet, Stargate Abilene is about 998,000. So you're condensing all of this power, all of this money, all of this labor into this one spot. And all of these data centers cost billions of dollars. All of these companies other than Microsoft are now to take out debt. And the thing is, they've spent over a trillion dollars so far and they want to spend another trillion dollars next year. And for what? To make tens of billions of dollars, most of which comes from two unprofitable companies, Anthropic and OpenAI.

• 7:42Steven Bartlett?

  One of the rebuttals to that would be that the adoption, the customer adoption of people using OpenAI and Anthropic has been absolutely insane. These are the fastest-growing products in all of history, especially as it relates to sort of technology. If we just focus in on technology, they are, you know, hundreds and hundreds of millions of people, billions of people are using these tools every single day for things that they have subjectively decided are problems they need solving. So, you know, money is a lagging indicator of value. So one would argue that they're just investing ahead of the monetization options.

• 8:16Speaker 00

  The first, let's start with this adoption. Is it honest adoption when you are forced to use generative AI when you load Google? When you load Google Docs, Gemini screams in your ear. When you load Word, Copilot's bugging you. When you use Amazon, whatever ruthless AI is, wants to have opinions on what socks you're buying. This is the largest non-consensual push of technology in history. ChatGPT, for example. Every single media outlet has been screaming about this for three years. They've been saying this will take your job, you must use this, if you don't use this, you're going to be falling behind. So people are using it because they've been told to use it constantly and they're using it like search predominantly. And that's partly because Google fell behind search and also because it's better in just inquiries sometimes.

• 9:01Speaker 00

  Sometimes if you use Generative search, it's like a trolling vessel, it's not very good at specifics. But if you're like, does this thing exist? Has this person ever said anything like this? It'll still probably get it wrong, but it'll scour the ocean for you. Nevertheless, that's not worth a trillion dollars. None of it is. The amount of money being sunk into this is just incomparable to anything. Railways, it blows everything out of the water because there is no post-bubble story even for this. AI GPU is not useful for other things either. There's, it's a directionless egregore of capitalism, this headless beast that lumbers around, desperate to seek out growth everywhere

• 9:41Speaker 00

  in the hopes that if it harasses people and scares people and demonizes labor enough, people will be forced to use it.

• 9:50Steven Bartlett?

  The reason I, I pause is because I just, I think about my own company. Obviously, everybody thinks about their own personal situation. So you have people listening now that don't use any AI tools and you'll have people that are using it for everything, from coding, new software tools, to everything they write, to, you know, images, whatever. And when you look at the stats around enterprise adoption, it says 88% of organizations regularly use AI at least once for one particular business function. And I'd say in our company, 95% of people use AI, one of these AI tools like Anthropic or ChatGPT or Gemini every day.

• 10:23Speaker 00

  Right.

• 10:23Steven Bartlett?

  And that exists on some kind of spectrum of like the super users that are using it probably, you know, every hour of every day for almost everything to, you know, someone maybe hiring the executive team that's using it less because their job doesn't require of it as much.

• 10:37Speaker 00

  Right.

• 10:38Steven Bartlett?

  And when you look out into the world, you know, at how the world is changing from a content perspective, if we're looking at generative AI, it is obvious that these tools are being widely adopted. Part of the symptom is the AI slop you see all over the internet.

• 10:51Speaker 00

  Right.

• 10:53Steven Bartlett?

  So I, this, this, this idea that it's not being used, I struggle with.

• 10:59Speaker 00

  It's being used. Here's the thing with the slop. Before we had AI slop, we had SEO slop because Google incentivized doing the lowest common denominator that would rank well on search. There's a whole story about how they pulled back spam guards, thanks to Prabha Gargavant, which we can get into, where they made the internet worse by allowing worse content to rank higher. It's why we had, when you used to Google our best washing machine, there's 11 different horrible blogs that read like somebody got a concussion. They are built to rank rather than be read by humans or built to be made good. So AI helps weaponize that at scale. Yeah, you can make a bunch of generic slop. We've had slop for years, we've just found a slop machine. But then also there's the problem of cost.

• 11:43Speaker 00

  So when you use AI services, you burn tokens and it's per million tokens.

• 11:47Steven Bartlett?

  What's a token?

• 11:48Speaker 00

  So it's around three-quarters of a word.

• 11:50Steven Bartlett?

  Okay.

• 11:51Speaker 00

  So it's characters.

• 11:52Steven Bartlett?

  So the AI companies have a currency in which they charge you, like a taxi in New York has a meter.

• 11:57Speaker 00

  Yeah.

• 11:57Steven Bartlett?

  And they call it tokens.

• 11:59Speaker 00

  Yeah.

• 12:00Steven Bartlett?

  And every word, let's just say for ease, it's a word.

• 12:02Speaker 00

  Yeah, about a word, yeah. And it's per million tokens. So you'll be charged per million input tokens, the stuff you feed into it, like a document or a codebase. And the output tokens are both the stuff it spits out at the end, but also when it thinks. So, okay, you've asked me to give you the best restaurants in this area of New York. I should find the best restaurants in New York. All of that's output tokens as well. However, when you're paying for a monthly service, you don't see any of that. All that, put all that crap to the side. They just have rate limits, so you can use them a certain amount and then when you run out, but they kind of obfuscate what that was. Now, someone recently found, semi-analysis actually found this, a big analyst group. They found that on a $200 a month ChatGPT subscription, you can burn $14,000 worth of tokens.

• 12:47Speaker 00

  And on Anthropic's, you can burn $8,000 for 200 bucks. That is how most, and even on the 20 buck a month service, you can burn $400. Now, most people don't realize that. Most people have no idea what AI costs. Most people just think, oh, it's 20 bucks a month. No, all of these companies run at a horrifying loss. OpenAI lost $20.9 billion last year because people can burn as many tokens as they want. And when they tried to move everybody on the enterprise side, so companies bigger than 150, onto actually paying the cost of AI in around March of 2026, to quote Sam Altman, they said, uh, people have a big problem with it, I think it's a huge issue, which is not really what the heir apparent of tech's history is meant to be saying.

• 13:32Speaker 00

  But the point is, enterprises immediately started freaking out. Uber burned through their entire annual token budget in three months. So suddenly, after everyone saying AI is the most productive thing ever, it's amazing, it's changing everything. The moment people actually had to pay for it, they go, oof, I don't know, actually, um, maybe it's, it's obviously, we all love it, it's all great, right? But it's costing too much, so we now need to reduce the cost because people are just dumping stuff into it, being like, what do I do here? And getting whatever the median is out because that's what these things do. They provide the median answer.

• 14:06Steven Bartlett?

  So essentially, someone like me who's a power user of these tools. I could be costing Anthropic or OpenAI $1,000, but they're only charging me $100, let's say. So they are having to subsidize $900 of my usage because of the electricity costs and the costs at their data centers. And so your assertion here is that that is unsustainable.

• 14:27Speaker 00

  Yes, and just to be clear, they're probably not $1.41, it might be 34, we don't, we don't know. I think it's unprofitable. These companies don't disclose them, even in their auditive financials, they play funny games with how they categorize things. But nevertheless, yes. And on top of that, the way that you stand up inference, which is the thing that creates the output within these data centers. You're not just saying, okay, turn the inference machine on, let's go. You are standing up the GPUs necessary to take in the demand. And if you buy too much, you've wasted the money. You have to pay for the hourly GPU use regardless. If you buy too few, your customers can't use it, they get pissed off at you, they cancel, they go with someone else. But nevertheless, yeah, they would get demand selling $20 or $40 for a dollar. And that's what these services do.

• 15:12Speaker 00

  And really, the simplest way to explain it is, they were actually profitable if they were actually just, they believed that these services were worthwhile and that they were worthy of the cost. They'd charge it. Regular people wouldn't be able to get a monthly subscription. They'd just be paying what it's worth, unless of course, there was an economic problem. And it's very simple. You pay when you use an LLM regardless of whether you get what you want. When these things hallucinate, say, you're doing something, you're coding something and they go through a codebase and they fuck up a bunch of stuff, they break a bunch of stuff, you're paying for that. You're paying for it whether it works or not, unless of course you're using one of these subscriptions.

• 15:48Steven Bartlett?

  I think that the really interesting point is, are they spending ahead of the value showing up? Which is, I imagine what they would argue. Or are they spending all of this money and subsidizing all of their users in a way that's unsustainable and that will never be justified? Like, doesn't, you know, because you think back through the history of technology, you often get people losing money to grab market share.

• 16:14Speaker 00

  Right.

• 16:15Steven Bartlett?

  And they're also focusing on bringing the costs down and making it more profitable for them as well. But they can't afford to under-invest.

• 16:24Speaker 00

  If they were bringing the cost down, they would have brought the cost down, which they have not. It seems to be getting more expensive. In fact, everyone, inference providers don't seem to be profitable. Even the companies renting out GPUs don't seem to be profitable. I imagine that it wasn't like they started out and they were like, shit, this is unprofitable at the beginning, we know it, screw it, we'll keep doing it anyway, we'll screw it. I don't think it's some big conspiracy. They probably thought at some point, yeah, this will go profitable, the chips will catch up. Customers will pay for the overwhelming value because you don't know in 2023 where it's going to be in 2026. You assume it's going to go up, that's the nature of venture capital. They should have stopped in like 2024 when OpenAI lost over $5 billion. They should have been like, yep, this is not going to work.

• 17:06Speaker 00

  But they kept going because it helped number go up so much. It helped stock values pump, it helped everyone pump, it helped Nvidia pump, Microsoft, everyone. And not from the revenues. Because here's the funny thing about Google, Microsoft and Amazon. People for years have been saying, their AI bets are paid off. Wow, their AI bets are paid off, as these companies refuse to say how much they're making from AI. But because their existing businesses continued to grow and did so, by the way, through price increases, changes to how Google and Meta did advertising. Amazon bumped up prices and changed how they did, actually, Amazon started a remarkable ad business during this whole time as well and the selling through Amazon platform. Anyway, nothing to do with AI, but because number go up, because revenue go up, everyone, it's AI.

• 17:50Speaker 00

  Because these companies wouldn't spend a trillion dollars for, for no reason, right? Except in fiscal year 2026, which just ended for Microsoft, annoying, I know. They made total, according to Bloomberg, about $34.33 billion. $24.1 billion of that was from OpenAI. So that leaves them with about $10 billion in a year when they spent $115 billion on capital expenditures and intend to spend $175 billion next year. The math does not make sense. I imagine their plan was, okay, this is just going to get exponentially more valuable and at some point, the costs will be outpaced by the return. Problem is that large language models need a bunch of money to train them. They need constant data flows, they need customized data.

• 18:33Speaker 00

  It's just this big expensive monster. And when you try and talk to people about it and you try and say, hey, look, this is really bad. Nvidia has sold, there's $215.9 billion in their last fiscal year worth of GPUs mostly. And you try and go, yeah, that's the support, like $22 billion of revenue total in the entire world outside of these two companies that literally require money being fed into them, sometimes by Nvidia to keep alive. When you tell people that, they go, well, companies just lose money, right? Companies, because we have this, quote Ed Elson from Prof G Markets, we have this cult-like worship of the wealthy where we think that someone wouldn't spend all this money for no reason, right?

• 19:15Speaker 00

  Because reconciling with that, with this idea that the ultra-wealthy, the ultra-powerful didn't get there through big brains, they didn't get there through anything other than luck and opportunism and getting an MBA perhaps of the right people. That they just got there because they're regular people and they just happened to be in the right place at the right time. Reconciling with that and realizing that the world is not controlled by people like a meritocracy is kind of grim. So it's easy to be like, no, they're not making a mistake, I must be missing something. And that's what they want.

• 19:48Steven Bartlett?

  So, you know, I think back through the history of technological breakthroughs and I think about, I mean, you can look at different industries. And one of my favorite books on this subject is The Innovator's Dilemma.

• 19:57Speaker 00

  I'll read it.

• 19:57Steven Bartlett?

  And one of the things it talks about is how the, the innovation that ends up taking out or transforming an industry. Often starts worse, doesn't make economic sense, none of your customers are asking for it. And this is typically why we end up ignoring it. So like, you've got horse and carriages in the eighteen hundreds. Amazing form of transport, according to the eighteen hundreds, you know, people of the eighteen hundreds. And then you have this thing called cars come along. Now, the problem with cars is they broke down all the time. It's kind of like AI hallucinates now. And they were more expensive and the economics of it didn't make sense. You might as well walk than buy a car. There was a law at the time that meant you had to walk in front of it with a red flag. And someone had to employ someone to walk in front of it waving a red flag. Obviously, it's worse. It's like a worse solution.

• 20:40Steven Bartlett?

  However, these things that are disruptive innovations, they have a higher ceiling of growth. And so they eventually overtake the horse. And when I think about that analogy in the context of all of this, I go. Okay, it's imperfect at the moment. The economic models aren't perfectly ironed out. They're still figuring out how to make it cheaper, the infrastructure, et cetera. But if you think about the rate of improvement versus other, you know, let's say coding. How much could I train a human coder to improve and to increase their output versus an AI agent? One would go, if you just imagine any rate of improvement in these AI tools. At some point, if you just imagine a five percent rate of improvement per month, at some point, it's.

• 21:23Steven Bartlett?

  And then you imagine a five percent reduction in cost, which is what we did with the internet, what we did with cars.

• 21:28Speaker 00

  Yeah, but that.

• 21:28Steven Bartlett?

  Moore's Law.

• 21:29Speaker 00

  Moore's Law is a theory and Moore's Law is not with GPUs. So let me, let me actually explain. So Nvidia. Nvidia invented, I think it was in the two thousands, they put out something called CUDA, which is the underlying software library and the way to run software on GPUs. Took them a solid decade or more to make it something where they could do data analytics, one of the early things, mapper and such. And then when AI came along, they'd had lots of experience with it. But nevertheless, this company has got more money, more attention. More geniuses behind them, more people focused on making their things more efficient than anyone could ever ask for.

• 22:04Steven Bartlett?

  And Nvidia, for anyone that doesn't know, makes the chips.

• 22:07Speaker 00

  So, and that CUDA thing I mentioned, they were the ones with CUDA and CUDA allowed generative AI to grow.

• 22:12Steven Bartlett?

  Okay, so they're chips.

• 22:13Speaker 00

  Chips, yes.

• 22:14Steven Bartlett?

  And chips are needed. Those are the things that go into the data centers.

• 22:16Speaker 00

  And their specific chips are the ones where you can run AI software on it. So the training runs and also the inference. Now, here's the thing, the car example. Back then, you didn't have pretty much every mathematician and scientist going into the car industry. You didn't have the combined worlds governments never shutting up about this. And by the way, giving them credit early. Since twenty twenty three, they've been saying this is inevitable. Even in what you said, five percent improvement. I don't even know how you'd measure that because a junior software engineer can still experience things and learn things from context, from how people deal with problems. And the way that people deal with problems is not as simple as looking at the code or reading some emails. It's context cues from speaking to a person. It's being in different environments.

• 23:01Speaker 00

  And there may, there are uses for LLMs in coding. I don't dispute that. But even saying five percent, what does that mean? Is it better at Rust? Is it better at C plus plus?

• 23:10Steven Bartlett?

  I'd say productivity. So just like, yeah, shipped. If we did it in the context of coding, it would be like shipped code.

• 23:16Speaker 00

  That's the thing. That would be like, he's the best writer in the world because his newsletter is really long. That's an insane way of evaluating it. With coding, it would be, I mean, it's even difficult to evaluate because it's, is the software out there better? Is actually a great way of evaluating it. And I would say uniformly not. I would say the standard of software. Across Google, Microsoft, Amazon, Meta, especially, God Meta is a monstrosity, is worse. GitHub. GitHub, someone posted on Twitter earlier today, we should get a notification when GitHub is up rather than when it's down, because that would be more reliable. Microsoft, one of the largest companies in the world, and they could barely wipe their own ass when it comes to GitHub. The quality of software is going down, weirdly enough, as more people use LLMs and more businesses demand.

• 23:59Speaker 00

  And I really do mean demand that people use these services.

• 24:03Steven Bartlett?

  So on this point of, if we go back to this horse and carriage and car analogy, say that we're at whatever point today. If you imagine any rate of improvement in the technology, which we have seen since ChatGPT came out. I remember when ChatGPT came out and I was in Asia and I was there showing it to my fiance. I was like, look, he can do this. And it was hallucinating once in a while and getting things wrong. I actually don't have that experience anymore. I have moments where I believe its reasoning is weak, but I don't have outright hallucinations anymore.

• 24:31Speaker 00

  See, that, I, I disagree. So.

• 24:34Steven Bartlett?

  Give me an example of what you define as a hallucination.

• 24:36Speaker 00

  Okay, great one. So I have a Bloomberg terminal.

• 24:38Steven Bartlett?

  Yeah.

• 24:38Speaker 00

  The very useful thing they have on there is ask B. So when you do a Bloomberg inquiry to like, look up what we think Nvidia's revenue is going to be next quarter. It runs something called BQL, which is its own programming language. Now, instead of having to learn that, you can just type into ask B and it will generate it and run it for you. And so you get pulled up and you know where the data is coming from. It deals with hallucinations real well. The other day I was like, you know what? We'll get a little spicy. I'm going to look up the growth rate of stocks of Microsoft, Google, Meta and Amazon over the course of five years, I think it was. And I was about to, I was copy pasted it over to something, looked at in Excel, I was about to, I was writing the newsletter and went, Microsoft's stock's never been five hundred and seventy five dollars a stock.

• 25:21Speaker 00

  You know what? When it's a cute little thing like, oh, it's a stock price and I kind of caught it, it was no harm, no foul. That's fine. But when you're talking about, I don't know, like a transcribing tool for a doctor or a financial model that a hedge fund is dependent on. At that point, it becomes a little more dangerous. And the thing is, a hallucination with a software package, for example, refactoring a code base and it leaves the door open security wise. Or it just breaks something and you, I don't know, maybe you've been vibe coding for six months. You haven't really been coding with your own hands for a while. Maybe you've forgotten a few things. You had this slot to look for. You go, fuck, you know what? I'm not doing it. And so the problems become multiplicative. And I don't really know how you train them out of that, and they've certainly not succeeded.

• 26:07Speaker 00

  So on one hand, they have got better. But one of the main ways they evaluate them getting better are benchmarks that are adjusted specifically for large language models. Because you can't just have them do tasks. They've got better at that. They've found some tasks they can have them do on. But even them like meter, M E T R, they have this thing where it's like, check out this chart, look how much better it's getting at running tasks. Wow, it can go for an hour. And then you look, it's like, yeah, and successfully completing them fifty percent of the time.

• 26:33Steven Bartlett?

  They have a hallucination leaderboard and it really focuses on basic tasks. And it shows that the four year trend, according to historical data from the Victoria Hallucination Leaderboard shows that hallucination rates on simple summarization tasks have plummeted from around twenty one percent, twenty one point eight percent four years ago, down to zero point seven percent roughly on today's top frontier models like Gemini and ChatGPT. Again, the point of nuance here is that these are on simple tasks, which is kind of what I've experienced. I've experienced it on day to day things that hallucinates less. Again, rate of improvement thinking. So if I just imagine the trajectory to continue, there is going to become a time where hallucinations become rarer than they are today increasingly.

• 27:17Steven Bartlett?

  And also what I'd say is when I think about other technologies, there's two more points. Other technologies at their inception, when they first came to the world, like the internet, also had technical difficulties. I remember growing up with dial up modems and I couldn't go on the phone at the same time as going on the internet. I'd have to stop RuneScape upstairs to go on the phone. And you thought, oh, this is crap. This is crap. Technology is crap. All the.

• 27:37Speaker 00

  I don't know, mate. I loved it.

• 27:38Steven Bartlett?

  Yeah, I know. It felt like magic. And then in hindsight, you go, wow, I now have Starlink and five G internet from my phone. It's unbelievable. You couldn't leave the house with internet before. And that's what I mean by the rate of improvement thinking. I'd say the last point is we often compare AI to perfection.

• 27:57Speaker 00

  Right.

• 27:57Steven Bartlett?

  Whereas that's not actually the alternative. In the working world, like if I wanted to do, let's say, a simple writing task. And I should compare AI to my alternative, alternative way of doing that simple writing task, which is both measured in my time. Right? And my ability to hallucinate as a person who doesn't know everything.

• 28:17Steven Bartlett?

  Or if I'm hiring someone, an intern who might also be prone to hallucination or have gaps in their knowledge. So it's not actually like we're comparing, we should compare AI to perfection. It's AI to the other alternatives. And if someone hallucinates zero point seven percent of the time, but knows way more and is faster. Maybe on a net basis, that's a good trade. Maybe I should use AI.

• 28:38Speaker 00

  So let's start with an example, someone I love dearly. Matt Hughes, my editor. He's, he's a side of Liverpool, wonderful guy. I don't pay Matt Hughes because he knows everything. I pay him because he has incredible context and a ton of knowledge and he's willing to expand it and work with me. And moral sport, and he's a great editor, but he's also someone who gets into the guts of it and has the experiences of it. He's a decorated tech journalist. And on top of that, a wonderful, loving being with empathy. Enjoy in his heart for the stuff he loves and absolute fucking venom for the people he hates. That's, I can't get that from a large language model. But on top of that, I don't, I push back on just the assumption there.

• 29:18Speaker 00

  When you say knows everything, what good is something that knows everything when it sometimes doesn't know anything, when it's sometimes? And the thing is, are you really paying an intern for something basic? Are you really going to them and saying, yeah, can you look up what the date is? No, you're doing that on Google. Whatever the task is, you are trying to also train an intern. The point of an intern is to train them and turn them and take them out of Pinocchio status. But it's also, an intern learns, an intern gets context, an intern learns your habits.

• 29:46Steven Bartlett?

  And AI gets context and learns.

• 29:47Speaker 00

  No, it doesn't.

• 29:48Steven Bartlett?

  AI doesn't learn.

• 29:49Speaker 00

  I mean, it doesn't. The way it learns is you create a giant Claude the M D file that it sometimes doesn't read, sometimes does read. You create a harness, you put, it's like, it's Pee Wee's breakfast machine from Pee Wee's Playhouse. You have to do all these contrivances to mitigate the hallucinations. And even then, at the end, how much effort have you put in?

• 30:08Steven Bartlett?

  But so, okay, this is an extreme simplified example. If I went on my Claude now and said, what's my dog's, my dog's name? It would know my dog's name.

• 30:14Speaker 00

  Jesus Christ, this company raised ninety five billion dollars this year.

• 30:18Steven Bartlett?

  I'm, I'm using an extreme simplified example to show that it can remember things from the past. Obviously, it knows much more complex things as well, but I just use that as an example. So we, we, we accept the fact that it can, it does have memory of the past.

• 30:30Speaker 00

  It has files it can access that have stuff on it.

• 30:33Steven Bartlett?

  Yeah.

• 30:33Speaker 00

  But that's not the same as memory. And it's also just, okay, so it remembers your dog's name. It might remember your habits. It might be able to read things you've said before. Does it know your moods? Does it know what's going on in the world around it? Does it have good days and bad days? Is it there for you? Because it's just a fucking text machine. And the thing is, the intern example. An intern is something that can grow. It's something that you invest in. That's not something you do through feeding files and text to it. The way that we store memories ourselves, the way in which we accrue experiences is a, a maelstrom of emotion and feelings and facts.

• 31:10Steven Bartlett?

  Completely different. So I think there's two things here. There's the process in which something happens and then there's the output. So the process, you were describing the process of how a human does memory.

• 31:20Speaker 00

  Right.

• 31:20Steven Bartlett?

  The way that an AI does memory is different, but the thing that people care about is their value in the output. I E, you know, if I dump all of my files into Claude, I don't really care how it processes it, as long as when I ask it, what's my revenue? It has the number. And one could say the same thing about training someone. You could say you teach them, you put lots of effort into them, you give them lots of context. You educate them and give them experiences and then you might come and say to them, by the way, what's my revenue? Now, the processes are entirely different, but the outcome is what I care about. Do they know the revenue number when I ask them? And so I think that's the part that we sometimes get lost in. We get, you know, because I have, I've heard this debate about like, can AI be creative?

• 31:59Speaker 00

  Right.

• 31:59Steven Bartlett?

  I think like the way to answer that question is like, is about the output. When I ask it to do a creative thing, does it give me the answer? Not is the process the same as a human process? Because actually, no, no, who cares what the, people care about, they pay for the outcome, the product.

• 32:14Speaker 00

  I actually disagree about the process because Matt Hughes, for example.

• 32:19Steven Bartlett?

  Your editor?

• 32:20Speaker 00

  Yeah.

• 32:20Steven Bartlett?

  Yeah.

• 32:20Speaker 00

  Watching him go down a rabbit hole and being there with him and actually vice versa, him doing the same thing. We wrote these, well, I mean, we were working on the research. I ended up sitting there for like the day long session of writing eleven thousand words and he, he had given me a bunch of notes. It was actually just, even describing that process, I feel so happy because it was like us being like, I can't believe how fucked these guys, Jesus Christ, they can't do, like just like the misanthropy of just the horrible cynical people of asset managers like Blackstone, just learning about them and being like, it can't be this. And having a back and forth with him. That is fundamentally different because we were both learning together. And the learning process was as much about creating the output as the output itself.

• 33:00Speaker 00

  When you learn something, you're not creating the average, which really is what these things do of the documents it could find. You're not getting particularly novel outputs. If I needed a generic slop output, sure. But I've, I've used some of the higher end LLM harness machines that the hedge funds use and they all get the same shit. It's all the same, the same generic reports, the same, oh, we noticed this analysis, things that you can find on any kind of AI slop out there.

• 33:28Steven Bartlett?

  What you described to me there, what I heard anyway, is there's two points of value you're getting from your time with Matt. I mean, I mean, there's many more, but you said you're, you're learning and then you're getting this book edited.

• 33:38Speaker 00

  Blog.

• 33:38Steven Bartlett?

  Blog. You're getting a blog edited, which is the output and you're getting learning and you're also really getting connection and all these other things. But when I come, when people sort of think about the value of AI, of course, they could use it to learn. But in the example I gave of like, repeat my revenue number back to me or do this number, I, I just care about the output. I could use it to learn. I could say spar with me.

• 33:56Speaker 00

  What if the revenue number was wrong once? You should have defined deterministic ways of knowing those numbers. You should not rely on them. Even with the terminal running BQL, which I trust, I will double, triple, treble check everything just to be sure. Partly because also the process of learning for me, I don't want just a report. I go like that. I want something that I fully understand and also understand the context around it. I don't think that LLMs do that and I just don't see them getting better in a way that does that because it's

• 34:28Speaker 00

  it's just not what they do. And also there's the other problem of the more detailed the report, the more likely there are things to be wrong with it. If you are with Matt Hughes, for example, I can trust he's got it right. I can trust he understood and I can trust that I can have a back and forth with him that will inform me if I've missed something. I can read the stuff that he's read and actually trust him because there's a big trust part as well.

• 34:50Steven Bartlett?

  What is the basis of your trust in Matt? Could it be his historical performance?

• 34:56Speaker 00

  I mean, yes.

• 34:57Steven Bartlett?

  Okay.

• 34:57Speaker 00

  And also the fact we've learned half of this stuff together.

• 35:00Steven Bartlett?

  But, but tenure, tenure doesn't necessarily, there's probably people, you know, for fifteen years who you also don't trust.

• 35:05Speaker 00

  Yes.

• 35:05Steven Bartlett?

  So I think I was trying to figure out like, what is the, what is the thing that's causing humans to trust another thing? And I guess it would be continual delivery of a commitment made of sorts. And so with Claude, for example, on simple tasks, as we've seen from this hallucination leaderboard, it continually delivers for people. And that's why we've seen the fastest.

• 35:23Speaker 00

  I mean, is that what that board says?

• 35:25Steven Bartlett?

  Well, it's saying like, is it getting it wrong? Is it hallucinating?

• 35:28Speaker 00

  On simple tasks.

• 35:29Steven Bartlett?

  Simple tasks.

• 35:30Speaker 00

  How are those defined?

• 35:30Steven Bartlett?

  I don't know.

• 35:31Speaker 00

  That's the thing though, because this is actually a very illustrative thing of the AI industry. They are the what about is masters. They have like, well, look, we've got this, we've got this benchmark that says we're good at this and look, the number's higher. What's the number mean? What does that mean? And I'm not using this as a critic against you. It's when you can't give a direct answer, you give a side answer. When you as the LLM industry want to prove your worth, you can't just be like, just use the product. When the first iPhone came out, of course, Penn State at the time, oh, I felt like the apes at the beginning of two thousand and one, oh, fuck, visual voicemail. It was immediate. And I showed it to tech friends. I showed it to the most normal people in the world.

• 36:12Speaker 00

  And everyone was like, holy shit, this is, they were on Razors, they were on Nokia thirty two tens. It was obvious the value. Amazon Web Services, same deal.

• 36:19Steven Bartlett?

  It wasn't obvious though.

• 36:20Speaker 00

  Yes, it was. I mean, I bought it.

• 36:21Steven Bartlett?

  To you, to you it was.

• 36:23Speaker 00

  It was. And I also showed it to a bunch of people because I'm aware that I have bias when I just love gadgets.

• 36:28Steven Bartlett?

  But I remember the famous Steve Ballmer, who was the CEO of Microsoft interview, where he is told about the iPhone. And he bursts out laughing.

• 36:39Speaker 02

  Five hundred dollars, fully subsidized with a plan? I said, that is the most expensive phone in the world. And it doesn't appeal to business customers because it doesn't have a keyboard, which makes it not a very good email machine. You can get a Motorola Q phone now for ninety nine dollars. It's a very capable machine. It'll do music, it'll do internet, it'll do email, it'll do instant messaging. So I, I kind of look at that and I say, well, I like our strategy. I like it a lot.

• 37:10Steven Bartlett?

  He bursts out laughing, mocking it because it was so disruptive. It was way more expensive. And it was way different, no keyboard.

• 37:17Speaker 00

  Well, phones used to be insanely expensive and the carriers would cover them, but you had to sign a long contract. You were still spending five hundred bucks. But the thing I'm getting at is, you didn't have to explain to someone what, perhaps you'd have to get past the cost part, but you could just be like, look how good this is. And then once the app was the iPhone three G with the App Store, people were like, oh shit, this could actually change things. Mobile web, even though it was a monstrosity, it was so bad at first. Even then you could get your emails and you could just look at them. Point is Blackberries were also expensive and were still actually kind of cool. But the way they worked was not like consumer software. They didn't have the classic GUI. iPhones felt like that. It felt like an, a cell phone designed even like a computer. It was obvious. It was obvious in the beginning. Everyone, I was dating to go in the center of Pennsylvania at the time and everyone I showed it to was like, wow, this is incredible.

• 38:02Speaker 00

  That to me is the obvious thing. With AI to this day, when you're like, okay, why is it so amazing? People still dither. People are still like, yeah, you can't run a business fully with it without this weird system of pulleys and levers and such.

• 38:17Steven Bartlett?

  But how come then, when you look at the stats around ChatGPT's growth? A hundred million active users in just the first sixty days after launching. For comparison, TikTok took nine months, Instagram took two point five years. And the internet itself, the world wide web, took roughly seven years to reach that scale. Over sixty percent of the US adults are integrated into AI tools in their daily and regular routines within three years of the launch, reaching a forty percent of the population. And that same milestone took the internet five years and personal computers nearly twelve.

• 38:48Speaker 00

  Okay.

• 38:48Steven Bartlett?

  So like this is the, I think this is the part that's giving me dissonance is like, when I showed my fiance ChatGPT, okay, it was, didn't really work. But as a sole entrepreneur who, English isn't her first language. Who has to write lots of texts, lots of copy and generate lots of images and was paying a graphic designer to help her make certain images that she, you know, couldn't make herself because she doesn't have the skills. She would describe it as being transformative for her business. What I'm hearing from you is that it's not transformative and there's no value in it for people. But she, if she was sat here now, she'd get transformative.

• 39:21Speaker 00

  It, would she pay the per million token rate? Would she pay the actual rate? Cause that's the thing. If this was sold at its honest cost.

• 39:28Steven Bartlett?

  Yeah.

• 39:29Speaker 00

  I would actually, if, and people reacting like that and they were paying two, three, four dollars every time they did something and they were genuinely happy. That might be an argument.

• 39:35Steven Bartlett?

  What is the, what would be the honest cost if they weren't subsidising?

• 39:38Speaker 00

  The actual per million token cost, the actual API cost, they should.

• 39:42Steven Bartlett?

  Do you know how much that is relative to what they charge?

• 39:43Speaker 00

  Oh god, it depends, it depends on the model. But there's actually kind of a point I wanna make about the thing you said with the internet earlier. So when I first got on the internet, thirty three point four kilo per second modem. Even back then, I was like, fuck, if this was faster. And that was like immediate, it's like, if this was faster, cause it was slow, you'd go on like Happy Puppy or something, download, take all bloody day waiting for shareware to download. Immediately like, if I could do this faster, it would be better. And even back then, I'm like, man, you could probably do video camera stuff with this. Stuff that eventually happened. And actually, there's this guy called Jim Cavill from Goldman Sachs in a report he did in twenty twenty four that was Gen AI, too much spend for not enough return. Paraphrasing there, and he made the point that in the run up to the iPhone.

• 40:26Speaker 00

  There was thousands of presentations that when GSM radios get smaller, when Bluetooth radios get smaller, when Wi Fi radios get smaller. It is inevitable that we will get something like this. And then he said that there is no such path for AI. There was no roadmap to AI becoming this thing that they promised. And I must be clear, if these companies had gone out there and are like, yeah, this is interesting cloud software, it's generative, it's really expensive. We're not sure if we can fully not trust it, not in the ooh, I'm scared way. I mean, just like, we're not sure that this is going to be a disruptive, world changing thing. It has potential, but we're gonna go slow. It's really expensive. This is an R and D effort.

• 41:05Speaker 00

  We're not gonna expose consumers to it and actually be like, call them like, I don't know, language models and no, no generative AI stuff, just being, not even calling, cause it isn't AI. It's not autonomous, it's not smart. I actually might respect it, but this is not, they've gone out there since twenty twenty three and said, twenty twenty two, this is the best thing since sliced bread. This is changing everything. This is gonna do all your work. This is gonna take your job. You're gonna talk to Bing and it's gonna take you to leave your wife, all of these crazy things. And what's funny is when the writer, Kevin Ruiz, I think it was, he was speaking to Kevin Scott, the CTO of Microsoft about it. And Kevin Scott goes, you know, I'm just glad we're having this conversation. Instead of being like, settle down Beavis, it's a website, the website told you something, it's just L L Ms.

• 41:49Speaker 00

  They talked it up and that's because everyone is talking about what they wish this was, rather than talking about what it can actually do. This makes it scary to people, deliberately so. It makes it environmentally destructive. Look at the gas turbines poisoning blank neighborhoods. I think it's in Louisiana, it's one of Musk's data centers. Look at the incredible energy draws, it is raising power bills. And also it is creating inflation across all consumer electronics because of the massive RAM.

• 42:15Steven Bartlett?

  Do you know what's interesting? I almost feel like so much of what you're saying is true. And also it can be true that this technology is gonna profoundly change the world. And I think like, you know, I think back to the early days of, the internet is maybe the closest analogy we have of, you know, in the dot com bubble. You know, you wrote this great essay.

• 42:36Speaker 00

  Ah, yes, yes.

• 42:37Steven Bartlett?

  Which I found really funny, especially the name, the rot economy. And you talked about the rot com bubble.

• 42:44Speaker 00

  Yes.

• 42:44Steven Bartlett?

  Talking about how AI is less value than people think. And in that, in this sort of dot com bubble, what you saw is huge hype, people overselling the capabilities of their websites and what they were building. But in the wake of the dot com bubble, yes, ninety percent of stuff went to zero. But you had generational companies born that changed the world.

• 43:07Speaker 00

  Right.

• 43:07Steven Bartlett?

  And so I, I do, I kind of, and that's what bubbles do, right? Huge hype, overinvestment, investors get crazy, delusional, they think it's, everything's gonna change. At the same time, you do have skeptics in these moments. The, the dot com bubble had, I mean, the internet itself had the biggest skeptics. In nineteen ninety eight, Nobel Prize winning economist Paul Krugman said, by two thousand and five or so, it will become clear that the internet's impact on the economy has been no greater than the fax machine. In nineteen ninety five, astrophysicist Clifford Stoll, famously, I wrote about this in my book, wrote famously in Newsweek. Do our computer pundits lack all common sense? The truth is, no online database will replace your daily newspaper. No CD ROM can take the place of a competent teacher.

• 43:53Steven Bartlett?

  Commerce and businesses will shift from offices in malls to networks and modems? Baloney. So how come my local mall does a roaring business and the cyber mall gets zero business? And then I'll give you one more from Krugman, who was the award winning economist. He said, the growth of the internet will slow drastically as it becomes apparent, most people have nothing to say to each other.

• 44:15Speaker 00

  That's, that, that, that may actually be the worst one of those predict, like the, hang around any bar in middle America, honestly, the best conversation.

• 44:23Steven Bartlett?

  But it's just all, it's just all the same thing.

• 44:25Speaker 00

  I actually, so Clifford Stoll, actually, his piece was interesting, cause that, there were some boner points in it. But he made points about how like, an overwhelming amount of bad information out there is bad for society, he's completely right. Saying how online education would not be a great replacement for regular education. I think we've seen that, but there is an economic difference that's vastly, it's just completely different. So, dot com bubble is actually two bubbles. There was the website bubble, which was just trash on trash and trash. It was just like, I think, what was it, Excite at Home bought a e-gear eating card company for like a billion dollars. It was insane crap happening. That was so small. The big thing that people are thinking about is the dark fibre.

• 45:04Steven Bartlett?

  Dark fibre.

• 45:05Speaker 00

  Dark fibre was all of the wires that are put in the ground, thinking, we're gonna have all this demand for internet. And it turned out that demand for internet, I think the analyst estimate was it was doubling every ninety days when it was doing that every six to twelve months, maybe, maybe longer. And just thus, there was a massive overbuild of fibre optic cable and indeed the transmission stations and such, just simplifying to bring that to people's houses. And there was the assumption that, well, that would all get lit up and people would want it immediately. Didn't really happen. Now, the post dot com bubble thing people say is, well, but after that, there was demand from the internet. That's the thing though, that's very different to demand for generative AI. Right now, the demand we have for generative AI is predominantly subsidised, just let's start there.

• 45:49Steven Bartlett?

  Yeah.

• 45:50Speaker 00

  Predominantly subsidised and most people experience it and yet are not paying the real cost.

• 45:54Steven Bartlett?

  I agree.

• 45:55Speaker 00

  On top of that, we already have all of the possible marketing in the world. We have the largest, most disingenuous marketing campaign in the history of man, pushing this up the hill. We have the apex predator of cloud software, Microsoft. They can only get single digit billions from selling AI software. And Christ almighty, outside of OpenAI and Anthropic, we barely get twenty two billion dollars. And the thing is, twenty two billion dollars is a large amount to you and me. It's not a large amount of money when you spend a trillion plus dollars, when you have Anthropic and OpenAI with one point one trillion dollars worth of cloud commitments. And on top of that, how does this turn into a post dot com bubble thing?

• 46:35Speaker 00

  A data center built today is gonna be as expensive to run in twenty fifty as it is today, unless there's some breakthrough in electricity. But again, that's not happening with AI. AI is not doing that. Unless there's some breakthrough in GPU technology, but we already have Broadcom, Nvidia etched. We have every major chip company, ARM, trying to do something about this. And no one seems to magically be able to make this profitable or indeed even less costly. Even Nvidia, with Vera Rubin, their more expensive new GPU system, even then they're like, yeah, ten X more efficient, it's a more dollars per megawatt. They're all coy about it. They don't just say, yeah, we worked with OpenAI and Anthropic and we found it reduced their cost by fifty percent. Easiest thing in the world if it was true. And that's because it's not happening.

• 47:20Speaker 00

  And this isn't a case where.

• 47:22Steven Bartlett?

  So you're saying there's not gonna be the demand for, let's say, let's, you know, there's different types of AI, generative AI.

• 47:29Speaker 00

  Yeah, and actually, that's a good point to make. The reason they use the term artificial intelligence is so everyone would lump everything into it. They would lump protein folding, nothing to do with L L Ms, robotics, not L L Ms. Autonomous weapons, even horrible as they are, not L L Ms, because you couldn't trust them. But they've mushed everything into AI so that when you say, well, AI can't, they'll go, um, um, sir, you forgot to get this homework and also AI, it's working on curing cancer. When it's just like, no, that's not L L Ms, stop giving them credit.

• 47:58Steven Bartlett?

  The similarity though is they all need GPUs, all these AIs.

• 48:01Speaker 00

  And that's the funny thing, all those data centers that we're building, all of them are for just generative AI. They're not for all of the other stuff. They're not for the cool shit. AI has been around for a long time. Google, a lot of the good stuff that comes out of Google from the search side is AI, but pre generative.

• 48:19Steven Bartlett?

  How would you run the, the type of AI that sits in a robot? Let's say one of the Optimus robots, if you didn't have a GPU.

• 48:27Speaker 00

  So Matic, Matic has this cleaning robot, for example. That thing is not got a little GPU in it. What it has, and may indeed have used some GPUs, but now a year as many as they need for generative AI, to run the data, feed training data into it, so it's able to clean a house. But when the little bugger's going around cleaning my floor, turdsly I call it, if it goes around mopping my floor, it's not like burning money the whole time. But when it comes to these massive amount of data centers, Saitlan Climate said in February, there's a hundred and ninety gigawatts of data centers under in planning, don't know about under construction. That works out if about twelve million megawatts, well, like one point six trillion to three trillion dollars a year in annual demand you'd need for that. We don't even have a hundred and thirty billion dollars worth of annual demand. And people say, well, it will grow. How?

• 49:12Speaker 00

  When most of the demand is coming from Amazon feeding money to OpenAI or Anthropic, Microsoft feeding money to OpenAI and Anthropic, Google feeding money to OpenAI and Anthro. Well, Google hasn't fed it to OpenAI yet, but they're a pretty big customer, billions of dollars. The con side is that we are building these effigies to capitalism, these giant GPU data centers. And people are being told, well, it's for AI. You know, the thing that's done all this other stuff that's unrelated, or the worst thing I've seen is like, oh, you don't like, you'd like online banking, well, you do like data centers. There's a big difference between a data center for regular non GPU compute, for standing up a server, a content delivery system like a Akamai or something that brings the website to you. Or how Meta runs Facebook.

• 49:55Speaker 00

  That is not the same, it takes way less power, mostly CPU driven, compared to these giant GPU data centers that are for one thing, one thing only.

• 50:03Steven Bartlett?

  But I was doing the research, looking at some of these notes here. It does say that for tougher types of AI, systems designed to solve concrete physics, biology and spatial problems, they require some of the most intense data center infrastructure on the planet.

• 50:16Speaker 00

  Yeah.

• 50:17Steven Bartlett?

  AI systems like DeepMind's AlphaFold, the protein folding company, used for genomic sequencing and climate forecasting, et cetera, run on high performance computing clusters. These require immense precision and continuous heavy computing data centers.

• 50:30Speaker 00

  Yeah.

• 50:31Steven Bartlett?

  Training the brains for self-driving cars requires billions of miles of simulated physics environments. The AI isn't generating text, it's learning to navigate three D spaces and gravity and relies on data centers.

• 50:44Speaker 00

  Right. And the thing is, those data centers, they might have GPUs in them. We had GPUs used for this HPC, the high performance computing, before generative AI. And yeah, that's how AI has been trained before. That's how Tesla did, I believe they've had their own data centers when it comes to training the autopilot system, for better or for worse. That's how we've done it before. Again, that is not why we're building these data centers. These data centers are being built to sell to AI, generative AI companies, to either train systems or run inference. These things are being built in this brainless way, where it's just, well, actually, maybe this is a good way of illustrating the con.

• 51:22Speaker 00

  Because everyone saw Google, Microsoft, Amazon and Meta give Nvidia over, call it eight hundred something billion dollars.

• 51:34Speaker 00

  Because everyone saw that, they went, well, they wouldn't do that for no reason. They went, we've gotta build more of these things, there must be all this demand, even though the demand, seventy percent or more of all that demand comes from these two companies, who are funded by these three companies. And that's the funny thing. The reason that they don't wanna break out their AI revenues is because it would become alarmingly obvious that this was the case. It turns out that the only real big customers, cause it's not like they're building a few data centers, they're building trillion plus revenue potential, they believe they'll get. Speculative, entirely speculative. They're building it because they saw the biggest companies in the world buy a bunch of GPUs and they said, I want in on that. They must have diverse customers, right?

• 52:16Speaker 00

  They wouldn't just have two unprofitable fail sons that they're propping up with, Christ, they've raised two hundred and seventeen billion dollars just in twenty twenty six.

• 52:26Steven Bartlett?

  So we know that some of the biggest companies in the world are using AI, generative AI, to write a lot of their code. That is a great productivity gain for those companies, right?

• 52:36Speaker 00

  I mean, have you used Google or Facebook or Instagram or GitHub recently? Because they are catastrophically worse. Amazon Web Services went down multiple times because of their AI coding tool.

• 52:47Steven Bartlett?

  How, how is, how is Google worse?

• 52:49Speaker 00

  Well, I'll tell the story of a real asshole, guy called Prabha Gargavan, previously one of the heads of ads at Google. In twenty nineteen, Google called something called a code yellow, which is when they said, we've got a problem. And it was material weakness in query numbers, which means the amount of times that people were searching on Google search. Guy called Ben Gomes, internal of Google, then the head of Google search says, wait a minute, to increase this number of using Google more. We're gonna have to, I mean, what you're suggesting would mean we'd give worse answers, because if someone got the answer quickly, that would reduce the amount of queries, right? And people at Google, Shashi Thakur was another engineer, was saying, yeah, can we please tell Sundar this? Because this doesn't seem good, we can't just increase the amount of queries.

• 53:32Speaker 00

  That would just mean that people would have to search more, which would make the product worse.

• 53:36Steven Bartlett?

  But, but it would make them more money, you're saying?

• 53:37Speaker 00

  Yes, because you'd show them more ads. So if you're spending more time on Google, cause Google's work.

• 53:42Steven Bartlett?

  But is this linked to AI doing code?

• 53:44Speaker 00

  Oh, I'll get there. So this is, the problem is, is that this guy called Prabha Gargavan, who was the head of ads at the time, was pushing, pushing and saying, no, we need to make more queries happen, gotta make it happen. Nick Fox, who was there as well, I believe he was actually taking over Google search, said, gotta make them go up, this is our new reality. Sometime in early twenty twenty, Prabha Gargavan takes over Google search. From then, and this is, this is what I believe, can't prove it. If you go and look around the various SEO sites, such as Journal and the various forums, Google stripped back a lot of the suppression of spammy sites, so that people would be on Google more. And then over the course of time, Google wanted to create more queries and Google search became much worse. It's why people always do like plus Reddit or from Reddit or what have you.

• 54:30Speaker 00

  It's because the actual underlying search results of Google had got worse. And then generative AI came along and Prabha Garg, wouldn't you know, it gets put to run part of Gemini. And Google also was having trouble getting people back on Google. And what did they think they'd do? Well, shit, everyone's talking about this AI thing, we'll just put it right at the top, so people have to stay at Google. And actually, they'll use it more because instead of searching websites and doing that annoying thing where they click away from Google, they'll just only use Google. Instead of generating answers, by which I mean, giving you search results you click through, now Google is the answer. Is it right? God, no, it might tell you to eat rocks, might eat poisonous mushrooms, maybe it'll give you a little, a few links you could click through. But the ideal situation was that AI was the ultimate form of Google's evil, which was.

• 55:15Steven Bartlett?

  But I'm saying here, I'm saying here, but that's not the fact that coders could code on Google, that's made Google worse, that's human decisions have made it worse.

• 55:22Speaker 00

  Yes, and then there's the instability of Google's platform, which is actually, I should have probably levered that, a problem across the whole tech industry.

• 55:29Steven Bartlett?

  Okay, so you're saying that, you're saying Google is going down more.

• 55:32Speaker 00

  Yes, Google is less stable, Google Docs is a bug fest right now and has been for a while, Google Sheets, same deal. And the thing is, you're right, I'm being a little unfair, this is everyone. It's the same with Microsoft, it's the same with Amazon, it's the same across.

• 55:45Steven Bartlett?

  How do we quantify that outside of anecdotes? Like, is there a way to?

• 55:48Speaker 00

  You're right, I mean, GitHub downtime is the best example. Amazon Web Services went down, I think, two or three times this year because of AI tools. And honestly, you're right, it is kinda hard to quantify outside of anecdotes. But I challenge anyone listening to this, go and use a website these days and tell me how well it works. Tell me how buggy it is, tell me how many problems, even with my iPhone, the supposed best UX in town, even the iPhone is a flipping mess these days.

• 56:15Steven Bartlett?

  Okay, so the research says, the short answer is yes. Tech downtime and software outages have demonstrably increased over the last few years and industry data points directly to the explosion of AI assisted coding as a primary culprit. The problem is hitting the tech industry from two entirely different directions. The code itself is getting buggier and the sheer volume of AI activity is literally crashing the underlying infrastructure. Interesting.

• 56:40Speaker 00

  Yeah, that's because GitHub, people are just writing a bunch of code, pushing it, and thus there's just more code on there.

• 56:48Steven Bartlett?

  That's interesting.

• 56:49Speaker 00

  Yeah, it's, it's a real mess as well, because open sources had this problem as well, because it's well meaning people. They're like, I'll learn a bit of code with an L L M, I'm gonna go out and do some stuff, I'm gonna make this project better. And these people barely understand what they're shipping. Or maybe they understand a bit of code and they say, oh, Dunning Kruger, this motherfucker, I'm gonna, I'm just like, I can understand some of this. And now the code's all written and it just push it right now. So GitHub is flooded with AI code.

• 57:13Steven Bartlett?

  This sounds like it's making humans complacent.

• 57:16Speaker 00

  It is.

• 57:17Steven Bartlett?

  Because we're going, okay, look, I let it write the, the code for the last hundred lines and it was broadly right, so the next hundred lines, I won't check them as much.

• 57:25Speaker 00

  Yeah, yeah, yeah.

• 57:26Steven Bartlett?

  And that's human nature, is to get sort of, to take shortcuts, to spend less energy on an activity if you can.

• 57:33Speaker 00

  Right, but the AI is still making the mistake and we're still making all the promises of AI, that's the thing. This thing is meant to be this autonomous, you say it can't be perfect, I don't know. Based on what Sam Altman has been saying for the last few years, Clammy Sammy's been promising the world, saying this will replace software engineers. Dario Amade, Wario himself has been saying, oh yeah, fifty percent of white collar labor is gonna go away in the next few years. These people are promising the world, again, if they were saying it would be smaller and they were like, yeah, it does have issues and we must be, none of this, oh, what if it wakes up and it's super powerful? Just like, yeah, it's probabilistic, it's gonna make mistakes.

• 58:12Speaker 00

  And if you don't know what you're doing, you don't really know what you're looking at, you're gonna miss those mistakes and it's gonna get multiplicatively worse as you go, when you don't know what you're doing. So yeah, human nature is part of it. But so is the marketing, so are the promises.

• 58:27Steven Bartlett?

  One of the smartest things a business can do is build like a bigger company without actually hiring like one. But the problem we all face is that most companies don't have every skill in house. So when I look at the businesses seeing real success today, the consistent pattern with all of them is how quickly they move. They bring in specialists with skills in emerging areas to keep themselves ahead. Even in our company, we spent the last year pulling in talent across areas like AI native strategy, no code builds and product workflows. And we find this talent for our long time partner, Fiverr Pro. Their premium service only shows you vetted talent. So you've always got the safeguard that anyone you pull in to help you with a complex project has the skills that you're after and will deliver to the same high standards as your internal team.

• 59:12Steven Bartlett?

  And most importantly, they'll keep up with the pace. It's a simple strategy, but it lets us stay agile without compromising on quality. So if you need these kind of skills in your business, head to pro.fiverr.com to find pioneering talent to fill your business's gaps. That's pro.fiverr.com. You know, the little traditional SIM card that goes inside of our phones? They haven't changed at all since they were invented in the nineties. You have this physical piece of plastic that means you're locked into one carrier, one network. And the second you cross a border, that carrier can start charging you whatever they want. But there are alternatives and today's sponsor, Salee is one of them. It's an eSIM app that gives you a safe and secure data connection in over 200 destinations.

• 59:55Steven Bartlett?

  All of their eSIMs have built in cybersecurity, which is great if you're traveling for work and looking at confidential material. I've been using Salee whenever I travel because the connection is always reliable and it saves me a ton of roaming fees. It also means I don't have to deal with all of the faff that surrounds sorting out a SIM everywhere I go. If you want to give it a try, download the Salee app from the app store now and scan the QR code on screen. And if you want 15% off your first purchase, use my code DOAC when you get to checkout. That's DOAC for 15% off. Keep that to yourself. My, my car that drives itself, that is AI technology.

• 1:00:34Speaker 00

  Yes.

• 1:00:34Steven Bartlett?

  I sat here with Dara from Uber and he was saying that I think in a couple of years' time, we won't need drivers for Uber because the cars will drive themselves, like they'll be fully autonomous. And I think if I'm not mistaken, driving is one of the biggest professions on planet earth. So when you hear people, when you hear these CEOs saying that there will be job disruption, you say that they are not telling the truth.

• 1:01:01Speaker 00

  Yes, or they're guessing in a way that's very good for them. Think about it from perspective of Microsoft, Satya Nadella. He's not going to be like, yeah, we don't know if this is going to work, mate. Of course, he's going to talk his book and he's going to say, yeah, this is going to replace all workers. It's going to be amazing. It's going to be so powerful. And then he'll change his tune and say, actually, it's not going to replace workers, it'll make them more powerful because the things aren't catching up. Dara from Uber, for example, of course, he's going to say, if this happens, then that would be good for Uber because Uber would just become an autonomous taxi service. There's a reason that Waymo has taken, I, I find Waymo fascinating. I think that shit's really cool. I think there are socioeconomic problems that will come from it. I think there are actual real problems that will emerge and also.

• 1:01:42Steven Bartlett?

  What kind of problems?

• 1:01:43Speaker 00

  Well, I mean, socioeconomically, they're, like you said, one of the largest employment centers in the world. I mean, just the economics of cabs before part, but again, we are nowhere, nowhere, nowhere near that. We're not even close. Waymo has had to do the smallest rollouts and the most controlled things because the problem with pretty much every AI system, but especially driving, is not the getting 95% of the way. It's those edge cases, it's raining, which is a big problem for them in San Francisco. It's a kid runs across the road, but they're wearing a high vis thing. Does it even notice it's a child?

• 1:02:13Steven Bartlett?

  Again, this is a really interesting, but very, very applicable example of the right comparison to be made shouldn't be autonomous vehicles versus perfection. It should be autonomous vehicles versus human drivers.

• 1:02:25Speaker 00

  I mean, I don't know if I agree because the human driver might make mistakes, sure, but again, not an expert in autonomous cars, just want to be clear. But if we're pushing autonomous cars out there, willy nilly, and we're not doing so in extremely controlled environments, those edge cases will multiply and be dangerous. Yeah, they might be better at human drivers in some ways, but they might also, I was in Vegas the other day and I was in a hotel and I watched a bunch of Zoop's cars just get fucking stuck.

• 1:02:50Steven Bartlett?

  They're autonomous cars.

• 1:02:51Speaker 00

  Yeah, yeah, they're these weird boxy things and they just blocked the exit. They just all kind of lined up and just fell asleep. I saw the same thing actually happen outside of a hotel when I got out of a Waymo in San Francisco, just stopped at the and then a bunch of cars and another Waymo got stuck behind it. And these are kind of, these are.

• 1:03:07Steven Bartlett?

  I've seen some human bad drivers as well.

• 1:03:09Speaker 00

  I, I agree, but it's just we have control over deploying these bad or good drivers. We have an ability to roll them out slowly, which is exactly what we should do. I'm not saying autonomous cars are bad. I'm saying we need to be so, so, so careful and treat them as guilty until proven innocent. Because we can prove, and also they have people overlooking them, they actually have people monitoring the routes. It is something they cannot rush out and it doesn't seem like they're rushing it, which is good and they're not promising the world.

• 1:03:38Steven Bartlett?

  I do agree. Listen, I, I'm a big fan of, a big fan of taxi drivers generally in part because I spend a lot of time in taxis and I think I'm not just getting in there because I want to get from A to B, I'm getting in there for lots of other reasons.

• 1:03:48Speaker 00

  Yeah.

• 1:03:48Steven Bartlett?

  However, when I look at the stats around what is more dangerous, driving myself or having an autonomous vehicle drive me, there's a 68% lower overall crash involvement rate when you're in an autonomous vehicle. Autonomous vehicles experience roughly 2.1 police reported crashes per million miles compared to humans that are at roughly 4.68 per million miles, so a 55% reduction when you get in an autonomous vehicle. And autonomous vehicles show an 80 to 81% reduction in crashes resulting in injuries versus human drivers. So you're 85% less likely to be involved in a single vehicle crash, like hitting a wall or a tree.

• 1:04:28Speaker 00

  Right.

• 1:04:28Steven Bartlett?

  If you're an autonomous vehicle versus being driven by.

• 1:04:32Speaker 00

  I, I agree, but.

• 1:04:33Steven Bartlett?

  So it's safer.

• 1:04:35Speaker 00

  In, also that data is, what's the sample size of human drivers? I mean, we've got many, many, many, many, many, many more years of drivers and many, many, many more years of accidents. And also, man, does that not have anything to do with generative AI? If, if we were just talking about that, we're having a different conversation.

• 1:04:52Steven Bartlett?

  I guess the question here was really around job disruption, like, you know, we, we look across industries and we go, driving is a massive profession. Is there going to be job disruption because cars can now drive themselves? If we think about white collar, you know, jobs, you know, lawyers and accountants, people sit here and they tell me that lawyers and accountants, the profession, right? I should say some of the skills within the profession will be relegated to AIs to do.

• 1:05:15Speaker 00

  Here's the thing, lawyers, for example, great example, always hearing fucking legal partners talking about AI. Never the associates, the associates are the ones that go out and find the president. They're the ones that go and do the grunt work. They're the ones who would pull emotions half the time. The partner is the one that might be the litigant, it may be the client facing, but the ones that are actually doing the day to day work, I'm not hearing from them. I'm not hearing associates being like, this is fucking awesome. I'm hearing a bunch of well-paid people that have sat on chat GPT and gone, yeah, you know, I'm the greatest lawyer ever. They're not the ones that I want to hear from, the actual workers. White collar labor disruption is not happening. OpenAI had a study that came out, I think like a week ago, that said there was no connection between spending on AI tokens and revenue per employee.

• 1:06:00Speaker 00

  Like this is open and that's the thing.

• 1:06:01Steven Bartlett?

  What does that mean? Could you explain that to me?

• 1:06:02Speaker 00

  As in, the more tokens you spend has no, no correlation at all with the amount of money you make. So the second report they've put out, the other one was like hallucinations and mathematically guaranteed. Kind of almost is the one thing I respect about that company, occasionally use per hour, a study, it's like, yeah, shit, it kind of sucks. But the people that are having their lives disrupted work wise are art directors. It's people, art directors, transcribers, translators, who have bosses that don't care about the output. It's what they consider cheap work. And the problem is, is those people would have automated your work away anyway. They would have sold it, they would have taken the cheapest offer, they would have sold it to the global self, they would have taken the shittiest option they could.

• 1:06:43Speaker 00

  That is something that AI is doing. And again, those people are not paying the actual cost of AI, they're using a subscription. The actual white collar labor force might have some things that are slightly changing, but there is no evidence of like productivity gains. In fact, if there were, they would be screaming it from the rooftops. There was an Oxford economics study last year where it's like, oh, young people are finding less jobs because of AI. We actually read the study, which multiple journalists did not. It was a single line that said, yeah, we saw some correlation. Didn't give a number, didn't actually say what the correlation was. We are so conditioned to believe that the rich and powerful know what they're doing

• 1:07:24Speaker 00

  that we internalize these narratives about like, well, previous booms lost a lot of money. Well, technology takes time to do stuff. And they are intentionally playing on those mythologies. They are playing on these knowing that journalists, analysts, investors will believe them. And this is partly because our realities are defined by stock prices. Because the stock prices of these companies went up, we're like, oh, look, it must be working, right?

• 1:07:49Steven Bartlett?

  Both of those things you said were true though, right? Like that previous technologies didn't make money at the start and the other one you said was, um, they'll get better.

• 1:07:57Speaker 00

  But that's the thing, okay, because another thing got better, this will get better.

• 1:08:01Steven Bartlett?

  No, but there's, there's got to be something that they're saying that is fundamentally not true. Because those are two true statements that, okay, technology often starts.

• 1:08:08Speaker 00

  I know, I get what you mean.

• 1:08:09Steven Bartlett?

  Yeah.

• 1:08:09Speaker 00

  What they are fundamentally misleading people about is how possible it is and how many actual signs they have. Because they don't have the signs, if they had the signs, as in the signs of this getting cheaper. As in the signs of this being able to autonomously do work without the Rub Goldberg machine. And even then, in a reliable way that was making the customer more money. Being productive in a way you can say with your whole chest without a series of asterisks. And that's how it is across the board. The people that are most excited about this, psychopaths on Twitter in many cases, are people that I believe. They really are some, I'm sorry, there are some people on Twitter, because the other thing about this is, this is really unique to the AI industry. I've never seen it any other industry outside of maybe like sports teams.

• 1:08:53Speaker 00

  The attachment that some people online have to these companies, if you dare, dare to criticize Anthropic. It's almost this religious attachment. Good example was this week Bloomberg reported that OpenAI was on track to hit $40 billion in annualized revenue. Month times 12, four weeks times 13, we don't know, they don't define it. I saw multiple people online going, actually, it's 60 billion. It's actually 60 billion I heard from someone. It is like a cult and it's a cult of software driven around growth. And this idea that by backing the right horse, you will have some grand thing. And OpenAI in particular, in particular, Mr. Altman, they have been fermenting this.

• 1:09:35Speaker 00

  They're Tibo as well, the T I B O, the, one of the guys at OpenAI, they ferment this thing online. They build this kind of parasocial relationship with both the large language model themselves and the companies. And one's allegiance to the companies is so important. It's truly vile. If only these people gave a fuck about, I don't know, Medicare for all or poverty or thing, like actual problems in the world versus, are we buying enough GPUs?

• 1:10:02Steven Bartlett?

  Do you know what's interesting is some of what your narrative, one would argue, actually helps them.

• 1:10:09Speaker 00

  How?

• 1:10:09Steven Bartlett?

  Because, you know, the AI doomers that have come here and told, you know, some of the original founding fathers of AI like Geoffrey Hinton have told me that what they're building is highly, highly dangerous and that it will be fundamentally disruptive to society. And it's interesting because some of the CEOs who you've mentioned, their historical narrative was also, by the way, this is really fucking dangerous.

• 1:10:29Speaker 00

  Yeah.

• 1:10:30Steven Bartlett?

  And there is a significant chance it could, we could fuck up the planet. And what we've seen is this slow pivot away from it.

• 1:10:36Speaker 00

  Which is so strange.

• 1:10:37Steven Bartlett?

  Now they're getting booed and they're being attacked.

• 1:10:38Speaker 00

  Yeah.

• 1:10:39Steven Bartlett?

  They've been this slow pivot away from it and the pivot almost sounds a little bit like your narrative. It now sounds like, actually, no, it's not going to change anything and you're all going to be fine. And it's now, it's just not, it's not, it's not dangerous at all.

• 1:10:51Speaker 00

  But that's the funny thing.

• 1:10:53Steven Bartlett?

  And that's why I'm saying like, you're, you're not, they, I actually think there might be a couple of PR people at these big AI companies thinking, thank God for Ed.

• 1:11:00Speaker 00

  Oh, I don't know about that.

• 1:11:02Steven Bartlett?

  Some of it, because you're like, you're saying, actually, don't worry, everything's going to be fine. It's not going to take your job, it's not going to disrupt the economy, it's just a fad, there's no technology. And I think they don't think that.

• 1:11:11Speaker 00

  Here's the thing, I think Altman and Amadeus are some of the most deeply corrupt and cynical people in the world. I don't, of course, they were going to say, from the, it was early 2023. Altman said, we're a little bit scared about what we're creating. Oh, shut up. I'm just, I hear that and I feel so frustrated because I've met so many of these rich fucking liars, these people. And you know why he wants to say that? So you'll invest in his company and buy the software. So you'll be scared that if you don't use AI today, you'll be left behind in the future, which is their continual narrative. That if you don't get on the train today, then you'll be left behind. By the way, every single scam and con starts with rushing you. Every single trick in history begins with saying, you must do this now. And best piece of advice I ever got was if anyone tries to rush you

• 1:11:56Speaker 00

  and it's not literally a mortal thing, like you are bleeding or on fire or the house is on fire, slow down. And yet all of these companies saying, so scary. And now they're talking about slowdowns, but you ever notice that Amadei and Altman, they say, oh, maybe we should slow down progress and then they don't? Right now, Altman's saying, oh, we slowed down progress because we're so delayed. Now they're out of compute. Now they're doing it. But I can guarantee you, by the way, their PR people do not like me. I know for, I know, I don't think OpenAI's PR people are super fond of me.

• 1:12:23Steven Bartlett?

  But I've been, there's elements of what you're saying, because you're calming people, you, you are theoretically calming down the general public.

• 1:12:28Speaker 00

  And you know what? I hope I am because the fear-based tactics is horrible. These companies don't want that. These companies want people scared. I'm 100% sure.

• 1:12:38Speaker 00

  I don't, I just fundamentally disagree. I think it.

• 1:12:40Steven Bartlett?

  Can I, so the timelines, and I sit here and what I do is I log their quotes over time. And I read them out from 2015.

• 1:12:47Speaker 00

  Yeah.

• 1:12:48Steven Bartlett?

  To 2026. And the change you see is them going from, there could be extinction. That's the narrative, the early narrative. Elon said it himself. He says it's the single most dangerous thing in the.

• 1:12:58Speaker 00

  Elon says a lot of things.

• 1:12:59Steven Bartlett?

  And then you track it over time and it evolves to this age of abundance. We're all going to have unlimited stuff. And then, um, the, the, the new slogan at chat GPT is intelligence for everyone. It's suddenly, and all the, and, and whenever Dario comes out and says, by the way, it's really fucking dangerous, they attack Dario.

• 1:13:16Speaker 00

  Yeah, that's.

• 1:13:17Steven Bartlett?

  They hate him.

• 1:13:18Speaker 00

  That man, Dario is.

• 1:13:19Steven Bartlett?

  They're like, Dario, shut the fuck up.

• 1:13:21Speaker 00

  Honestly, I, I've been saying, Dario, shut the fuck up for years, but it's, but the thing is, I get your point where it's like, I don't think they've changed to calm the public down so much as they're desperate to not get regulated, which is laughable. We don't regulate tech. We don't regulate shit. America doesn't regulate shit. We are in the, we are still trapped in the hands of Milton Friedman, Margaret Thatcher and fucking Ronald Reagan. We're still stuck in the neoliberalistic hellscape, which is growth at all costs, free market capitalism. So no, no one's regulating, the regulation of these companies should have been, I don't know, breaking up. Put these bastards aside, break out these fuckers for sure. We shouldn't have companies this big. It makes things worse.

• 1:14:02Steven Bartlett?

  But these technologies are dangerous.

• 1:14:04Speaker 00

  I mean, they're dangerous, but not in the ways they've been warning about.

• 1:14:07Steven Bartlett?

  Less if we think about cyber hacking.

• 1:14:09Speaker 00

  Right. And just be clear, those cyber hacking things that happened were not a result of, they were like, break out of the sandbox and then they set the sandbox up. Wrong. They set up the servers they were on wrong.

• 1:14:20Steven Bartlett?

  But I mean, you know, advanced AI models could very easily, because they can go out onto the open internet as agents, they could very easily go and look at code bases of different websites, find vulnerabilities and exploit those vulnerabilities.

• 1:14:32Speaker 00

  Yeah.

• 1:14:32Steven Bartlett?

  In at scale and arguably at a higher intelligence and faster and wider than humans, a human hacker could theoretically. So that's dangerous.

• 1:14:42Speaker 00

  Well, here's the funny thing. We don't know how much compute was spent to do the hugging face attack, the OpenAI one. We also do know that they improperly set up the server to keep it. They thought they'd turn the internet off and they didn't. That's human error and that's human error in a sense that, yeah, they threw about an indeterminately large amount of compute. This is dangerous, but people keep saying, we can't let the, the Chinese get a hold of these models. We couldn't possibly, because what if these models fall into the wrong hands? They're already in the wrong hands. Mark Zuckerberg, Sam Altman, Dario Amadei. The wrong hands are the hands of those who are running these companies. We should not be training these models to do these things. I don't know why the fuck we're doing it, other than they've run out of other things they can train on.

• 1:15:26Speaker 00

  There's a ton. And the fact that they can do it, it's kind of interesting.

• 1:15:29Steven Bartlett?

  But you do, would you agree that it's an intelligence? And I'll call it that, you know, you might disagree with that terminology, but an intelligence that can go out onto the internet and click around and take actions is inherently, there's risks associated with that.

• 1:15:45Speaker 00

  Well, the second part I agree with, the risks. We've had people running automated scripts, hacking scripts for a while. We've had hackers doing that for years and years and years. This is brute forcing it with a bunch of compute and yet it is dangerous. These companies are doing something dangerous. That is not what Geoffrey Hinton et al have been warning about. They've been saying, oh, these things could destroy society, they can manipulate people. When you actually look at the underlying things, not so much. Geoffrey Hinton as well, talking his book, still got his Google stock, I think. And weirdly enough, he left Google because he was worried about the AI there, but then immediately made a comment being like, yeah, actually though, Google's very responsible. Strange thing that. But let's get back to the, the cybersecurity side. I agree, this is dangerous. These people should not have access to so much compute. They clearly don't know what to do with it.

• 1:16:29Speaker 00

  There's a really easy way of dealing with this. It's not letting them use so much compute, it's regulating that part out of existence. What if the Chinese do it? The Chinese were able to distill the models. And also, I don't know, regulate it and stop, I, I feel like with this particular thing as well. We got to this point and let the genie out of the bottle, to use an annoying Sam Altman term. We let this happen because we let these companies be unregulated and use as much computers we want. We had these fucking enablers allow them to burn as much computers they want. And also, we, for all of these dire warnings about AI dangers, no one seems to have fucking done anything.

• 1:17:08Steven Bartlett?

  Okay, we're going to play a game, Ed.

• 1:17:09Speaker 00

  Let's play it.

• 1:17:09Steven Bartlett?

  On these cards here, I have the things that you consider to be myths about the AI industry. The challenge is I want you to give me one sentence.

• 1:17:20Speaker 00

  Fuck.

• 1:17:21Steven Bartlett?

  On each myth.

• 1:17:22Speaker 00

  Oh, Christ.

• 1:17:23Steven Bartlett?

  So just your first reaction, you're going to pick it up, you're going to read it and then you're going to give me one sentence on your opinion of that, um, belief.

• 1:17:30Speaker 00

  Okay, let's go.

• 1:17:30Steven Bartlett?

  So.

• 1:17:31Speaker 00

  Let's do this.

• 1:17:36Steven Bartlett?

  What does it say? And what's your one sentence?

• 1:17:38Speaker 00

  It says the AI industry is creating enormous economic growth. No, it's not. It's nowhere in the data.

• 1:17:45Steven Bartlett?

  Okay.

• 1:17:45Speaker 00

  Like, it's just, may I do a second sentence?

• 1:17:48Steven Bartlett?

  Go ahead.

• 1:17:49Speaker 00

  Pretty much all of the economics is either Nvidia feeding money to its companies like Core Wave, or these three companies feeding money to these ones to spend it with them.

• 1:17:58Steven Bartlett?

  Okay. And what evidence do you have that it's not causing economic growth?

• 1:18:03Speaker 00

  Just to be clear, other than the spend on semiconductors, so the speculative investment in GPUs and data center infrastructure, that's happening. But as far as like, spend on AI goes, barely cracking a hundred billion dollars, and most of that is just these two running their services and paying these three companies, Oracle, Core Wave and others.

• 1:18:21Steven Bartlett?

  But a hundred billion dollars is a lot of money for a relatively new technology.

• 1:18:25Speaker 00

  Not when you've spent three hundred billion dollars in equity funding and if we're going with just these three, I think six hundred billion dollars in capital expenditures.

• 1:18:33Steven Bartlett?

  Yeah, I get that. That means it's not profitable, but the hundred billion is an expression of consumer demand.

• 1:18:38Speaker 00

  When the compute is mostly driven by subscriptions that are subsidized, no, it's not. When you're giving someone twenty dollars or forty dollars for a dollar, they are going to use it more. If this was all on a per million token basis, we'd be having a different conversation.

• 1:18:50Steven Bartlett?

  Okay, fine, cool. Next one.

• 1:18:53Speaker 00

  The United States need to spend trillions to beat China in the AI race.

• 1:18:59Speaker 00

  Let's see. What AI race? That's actually, that's actually my point. It's what AI race is there? Is it to make big scary LLMs? They did that already. Without the Nvidia GPUs, by the way, they've got Blackwell GPUs, Kakashi and Justario, two amazing analysts I love, they've been on this for years. It's like, China's already had Nvidia GPUs that they're not meant to have for years. But also, to do what? They already got the LLMs. What's the race to do? To make us spend more money than them? For us to constantly piss our pants worrying about China? Because they won, if that's the case.

• 1:19:33Steven Bartlett?

  Myth number three.

• 1:19:34Speaker 00

  AI will replace all human jobs. That just isn't happening. There's no economic data to support it.

• 1:19:42Steven Bartlett?

  Will it replace some jobs?

• 1:19:44Speaker 00

  I mean, it's replaced some contract labor that would otherwise be replaced with cheap labor out in the global south. It's a digital globalization in that sense, but all jobs, most jobs, a lot of jobs, no.

• 1:19:56Steven Bartlett?

  What about robotics?

• 1:19:57Speaker 00

  Robotics is not what we're talking about. Robotics is a very different thing. And even then-

• 1:20:01Steven Bartlett?

  Robotics will be powered by AI.

• 1:20:03Speaker 00

  I mean, yes, but there are tons of different kinds of AI. We're talking explicitly about generative AI. And that's what, this is from my Mythbusters piece, that was definitely about generative AI.

• 1:20:11Steven Bartlett?

  Okay, but what about robotics? Like-

• 1:20:12Speaker 00

  The thing is-

• 1:20:13Steven Bartlett?

  The Optimus robot that Elon's working on at Tesla?

• 1:20:16Speaker 00

  The one where even in the demo of the hand, he did like, they had to have a guy controlling it, wasn't doing it autonomously. Here's the thing, if they can beat all these challenges, yeah, robotics would be really cool. I don't know how long that's, that's one I'd actually be willing to believe in a couple decades.

• 1:20:33Steven Bartlett?

  Have you seen them Chinese robots? I know you've seen them Chinese robots.

• 1:20:36Speaker 00

  What's it called? The one that can dance and that, but they can't really do human things?

• 1:20:41Steven Bartlett?

  Well, it's just, it is pretty mind blowing.

• 1:20:43Speaker 00

  Robotics are fucking cool. I like, I'm not going to pretend I don't think robots are cool. I wish they were building robots and actually doing cool shit. I wish the tech industry still made fun stuff and interesting stuff, instead we get these fucking large language models.

• 1:20:56Steven Bartlett?

  But AI plus robotics is, you know, I was in San Francisco and I went to this massive incubator there. And when I'd gone there three years earlier, it was all software startups.

• 1:21:06Speaker 00

  Right.

• 1:21:06Steven Bartlett?

  And when I went back three years later, it was all these robot startups. And I remember saying to the founder of the incubator, I was like, why is everything robots now? There was this one robot where it was just the arm and it had a frying pan on it.

• 1:21:17Speaker 00

  Yeah.

• 1:21:17Steven Bartlett?

  And its whole thing is it cooks for you.

• 1:21:19Speaker 00

  Yeah.

• 1:21:19Steven Bartlett?

  So it was showing me it cooking, whatever. And he goes, well, you know the arm? He goes, the hardware part, the physical parts, that's always been fairly cheap.

• 1:21:28Speaker 00

  Yeah.

• 1:21:28Steven Bartlett?

  He goes, the expensive part was the intelligence.

• 1:21:30Speaker 00

  Yeah.

• 1:21:31Steven Bartlett?

  And now that's come down to pennies. So what you're seeing is this explosion in the robotics industry, because robotics is a function of intelligence plus hardware. We've always had the-

• 1:21:38Speaker 00

  And a ton of data though, as well. And the data is very expensive.

• 1:21:42Steven Bartlett?

  Yeah.

• 1:21:42Speaker 00

  The thing is, Cybercabs rolled out real slow. It's gonna take a long time. It could be a threat. If they do a robot that could replace a human job, sure it could. But that, human jobs are multifaceted. Human jobs change with environments. And also, a lot of human jobs that you might think of like, I don't know, dishwashing robot, for example.

• 1:22:01Steven Bartlett?

  Yeah.

• 1:22:02Speaker 00

  Some guy at a restaurant isn't paying ten, twenty grand for a robot to replace the job that they're already not paying enough for. The point is, yeah, it could, if you can replace the jobs. That is not what we're talking about with this.

• 1:22:14Steven Bartlett?

  Yeah, I just, I ask these questions, not because I'm trying to be like, I actually I'm trying to form my own opinion on these things. And I, I do think, you know, as it's written there, it says AI will replace all human jobs. Obviously not. Obviously that's bullshit. But I'm trying to figure out if the truth is somewhere in the middle, that there's a certain type of job, which actually humans probably shouldn't have ever been doing, really. If you think back through history, there was someone's job just to sit in an elevator and press the buttons.

• 1:22:42Speaker 00

  Right.

• 1:22:42Steven Bartlett?

  That's an example of a job that humans probably shouldn't have been doing. And as technology gets more advanced, it takes on a lot of that sort of automated monotonous stuff.

• 1:22:51Speaker 00

  Right. The thing is, with this particular thing that I know that this is from, it's a specific blog I wrote, I was explicitly talking about generative AI though. I was explicitly talking about people, when they say this, they are referring to that.

• 1:23:03Steven Bartlett?

  So you're not talking about agentic AI, which-

• 1:23:04Speaker 00

  Agentic AI is LLMs. Agentic AI is just a fancy way of saying an LLM talking to another LLM with a harness on top. That is still LLMs. Agentic AI is one of the bigger lies they tell. It's like, when you hear agent, you're meant to think autonomous AI can do what you want. It's still LLMs. It's still LLMs talking to other LLMs to do LLMs.

• 1:23:22Steven Bartlett?

  Taking screenshots and putting them in LLMs and stuff.

• 1:23:24Speaker 00

  Oh god, yeah.

• 1:23:25Steven Bartlett?

  Okay, but, but you know, I could, I could make the case that, I'm just thinking about my personal usage. I definitely use agents to do things that I would have previously asked people to do. It's not to say that I didn't, I still don't hire, because hiring is crazy.

• 1:23:38Speaker 00

  Yeah.

• 1:23:38Steven Bartlett?

  And I still, in that particular function, I'm thinking about like, the chief of staff role. So my chief of staff would have triaged all of my inboxes previously and put them somewhere and told me about them, or maybe once upon a time, shown me a piece of paper back in the day, I guess. Now my chief of staff is no longer doing that job.

• 1:23:54Speaker 00

  You still have a chief of staff, though.

• 1:23:56Steven Bartlett?

  This is what I'm saying, they're doing other things.

• 1:23:58Speaker 00

  Right. But the thing is, again, what you were describing is fairly basic automation. I don't know what the tasks are, triage of emails. Didn't spend a trillion dollars on triaging email. Like, that's the promise, if they'd spent ten billion dollars and this was much smaller and you're like, I go, cool, software, yay. A lot of the things that people are impressed with, like script stuff as well, it's just LLMs doing Python. You should be impressed by Python code. Python's incredible. You can scrape websites, you can download shit, it's awesome. But the point I'm making is, none of this would be anywhere near as much of a problem if they didn't ask for all of the attention, all of the money and promise the world. It's their promises that are the problem, and the journalists who went along with it, and the analysts and the Twitter people, who went along with this, saying that this would change everything and replace everything, and leaving the realm of reality.

• 1:24:43Steven Bartlett?

  Is there any technological innovation through history that was really, really game changing, where that didn't happen?

• 1:24:50Speaker 00

  I mean, the internet-

• 1:24:53Steven Bartlett?

  I mean, people overpromised that.

• 1:24:55Speaker 00

  I mean, they overpromised on the businesses, but I've read through a great many pieces about the early internet. A lot of people were excited but hesitant. They were worried that there was not enough demand. But they were still like, oh yeah, this could have potential ramifications if it happened. People were not super negative about the internet. A lot of the skeptics were saying, we're worried about an overload of bad information. Look at where we are. A lot of people were worried about the social consequences of everyone talking online, which they were correct about. With the economic things, they were specifically talking about like, The Globe, which I think made hundreds of thousands of dollars and had like, I think a billion dollar market cap. They were talking-

• 1:25:33Steven Bartlett?

  Yeah, there was massive hype in the dot com era.

• 1:25:36Speaker 00

  I read a lot of those stories, the hype was nowhere near. You didn't have articles everywhere that were saying, if you don't get online, you'll be left behind. You didn't have professional consequences. Nick Suresh mentioned his blog earlier. He described this thing, global, AI is a vistorate in global decision making, where he said that you have businesses you work at, where if you don't say that you're more productive with AI, whether or not it's true is irrelevant, you have professional consequences, you can get fired. There are people having to AI wash their jobs by saying AI did it. Otherwise, their bosses, who don't do shit, will get mad at them. This did not happen with the internet. It was not present. And part of the thing is, social media was not like it is today.

• 1:26:17Speaker 00

  The kind of, was it decentralization of media in general has caused this as well? And also the fact of day trading, there's so many different things that are different, it's crazy.

• 1:26:27Steven Bartlett?

  I do think AI is different from the internet, in part if you just measured it on the speed of adoption. Especially if we could just think about generative AI, I know AI is lots of things.

• 1:26:36Speaker 00

  But the adoption of the internet required physical connections to your house. The adoption of generative AI involves having a web browser. It took a vast amount of effort to bring internet to people. Even with dial-up connections, it still required the distribution.

• 1:26:49Steven Bartlett?

  And that's why it was so slow and there was less, you know, there was less hype than AI. I do agree that there's way more hype. And we are, again, going back to this point, that we're clustering AI in this big category of lots of different things.

• 1:27:01Speaker 00

  It was generative AI.

• 1:27:02Steven Bartlett?

  There's generative AI, there's like, real world AI.

• 1:27:04Speaker 00

  But generative AI is explicitly what I'm talking about here. When bosses are saying you need to use AI, they're not saying, I need you to go and buy a Unibeam robot. They're saying, use LLMs so that I, and that's the thing, they have this theory, the era of the business idiot, where it's like, we are ruled by people that don't do work. Because nobody who actually does a bunch of work, who really is productive, is harassing someone who works for them for not being productive enough. They're not, they don't have the time, they're doing work. Someone who is sitting there with the ingratiation machine, that's telling them that every beautiful idea out of their messy little skull is amazing, yeah, they're going, damn, this thing says I'm a genius. Why are you not using the genius machine to do more work? And yeah, if you're a boss that goes to lunch, leaves lunch and sometimes reads your emails, LLMs are magic.

• 1:27:46Steven Bartlett?

  I, do you know, one of the most compelling arguments I have for the overhype of AI? In a world where everybody has access to these tools, whatever the tools can do would largely be commoditized. And what the tools can't do, which one could say is the human taste judgment, you could say it's people's skills, whatever you want to say, is now going to be the valuable thing. Because the scarce and the hard becomes the most valuable through history. And the commoditized becomes the least valuable. So the very nature that we're commoditizing the generation of content, or whatever you want to call it code, means that's actually not where the value will accrue for the user. And actually, if you think about what it takes to now make something that is objectively

• 1:28:30Steven Bartlett?

  great, if an AI can do it, then it's not, the great thing is not of value.

• 1:28:37Speaker 00

  Right.

• 1:28:37Steven Bartlett?

  So I think a lot, I've been thinking a lot actually about how, how do you avoid the temptation of sloppification of the things you make, the value you put into the world? It's a very simple example that people will be able to relate to. If you use ChatGPT or Anthropic, you know, Claude, to make your LinkedIn posts, let's say, they will be shit LinkedIn posts, because everybody else is using them. And actually, a great LinkedIn post now is someone who doesn't use them and makes something that's like irreplaceably human.

• 1:29:05Speaker 00

  Right.

• 1:29:05Steven Bartlett?

  And deeper and more personal, N of one, lived experience.

• 1:29:11Speaker 00

  Yeah.

• 1:29:12Steven Bartlett?

  All these things that AI can't do. And I think that's a compelling argument, that actually, the commodity tools produce commodity outcomes.

• 1:29:19Speaker 00

  So everyone has access to these things and what's changed? Like, really, like what?

• 1:29:22Steven Bartlett?

  The sloppification of stuff.

• 1:29:23Speaker 00

  We've, we've got a bunch of slop, but these people were half-assing their jobs before. It's just a half-assery machine. And it's just, it's, it's the thing, it's what I'm talking about with the slop blogs. It's like, it's, yeah, people that gave you dog shit before have now got the dog shit machine to pump out dog shit. It's, so there's a guy called Carl Brown, Internet Bucks, awesome guy, great software engineer. He, he said, I might have said this earlier, so it makes the easy things easy, the hard things harder. When you know you're doing a really distinct, small script for something and it can plop that out, it's awesome. I used Claude the other day for something useful. My kid loves Minecraft. I was trying to fix a fucking broken mod, because he loves this wither storm, it's awesome. And it still took me half an hour and kept getting things wrong.

• 1:30:03Steven Bartlett?

  What do you use AI for? Generative AI?

• 1:30:05Speaker 00

  I really don't.

• 1:30:06Steven Bartlett?

  You don't use it?

• 1:30:06Speaker 00

  With Bloomberg Terminal, I use Ask B, which is just when it's like, requesting the consensus analyst estimates for Nvidia.

• 1:30:13Steven Bartlett?

  But otherwise, you don't use it?

• 1:30:14Speaker 00

  No.

• 1:30:14Steven Bartlett?

  So how do you know it's bad?

• 1:30:16Speaker 00

  I've used it, I've put it through its paces, I've used it to try and do financial models and found one error and immediately been like, ah. I've never been particularly impressed. The one thing I will defend it on is, it's really good for like, tech support. Like, I have this thing called Synergy in my New York, New York place I go to. I have this monitor where I have a MacBook and a PC laptop, and this thing, Synergy, for using the same mouse and keyboard. Drop in a giant fucking troubleshooting log into this thing and going, what's wrong? And it going, this is wrong? Yeah, it's super useful. Is that trillion dollars? No. Is that a two trillion dollar company? No.

• 1:30:48Steven Bartlett?

  Better than Google though, right? Better than Google search?

• 1:30:50Speaker 00

  No, I mean, yeah, remember-

• 1:30:52Steven Bartlett?

  Do you use Google search still?

• 1:30:53Speaker 00

  I try. I have to fucking push the crap out of the way and scroll.

• 1:30:57Steven Bartlett?

  I can't remember the last time I did a Google search.

• 1:31:00Speaker 00

  Christ, I find myself using Bing sometimes. I know, I hate saying it too. But I have to scroll past the AI crap, because I want the good stuff. I want the, I want the actual links to stuff so that I can read the thing and go-

• 1:31:12Steven Bartlett?

  But you can ask the AI to give you the links.

• 1:31:15Speaker 00

  Yeah, and it doesn't do a particularly good job. Like, my-

• 1:31:18Steven Bartlett?

  So, say that, the other day, my iPad wasn't turning on and it was doing this funny little thing on the screen. You think that it's better to type that into Google than to-

• 1:31:25Speaker 00

  Oh no, I must be clear. That may be the only LLM use case I defend. The troubleshooting thing is awesome for it. It's the one weakness I have, it's like, genuinely being able to drop a log into it. That's awesome. Again, that is not what they're selling it as. They're not selling it as a useful little tool. They're selling it as the, uh, software, as the thing that will change everything, that will replace all jobs, that will do this and that. It's not like they sold it as a quirky bit of software.

• 1:31:52Steven Bartlett?

  No, you are right, they are, you know, telling us that it is going to replace everything. But funnily enough, the critics are saying that as well.

• 1:31:58Speaker 00

  Which one? I mean, I mean-

• 1:31:59Steven Bartlett?

  They are, like the Geoffrey Hinton's of the world. You know, even people that have left the safety team in ChatGPT, who I've sat here with, these are critics that are, that are warning of the impacts it's going to have on the world.

• 1:32:11Speaker 00

  It's weird how all these critics also have a vested interest in AI doing well, though. Daniel, former OpenAI guy, AI twenty twenty seven, written with the Star Codex guy that was nothing more than badly written science fiction that he's already had to walk back.

• 1:32:24Steven Bartlett?

  You know, he could have made more money by staying at ChatGPT.

• 1:32:27Speaker 00

  Could he?

• 1:32:27Steven Bartlett?

  I mean, looks like it. If he had options early, sticking around would have made him-

• 1:32:32Speaker 00

  Did he lose the options? How much did he lose?

• 1:32:34Steven Bartlett?

  You're not saying that they're, they're being critical?

• 1:32:37Speaker 00

  They're not critical of the companies themselves, they're not critical of the stealing, they're not critical of the environmental damage, they're not critical of the fact that you cannot rely on the answers. They're critical of this big scary boogeyman out in the future, where it's like, oh, I'm scared of when this becomes so powerful and everyone should talk to me about how scary and powerful it is. They're not saying, hey, here are the harms today. Here are the things we're actually looking at today. Here are the social problems of having this automated way of spewing out slop, of filling our feeds with crap, of having information that will pop up that is presented, even with the little disclaimer thing of saying, yeah, sometimes this gets shit wrong, so, in the tiniest words possible. They don't talk about the fact that these things are trained on stealing millions of people's work.

• 1:33:21Steven Bartlett?

  But on that last point, where you say that it's going to get progressively more intelligent, and when it does, it'll be a danger.

• 1:33:26Speaker 00

  Yeah.

• 1:33:27Steven Bartlett?

  Would you agree with the statement that artificial intelligence has gotten more intelligent if you measure it based on any sort of measure of intelligence one might use?

• 1:33:37Speaker 00

  It's got better on the tests that are rigged for the models. It's got better at tests where you can train for the test.

• 1:33:42Steven Bartlett?

  Okay, so it's got better at-

• 1:33:44Speaker 00

  It's got better at tests that they're intentionally trained for.

• 1:33:47Steven Bartlett?

  So, if you logged the rate of improvement on a graph, it would look something like this.

• 1:33:53Speaker 00

  Right.

• 1:33:54Steven Bartlett?

  You agree, in terms of what it's capable of doing?

• 1:33:56Speaker 00

  Oh, that's, there we go.

• 1:33:58Steven Bartlett?

  Yeah.

• 1:33:58Speaker 00

  Because it's not, it's not got new features. You'll notice that outside of OpenAI and Anthropic, the, when you remove the coding startups, there's basically no successful AI startup company.

• 1:34:09Steven Bartlett?

  So, we agree that it's got better, it's got more capable at doing things.

• 1:34:15Speaker 00

  Yeah, fine.

• 1:34:16Steven Bartlett?

  Over time, AI has got more capable. If we imagine that trajectory will continue, it will get more capable, then at some point it does cross, you know, this is what they say to me, it crosses human intelligence. And at such time, will it not start to do some of the jobs that people are doing today?

• 1:34:35Speaker 00

  Outside of software engineering? Remove software, because I will concede, software engineering, it's got better at that. Outside of software engineering?

• 1:34:40Steven Bartlett?

  Yeah.

• 1:34:41Speaker 00

  Where?

• 1:34:41Steven Bartlett?

  So, the chief of staff things, the admin.

• 1:34:44Speaker 00

  Okay, so it's got better at admin.

• 1:34:45Steven Bartlett?

  Video generation, photo generation.

• 1:34:47Speaker 00

  Okay.

• 1:34:48Steven Bartlett?

  Text generation, theoretically, coding.

• 1:34:51Speaker 00

  Right, but-

• 1:34:52Steven Bartlett?

  And then I'd say agentic workflows.

• 1:34:54Speaker 00

  What is an agentic workflow?

• 1:34:55Steven Bartlett?

  So automated workflows, where you're doing the same, I mean, a good example is, looking at the backend data of the diary of a CEO.

• 1:35:01Speaker 00

  Summarizing?

• 1:35:02Steven Bartlett?

  Looking at all of the data and adjusting all of it, going out onto the internet and searching who Ed is, looking at every interview you've ever done, ever.

• 1:35:09Speaker 00

  Uh huh. This is summarizing and generating?

• 1:35:12Steven Bartlett?

  Making a little model on, you know, the things people want to know from Ed. Producing a report, sending that to my inbox. Me getting a twenty, thirty, forty, fifty page report on Ed before he arrives.

• 1:35:21Speaker 00

  This is all basically the same thing it's been doing for years, though. It's not really new capabilities.

• 1:35:25Steven Bartlett?

  Research, it's, it's-

• 1:35:26Speaker 00

  It's still the, it's still the same thing. They've had web search for years, they've had report generation for years.

• 1:35:32Steven Bartlett?

  But we couldn't generate high quality videos that are like indistinguishable from cameras. See Dance and these ones that look like movies.

• 1:35:40Speaker 00

  I mean, they-

• 1:35:41Steven Bartlett?

  Are incredible. So I'm saying, the point I'm trying to make is that, if we imagine that over the last ten years, there has been a rate of improvement in terms of capabilities and output and quality. We've seen hallucinations drop, we've seen the models get more quote unquote intelligent, get better at, you know, if you did give it an IQ test, it's getting higher scores than it was ten years ago. We agree that there's been a upward motion of improvement.

• 1:36:01Speaker 00

  This is pretty much how machine learning goes, when you feed it more data.

• 1:36:04Steven Bartlett?

  Exactly, and you put more compute behind it. So, if this continues- What does the future look like? So the rebuttal I was expecting to hear is that it won't continue.

• 1:36:14Speaker 00

  But I actually don't think it. I think that there are hard limits that we're going to hit.

• 1:36:18Steven Bartlett?

  So you do believe that there's a hard limit somewhere?

• 1:36:21Speaker 00

  We've kind of already hit the diminishing returns level because, for example, video generation, which is, by the way, far less an American concern anymore. OpenAI has shut down Sora. I think you can still use the API. But nevertheless, look at, look around you with the amount of stuff and the crew you need to get a shot. People think that movies are just shot by shot by shot and they just magically happen. When you've got my wonderful girlfriend of first A Ds and assistant directors, you've got gaffers, you've got liars, and also simulating light is insanely difficult. There are so many magical things that happen in creating visual images that, yeah, you could create a one minute long thing that might fool someone. How do you practically turn that into a movie? Because that movie, I forget what the name is. There was a movie that claimed it aired at Cannes. It didn't.

• 1:37:05Speaker 00

  No one, it aired in the city of Cannes during the Cannes Film Festival. It was not at the film festival. When it comes to the practical creation of actual things at the end of it versus magic tricks, the actual practical outcomes are not there. The reason I keep coming back to the capabilities thing for the example is, yeah, they can do better at tests, do better, you number go up. When it comes to can this actually do distinct tasks, you can rely on it? You can rely on it for summaries. You can rely on it for generations. The things it was doing, it's getting linearly ish better at. But again, there's a ceiling to that. Like, okay, so it gets really good at research. What does that actually mean? You've already kind of got the automation there. What is the next step of that? Because training it to be more autonomous, for example, that's not something that comes from training data. That is actually a new, Gary Marcus, a neuro symbolic.

• 1:37:50Speaker 00

  You actually need to build a structure around the AI to make it work. And even then, it doesn't fix the.

• 1:37:55Steven Bartlett?

  So you're saying that there will become a point where the rate of improvement will plateau.

• 1:38:00Speaker 00

  We're already there.

• 1:38:01Steven Bartlett?

  And stop.

• 1:38:02Speaker 00

  We've already hit that diminishing, Gary Marcus said this in 2022 as well.

• 1:38:05Steven Bartlett?

  Do you know there's lots of people listening now that like, they've had their workflows completely transformed by these tools?

• 1:38:11Speaker 00

  Have they?

• 1:38:12Steven Bartlett?

  They'll be, yeah, they're.

• 1:38:13Speaker 00

  Yeah, the thing is, first of all, every single one of them, did you pay for the tokens? That's the thing. Did you pay for the tokens? And also, how many tokens did you burn? But putting all that aside, what workflows? Because if it's, yeah, I did a bunch of web scraping or web searches, I'm just not impressed. Did you make an entire fucking movie? No, you didn't. Is it speeding up your coding? Yeah, I believe that. I've heard that from multiple people. But again, how much can you trust this?

• 1:38:37Steven Bartlett?

  I think I was getting at is, you know, when, in the moment of any technological innovation, people, they extrapolate linearly or they view it as a static state. I E. They think today is going to look like tomorrow or they think it's going to get better in this sort of straight line. But what we end up seeing a lot of the time is this exponential improvement.

• 1:38:56Speaker 00

  All of the innovations we're talking about with you, with like, with compute and all that, with fast processors, those are hardware breakthroughs. The hardware breakthrough companies don't seem to be fixing the L L M problems. Despite that, all the king's horses, all the king's men were what? Nine, 10 generations of T P U's from Google now. Broadcom's building stuff with OpenAI, their jalapeno chip. And yet none of these people could just say, yeah, we're on the path to making this profitable. Because they can't. If we fix the environmental problems and the profitability situation, maybe I'd be more generous with this stuff. But they don't seem to be able to. And you talk about these improvements and capabilities. There's a certain point at which I'm saying, okay, can it do even a 10th of the stuff they're promising?

• 1:39:38Speaker 00

  Samuel, on the other fucking week, was saying it was going to be in like six months, we'll be like a genie that you can ask wishes for. From, it's like, motherfuckers never watched Aladdin. What's he talking about? Like, also, the genie was charming. Anyway, long story short, the promises do not line up with the capabilities or the capability improvements. An exponential improvement in software and software performance is always a result of direct hardware improvement. We have all the gifted mathematicians, all the gifted software engineers, all the gifted hardware engineers. And where are we? Trillion plus dollars in with the future great financial crisis and the world's greatest marketing psyop.

• 1:40:18Steven Bartlett?

  I just think in the future, I do think that all of the devices and the computers we use and the physical items in our world will be more intelligent.

• 1:40:25Speaker 00

  I mean, sure, but is that L L Ms?

• 1:40:27Steven Bartlett?

  And that will be powered by the underlying AI infrastructure. It'll be the more data centers.

• 1:40:32Speaker 00

  How?

• 1:40:33Steven Bartlett?

  It'll be energy coming down.

• 1:40:34Speaker 00

  How does a GPU full data center translate to a Nikon camera that can? I don't know even what you'd think, think like, because what is the thing we're talking about here? Because the idea that devices will get smarter, sure, I can see that. That's a very broad statement. I could see it happening. It's really kind of happening. What does that have to do with the data centers? Because these data centers, again, are not being built to make your consumer electronics smarter. They're not being built for anything other than speculating on the ability to capture demand for generative AI services.

• 1:41:07Steven Bartlett?

  But it's not just generative AI. We went through that.

• 1:41:09Speaker 00

  It is, no, but those data centers, they are being built for generative AI. They are not being built for anything else.

• 1:41:14Steven Bartlett?

  Would you consider generative AI to be the fact that on Meta's earnings call like a couple of weeks ago, Mark Zuckerberg said, the big breakthrough we've had, which has resulted in 15 basis points of increased retention, I believe he was referring to Instagram, is that we now take anything you post on social media and we run it through an AI to get full context of what it is. And because we can see Guy sat in front of me called Ed with blue shirt and coffee, we now can train the AI to serve whoever wants blue shirt adding with coffee to the right user, which means people are retained longer because.

• 1:41:49Speaker 00

  Isn't 15 basis points like 0.15%?

• 1:41:51Steven Bartlett?

  Yeah, it's fuck all, but it makes a difference at scale. It makes a big difference at scale.

• 1:41:55Speaker 00

  Yeah, but 100 and something billion dollars in and the best you've got is 0.15%. If, if he could be fine, I mean, how much of a difference? Because there's a reason he's saying basis points versus dollars. Because think about it like this, if Mark Zuckerberg was, I take your point about scale.

• 1:42:12Steven Bartlett?

  No, I'm saying, the point I was making was that that is another application of these data centers. Cause it needs a data center that is driving revenues, but also that's not outside, that's outside of us thinking about just generating a sentence.

• 1:42:26Speaker 00

  And that's generate their gem, their generative model.

• 1:42:29Steven Bartlett?

  Muse.

• 1:42:30Speaker 00

  It was, oh, Muse Spark is their L L M. Gem is their generative.

• 1:42:33Steven Bartlett?

  It's Muse.

• 1:42:34Speaker 00

  Well, Muse, then, then that's them doing the weird thing where it's like on Instagram and it's like Dave the Cat. Why is Dave the Cat suffering? Like, it's the weird pop up things. Meta is fu, goddamn, that company sucks. Like, every time I think about how they've ruined that product. But that's the thing though, again, why can't he just say with his whole chest, we've made a couple billion? Why can't he say that? Because he isn't, because there's not actually a way of going, I spent all this money. I spent 14 billion goddamn dollars on scale to hire Alexander Wong and I made this much. They can't, it gets back to a very simple point of, hey, if it was going well, you'd tell me how well it was going. Rather than, I don't know, doing this weird rain dance thing where you're like, well, if we move all the pieces around in three years, theoretically this will happen.

• 1:43:19Steven Bartlett?

  I've done almost 700 interviews with some of the most interesting people in the world. And one of the things you learn, which is unexpected, is that vulnerability is the doorway to connection. And after sitting here for two, three hours with a guest, I feel a deep sense of connection to them. And as they leave, what I get them to do is to write a question in the diary of a CEO. We've taken all of the questions from the diary of a CEO. We have put the question here on this card with the name of the person that wrote it. So you can sit at home, as I do with my fiance and my colleagues at work and other people in my life. Whenever we get a minute, we play the diary of a CEO conversation cards. And it is incredible what happens.

• 1:44:01Steven Bartlett?

  These are great if you're in a romantic relationship and you want to connect your partner more. These are also great if you're in a team and you want to bond your team together. And I have to say, they're also great for families that want to learn more about each other and that need a good excuse to spend some time in a digital world, in the analog environment, connecting human to human. It is remarkable what the right question at the right time can do. Go to the diary dot com and you can get these conversation cards right now. I do think you're accurate and right when you talk about the fact that there's a lot of like, is the word for gazy?

• 1:44:36Speaker 00

  Yeah.

• 1:44:37Steven Bartlett?

  Where like, there's a lot of people that have spent a lot of money and they kind of shouldn't have spent it and they fucked it up. And now they're thinking, shit, like, we spent all this investor money, kind of like the metaverse was a bit of a fucking.

• 1:44:45Speaker 00

  Oh, my God.

• 1:44:46Steven Bartlett?

  That was a bit of a joke.

• 1:44:47Speaker 00

  That's so weird.

• 1:44:47Steven Bartlett?

  Lot of money spent. We kind of thought this dream was coming of this, well, I shouldn't say dream, because it's not a dream that I've had.

• 1:44:53Speaker 00

  Dream that they had.

• 1:44:54Steven Bartlett?

  Yeah, this sort of virtual world, and actually it never transpired and there's no sign that it will in the near term. AI and the dot com boom, in this regard are the same. N F Ts were the same.

• 1:45:05Speaker 00

  Right.

• 1:45:05Steven Bartlett?

  So crypto, one could argue that a lot of the crypto industry was the same.

• 1:45:09Speaker 00

  It's weighing that is inflated by the media. The difference is, the reason the metaverse and N F Ts didn't escape this was there weren't stocks to speculate on. There weren't big companies that you could invest in. They had record earnings in 2021. There's a bunch of money floating in the system, thanks to post-COVID, the P R D C, that basically government, federal money flowed in to the banks. There's a bunch of easy money, zero interest free era, money was easy to find. Then after that, there was the hangover. Growth started to slow down dramatically. This is actually my rock con bubble theory, which is they don't have any hyper growth ideas anymore. So suddenly they started buying GPUs. And when they bought GPUs, people went, they're doing AI. Oh, we better buy the stock. And the stocks went in an incredible run. That's like several hundred percent growth in the last few years.

• 1:45:53Speaker 00

  Their stock has grown by hundreds of percent despite zero proof. And because the media was just saying, yeah, Meta's revenue is growing because of AI, right? Microsoft's revenue is growing because of AI, right? The for gazy you're talking about was the fact that everyone just gave them credit in advance. And now we're kind of getting to the point where it's like, hey, you didn't spend that trillion dollars for no reason, did you, Sacha? Amy, Amy Hood just going to take him out back, send him to the glue factory or something like.

• 1:46:20Steven Bartlett?

  I do think there's overspending. I want to concede that.

• 1:46:22Speaker 00

  Dramatic.

• 1:46:23Steven Bartlett?

  Yeah, no, I do think there is. And I think the reason why there's overspending, Ed, is I think there is something here. And.

• 1:46:31Speaker 00

  What?

• 1:46:32Steven Bartlett?

  In terms of like, I think there is practical uses for this technology. And I think when people realize that through history, they go crazy because they want to be the person that owns the opportunity.

• 1:46:42Speaker 00

  I'm going to be honest, I just, I fundamentally don't agree.

• 1:46:45Steven Bartlett?

  You don't agree with which part?

• 1:46:46Speaker 00

  I don't agree that this, that the speculation is a result of actual demand. I don't believe it's suspect. I don't think private credit is sinking hundreds of billions of dollars into AI because of actual demand. They are doing it because they saw the biggest companies in the world building data centers, making a ton of money from two companies, they feed money and went, I want some of that money.

• 1:47:02Steven Bartlett?

  I'm saying that I do think there is value in the underlying technology.

• 1:47:06Speaker 00

  Sure.

• 1:47:07Steven Bartlett?

  And so I think, I'm not saying how much value.

• 1:47:10Speaker 00

  Right. Okay, I actually, I get you meaning, that's fair.

• 1:47:13Steven Bartlett?

  I'm not saying it's proportionate to the investment. All I'm saying is that, do you know what it's like? It's like, if I take your example, the rot economy essay that you wrote.

• 1:47:20Speaker 00

  Yeah.

• 1:47:21Steven Bartlett?

  Say that you're on a desert island and then someone says they found a banana tree.

• 1:47:25Speaker 00

  Right.

• 1:47:26Steven Bartlett?

  And there's, there's 10,000 people on the island.

• 1:47:28Speaker 00

  Okay.

• 1:47:29Steven Bartlett?

  They are going to stam fucking peed towards where they think the banana tree is.

• 1:47:34Speaker 00

  Banana crazy.

• 1:47:34Steven Bartlett?

  They are going to fucking claw each other to pieces. And if, if your essay here is right, that there was desperation because they hadn't found an innovation in a while, maybe that explains it. Maybe there is a bit of value here.

• 1:47:44Speaker 00

  Right.

• 1:47:45Steven Bartlett?

  And they're stam fucking peeding and killing each other and making irrational decisions like hungry people would.

• 1:47:51Speaker 00

  I actually think we're, then we actually agree. That is actually my point, which is these three companies are meta. Their main business lines are running out of growth. There's only so much they can grow. And indeed, in the next three and a half years, analysts think that these two bastards, these two, OpenAI and Anthropic, are going to spend over 400 billion dollars on these people alone.

• 1:48:08Steven Bartlett?

  Microsoft, Google and Amazon.

• 1:48:10Speaker 00

  And the crazy thing is, is that's a large part of their future growth. And if this money isn't spent, their growth slows down.

• 1:48:15Steven Bartlett?

  Okay.

• 1:48:16Speaker 00

  So your point about a bananas, I actually agree. That is the rock con bubble. It's, they don't have a new thing and they're desperate. And indeed, they got rewarded for buying the GPUs. They got, when they bought these goddamn GPUs from Nvidia, all the markets went rock hard overnight. They loved it. There were stories about how they were sending armored cars with the GPUs to Microsoft to make sure Microsoft got the GPUs. And so everyone saw all that money flowing in, even though they never disclosed AI revenues. They saw the expenditures and they went, well, I want to do what these people are doing. I want to get a little of that money, don't I?

• 1:48:47Steven Bartlett?

  I think the area where we have a slight disagreement is that I think the underlying technology has a lot more promise over the long term than you do.

• 1:48:57Speaker 00

  So the thing I want to push back on there is to have progress with AI, just on a, taking it in a vacuum, to have progress for these two companies to keep going and to keep progressing. They need to spend tens of billions of dollars a year on training. The only way that that can happen is if these companies and venture capitalists and private credit firms and Nvidia keep circulating money to them. So the progress.

• 1:49:21Steven Bartlett?

  Yeah.

• 1:49:22Speaker 00

  That we've got so far is entirely a result of this circular system. So it means that without.

• 1:49:27Steven Bartlett?

  Circular, you talked about V C's there.

• 1:49:29Speaker 00

  Venture capitalists who are, by the way, the majority of the funding that OpenAI got in the last six months.

• 1:49:35Steven Bartlett?

  Yeah.

• 1:49:36Speaker 00

  Came from SoftBank, Nvidia and Amazon.

• 1:49:38Steven Bartlett?

  Okay, yeah.

• 1:49:39Speaker 00

  So just the point is, is you're talking about progress continuing. Progress in L L Ms can only continue as long as the money keeps flowing.

• 1:49:47Steven Bartlett?

  I completely agree.

• 1:49:48Speaker 00

  Once the money stops flowing, the progress stops, which means.

• 1:49:51Steven Bartlett?

  Isn't that most like early, like Spotify didn't make money for 20 years.

• 1:49:54Speaker 00

  Spotify didn't lose 20.9 billion dollars in one year. They didn't need to raise 217 billion dollars in the space of six months.

• 1:50:00Steven Bartlett?

  Yeah, and Uber's another example.

• 1:50:02Speaker 00

  33 billion dollars since inception before it became a messy kind of profitable. Amazon Web Services between 2003 and 2015, when it became profitable, 29.7 billion dollars.

• 1:50:11Steven Bartlett?

  They'd spent.

• 1:50:11Speaker 00

  The scale, yeah, that's the total capital expenditures. And that's not just Amazon Web Services, that's the entire logistics operation normalized for inflation.

• 1:50:19Steven Bartlett?

  So they all lost money for a long period of time, is the T L D R.

• 1:50:21Speaker 00

  Yes, but the amount of money they lost is completely just magnitudes different on a level where these three.

• 1:50:31Steven Bartlett?

  Can I argue then that the, that's because the potential of intelligence permeates everything? Whereas Amazon at the time was like selling books.

• 1:50:39Speaker 00

  No.

• 1:50:40Steven Bartlett?

  That was, that was bringing retail online.

• 1:50:42Speaker 00

  When Amazon Web Services grew, it was.

• 1:50:44Steven Bartlett?

  Oh, Amazon Web Services.

• 1:50:44Speaker 00

  Amazon Web Services, so.

• 1:50:45Steven Bartlett?

  Amazon cloud.

• 1:50:46Speaker 00

  With Amazon Web Services, the reason I bring that up, repeat something, but it's really important. 2003, it was founded. And it was founded mostly because Amazon as a growing online store needed hardcore infrastructure. 2006, I think is when they turned it client facing. I may be wrong on the dates there, but 2015 was the year it became profitable.

• 1:51:03Steven Bartlett?

  Yeah.

• 1:51:03Speaker 00

  The total capital expenditures normalized for inflation with 29.7 billion dollars across that 12 year period.

• 1:51:10Steven Bartlett?

  Yeah.

• 1:51:11Speaker 00

  And yeah, it lost money, but if we speak cold economics here, Amazon didn't have to go into the, they were unprofitable in a, in a way, but their margins actually started improving because A W S was a very margin heavy business. It was great.

• 1:51:24Steven Bartlett?

  Yeah.

• 1:51:25Speaker 00

  These, these two, Google, cash flow negative, Amazon, cash flow negative. These businesses, the reason you liked software businesses was they are meant to be cash heavy, asset light. These companies, along with Meta, have added more than 700 billion dollars of new property, plants and equipment. So assets, data centers, GPUs in the last four years. They have gone from being these cash machines to these cash furnaces.

• 1:51:54Steven Bartlett?

  You said a second ago, this can only continue if, if investors continue to invest.

• 1:51:58Speaker 00

  Yes.

• 1:51:58Steven Bartlett?

  And I was saying, I, I think that investors are used to pumping money into things that are burning cash. Your rebuttal to me sounds like, well, this is burning more cash than ever. And then, so I would say, well, is the opportunity bigger than those other case studies you referenced, like A W S? And one would say that the opportunity of intelligence permeates everything. So the TAM, the total addressable market is enormous. Maybe the rebuttal back to me is about open source and all these kinds of.

• 1:52:28Speaker 00

  No, no, no, I, I actually know what you're going at. So what you were describing there is the argument that Sachin Adella or Samuel would make, that the theoretical opportunity of large language models, and I could have bought that shit into any 24 from them. When they were like, oh, we see the opportunity. We've gone way past the point at which you can rationally argue that L L Ms need this much money. And when I say the money needs to keep flowing, I am talking these two companies, OpenAI, just OpenAI. Clammy Sam Altman has said, Wall Street Journal and E C G A D Z reported a few weeks ago, they plan to spend 750 billion dollars on compute through 2030. I think they're going to be dead before then, but 750 billion dollars, that is an insane amount of money.

• 1:53:12Steven Bartlett?

  It is crazy.

• 1:53:13Speaker 00

  And a large chunk of that is training. So when I say progress, I mean literally to make the models better at stuff requires billions of dollars invested just in data. And also tens of billions of dollars of taking that data. And so training, training is actually a really interesting thing because when you think of like, for Jake and Troy, my trainers, when I train with them, when I lift with them, I have a defined thing. And when I do it and I eat right, muscles get bigger. They would, and here's the thing, when you train with an L M, you're experimenting each. And this is not actually a hit on the companies because they're still trying to work out how to do the thing. Because putting aside how I feel like they're trying to innovate, I think there are people at these companies that actually want to do something interesting. It's costing too much money.

• 1:53:54Speaker 00

  So once the money tap turns off, the money won't be there to buy the data or to feed the data into the GPUs. Put aside all the thoughts I have, just the raw capital to get them this far has cost increasingly larger amounts of money and increasingly larger amounts of training money for training runs that sometimes can fail. G P T five was meant to be this panacea for the AI industry. They had at least one training run that cost half a billion dollars and did nothing. And that's the thing, if we are thinking about progress in a, in a vacuum, they need so much more money just to maybe get somewhere. There's no guarantee, there's never any guarantee, but there's a reason that Google and Amazon are cash flow negative now. There's a reason why Oracle's probably going to die as a result of OpenAI, because Oracle's future depends on OpenAI

• 1:54:39Speaker 00

  spending 300 billion dollars over five years.

• 1:54:41Steven Bartlett?

  It's absolutely fascinating because I was just reading through a list of quotes from the big CEOs of the AI companies to see what they would rebuttal you.

• 1:54:48Speaker 00

  Yeah.

• 1:54:49Steven Bartlett?

  And they're all basically saying the same thing. They're all saying, this is actual, an exact quote from Sundar, who is the CEO of Google. He says, the risk of under investing is dramatically greater than the risk of over investing.

• 1:55:05Steven Bartlett?

  You go down, you go through this, you know, Andy Jassy, CEO of Amazon, we're not investing approximately 200 billion in capex in 2026 on a hunch. We're not going to be conservative in how we play this. We're investing to be the meaningful leader. And our future business operating income and free cash flow will be much larger because of this investment. Then Mark Zuckerberg, CEO of Meta, says, we'll continue to invest aggressively in infrastructure to meet the demand. I'd rather risk building capacity before it's needed than being late.

• 1:55:35Speaker 00

  Makes me think of Shrek with Lord Farquhar. Some of you may die, but that's a risk I'm willing to accept. It's like, you know, I'm just gonna spend all this money. You can't fire me because Mark Zuckerberg can't be fired due to the unique board situation he's got going. So yeah, he's just gonna piss the money away and hope he's right. And I know from the people who know it matter, he's not right.

• 1:55:53Steven Bartlett?

  Okay, why might you be wrong?

• 1:55:55Speaker 00

  I mean, this is the thing. The AI people who claim this is gonna be the biggest, strongest thing in the world, did they ever get that? I mean, this like,

• 1:56:02Steven Bartlett?

  It's a good question.

• 1:56:02Speaker 00

  Because it's like, they don't. And the thing is, what would it take for me to be wrong? A bunch of hardware breakthroughs that make this profitable.

• 1:56:08Steven Bartlett?

  That's a good question, though.

• 1:56:09Speaker 00

  New mathma- because the thing is, when it comes to being a critic or a skeptic, you are put on the hot seat. Not the people spending a trillion dollars, not the people promising the world. The person, the asshole with a blog is the one who's like, no, no, no.

• 1:56:21Steven Bartlett?

  Trust me, if they came here, they'd be on the hot seat too. Trust me.

• 1:56:26Speaker 00

  Oh, they, they won't talk to me. Don't know why, Steve. It's because I call him Clammy Sammy.

• 1:56:31Steven Bartlett?

  I think it's because my guests are quite, quite, quite critical that I don't think Sam Altman wants to come here.

• 1:56:35Speaker 00

  Mr. Altman, go on, Steve, show, do it. But this is the thing, like, of course, they're gonna say that. And also, if they thought they were right, I don't think they do anymore. If I was in their shoes and I thought that this was an existential thing, sure. But it gets back to the Rockcom bubble, which is, yeah, this is the last thing they've got.

• 1:56:51Steven Bartlett?

  But I really wanna know that question. It was one of the questions I was really excited to ask you, which is, you have a different opinion. We said this at the top. You have a very different opinion from a lot of people.

• 1:56:59Speaker 00

  Yeah.

• 1:56:59Steven Bartlett?

  I would categorize the, the two most popular opinions as AI is gonna hurt everybody and it's gonna be catastrophic and we need to stop.

• 1:57:06Speaker 00

  Yeah.

• 1:57:07Steven Bartlett?

  The other opinion is age of abundance is gonna be amazing. Let us crack on. Yours is different from both of those, which is, as you said in your words, it's a con. And it's, and there's no real underlying value in the technology and it's overhyped.

• 1:57:20Speaker 00

  Yes.

• 1:57:20Steven Bartlett?

  And there's way too much spending. I mean, a few people agree on the spending part, but the other part. So with you, it's one of, probably the first person that I've spoken to that's had this opinion. So how, what would it take for you to change your mind about what you believe here?

• 1:57:37Speaker 00

  There would need to be a hardware breakthrough that reduced the cost by like a thousand. It would have to be just a dramatic breakthrough that is not happening, just to be clear. Because they've all been trying.

• 1:57:47Steven Bartlett?

  So it's the cost for you that would have to change?

• 1:57:49Speaker 00

  It's the cost and it's also the data centers. I think the way they're building the data centers is reckless and damaging to communities. The fact that you have communities like in Vineland, New Jersey, where the residents, like, I don't want this, but the planning boards vote for it because they're all, I assume, having chummy lunches with the people doing it. I think the use of gas turbines is fucking disgraceful. I, the water situation, I'm not super well read on, so I'm not gonna wade into it. But the use of gas turbines and behind the meat of power is reckless and damaging to communities. The noise that these things make. And also, generative AI is this egregious pornographic demonstration of how unfair the world is. Regular people try and get a loan for a business, a random business they want. I have a good idea.

• 1:58:30Speaker 00

  They go to a bank, a bank on talent, they'll go fuck themselves. They'll say, I'm not getting, you're gonna make a store that sells stuff? Screw you. You wanna build a data center? Jensen Huang will back you. Jensen Huang will give you 25% residual value. You wanna build a regular business that's even profitable? Fuck you. No, a venture capitalist won't give you the money. Something that's just growing steadily but it's profitable? Screw that. No, I need 10, 100 decks return. Try and get a mortgage. You have to give the bank a full colonic. But you wanna get money for Jensen Huang to buy some GPUs? He'll give you a contract. Core Wave is a great example. A NeoCloud, which is just a company that builds data centers and puts GPUs and rent people. Nvidia, one of their first investors, in 2023, signed a $1.3 billion contract

• 1:59:15Speaker 00

  to rent back their GPUs from Core Wave. So that Core Wave go to a bank and go, I've got a customer. Yeah, it's the guy I'm buying the GPUs from with the debt I'm getting from you. If you wanna buy GPUs, it's open season. If you wanna live a regular life or you build a regular business or buy a house, highest interest rates ever, screw you, up yours. Yeah, you need to show us way more than that. I don't trust you regular folks. But if you're an unprofitable NeoCloud, you get billions from Jensen. It doesn't matter.

• 1:59:43Steven Bartlett?

  It's so interesting. It's interesting because you are the first person that I've spoken to that has that opinion.

• 1:59:48Speaker 00

  I am pro user. Let's take another myth. AI will be conscious. So, superintelligence, artificial general intelligence, these are theories. Anyone saying this stuff will become this is just guessing and does not have proof.

• 2:00:06Steven Bartlett?

  Okay.

• 2:00:07Speaker 00

  And like, that's really it.

• 2:00:08Steven Bartlett?

  Okay.

• 2:00:09Speaker 00

  Okay, let's take another myth.

• 2:00:12Speaker 00

  AI systems are already blackmailing and escaping control. So this is a really specific one. Anthropic, there's actually two. OpenAI's GPT 3.5, I realize this is more than the sentence, I apologize. In their system card, and a bunch of media outlets cover this, saying that OpenAI's model blackmailed a task rabbit into solving a capture. What actually happened was a user of GPT doing the experiment got it to generate things to say to a task rabbit to make a task rabbit do stuff.

• 2:00:46Steven Bartlett?

  A task rabbit being?

• 2:00:47Speaker 00

  As in a person that you rent, not even to do a capture, it's something you rent to like nail that, nail a picture up in your apartment. It's an insane example. This was covered as if these things blackmailed someone and, and they specifically said, yeah, we prompted it to do this. And also, the other note was that, yeah, AI systems can't do autonomous stuff like this. Then there was this other one where Anthropic said, oh yeah, a model was blackmailing someone, saying that if you don't do this, I'll email proof that you slept with someone else other than your wife, I think it was. What actually happened was Anthropic explicitly trained a model to do this and then prompted it to blackmail. This keeps happening and the media just, slop, slop me up. I don't need, no thoughts.

• 2:01:28Speaker 00

  Put the story in the bag. And it's frustrating because it scares people. Put aside the fact it's wrong. It's scary. It's scary to people, people living their lives who have to work longer hours to make less money. And their money doesn't go far. And they turn on the fucking news and there's some asshole being like, yeah, you should be terrified. It blackmailed someone. Ooh.

• 2:01:47Steven Bartlett?

  But this is, this is so counterintuitive of their interest to some degree. And they've experienced it backfire.

• 2:01:54Speaker 00

  Well, they have now. Like, it's, it's literally backfired.

• 2:01:56Steven Bartlett?

  It's backfired. Eric Schmidt getting booed at the commencement speech by 8,000 people every time he said the word AI. But I mean, this is, this is, I mean, they're, they're, these CEOs are being attacked at home.

• 2:02:06Speaker 00

  Yeah, which fucking sucks.

• 2:02:08Steven Bartlett?

  Yeah, which is terrible.

• 2:02:09Speaker 00

  I must be clear, like, you dislike the kind, don't fucking hurt people.

• 2:02:12Steven Bartlett?

  Yeah, don't, don't attack people at home. But, but the point here is that that narrative is backfiring in a big, big way for them.

• 2:02:19Speaker 00

  I don't think they saw it coming. Because you have to remember, you mentioned regulation earlier. These tech companies have been glazed for their entire existence. Travis Kalanick's like, oh, what? People don't like me now. And it's because Uber was a horribly run place and he was kind of a monster. Also, tons of articles about how great Uber was at the time. The point I'm making is, these companies are not used to pushback. They thought what would happen, I believe, just guessing, they thought they'd do this scary stuff and they would just get floods of money. And everyone would just be like, I kneel before you, I'll do whatever you want. They didn't expect, I think, what has, I, I agree, this has backfired on them. Because they were in articular, they're disconnected from regular people. Sam Altman drives a $5 million car around San Francisco. So that, that man's doing it like nine miles an hour. It's hilarious.

• 2:03:04Speaker 00

  But these people are disconnected from everyone else. So they don't, they don't experience real problems, so they can't build the solutions for them. And they think, well, if we scare people into doing what we want, that'll work, right? It didn't. They, this was, all of this blackmail stuff was an attempt to make it mystic. It was a mysticism attempt. It was to make it seem like this unknowable, impossible to control, just this powerful thing. But we're the only ones. We are the only, only us, only these two angels could possibly control the beast we've created.

• 2:03:33Steven Bartlett?

  This is, this is quite a controversial statement, but I think that for some reason, I trust Dario a little bit more. Because I think he's been the most balanced in his writing about the risk profile.

• 2:03:44Speaker 00

  I.

• 2:03:45Steven Bartlett?

  Whereas the others, they, they seem to kind of move with the wind.

• 2:03:49Speaker 00

  I, I, I get what you mean. The reason I don't like Dario is, Dario was doing the scare tactics thing when he worked at OpenAI. When GPT 2 came out, it's too scary to release. He's also gone on television and given AI psychosis to Axios, being like, 50% of jobs are gonna go away because of AI.

• 2:04:07Steven Bartlett?

  What I respect is the consistency. He's now being attacked by them.

• 2:04:13Speaker 00

  Good. But the thing is.

• 2:04:14Steven Bartlett?

  He is, sorry, I mean, clarify the word attack. Dario is being verbally attacked by Silicon Valley. And, you know, if Silicon Valley, if powerful people in Silicon Valley are attacking someone.

• 2:04:26Speaker 00

  Four months ago, he wasn't though. They were all saying he was the smartest boy ever. But the point I wanna make there as well is, again, wow, you're so scared of how powerful this is. You're so scared of it. It's so scary. What are you doing about it? Oh, nothing. Like, it's just like, what are you doing? Well, we have an alignment team. So does every AI lab. Well, I guess OpenAI cycles through those really quickly. Here's the thing, if I'm Dario Amadams and I go, I'm scared of all things changing. And I thought I had made a thing that would eliminate all jobs, I'd be fucking terrified. I'd be walking around with like, like a 10 ton weight on my back. The shot, the responsibility. The fact he doesn't, the fact he wants to be this weird elder statesman that's too scared to hold Sam Altman's hand at an event

• 2:05:04Speaker 00

  just makes me believe that he's just saying it because it's convenient. And he'll wind that back as he kind of already has, whenever it's convenient for him. I think OpenAI and Anthropic are basically the same level of bad company. I think Anthropic is more cult-like. I think, it's so weird, like Jack Clark over there, one of the co-founders, that fella used to be at the Register. He used to be one of the most critical journalists ever. Now he's, it's like, like, something took over him. Because they talk of these things in these highfalutin terms. But then again, maybe the people at Anthropic buy their shit. Maybe some of the people at OpenAI buy their shit. I don't know.

• 2:05:35Steven Bartlett?

  So going back to the central question we asked at the top here was, what would have to be the case for you to look back and say, do you know what? I was wrong in 2026. And you said to me, it would be mainly that the cost of production around AI drops dramatically.

• 2:05:48Speaker 00

  And it would have to also do insane amounts of stuff it does. It would have to be a truly autonomous.

• 2:05:54Steven Bartlett?

  It would have to continue its improvement in terms of capability.

• 2:05:57Speaker 00

  It would have to be a different product. It would have to be, it would have to be indistinguishable from magic. And the reason they have these high standards is, they set them.

• 2:06:03Steven Bartlett?

  Okay.

• 2:06:04Speaker 00

  It's interesting as well, because all these myths and all these conversations, it's about technology, but it's also, it's an information war. It's literally narrative versus narrative. Everyone trying to escape the financials, everyone trying to actually escape what the models can do. And the big thing I always say about AI boosters is, if I could regulate them, I'd regulate them. They can't speak in the future tense anymore. Just, you gotta talk about today, mate. You get two weeks in the future, max. Because if they were constrained to what was happening today, it, they would sound like insane people.

• 2:06:35Steven Bartlett?

  Yeah, no, I think, yeah, most, I guess most technology companies would at the time. Like Uber would sound insane. Amazon would sound insane.

• 2:06:41Speaker 00

  Uber was basically, the difference.

• 2:06:42Steven Bartlett?

  They were pissing money though, weren't they?

• 2:06:43Speaker 00

  They were pissing money away, but the unit economics were the same, just subsidized. So you were still getting a service from A to B and paying a much lower cost. It wasn't like you paid Uber 200, sorry, 20 bucks a month and you could get 500 miles of Uber. And then one day you started paying by the mile. Because that's what's happening with this.

• 2:07:01Steven Bartlett?

  Have they, they've, they've changed their business model for customers like me now, so that I have to buy credits?

• 2:07:07Speaker 00

  No. So you, well, kind of with.

• 2:07:09Steven Bartlett?

  They asked me the other day to buy credit.

• 2:07:10Speaker 00

  So with the Anthropic's Fable model.

• 2:07:13Steven Bartlett?

  Yeah.

• 2:07:13Speaker 00

  With some accounts, you have to pay for usage. And also, adoption of Fable has been pretty low because of this, because of the cost. But with enterprises, so companies over 150 people, you have to pay by the token now, or per million token.

• 2:07:26Steven Bartlett?

  Oh, so they are moving to a token.

• 2:07:27Speaker 00

  Yeah, but when they did that, everyone went from being like, this is the most impressive thing ever, to being like,

• 2:07:32Steven Bartlett?

  So expensive.

• 2:07:33Speaker 00

  It's always, we've gotta control these costs. Uber's COO says, Andrew McDonald, I think, he said that it's getting hard to justify because it's hard to connect spending money on tokens to actual useful outcomes.

• 2:07:44Steven Bartlett?

  Hmm.

• 2:07:44Speaker 00

  He said the thing. Like, he said the actual thing I'd be saying. And it's.

• 2:07:48Steven Bartlett?

  So we're in an AI bubble?

• 2:07:49Speaker 00

  Yes.

• 2:07:50Steven Bartlett?

  And when will, when this AI bubble collapses, so much of the economy is resting upon it.

• 2:07:56Speaker 00

  Yeah.

• 2:07:56Steven Bartlett?

  It's gonna have downstream consequences. So I got two questions for you. I guess the first question is, are we in an AI bubble? And what happens when the bubble pops?

• 2:08:03Speaker 00

  Yes, and it's, it depends. So the big thing that people say is, oh, we'll get bailed out. Donald Trump, scared of Donald Trump. Here's the problem with this. It isn't just an AI bubble, it's the Rockcom bubble. So the AI bubble collapsing will probably be this company running out of money.

• 2:08:22Steven Bartlett?

  The company.

• 2:08:22Speaker 00

  OpenAI. And the thing is with OpenAI is, they were meant to go public this year. And now it's been pushed to next year. A week and a half after I released their auditive financials. Wonder where that was. But they've delayed to next year. Sarah Fry, the CFO, has now said, well, they'll do it earlier than 2027 or 2027. Great answer there.

• 2:08:40Steven Bartlett?

  For anyone that doesn't understand what going public means, that means joining the stock market. And at such a time when you join the stock market, your investors can finally sell their equity that they got for investing in the company when it was private. So oftentimes, companies will flirt with the idea of, we'll go public someday soon. Because investors will have a moment in their head, well, they'll get their money back at a return. So you kind of need to, if you're in these guys' shoes, you kind of need to be flirting with going public or investors won't wanna invest.

• 2:09:09Speaker 00

  OpenAI, up until this point, has been a private company. And their last funding round, they were valued at $865 billion. Now, when they tried to go public, New York Times Mike Isaac reported this. They tried to list that, well, they wanted to go at a, a $1 trillion valuation. Apparently, their advisors said, no, don't do that. That is very bad for a number of reasons. One, OpenAI needs perpetual amounts of money. They raised $122 billion this year. Most of it's crossed, there's some left, but they are gonna need to raise at least $100 billion a year just to survive. If they can't go public, they will have to raise another funding round. Problem is, it's gonna be difficult to raise at even the same one they raised that. So they're probably gonna have to take a flat, so the same amount or down.

• 2:09:54Speaker 00

  Exactly. But they need money. They need money so bad. Amazon sent them $35 billion that was meant to be contingent on them going public early. They did that because they need the money. Now, OpenAI is the kind of catastrophe center here. Because Anthropic is likely gonna beat it to go public. And once Anthropic goes public, it'll be borderline impossible for OpenAI to do so because Anthropic, an unprofitable, unsustainable AI lab, but a better business that's growing faster than OpenAI's. I believe they have a ceiling. They're eventually gonna face petition too. I think sometime in 2027, things are gonna start running out of steam. Because, I think I said earlier, the only way these models get better is if you feed more money, tens of billions of dollars into them.

• 2:10:34Steven Bartlett?

  So you think OpenAI runs out of steam in 2027?

• 2:10:37Speaker 00

  I think they're already running out of steam, yeah. But I think they run out of cash.

• 2:10:40Steven Bartlett?

  You think they run out of cash?

• 2:10:42Speaker 00

  Yes.

• 2:10:42Steven Bartlett?

  And the sequence of events here will be they, they go out and try and raise.

• 2:10:45Speaker 00

  And they have trouble raising another round. I think maybe Nvidia props them up a little, maybe private credit, Blackstone, BlackRock and the like, the ones. And the reason that private credit is getting involved, so asset managers, is because they're investing in the data centers and they know this company's most of the data center demand.

• 2:11:01Steven Bartlett?

  Okay, so they run out of steam in 2027, according to you?

• 2:11:03Speaker 00

  Yep. And maybe they try, if they bum rush to go public, they're gonna have worse economics than Anthropic. They're gonna get savage. WeWork was a great example. Another SoftBank classic. Now, I think OpenAI collapses, there are many different ways it could happen. There are many different ways it could end. But the crucial thing is, is that there are multiple companies that are existentially tied to OpenAI. SoftBank, one of the largest companies on the Japanese stock market, a holding company with lots of investments. They have on paper about $100 billion worth of OpenAI stock. If they can't go public, they can't do diddly squat with them. And so SoftBank's future, their ability to continue paying the people around them and existing as a business, relies on their ability to continually liquidate funds, to be, to take the things they've invested in

• 2:11:49Speaker 00

  and have value from them, either by selling the stock or taking loans out on the stock. If OpenAI can't go public, SoftBank can't do that. SoftBank probably won't run out of money. But we're gonna see one of the largest holding companies in the world become much smaller. We will also see Amazon, Google and Microsoft have to restate guidance. They will have to say, actually, we don't think we're gonna grow as fast.

• 2:12:10Steven Bartlett?

  And what happens then?

• 2:12:11Speaker 00

  Well, I think we enter a tech depression. Because the Rockcom bubble, the core of my theory is that they're out of hypergrowth ideas, but the market doesn't think so. The reason they're so maniacally spending is because buying AI GPUs allows them to kick the can further. It allows them to say, we're still doing something. We're working on AI. Don't think too hard. And also, their current businesses are still growing. Their current businesses will eventually slow. There's only so many price increases. There's only so many tweaks to ads. Only so many tweaks to Google search. Only so, only so many ways that Amazon can screw merchants.

• 2:12:45Steven Bartlett?

  So in that tech depression, which you think it might be triggered in 2027, is that a cascading downstream economic depression? Because the stock market is heavily dependent on these companies. The stock market sees a pullback. Investors stop investing, they get panicked.

• 2:13:02Speaker 00

  Yes, I think that because.

• 2:13:04Steven Bartlett?

  What's the sort of downstream consequence, the sort of domino effect?

• 2:13:06Speaker 00

  There's so much to imagine that it's difficult to capture everything. But there are a few things that worry me. First of all, a ton of American money, just regular people's money, retail investors are in these companies. And they bought into the magnificent seven, thinking that number go up forever. Nvidia is the largest company on the Fortune 500 and Nasdaq as well. And like 7% to 8% of the S and P 500. That company, when, when the bottom falls out from Nvidia, and we haven't really got into it, but Nvidia is doing the most circular of financing, feeding companies money so that they can raise debt to buy more GPUs. I think Nvidia's revenue could go 50 to 70% now. I think that Nvidia could, Nvidia back in 2022 was making single-digit billion dollars.

• 2:13:45Steven Bartlett?

  And what happens, though? I'm thinking about like Jenny and Dave that are watching this right now. And they are just normal people with normal jobs.

• 2:13:52Speaker 00

  People's retirements are going to contract severely. And I don't believe they're going to return to those values. And I think that because so much of the value of the S and P 500 and Russell 1000 index comes from these four companies and the rest of the magnificent seven, so Apple, Tesla, Meta as well. And the thing is, I don't know what happens after that. Because venture capital has also, like, more than half of venture capital last year went into AI. I think most venture capital investments in AI are going to zero. Because when it comes to building a company on top of an LLM, all of those are unprofitable too. And the thing is, LLM companies have not really been acquired. The exception being Cursor bought by Elon Musk for the coding side.

• 2:14:32Speaker 00

  But you have Cognition, which is just another LLM company, raising at a $26 billion valuation. That means that company has to go public. Because who's buying a company at $26 billion other than Elon Musk? And there are rumors that Elon Musk was trying to buy them as well. Is Elon Musk just gonna pick off every LLM company, like, gonna fucking TJ Maxx for AI? Like, Jesus Christ.

• 2:14:52Steven Bartlett?

  So is that a recession you're describing?

• 2:14:54Speaker 00

  It is a recession, but it's also a depression within people's retirements. Like, I'm talking about 20, 30, 40% off the top of these companies' stock value.

• 2:15:02Steven Bartlett?

  Economic contractions, recessions consistently lead to job losses and rising unemployment. When an economy contracts, the mechanism driving job losses typically follows a predictable sequence. Falling demand, consumers and businesses spend less money, causing revenues across most industries to drop. Margin compression, with lower revenue and often fixed overhead costs like rent or debt, corporate profit shrink. And lastly, cost-cutting measures. To survive or protect profit margins, businesses freeze hiring, reduce hours and resort to layoffs.

• 2:15:28Speaker 00

  Yes, that's, that would all happen. But the thing is, we're talking about equity values dropping. And we're talking about they're not really being a home for that value or that money. So much is riding on these companies, but you can't bail it out. You can theoretically bail out OpenAI. I don't think it happens. You could pump these dogs full of money and keep them alive for a bit. But at some point, they're gonna have to start. They have, between these two companies, Anthropic and OpenAI, you have $1.1 trillion of commitments. Just OpenAI, Oracle is building 7.1 gigawatts of data centers, so over $400 billion worth. Just for OpenAI. There is not a customer on earth. And Oracle's revenue has been flat the last 15 years, when you adjust for inflation. Without OpenAI, Oracle dies.

• 2:16:12Steven Bartlett?

  So you think OpenAI is gonna crash and run out of money? And that's gonna cause this domino effect across these other big tech companies, which is gonna impact the stock market and impact the broader economy?

• 2:16:21Speaker 00

  Yes. And also the tens of thousands of people that will be laid off from the tech sector. But also, the venture capital thing is significant. Because venture capital has been having one of the most historic. Bad runs in history. Since 2018, the average return from venture capital, a total value put in, so the amount of money you get back for your dollar is between 0.8 and 1.21, meaning for every dollar you invest, you get 80 cents to a dollar twenty.

• 2:16:46Steven Bartlett?

  Paper gains.

• 2:16:47Speaker 00

  Well, no, that's just actual gains, like actual returns. Paper gains they'll give you, but even then the internal rate return, which is a whole separate thing, even that's not very happy. But, long story short, very simple. Venture capital is not making money come out. Venture capital is not actually providing returns.

• 2:17:03Steven Bartlett?

  They're celebrating paper gains.

• 2:17:04Speaker 00

  They're celebrating paper gains.

• 2:17:05Steven Bartlett?

  And they're raising off paper gains.

• 2:17:06Speaker 00

  Uh huh.

• 2:17:07Steven Bartlett?

  And paper gains, I mean, just being able to say, oh, look, the valuation of Anthropic went up, so.

• 2:17:11Speaker 00

  But that's, that's what Google and Amazon were doing. Google's last quarter, they boosted their net profits, profits on paper, by $99 billion because of the increased value of their SpaceX holding and their Anthropic holding. And again, the fact that this is happening is insane and the fact it's not a scandal is insane, but we live in this culture, I guess. But everyone is really benefiting right now. It's really that, it's that great tweet, where it's like, when you're reaping, it's like, yeah, fuck yeah, this rocks, sewing, ah shit, this sucks. Because right now, they're all like, yeah, all the speculative gains are awesome, the paper gains are awesome, the theoreticals of Anthropic being worth $2 trillion, wow, the articles we can write, the promises we can make. Then when the rubber meets the

• 2:17:53Speaker 00

  road, it's gonna be pretty rough on them because my, the valuation of Amazon, Google, Microsoft and Meta is based on this idea that they will grow eternally, that they will grow forever. If that changes, to quote Ed Elson from Prof G Markets again, it's this, they're all doing Botox right now. They're sinking money into it to make themselves feel young again, and the market believes them. When the market doesn't, we're not just talking about a depression, I'm talking about the market valuing them like airlines and saying, yeah, you're real big and you make money off your existing products. But guess what? You don't have new shit. You're just gonna be doing this forever and we're gonna value you as such.

• 2:18:27Steven Bartlett?

  So for Jenny and Dave, should they do anything differently? Should they be conserving money if there's a recession or depression coming? Should they be a little bit more conservative? Should they?

• 2:18:36Speaker 00

  Yes. I actually, I actually think it's, I don't know, I don't have money in the market. I think it's a casino. Casino pumped up by the media.

• 2:18:44Steven Bartlett?

  Should they invest in the S and P 500? Should they invest in OpenAI?

• 2:18:46Speaker 00

  Oh god, no. I, honestly, I live in cash right now. I.

• 2:18:50Steven Bartlett?

  You live in cash?

• 2:18:50Speaker 00

  Yeah. I don't fucking trust the market, man. Try and get some gains here. I'm like, I'm not comfortable giving financial.

• 2:18:56Steven Bartlett?

  Sure.

• 2:18:57Speaker 00

  Advice, but it's like, if you, like, it's like you're gambling.

• 2:19:00Steven Bartlett?

  Okay, be conservative. Things might get volatile.

• 2:19:02Speaker 00

  Yeah, it really is. It's gonna be, act as you would with volatility. Take the gains when you've got them. Don't sell everything, but be suspicious of tech. Like, that's actually the biggest thing. It's like, be suspicious of what they're promising. If you're acting based on their promises, don't trust the promises. Trust that they are going to say what will make the stock run, rather than what's actually happening. And that they will find every dodgy way to make you think something is happening, rather than it's actually happening. Annualized run rate, great example. Microsoft said that they had $38, $37 billion of annualized run rate in AI. You hear that, you go, I made $38, $37 billion, right? Wow, that's so much. Run rate may be month times 12. They don't even define

• 2:19:47Speaker 00

  it, but it's built to manipulate. And they do that because we don't have a functional SEC, and we don't have a media environment that actually, where skepticism is the priority and where protecting the readers is necessary.

• 2:19:59Steven Bartlett?

  What would they say? They would say, Ed, this technology is gonna be so great and so transformative that we are investing a ton of money in advance of the value and utility showing up. That's what they would say.

• 2:20:14Speaker 00

  Right.

• 2:20:14Steven Bartlett?

  And I've heard your rebuttal, but I just wanted to express.

• 2:20:16Speaker 00

  No, I get that.

• 2:20:17Steven Bartlett?

  I think that's their sentiment. I'm not defending them or anything.

• 2:20:19Speaker 00

  No, I get it.

• 2:20:20Steven Bartlett?

  I'm trying to provide enough, like, balance to see if we can dance between these, these two perspectives. And a lot of people would say that there's gonna be a bloodbath, because they can't all win big in the way that they're kind of describing. So someone's gonna have to lose. And when one of these players starts to lose big, I think it could, as you say, there could be some kind of domino effect or contraction.

• 2:20:42Speaker 00

  Yeah, and I think the thing that people want to believe is they're, the dot com bubble thing. It's like, it worked out afterwards because Amazon, Oracle, they didn't die after the dot com bubble, they're actually fine. This isn't like that. They're bigger companies, they have bigger promises. And even, I'm not, like, Oracle I actually think could die. I, R I P Larry. Couldn't happen to a nastier man. They'll probably.

• 2:21:04Steven Bartlett?

  You don't like these people, do you?

• 2:21:06Speaker 00

  No.

• 2:21:06Steven Bartlett?

  Why, no, again, I ask this question purely because I want an answer, not because I agree or disagree. But, um, why don't you like these, these people?

• 2:21:14Speaker 00

  I don't like being misled. And I don't think regular people are being misled either. And I really don't think that the average person can get away with bullshitting as much of these companies do. And I don't think the average person gets anywhere near the level of affordance for failure and lying as these companies do. And I think there is a real economic and human cost to allowing these companies to run rampant and promise the world and never really get called up on it. The tepid nature of criticism these days is so frustrating. There are some really great critics out there, but, they're really great people, but it's like, seeing these ultra-rich, ultra-wealthy, ultra-powerful people lie through their fucking teeth or misstate or whatever people wanna call it,

• 2:21:57Speaker 00

  it turns my stomach. And I hate seeing people being misled. And I feel like I write at such length because I really want people to see why I've come to a conclusion. Am I right? Am I wrong? I think I am. Of course I do. But I also, I just find it loathsome. I find these companies don't make good products anymore. They don't care about their customers. And, and they treat their customers with contempt.

• 2:22:22Steven Bartlett?

  If people wanna go read more about your work, you have a great Substack.

• 2:22:25Speaker 00

  Ghost, actually. It looks exactly like I moved off of Substack in 2024.

• 2:22:29Steven Bartlett?

  Oh, okay. And you also have a podcast you do?

• 2:22:31Speaker 00

  Yeah, Better Fine.

• 2:22:33Steven Bartlett?

  I'm gonna link both of them below. So if anyone wants to read more, get more detail and, and follow Ed, I think it's, I would highly recommend. It's, it is fascinating. And do you know what? One of the things people sometimes struggle with when they listen to podcasts is you get lots of different opinions. And weirdly, I think they think of, some people assume podcasts are gonna be like one person saying the same thing as the next person and then the next person.

• 2:22:52Speaker 00

  Yeah, yeah, yeah.

• 2:22:53Steven Bartlett?

  That is just not the nature of information in the world and opinions and progress and discussion. What, what happens is people have different opinions. And I think my job, but also the listener's job, is to try and parse through it and over time, collect more of these reference points from different people and, and do your own research.

• 2:23:09Speaker 00

  Yeah.

• 2:23:09Steven Bartlett?

  Whether it's on your health or whether it's on something like this, is to watch and do your own research and to learn. And I would say also, never believe one person, never believe one particular perspective religiously, you know, collect a body of evidence and follow, follow the evidence yourself. But I love watching your YouTube because it provides a different opinion. And that challenges me to think beyond my current opinion about what might be possible. So when I've heard you talking about how this is an economic bubble, and I've heard you talk about the capex spend with these big sort of frontier AI labs, it really did make me pause for a second. And it really did make me consider that there could be a bit of fagazi going on here.

• 2:23:53Speaker 00

  Yeah.

• 2:23:53Steven Bartlett?

  And then it made me reflect on history and go, you know, through history, there's always a bit of fagazi in these moments. And, oh, that's an interesting take. And what's gonna happen in 2027, 2028, when there's a bit of a market pullback? And so I highly recommend people go watch, because you do, you challenge me to think differently.

• 2:24:06Speaker 00

  Yeah.

• 2:24:07Steven Bartlett?

  And we need some of those contrarian voices to, to have honest discussions. So thank you for doing what you do. Really appreciate it. And I find you to be a very compelling, captivating communicator. And I've, I feel like I've learned a lot today. So I appreciate that. We have a closing tradition.

• 2:24:20Speaker 00

  Yeah.

• 2:24:21Steven Bartlett?

  Where the last guest leaves a question for the next guest, not knowing who they're leaving it for. And the question left for you is, given that high-quality relationships are important for health and longevity, what should we be doing to improve our relationships and social connection?

• 2:24:34Speaker 00

  So this is actually connected to the AI bubble. So I am a critic, I'm a skeptic, what quote. I have found that showing and appreciating and loving the people around you and uplifting them and, and raising them up as you succeed is the way we do that. Your success should be everyone around you. It's not economic, it's, talking about Matt Hughes for a while, made me really happy. This whole thing has been at times quite grueling and quite negative and quite brutal. But the love I've found and the joy I've found from community and the people around, because even in the, in the small groups of haters, even like Gary Marcus and sort of the people I talked to, Edward Onguoso Jr., Molly White, Brian Merchant, there are so many people who have been loving and caring.

• 2:25:19Speaker 00

  And I think within especially these very critical moments, when you're like very much dialing in on how negative things are, how bad things are, finding the people who maybe find it repulsive too, finding the people.

• 2:25:32Steven Bartlett?

  Finding your people.

• 2:25:33Speaker 00

  Who can be, and the people who will talk to you about it, even like Troy and Jake, my, my trainers, who's so excited about this. Even talking to them about the shit as normal people, knowing that there are people there going through their own struggles, but also to just give you the perspective and also remind you that you are human too and focus. I know this is kind of an all over the place point, but it's just, it's really easy to get hardlocked on everything in life. And to kind of get away from why you do things and focus too much on the work, when the most important thing at times is just to know there are other people feeling the way you do. And when I hear from my listeners and my readers a lot, the most common thing I feel is they feel like they have a voice and they feel like someone is there for you.

• 2:26:12Steven Bartlett?

  Yeah.

• 2:26:12Speaker 00

  And I don't think it can be understated how much it means when you just reach out to someone you love and tell them you love them, tell them their shit rocks, say that their shit bangs. Tell everyone, when you like an artist or a writer, it's like, we're a podcast like this, tell them you fucking love it. We don't do this enough and we need to do it more.

• 2:26:30Steven Bartlett?

  Well, that's a good closing message. So if you do, if you have enjoyed the conversation today with Ed, please do let Ed know that you love it down below. But please do leave your opinions down below and I shall read all of them. Ed, thank you so much. I'll link to your website, but also to your YouTube channel where people can learn more. And I would highly recommend you do, because it is truly fascinating. And I think we need more voices that are demystifying a lot of the fagazi and the narrative in this moment in time. And you're certainly one of them. I really enjoyed the conversation. Thank you.

• 2:26:54Speaker 00

  Thanks so much.