Trashfuture x Better Offline: Goosed In The Shell

This week’s Better Offline is the first joint episode with Riley, November, Hussein from TrashFuture, covering SoftBank’s crazy annual shareholder meeting and the general collapse of the AI bubble. Ed Zitron and the TF Crew are on both your feeds this week to discuss the Softbank slide deck breakdown you’ve all been waiting for. It’s nothing other than the goose, and whether or not the goose was valued, and what kind of factory does a goose use to make golden eggs. Shareholder deck for following along: https://group.softbank/media/Project/sbg/sbg/pdf/ir/investors/shareholders/2026/shareholders-meeting_46_05_en.pdf https://trashfuture.co.uk/ Please subscribe to my premium newsletter - save $10 off a year of my premium newsletter: https://edzitronswheresyouredatghostio.outpost.pub/public/promo-subscription/gzqwkv54e1 YOU CAN NOW BUY BETTER OFFLINE MERCH! Go to https://cottonbureau.com/people/better-offline and use code FREE99 for free shipping on orders of $99 or more. --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/ Discord: chat.wheresyoured.at https://discord.com/invite/QUUQUP9szv Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/edzitron.com https://www.threads.net/@edzitron Email Me: [email protected] mailto:[email protected] See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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

• 0:00Speaker 00

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• 1:22Speaker 04

  Call Zone Media.

• 1:24Speaker 05

  It is with great excitement that I would like to announce the newest joint venture in the high-tech world between Trash Future Podcast Limited, formerly Oil Warehouse, formerly NFT Tax Loss Harvesting Service, formerly, I believe several kinds of consulting firm and maybe a private investigator, and our good friends at Better Offline.

• 1:47Ed Zitron?

  And of course, I'm representing the SoftBank-Zitron merger we did earlier in the year, in which case I am now technically Masayoshi Son's son. And so we are related. He is my father and I am his son now. I am Masayoshi Son. We are all Masayoshi Son on some level. Welcome to Better Offline and Trash Future at the same time.

• 2:21Speaker 07

  Yeah, it's TF Zitron.

• 2:23Ed Zitron?

  Oh, it's beautiful.

• 2:25Speaker 05

  I'm so excited to announce that between our two shows, which are our independent company and and iHeart, we're actually going to be building a pod. Look, Meta and Blue Owl have said they're going to be building a data center, an AI data center the size of, I believe, several Manhattans. Well, we are building a podcast generating data center that will cover 19 Staten Islands and cost only $1 trillion and is expected to generate upwards of $50 a year.

• 2:53Speaker 07

  People are telling me, you're on too many podcasts, November, and I will not stop. Not only am I starting more podcasts, but I'm also folding more into the existing podcasts. So pretty soon, everything will be trash future.

• 3:09Speaker 05

  Yes.

• 3:09Ed Zitron?

  Zorin's like trying to stop us from building the data center, saying that it's not viable. And to that, I tell, I say to him, well, have you ever started a business that's been successful? No, you haven't. So shut the fuck up.

• 3:20Speaker 05

  We all know. That's one of the two things that can happen in New York City.

• 3:23Speaker 07

  Yeah. I mean, this is a really, a really obvious thing. When you look at Zorin Mandani, you look at that guy and you say, that guy doesn't know a thing about being successful. I'm pretty certain that guy's never succeeded at anything.

• 3:33Ed Zitron?

  Yeah, he's truly disliked by New Yorkers. That's the thing that I hear from them. They're not just like welling up with pride over his 4th of July speech. They don't love the fact they fixed the Williamsburg bike lane. No, no, no. It's all just everyone's sitting in their apartments in Connecticut where they live most of the time, other than the one day of the year where they come into New York to complain.

• 3:54Speaker 05

  Well, okay, I did say 19 Staten Islands. What if we data centered over Staten Island and just made it 19 stories? How about that?

• 4:03Speaker 07

  Actually, based on everything I know about Staten Island, the people there might approve. But they might just be like, eh, fuck it. We've, we've done our best.

• 4:12Speaker 05

  We've automated Staten Island. No, welcome to TF Better Offline. And here's the thing. TF listeners have been saying to me, like in our Discord and stuff, why haven't you covered the Masayoshi, the newest piece of, I guess, outsider art published by SoftBank in the form of their investor presentation?

• 4:30Speaker 07

  It's so beautiful.

• 4:31Speaker 05

  There's always a lot in them. And Masayoshi Son, your father.

• 4:36Speaker 07

  Yes.

• 4:36Speaker 05

  Our, I believe, uncle has-

• 4:39Speaker 07

  These fucking podcast Nappo babies.

• 4:42Speaker 05

  There's always some visual metaphor. I think that Masayoshi Son decides this is gonna be how I communicate to everybody. The thing that ChatGPT and I stayed up all night for a month, kind of coming up with.

• 4:57Ed Zitron?

  Yeah.

• 4:57Speaker 05

  And it used to be like flying unicorns, right? How they would fly over like the trench of despair and into like the future of optimism.

• 5:06Ed Zitron?

  Yeah, the trench of coronavirus, right? That was one of his.

• 5:08Speaker 05

  Yeah, the trench of COVID, that was the one.

• 5:09Ed Zitron?

  The valley of coronavirus.

• 5:12Speaker 05

  Now, this SoftBank presentation has, I would say, a different recurrent visual metaphor that starts around slide 44.

• 5:22Ed Zitron?

  And we'll link to this in the, in the notes, so that you can behold the goose.

• 5:28Speaker 05

  Yeah, so can everybody turn to slide 44 in your packs, please?

• 5:33Ed Zitron?

  I'm there. This is, it's beautiful. I am crying.

• 5:37Speaker 05

  So what I have in front of me, in case you can't turn to slide 44 in your packs, because you're catching up on our investor presentation, our, our presentation of SoftBank's investor presentation. Imagine you're an investor in SoftBank, maybe you're a pension fund, you're Ontario teachers, you've invested in SoftBank. And Masayoshi Son, you can see his face light up because he's about to give you his visual metaphor. Slide 43 to 44, transition. It's a picture of a goose and five golden eggs.

• 6:02Ed Zitron?

  Yep, that's right. And the thing, yeah, the thing is like, it actually does make sense when you read it 100 times, because, well, actually, let's go a little bit into it and then I'll give a full explanation, because there is a logic, it's just insane.

• 6:20Speaker 07

  Generally, I love the graphics. Like, I've got a friend who's like, he does, like, his, his job is to sort of apparently upgrade decks. He gives like, he does consulting for like companies to be like, here's how you can make your PowerPoint presentations look better, because.

• 6:33Ed Zitron?

  I had a real like, do you pronounce it unionized or un-ionized moment there, where I'm like, Dex, like the thing you have like outside of a house?

• 6:42Speaker 07

  Well, I mean, I asked him in terms of like, what do you mean like Magic the Gathering? Which apparently, which I guess would make more money. But, but I, I saw this and I sent this to him and he was, and he, and he, and like, his reaction, I think, was one of the funniest things that I've ever, I've sort of ever encountered. Every graphic in this presentation is a mixture of graphic design is my passion, but also like.

• 7:06Ed Zitron?

  I it's one like I sort of feel like it's actually ironically beautiful. Yes. This is amazing. It's an amazing. It's genuinely beautiful because like I said, so I I must be clear when the goose is SoftBank, right? Goose appears like seven times in this as well, right? Okay, so SoftBank is the goose. Masayoshi Masayoshi son is the gander. Masayoshi son mounts and impregnates SoftBank, by which I mean invest money in companies using SoftBank's funds. At which point the goose, which is SoftBank, becomes pregnant and the portfolio company grows larger. Then it lays the egg, the portfolio company goes public. Basically, SoftBank is a company that invests in companies that then go public and make SoftBank money.

• 7:49Ed Zitron?

  In theory, and Masayoshi's son just vigorously.

• 7:53Speaker 07

  You could you could more normally call this like an incubator, but instead he's picturing himself as a virile goose.

• 8:00Ed Zitron?

  Yes, exactly. He's just he is just like absolutely going to town on the goose of SoftBank every year.

• 8:08Ed Zitron?

  Jesus, Jesus. It's so disgusting.

• 8:12Speaker 07

  Coming up to the coming up to the lex and grasping it with both hands and talking to a lot of people who have real sort of influence in terms of capitalist central planning and going, I've been fucking gooses.

• 8:24Ed Zitron?

  Can you imagine like being a major investor in SoftBank? Like the Japanese government is invested in this company through ETFs like. And you're just like, great, what what Masayoshi's son's got for me this year? And you're just like, what, what, what?

• 8:39Speaker 07

  I think the sort of interesting question about this slide deck and about Masayoshi's son himself is like, yes, there is a logic if you work hard enough. This is also true of the ramblings of someone experiencing a florid mental health episode on public transport.

• 8:55Ed Zitron?

  Yes.

• 8:55Speaker 07

  Who we've, you know, decided as a society now, I guess, it's okay to kill that person, but it's not okay to kill Masayoshi's son. And I don't really know how to reconcile those two things.

• 9:08Ed Zitron?

  Not to not to say that we approve of that for legal reasons, just to be just to be clear in you.

• 9:12Speaker 07

  Yeah, I mean, that's your dad. I wouldn't say like that you should.

• 9:15Ed Zitron?

  Leave my father alone. Anyway, sorry, Riley.

• 9:18Speaker 05

  So basically, and this is the mental health point, I think is interesting, right? Because there's this idea that's been going around, that's been going quite sort of in like legitimate business publications, that CEOs are getting AI psychosis.

• 9:32Ed Zitron?

  Yes.

• 9:33Speaker 05

  It's just that because they're CEOs, you know, they, when they get AI psychosis, they don't like get on the path train and have a heart attack while trying to meet like their fake girlfriend from character AI, which more or less sort of actually happened to somebody.

• 9:46Ed Zitron?

  Yeah.

• 9:46Speaker 05

  Details slightly different.

• 9:47Ed Zitron?

  Specifically.

• 9:48Speaker 05

  Yeah, yeah, yeah. But in this case, they get up on stage and they say, I have, I am destined, I am destined to bring about the birth of an artificially super intelligent god through this goose that has historically not been valued. Because if you turn to slide 47, you'll see the main problem is goose was not valued.

• 10:08Ed Zitron?

  Yes, goose value zero. And I think of, I don't know if you remember the Rob Wissman fake Uber YouTube thing, the listeners are gonna love this.

• 10:16Speaker 05

  Yeah, yeah, yeah.

• 10:17Ed Zitron?

  And it's just him going, Uber driver sucked me off. And he's just like shrugging. I just think like goose value zero.

• 10:23Speaker 05

  Zero.

• 10:24Ed Zitron?

  Goose value zero.

• 10:26Speaker 05

  It's really good. Imagine this in the, I imagine this in the Dark Souls font, goose not valued.

• 10:33Speaker 07

  Well, this is the thing, right? What we've got here is, and I think it's interesting, the AI sort of cyber psychosis thing, because Massey O'Shea's sort of very open about using AI, spending a lot of time talking to AI, really internalizing and personalizing the AI for himself. What we've done is we've done a kind of like European medieval royalty thing, where we've created a kind of system where if you are, you know, at the top of it, you can have the delusions and society has to conform around you. You are the king of France, everybody has to act like you are made of glass.

• 11:06Ed Zitron?

  Oh, God, it is. It's just Versailles. It's digital Versailles. It's just that, like, everyone stinks. Everyone's weird. It's like, it's either shit or oranges in the air. No, everyone's just like, wow, we all love loops now, right? And everyone goes, loops, yeah, yeah, yeah, I love loops. Loops are the best. Where we hate, we hate the other thing now.

• 11:26Speaker 05

  And so each of these eggs is a trillion yen, and the market saw only the eggs, which is the value of the companies, but the goose not valued, goose not valued. Goose value zero, yeah. Goose value zero. But in fact, and it says, eggs do not lay eggs. And it was the goose that created the value.

• 11:43Ed Zitron?

  People are saying that. I died. This whole time I had it wrong. I thought the eggs laid the eggs.

• 11:50Ed Zitron?

  Fuck.

• 11:50Speaker 07

  It's very funny to have a sort of like arch capitalist go, wait a second, this business doesn't create any of its own value. And this value's got to come from somewhere. So I assume it's from, you know, analogously a goose and a non-analogously me. Yeah.

• 12:06Ed Zitron?

  See, I've been doing the haters guide to SoftBank and they just went out. So I'm very fresh in my mind. And the thing that you'll know when you look back at Masayoshi Son is he's a terrible fucking investor, like historically bad. Other than like four times when he was amazing, uh, he bought Alibaba at $20 million. He invested it, put 20 million in worth about $100 billion equity value at the top, sold it for about 30 billion. Cause that's Masayoshi Son. He bought ARM for $32 billion, took it private and then took it public. Now it's worth a bunch more money, but Yahoo Japan is the craziest one, like classic loser company Yahoo. But it turns out that he managed to, through one of his weird joint ventures, stop it from being absorbed into the problematic Yahoo.

• 12:50Ed Zitron?

  So he accident, but every time he does something well, it's by accident. Every time he loves also, I swear this is true. He has a thing for whimsical white boys, like.

• 13:02Speaker 07

  Well, who doesn't?

• 13:02Ed Zitron?

  I mean, the Greensill cat, like Lex Greensill and him used to talk on the phone every day. He invested in WeWork in 28 minutes. They signed the $4.4 billion deal in the back of a car on an iPad. And it was like 2017. So the iPad wasn't very good at the time. So they're just like, like this fucking like clunky, probably cracked. Like across the front font, probably 72, just like, no, we must do this. We must do this now. We have to do this.

• 13:32Speaker 07

  Oh, I'm, I'm, I'm being whimsical in front of the wrong people.

• 13:35Ed Zitron?

  Exactly. No, I genuinely think the, if I got in front of Masayoshi Son for maybe 10 minutes, I could get $7 billion.

• 13:44Speaker 05

  But he is your father, so you hope that you will, he will give you the time.

• 13:48Ed Zitron?

  I wish all of this could, I wish I could get in front of him. I wish I could just tell him some of the great ideas I have about like, I don't know. Look, I have a newsletter with 108,000 subscribers. Masayoshi Son, what if it had a trillion subscribers? Uh, right? And, and he'll be like, whoa, that's a-

• 14:08Speaker 07

  And we're, we're in on the ground floor of this. We can get in.

• 14:11Ed Zitron?

  That's a big number, Ed. I'd love to invest $7 billion. I'll be like, I think that should be good enough to get us started, Masayoshi Son. Another $10 billion and I guarantee you a trillion subscribers will happen by, it could be as early as 2090. Easy peasy.

• 14:29Speaker 07

  Hmm. Well, the thing is, right? I, I, I think this is a good start, right? But we've got to aim higher.

• 14:34Ed Zitron?

  Okay, okay.

• 14:35Speaker 07

  So like, yeah, what we do is we get, we get you in front of him and we say all of this, but then, you know, as he's sort of like, he's warming to you, you see that he's kind of receptive to this. What you do is you switch it up, right? You, you, you lean forward, you jump out of the seat, you grab him by both lapels and you, you look him dead in the eye and you say, and I'm going to invent God.

• 14:54Ed Zitron?

  Oh, yeah. And how do-

• 14:57Speaker 07

  He loves that shit.

• 14:57Ed Zitron?

  And here's the thing, how do Christians to like get a relationship with God? The Bible, a written document.

• 15:05Speaker 07

  Mm-hmm.

• 15:06Ed Zitron?

  What if the Bible could be emailed to people every week? Every week they email the Bible. That's what, that's what, where's your head at is. And Masayoshi Son by this point is just, he is taking out a margin loan. As I'm there, he's like calling his bank and like, I need every dollar I've got. Sell it all. I need to bank this.

• 15:26Speaker 05

  Redirect all of it from OpenAI. I've got a new person who is recently, who told me they're going to build God most recently.

• 15:32Ed Zitron?

  It really is so.

• 15:34Speaker 05

  So basically, because that's a little, like WeWork was supposed to be heaven on earth. Like that was the pitch is that, oh, oh, that you could remake. You could remake a kind of prelapsearian, non-alienated community. You could have gardens of Eden everywhere. It was the point of it. But just that's office sharing. That same thing with Flow. That's supposed to be that too. It's just like, no, no, we've got a much, a much more abstract God.

• 15:56Ed Zitron?

  Yeah.

• 15:56Speaker 05

  Any case.

• 15:56Ed Zitron?

  Yeah, yeah. Sorry. Back to the geese.

• 15:58Speaker 05

  He, he said, so back to the geese. Can we focus on the geese on this technology podcast, please?

• 16:03Speaker 07

  Sorry, sorry. I, I got, I got us off of goose. My bad.

• 16:06Speaker 05

  So, eggs do not lay eggs, obviously.

• 16:08Speaker 07

  Obviously.

• 16:09Speaker 05

  And so, the mission to go, how do you go from three eggs to 74 eggs? And it's an increase of 71 eggs.

• 16:15Speaker 07

  You're gonna need a shitload more geese and Masayoshi Son's gotta start fucking them.

• 16:19Speaker 05

  It was the goose that created, it was the goose that created value.

• 16:22Speaker 07

  Oh.

• 16:23Speaker 05

  So, the value came from the goose. Uh, I think I read that in, uh, in Capital. Yeah, so goose value, goose value is 71.

• 16:31Speaker 07

  Right.

• 16:31Speaker 05

  So, goose value, 71. And people didn't value the goose at 71.

• 16:36Speaker 07

  No.

• 16:36Speaker 05

  What matters is not the eggs, it is the goose itself. And true value is the power to keep laying eggs.

• 16:41Speaker 07

  Right.

• 16:41Speaker 05

  And because of this, he estimates that in the next 16 years, he will be the first yen-based quadrillionaire. Or at least SoftBank will be a goose worth of a quadrillion yen.

• 16:52Speaker 07

  I'm not sure what affects me more, the fact that this is written so much like sort of serial killer taunting the police? Or the fact that it kind of appears to maybe be working?

• 17:02Ed Zitron?

  Well, the thing is, it works because Masayoshi Son is able to keep getting debt. And genuinely, had OpenAI not come along, Masayoshi Son might have been fine. Arm turned out so well, like as it just, as a chipmaker, he's been able to do basically unlimited margin loans. And he was okay, he could have been fine. But then the whimsical white boy apparated in front of him and he was like, okay, this is it. Like, this is my boy, I will give him. He took out a $40 billion margin loan, uh, not margin loan, sorry, a bridge loan, it's a year-long loan.

• 17:35Speaker 05

  Yeah.

• 17:36Ed Zitron?

  Jesus Christ.

• 17:37Speaker 05

  If you want to, if you want the story on bridging loans, refer back to our episode with Rob Smith about bridging loans and what kinds of things they're for and what kinds of terms they usually have.

• 17:47Speaker 05

  So, the true source of the value, could you ever please turn to page 55, this includes everyone listening?

• 17:50Speaker 07

  Okay, great.

• 17:51Speaker 05

  On your, on your packet?

• 17:52Speaker 07

  Uh, uh.

• 17:53Speaker 05

  So, the true source of the value is the golden egg factory inside the goose.

• 17:57Speaker 07

  Yes.

• 17:57Speaker 05

  And then it actually gets hopefully broken down.

• 17:59Speaker 07

  Like a womb, I guess?

• 18:01Speaker 05

  Well, so the goose here is SoftBank bringing out artificial superintelligence. And the internal mechanism is an AI-generated factory of, uh, of, of eggs that are also labeled artificial superintelligence.

• 18:15Speaker 07

  Yeah, each egg is ASI.

• 18:18Ed Zitron?

  Right, so eggs used to be, eggs used to be just a trillion dollars of yen, but that, sorry, a trillion yen, it's like six something billion dollars. Well, I don't really know what the eggs mean anymore, other than ASI, which is, it's kind of like a, was like the Ben Garrison cartoon?

• 18:38Speaker 05

  Well, I mean, this is where I, we want to go, I want to go back to what Dova was saying about mental illness, right? About, this is someone who, because we know what happens with Masayoshi Son. We know he talks to ChatGPT every day. He's like, one of the, probably one of the world's biggest users of its like, talk to you function. And he has been convinced by it that he's going to build God, but because he is a, because he is one of the central economic planners of the global economy, he gets to allocate capital according to his delusion, as opposed to the poor schmuck dying on the path train, who just gets like scraped off the wall, but Masayoshi Son gets to fucking run through. It's a bit like, a bit like Peter Thiel, I think also went crazy with AI, has gotten more unhinged in public. Example, he recently said that the Pope is a

• 19:23Speaker 05

  Chinese Communist Party agent, which he's not supposed to know. Right. Look, that's, you're not, you, look, you don't have any way of proving it.

• 19:32Speaker 07

  In fairness, in fairness, the odds of him having figured that out were crazy low. So like, it's no shame on the Vatican, but like, Jesus, guys.

• 19:39Ed Zitron?

  The other thing is as well, is it's like, on top of just the ridiculousness of this, and if you had a homeless man on the tube saying, "True source of bad, he's got an egg factory inside the goose. You see the internal mechanism, right? What you see are the eggs that produces them is the factories." You would like, hopefully, get them the help they needed. But because he invested in Alibaba, we have to like, take this shit seriously. Now, slide 56 is also good, because he invents a new kind of goose math. Where egg value equal.

• 20:13Speaker 07

  I've been wasting on this. I've been using Terrence Malick's old goose math.

• 20:17Speaker 05

  You've heard of girl math. Get ready for goose math.

• 20:20Ed Zitron?

  Well, it's like goose value, alpha.

• 20:24Ed Zitron?

  I don't know. I'm not going to come up with a natural thing because SoftBank is a valueless company outside of the things it holds. It is just a large holding company that is kind of a big part. It's like the second or third largest company on the Japanese stock market. And it's like that. The other thing that I keep coming back to that really isn't shown here is that's not actually the net asset value of SoftBank. Like that's like, I'm going to just go right. Like the net asset value right now is, yeah, 40 trillion. Like this is from SoftBank's own website. So what he is doing here is he's like, yeah, I'm adding the other 30 trillion from OpenAI.

• 21:03Ed Zitron?

  He's just adding, he's just making up how much OpenAI is worth. And as eager listeners will know right now, Masayoshi Son tried to get a margin loan on his OpenAI stock, all of it. And yeah, then couldn't. The banks were like, no, thank you.

• 21:26Ed Zitron?

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• 22:22Speaker 03

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• 22:45Ed Zitron?

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• 23:17Speaker 05

  I was gonna play this game later, but um, I can, can we get a, an applause sound effect, please? Because we're gonna have an impromptu episode of everybody's favorite game show. Yay! With, with so far its only contested possibly host, Ed Zitron. Welcome to Is That Good? Yeah! Ed, thank you for coming on the show.

• 23:40Speaker 07

  Sprinting, sprinting down from the audience. Yeah.

• 23:45Speaker 05

  Chosen again.

• 23:49Speaker 07

  I really hope I get on Is That Good? Ed Zitron.

• 23:53Ed Zitron?

  My fingers crossed, like.

• 23:57Speaker 05

  Do you have like, do you have like a phone a friend option on that? It's just a switch. It's just an unlabeled switch. So, Ed, thank you for playing Is That Good?

• 24:07Speaker 07

  Thank you for having me.

• 24:10Speaker 05

  So, all right. The situation you just described, where Masayoshi Son, who's already borrowed a lot of money to invest in OpenAI, essentially like a sports, a sports gambler, paying for his bets by borrowing from the mob. The bet on OpenAI, if you can't roll over the bet to keep on doubling down on the bet, is that good?

• 24:30Speaker 07

  Yes.

• 24:32Speaker 05

  Cool, thank you. No further questions.

• 24:34Speaker 07

  Again, it's amazing.

• 24:35Ed Zitron?

  It's just really funny as well because literally the, we keep coming back to the point, literally the only reason we don't treat this man like he's an insane person is because he is, he hasn't blown himself up yet. Like it really, and it is, yeah, it's like, he has taken out so much debt on OpenAI, like way more than WeWork, like historic amounts. And he's just, and he's even, the more I think about, he's doing goose fraud right now. Like he's like, 57 claims 74 trillion dollars of, of egg value or shareholder value. And that's not what's on SoftBank's website. It's 30 trillion dollars. So it's 48.26 trillion yen is the equity value of holdings.

• 25:16Ed Zitron?

  That's lower than 74. I'm, I'm pretty new to goose math, but I can see that that is still a lot. Yeah. Drives me insane actually, because in a world of deep equality, Masayoshi Son gets away with it only because he's a whimsical man after Japan. Like.

• 25:34Speaker 05

  Yeah, because he's fun.

• 25:36Ed Zitron?

  He is. And the thing is, people, you're like, oh, we got AI psychosis. It's like, I think he might have had it already. Like without, he just got it from books.

• 25:46Speaker 05

  World's first case of, world's first case of AI psychosis inflicted before 2022.

• 25:50Ed Zitron?

  Well, can I?

• 25:51Speaker 05

  First person to get AI psychosis with GPT-2.

• 25:54Ed Zitron?

  I, I actually want to read you a quick, a, a quick quote about Masayoshi Son from an article. This is, I promise you, this is worthwhile. It's actually very important to understanding the whole goose thing. So, um, from Kakashi, great pseudonymous analyst guy I follow. So, okay. His dad was talking about him and 60-year-old Masayoshi Son, he was super wrestling his older brother and losing badly, but refused to stop. When his father finally pulled him away, the boys' eyes were, in Mitsuna, or his words, his dad, like an animals, a wolf's eyes. I thought to myself, this bastard is not human.

• 26:29Speaker 07

  Doing hype edits for your son like play fighting is really funny.

• 26:34Ed Zitron?

  I just really like the idea of him just getting his ass kicked when he's six. And he's like, he just turns around, he just has like demon eye.

• 26:43Speaker 05

  World's first person to have laser eyes in real life. Well, here's the, there's the other thing, right? We're talking about Masayoshi Son's life. The, the, the, the presentation concludes with what used to be his 50 year life plan, but now is his 60 year life.

• 26:57Ed Zitron?

  It's so good.

• 26:58Speaker 05

  So his 50 year life plan was get acknowledged in your twenties, finance a war chest in your thirties.

• 27:06Speaker 05

  In your forties, take on a challenge. In your fifties, complete business.

• 27:11Speaker 07

  Love to do that.

• 27:12Ed Zitron?

  Just like a bucket, like.

• 27:13Speaker 07

  Is any of them, just any of them?

• 27:14Ed Zitron?

  Like an 18 year old girl's Instagram post.

• 27:19Speaker 05

  Take, take on a challenge. Sure. Remember, uh, ice bucket challenge for ALS in 2011? Take on that challenge. Done. Finish the decade. Fifties, complete business.

• 27:29Ed Zitron?

  Okay.

• 27:30Speaker 05

  So.

• 27:31Ed Zitron?

  Complete all the business. What could that mean?

• 27:33Speaker 07

  Yeah.

• 27:34Speaker 05

  Sixties, hand over business to next generation. But no.

• 27:38Ed Zitron?

  Fucking crossed out.

• 27:39Speaker 05

  No, crossed out. This is the 60 year life plan. Sixties, crossed out. Hand over business to next generation, gone. It's not replaced. It now just has a seventies value, which is realizing ASI or artificial superintelligence. A similar, a term that sort of.

• 27:55Speaker 07

  This is like not a new hubris, right? You could have done this at any point in human history. There were guys back in the day whose life plan was twenties, unite Southern Song Dynasty. Thirties, conquer Northern Song Dynasty. Forties, establish Mandator's Son of Heaven. Fifties, alchemy. Sixties, alchemy. Seventies, never die.

• 28:22Ed Zitron?

  I feel like it's missing like a little detail. I feel like you need like a bit of a side quest to sort of really make this fun. Like, you know, you should like, you know, 55, start a band. I don't know. There's so many like-

• 28:32Speaker 07

  Yeah, 60, learn to ride a motorcycle. No, it's, it's, it's, in this case, it's really just like the most obvious thing of like 20s, conquer entire known world. 30s, weep because there's no more worlds to conquer. 40s, build giant statue. 50s, start reinforcing statue at legs.

• 28:50Ed Zitron?

  Yeah, I also want to be clear. It's really funny to do this insane hour and 50 minute long presentation where you're like, slide four, JPY, one quadrillion. And then just be like, and I'm not retiring for at least another decade. Fuck you.

• 29:06Speaker 07

  I don't, I, I don't think that I live in a functional enough economy or society to have a life plan. Like, my life plan is like, 20s, fuck around with mental health and drop out of uni. 30s, podcast. 40s, podcast. 50s, podcast. 60s, uh, climate wars? Maybe?

• 29:25Speaker 05

  Yeah, woke battalion in climate wars.

• 29:27Speaker 07

  Uh, she thinks the climate wars aren't gonna start until she's in her 60s, fucking idiot.

• 29:32Speaker 05

  So this is, but this, basically, this is, this is the story of someone who has, I think we come back around to this, because I think it's very important, someone who has been driven to mania about this thing, but who happens to be able to force that mania upon everybody else.

• 29:48Speaker 07

  Yeah.

• 29:49Speaker 05

  And, you know, one of the things I wanted to dig a little deeper into actually is his claim that artificial superintelligence is coming. Artificial superintelligence and artificial general intelligence, I think, are used pretty interchangeably. He uses artificial superintelligence.

• 30:01Speaker 07

  That's basically the same thing.

• 30:02Speaker 05

  Yeah. And so he, basically, Masayoshi Son and Sam Altman are now, so Sam Altman's guys, excuse me, told Masayoshi Son, probably in the, uh, we just need another, can you take out a loan to give us a loan? Uh, said that an AI model is designing the next future AI model at OpenAI. Uh, so like sunset.

• 30:23Speaker 07

  You can't, you can't see the model or anything to do with the model. Read this like philosopher we got in to talk about, you know, the fucking constitution or whatever.

• 30:32Ed Zitron?

  It's just like, it's, they find a new key to jingle and it's like, well, why don't we invent? I don't know. Make the model do something new. It's like, what if we just made the model do that? Or if we just fucking, you know, like the model could do the model stuff and we could just sit here and take the cash? Masio and like, it's the laziest thing in the world. It's like if any, any other situation, it's like, I'll have someone else do it. You'd probably be like, they'd be like, well, no, you've got to do something. I gave you, gave you 40 billion dollars. Like probably want to do something with it. Uh, but Masayoshi Son's like, hell yeah. But what's funny is Masayoshi's son, Sam Altman came to him in 2017, I think, and asked for 10 billion dollars.

• 31:13Ed Zitron?

  Masayoshi's son said yes, but then Sam Altman just kind of walked off and took the money from, from Microsoft. And that drove Masayoshi's son insane. He was like, oh my fuck, what? Ah, I missed out the one that got away. And now I will shower her with jewels and gems. She will be mine.

• 31:34Speaker 05

  Yeah. And like the time to get it, if you wanted to sort of make money on that, the time to get in was then and the time to get out is now.

• 31:41Ed Zitron?

  Yeah, he really, he has invested in the worst times. He invest, his only, I would say maybe if OpenAI goes public, which is now an if, he might have done very well based on the first 40 billion. The next 30 at the highest possible valuation, insanely stupid. Just, and also these, these hogs are going to need more money than this. 30 billion dollars isn't going to work.

• 32:06Speaker 05

  Into that.

• 32:06Ed Zitron?

  Oh, yeah.

• 32:07Speaker 05

  We're going to go into that needing more money. Uh, but so, but, but just before we move on from sun, he said, so that's going to happen to all the major models. So once that happens.

• 32:16Speaker 07

  Before we move on from sun, like there will be blood.

• 32:21Speaker 05

  So once that happens, the model generates the next model and it's going to be exponentially smarter than all of us. That's a super intelligence. In my mind, I thought it was coming in four years instead of the next 10. Now I'm saying it's coming in the next two. Then the CNBC article goes on to say, "The SoftBank CEO says he currently uses OpenAI's ChatGPT for up to three hours a day as the AI is smarter than he is on, quote, 'most subjects.'"

• 32:43Ed Zitron?

  That's so good for you.

• 32:44Speaker 05

  Three hours a day is so... If you're awake for 12 hours, that's a quarter of your time spent just talking to the mirror that drives you crazy. That's...

• 32:54Ed Zitron?

  Cool.

• 32:54Speaker 05

  It's what if narcissist wasn't just sucked into the pool but also driven mad by it?

• 32:59Ed Zitron?

  It's just, it's so good as well because the grander theme of this, it's pretty much all of these CEOs have AI psychosis. Because usually, even with human beings, there is a limit to how many ideas someone will say are good. Or at least before you fire them. With an AI, you can just berate them into any idea. You could just be, "I heard a story of someone at a major tech company where they weren't, they didn't have security access to access something and they just said, 'Actually, yes, I do,' to the internal LLM and it gave it to them." Like, it's just, like, this is just, like, anything it disagrees with, you could just be like, "Actually, that's true." And it'll go, "Yeah, absolutely. Yeah, sure." Like, just so can you imagine the shit he's saying to... It's like, you know, you're exactly right.

• 33:44Ed Zitron?

  The goose will lay golden eggs forever. You're absolutely right. Just the, I would love to read his logs. I'd love to read the insane back and forth he's having with them.

• 33:54Speaker 05

  Masayoshi Son, your understanding of goose biology isn't just detailed, it's prescient.

• 34:02Speaker 05

  So in fact-

• 34:02Speaker 07

  ChatGPT role-playing as a goose with him?

• 34:06Speaker 05

  No, I think you need Grok's adult mode for that.

• 34:09Ed Zitron?

  I show my plumage.

• 34:10Speaker 07

  Honk honk.

• 34:13Speaker 05

  So here's what you've said, actually, Ed, about Masayoshi Son and OpenAI. "If OpenAI doesn't go public, there's a very real possibility that SoftBank collapses or at the very least is forced to finally put an end to the era of unrivaled financial risk." It's easy to like Masayoshi Son, to laugh at his goofy geese-related presentations, and I'll say as a side note, it is, and his ridiculous statements about the future. But in reality, he's a deranged, delusional man with too much money and a few lucky breaks that have saved him from annihilation. His future lies in Sam Altman's hands, and if this is what finally ends his wasteful, reckless reign, it's a well-deserved punishment for believing every damp, corked-up white boy to beg him for a billion dollars. He's an enabler, enabled by other enablers, that's created a culture of unbelievable risk and destruction.

• 34:53Ed Zitron?

  Yeah.

• 34:54Speaker 05

  Tell me you really think.

• 34:54Ed Zitron?

  That guy, that guy is smart. Like, I, but it's really funny as well because we live in, my girlfriend brought this up, there's a Twilight Zone episode where there's a kid who, if he doesn't, if he doesn't believe you're happy, he turns you into an ear of corn. We basically live in that society now where it's like, all of these CEOs get caught, the AI bubble is just a large coddling. It's just like, yeah, the rich people always have good ideas. We must orient ourselves around them, despite the fact that most of the industry's revenue is either Anthropic and OpenAI, or Anthropic and OpenAI paying for the compute to lose money. Like, it's not even sophisticated, it's just that, it's people nibbling around the edges.

• 35:35Ed Zitron?

  And Masayoshi Son, literally, I must be clear, had he just not invested in OpenAI, SoftBank would be doing great. It would be, it would perhaps not have had the massive on-paper gains of OpenAI's stock going up, but like, it probably also wouldn't have needed 40 fucking billion dollars. Forty billion dollars. It's just, and I, I wasn't able to add up all the debt and do a deep analysis of that part yet, but it really does seem that at some point, he's just not going to be able to refinance a loan and run out of money. It's, it's, it's just like a teenager with a credit card, except it's 150 billion dollars of debt, and there's Goose involved.

• 36:17Speaker 05

  And, and what, what OpenAI, what SoftBank is doing via OpenAI right now, this is from a very, uh, refreshingly candid telecoms.com article, is that it's, it's going to take on additional debt in order to build data centers, more data centers in the US, tens of billions of dollars in AI data centers in the US, um, and giving more money like, of that to OpenAI. So that, that the data center project is called, I believe, SB Neo?

• 36:41Ed Zitron?

  Yep.

• 36:42Speaker 05

  And they are, uh, they are going to, again, say, okay, we're gonna build 10, uh, 10 gigawatts of, of, of data center, right? But, quick question, we talk about data centers a lot, you and I, we talk about data centers a lot on this show, you and I talk about data centers a lot, do you, have any of... The enormous supply chain bottlenecks that have largely prevented data centers from being built, but yet let alone the sort of, let's say, lack of demand from outside the industry for their services, are any of those bottlenecks alleviated? Can you get a gas turbine right now?

• 37:16Ed Zitron?

  No. And the thing is as well is just data centers are taking like 18 to 36 months to build. So him saying, we're going to build five or ten, he did a thing with France as well. It doesn't bear repeating. It's something with Emmanuel Macron and he's like, they're building five gigawatts, they're 10 gigawatts here. You may as well be talking about the year 2090s. Like, because the, just, just the speed of construction, put aside any thoughts I have about the AI bubble, the speed of building these things is very slow. And that's before the power comes in. It's just, the power doesn't exist either. Again, if you took away the money, this person would sound fucking insane. Well, they do right now, but like, you would laugh them out of the building. If just a random guy was like, I'm going to raise, oh, 10 gigawatts.

• 38:01Ed Zitron?

  So a trillion dollars, because a gigawatt is now 100 billion dollars. Trillion dollars. I'm going to raise a trillion dollars for a data center. And then one company's going to rent all of it. And yeah, that company loses money, but like, they won't. And anyone else, you'd be like, you sound like a moron, man. But because it's Masayoshi's son, because it's OpenAI's Sam Walton, because it's Dario Amadeo. You're like, oh, yeah, yeah, absolutely. Yeah, absolutely. That makes perfect sense.

• 38:28Speaker 05

  These are the guys. They're, they're the guy. They're the pharaohs. All things have, and with inequality accelerating, with the bets, the actual bets on the future getting better, getting smaller and smaller and smaller, and concentrated on a smaller and smaller number of big hands, if you like, you, you get a kind of, you sort of rebuild like a pharaonic system of kingship from first principles, where, you know what, you, you can just be like, you know what, we're, we're, we're, we're monotheistic now. Egyptian polytheism is done. We're going to try monotheism for three generations. And you, but like, the problem is also, being in a pharaonic system like that with sort of this much concentration of, you know, with this much allocation of productive capacity to madness, is quite,

• 39:12Speaker 05

  I'm going to surprise you, quite damaging. Because the question of can you get a gas turbine, that's super important for lots of stuff other than AI data centers. It's just- These data centers are, in some cases, because of political pressure, like in the UK, able to skip the queue for certain kinds of planning or grid hookup capacity. Or, you know, they're, they're just, they're clogging up the order book for these things that will just get deployed to these data centers that we're going to explore if people are, let's say, using enough and profitably enough to make them viable. And all those spiking infrastructure demand has now, is now going out to other, it's like spreading through other pieces of like infrastructure, like hard to build infrastructure equipment.

• 39:57Speaker 07

  Really? Quick question.

• 39:59Speaker 05

  Uh huh.

• 39:59Speaker 07

  Yeah. Has anything else happened recently to maybe fuck up like global infrastructure at all?

• 40:08Speaker 05

  Something in the World Cup, maybe?

• 40:10Speaker 07

  Yeah.

• 40:10Speaker 05

  The England win.

• 40:12Ed Zitron?

  Watch the World Cup.

• 40:14Speaker 07

  Cause I, I kind of feel like the, the straits of Hormuz fucking up the supply chain for this and everything else is sort of like one point on the, the sort of trifecta, the palace logo of we are really fucking bad at long latency stuff as people. So like it, it's, I'm sure all of the consequences of this will just be fine for an extremely like fragile, sort of delicately balanced goose fucking portfolio.

• 40:46Ed Zitron?

  But that actually leads me to an important point, which is let's take the AI people at face value. Don't know why we're doing that, but let's do it. They are saying, because based on Nvidia CEO Jensen Huang says trillion dollars of GPUs visibility sales through the end of 2027. It's about 400, 500 billion dollars a year worth of AI compute revenue just needed to pay for that. Put aside my thoughts, just like you need that. This is not a hyperbole. This is like, you need that money. They're, the, the demand doesn't exist, but on top of that, they are just saying, yeah, the AI bubble is going, the boom even in their mind is going to just keep going. We're just going to spend three trillion dollars on this every year. Like just, and when you ask them how that works, they're just like, the money will be there.

• 41:31Ed Zitron?

  The money, how are we going to substantiate? The money will be there. The money will be there. It will happen. The demand's there. And you're like, well, there's compelling proof it isn't there. And they're like, well, it will.

• 41:40Speaker 05

  And it's a great way of, it's, it's a great way of magicking away these long latency problems you bring up Nova, like climate change, for example. We were talking earlier, it was like, well, The warming that's happening now was from emissions from, I don't know, 40 years ago, whatever, right? Like, this is all baked in.

• 41:55Speaker 07

  Yeah, if you stopped, like, any CO2 emissions, like, today, we would still be locked in on, like, decades of warming, which is really gonna fuck up my life plan, I think.

• 42:05Speaker 05

  Yeah, that's good. Climate wars in the 60s? Come on.

• 42:08Ed Zitron?

  Yeah, you're gonna have to add another decade.

• 42:09Speaker 05

  So, but, but their answer to this, the way that the AI comes and forestalls, like, actual good long-term latency planning is it's like, well, the AI is gonna be smarter than us because it's gonna be super intelligent, so we won't have to solve long latency problems. We don't have to worry about the fact-

• 42:25Speaker 07

  I love that. Well, that's a relief, to be honest, because I hate solving problems. And to be honest, in my 60s, I'm hoping to get into, like, alchemy, so...

• 42:35Speaker 05

  So, here's another stat I picked up, right, which is, it's no longer, it's not just gas turbines anymore. High voltage transformer lead times have gone from 12 months to 48 in some cases. So, good luck, Bill. So, for example, at a time where we need to do, let's say, an energy transition,

• 42:52Speaker 05

  or a time when, say, even just in the UK, right, national level grid upgrades are more or less needing to happen in the next 10 years, or there's gonna be, like, rolling blackouts. All the high voltage transformers you can order are going to the God machine, which will then solve the grid problem some other way.

• 43:10Ed Zitron?

  I just like, yeah, dude, just being like, we'll work it out when we work it out, using the working it out machine.

• 43:18Ed Zitron?

  They just keep giving it money and then it fucking, duh, at some point, you know, you work it out. What are you being a quack about? Wait, come on, man, just give me 10 billion.

• 43:29Speaker 05

  You're being, you're being lame.

• 43:31Ed Zitron?

  You're being lame, man, come on.

• 43:34Speaker 05

  So, and also, it's like, another thing that's really funny, that this, the fear is always, oh, AI is gonna be a paperclip maximizer, right? The entire, the whole world and universe and all matter will be made into paperclips by an AI. But if you look at what we're doing with data centers, and we're gonna go on again to the profitability of them in a second, because some stuff has happened there, is you don't need the AI to be a paperclip maximizer, because capitalism as a system is already maximizing the paperclips in the form of the data centers. We're cannibalizing useful things to build this. But you can't upgrade the grid anymore because all of the transformers are being turned into, effectively, paperclips.

• 44:12Speaker 07

  Yeah.

• 44:13Speaker 05

  Um, and that's, and, and I know that's not even touching Databricks, which is another N scale type snafu that got uncovered by a similar situation.

• 44:20Speaker 07

  You can be saying that, Riley.

• 44:22Speaker 05

  Sorry, sorry. Uh, check out No Gods or Mayors. Um, but we'll go into that on Thursday.

• 44:38Speaker 02

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• 46:20Speaker 05

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• 46:29Speaker 05

  Hey, I wanted to talk about some profitability stuff, right? As we mentioned that OpenAI's going public is now an if in that earlier episode of Is That Good? That we played. So I actually want to quote from a friend of the show, Mike Isaac. The Wall Street Journal reported that the company planned to go public by the end of 2026. OpenAI said this month it had filed confidential paperwork with securities regulators to kick off the process. A trillion dollar valuation of the public market, which would exceed the market capitalization of Walmart, would be staggering for OpenAI, a startup that is not believed to have turned a profit and is aggressively spending on new data centers. OpenAI's advisors presented company executives with the option of waiting till 2027 or lower the target valuation for a quicker IPO.

• 47:09Speaker 05

  Mr. Altman responded that any change to a trillion dollar valuation was a nonstarter. I assume this is me editorializing because he's in a pissing contest with Elon Musk.

• 47:19Ed Zitron?

  I mean, I think it's also the, so their last pre-money, so before the cash they actually raised, valuation was like 200, sorry, 730 something. So a trillion dollars would be a 30% premium-ish. That's not a lot. And the fact that the bankers are saying that they couldn't get that because that's, I'm reading between the lines, but I mean, that's what's happening. They clearly talked to some advisors who were like, you know, that's a negative. That's worse than people are giving this credit for. If you can't get a 30% premium, it basically means all of your private investors at the last round fucked up. Because you're not even get, like a good venture capital return would be like 3X.

• 48:03Ed Zitron?

  You're not even getting just to it. Like it's, you're genuinely making nothing here. And also they're saying they couldn't list at 1 trillion. So they probably wouldn't be able to list at much above 800, which is fatal. I mean, just, and this is fatal for SoftBank as well because SoftBank needs OpenAI to go public. But it's just like, these things, the reason we keep having bubbles is because when

• 48:30Ed Zitron?

  Stuff like this happens, the media and a great many different people immediately move not to go, "Hey, that's a problem. We should fix that." Or like, "Hey, we should be worried about the company that's become the single focus of everyone, isn't gonna make it." Instead, it's like, "No, no, no. Let's rationalize this bad boy real quick. Let's enable the enabler." Like, "We need to make sure we keep this." And it's just completely nonsensical. And to be clear, when this explodes, I'm going to be ripping holes in anyone who tries to be like, "How did we not see this coming? You didn't look?" Is the big thing.

• 49:06Speaker 05

  Well, the main, because the main, the thing that is at the bottom of this is always the unit economics. And what I think is, is very telling, is that Open Air executives, in talking about the IPO, said, "Well, the company is moving in the right direction because more than 5 million people use Codex on a monthly, on a weekly basis," the company said. Now, more than 5 million people using Codex on a weekly basis? Pretty good. Which means I assume they've solved their unit economics problem and that's not costing them a huge amount of money.

• 49:32Speaker 07

  Yeah, they've definitely avoided, they've gotten out of the sort of thing that they were doing of just going, "Hey, AI is free until everyone uses it and then they can start charging what it actually costs, right?"

• 49:45Ed Zitron?

  Yeah, and what's great about that is they did that and they were like, "Okay, and now they jack up the price." And within one month, they're like, "Oh, uh, everyone's like, we gotta limit the cost of this." Just immediately. And by the way, on a 200 buck a month subscription to ChatGPT, you can burn $14,000 worth of credits of tokens.

• 50:05Speaker 07

  Jesus.

• 50:06Ed Zitron?

  It's so good.

• 50:07Speaker 07

  It's, I mean, so this is the thing. We've had everybody panic, right? And go, "Oh God, it's expensive now. We gotta like maybe think twice about using it." They're still charging a fraction of what it costs, just a slightly smaller fraction, a slightly larger fraction?

• 50:26Ed Zitron?

  Exactly.

• 50:27Speaker 07

  And amazing.

• 50:28Ed Zitron?

  And also.

• 50:29Speaker 07

  Instead, instead of it costs like, I have $14,000, uh, for a dollar, you can set that on fire in front of me. What they've gone is, it now costs $2 to. Do that and everyone has panicked.

• 50:41Ed Zitron?

  Well, what's happened, what's happening is the, it's a little different from that where it's the enterprises are having to pay the actual per million token rates. So they, and they, this is, it's really, it was actually a very funny punchline setup because they, all of the business idiots who've been using AI, who have got AI psychosis, told all their people, because they were all able to burn as many tokens as they like, use this constantly, use it for everything. If you don't use this, I'll kill you. I'll shoot you with a gun. And then the moment that they, because in, I think it was March or April, Anthropic and OpenAI were like, okay, you're gonna have to pay on a per million token basis. They, within one month, were just like, like John Major style, like, I've got to, got to austerity measures. We've got to be very careful with the cost of AI out. We couldn't, couldn't possibly.

• 51:25Ed Zitron?

  And it's just so funny because it's like, even if they cut the price in half, it's not clear if that would actually fix the problem. Because you can't measure the ROI of any of this. So it's just a certain degree of like, great, now it's half of, half of a thing that we still can't measure, so we probably have to cut that too. It's just, it's truly ludicrous. It's genuinely, I mean, it, it's genuinely hilarious as well.

• 51:50Speaker 05

  I mean, the, the, I don't know, have you, have you heard of the new plugin for Claude called Caveman?

• 51:55Ed Zitron?

  Oh, yeah. Where it's just like, it just gives you very simple, single sentences.

• 52:01Speaker 05

  Yeah, this is a plugin that was you, that is, that is useful to, um, let's say, be austere with tokens by saying, okay, well, maybe we can save a little bit of money on our token budget if we make Claude be kind of rude and abrupt. It's like, I don't, I don't think that says anything good if that's, if that's the solution you're using.

• 52:19Speaker 07

  It's kind of funny how much of the cost of this was making it glaze the user, at least.

• 52:26Speaker 05

  And, um, and, and like, so in late June, there has been this huge, it's not, because this is not just prices rising. There's been a huge sell-off in names across the stock market related to AI. Nvidia, SpaceX, by the way, SpaceX already is down like hundreds of billions of dollars from its post-IPO pop. So if you thought you were gonna get on the Elon scam, you got hosed. Um, this is, but this is also related. Related to Microsoft, Alphabet, Amazon and Meta, all suddenly becoming like high capex, heavy industry companies more or less overnight. So the customers of these companies, right, are the ones who are supposed to provide the money to help them lose money more efficiently, still aren't able to capitalize on them. Like, like consulting firms aren't using it to get better. Banking companies aren't using it to get better.

• 53:09Speaker 05

  You can't, you're not using it to really generate a lot of return on investment. And so more and more people are realizing this subsidized pricing is coming up against reality. And like that exuberant, that exuberant investment pop is, that's been happening for the last little while. Those names are beginning to go down. In fact, this is from Katie Martin in the FT. The once vaunted magnificent seven stocks, an imperfect but nonetheless go to gauge of hyperscaler performance, performed slightly worse than the UK government debt.

• 53:36Ed Zitron?

  Hmm.

• 53:37Speaker 07

  Oh, how are you a worse investment than Keir Starmer?

• 53:42Speaker 05

  Yeah, that's like, that's like at the World Cup.

• 53:47Speaker 05

  It's like, it's like getting rolled by Qatar at the World Cup. Like, come on.

• 53:53Speaker 05

  You shouldn't be beating us.

• 53:55Ed Zitron?

  Can't believe they did that to him like that.

• 53:58Speaker 05

  Yes, and, and I mean, this is, this is, the Bank of International Settlements is also getting in on this as well, which, yeah, now suggesting that with the five largest hyperscalers setting to spend over a trillion dollars on AI related capex from 2025 through 26, that the commitments are outpacing earnings and free cash flow, leading some to issue debt to raise additional financing. And that, again, the Bank of International Settlements is now saying this is, this is now, let's say, a significant global risk.

• 54:29Ed Zitron?

  Yeah.

• 54:30Speaker 07

  Ah, what are those guys?

• 54:30Ed Zitron?

  If only someone had fucking said something. It's so funny as well when like the, the BIS put that out. So like the Central Bank of Central Banks. And immediately I saw an analyst, this guy called Daniel Newman on Twitter, who is a- Massive word I won't say was just to me like, oh, oh, what was this a press release, a press release and the haters. It's like, no, it's a statement from the Central Bank of Central Banks. You're a financial analyst, but this is the media behind this. The media is just like immediately ready to just attack any bad sign. And it's very strange. It's, I know it's always been like this, but to see it reach its kind of pornographic

• 55:12Ed Zitron?

  heights. I think it's just the, the data centers are too easy to invest in. The AI companies are too easy to invest in. There's so many places to put your money and they're so brain damaged from years of ignoring the consequences of their actions that they don't think anything can go wrong. Masayoshi Son, all of them. I mean, all of the data center operators, same deal, hyperscalers, same deal. They're not, they all think that they, they have found the mandate of heaven printer.

• 55:38Speaker 05

  Yeah. And, and like, the thing that was that the test is, it was this, the mandate of heaven is, is this going to, is this going to do to like knowledge work, for example, what containerization did to stevedores? Is this going to do, is this going to be like the great enclosure of the digital commons once and for all? Is this going to be the thing that creates the new, I don't know, six person ruling class of the entire world by fundamentally transforming the economy with this like huge technological displacement of labor? Like, that was the actual question. Are you going to do that? And on day of recording?

• 56:17Ed Zitron?

  To which the answer is, yeah, I reckon.

• 56:18Speaker 05

  Yeah, probably.

• 56:20Ed Zitron?

  Sounds good.

• 56:20Speaker 05

  Well, here's, here's the great thing. And look, this is inferential. This is not deductive. This is not provable. But the Wall Street Journal has posted that big tech has suddenly flipped on the AI jobs wipeout scenario, where they've, they've now, they've collected some, let's say, barometers of opinion from the, from the big guys, the Sam Altman's and Dari Amadis and stuff, surveys. And they've said, hey, wait a minute. It looks like all that, all those jobs aren't going away. A lot of people were still fired with AI as an excuse. A lot of them got rehired in some cases. But this is excerpt one that the Wall Street Journal quoted. A year ago, the message from many business leaders was that AI was going to wipe out jobs.

• 57:03Speaker 05

  For the past month or so, tech CEOs have been striking more optimistic tone. In late May, Sam Altman said, "We've been roughly right on the technological predictions and pretty wrong in the social and economic implications," saying to CNBC, "Our industry underestimated how much we're going to be able to keep people at the center of everything." But what your thing was the replace all human labor machine?

• 57:25Ed Zitron?

  Yes.

• 57:26Speaker 05

  And your replace all human labor machine, what you're saying is it's failed to replace all human labor, at least in the timescale that you need it to, in order to go public at write down a value and you can decide how rich you are.

• 57:37Ed Zitron?

  Yeah.

• 57:38Speaker 05

  I do, I do, I do kind of wonder whether like, the reason why they don't think of the idea of consequences is because the AI is not telling them that this might be the thing that happens. Like, I know there's that sort of thing where like chat, where Sam Altman sort of sounds like he is kind of, just he sort of, his brain is entirely like ChatGPT and that sort of, you know, the guy who sort of drinks too much of the Kool-Aid and becomes a Kool-Aid guy. That's how you make new Kool-Aid guys.

• 58:06Speaker 07

  Kool-Aid guy, value zero.

• 58:09Speaker 05

  That's right, presumably, presumably that's how it works. But yeah, like, even when I sort of think about the boosters, the stuff like Ed, you were just sort of saying now about like, sort of boosters and tech types who are like genuinely surprised when people are like, "Hey, maybe this thing kind of sucks or is overhyped." Like, to me, it does sort of strike as like, not, not just that they believe that this has to happen and this is like the inevitable next frontier, because if not, then like, what else? You've wasted all this time, you've wasted all this money, you've wasted all this energy, basically kind of doing nothing except creating a vanity project. But like, one of the things that feels so evident about this entire cohort is that like, they just don't think about consequences, because I guess they don't believe it exists?

• 58:51Speaker 05

  Because to believe that consequence exists, you have to believe that other people live among you and that their lives are important and worthy of some kind of dignity. And once you do that, like-

• 59:02Ed Zitron?

  When do you think Sam Altman loves carried a wallet?

• 59:06Ed Zitron?

  When do you think, do you think he, he carries money? Do you think he, do you think any of these people do? Because this is, are they just so separated that the only people they talk to are just worm-tongue-like figures and ChatGPT? And one another?

• 59:21Speaker 05

  Well, I mean, yeah, I mean, it's sort of, it's sort of just, it's striking me as like-

• 59:25Ed Zitron?

  The guy who sort of has never really had to experience any type of friction in his life. And so doesn't have to like, understand that, no, there are like parts of the world where you just can't. I mean, it's also like, why they always get confused whenever like the European Union is like, yeah, we're gonna maybe regulate you. And they're not like, oh, the regulation is bad and we can. So it's like, but why, why would you want to regulate us? What would the purpose of regulation do? Like, why would you? Why? Why? Yeah, exactly. Why would you want to restrain us? Like, the idea of sort of being held back is like, completely foreign to them. And so imagine like, sort of then sort of trying to explain to them, but hey, look, like, there are a lot of societies in the world that like, you know,

• 1:00:04Ed Zitron?

  don't operate using kind of, you know, the, the computer is not the be all and end all of like, communication, you know? People actually like, talk to each other. There, there exist like, communities and barter systems and all those types of things. Like, imagine just trying to explain to them in general, like, hey, like, people just don't live like you.

• 1:00:24Ed Zitron?

  Yeah, it's like, what do they do when they want to? What do you mean they run out of money? What does that mean? You know, you, you know, it reminds me of like, there was a clip that was circulating today. It's a very old clip. It's like an Anthony Bourdain clip where like, he's explaining to a bunch of like, uh, very rich Singaporeans, I think, that he does his own laundry. And one of them is just like, well, what, what do you mean you do your own laundry? And he's just like, yeah, I go to the laundromat and I put the coins in and the machine kind of does it. And I, and I fold it and I feel quite good about doing it afterwards. And like, the reaction that this guy has is like, you are speaking to him in a foreign language. Like, he has never understood the concept of like, touching his own clothes before. And this is like, this reminds me so much of just like, what, how all these guys view the world. They got too rich.

• 1:01:05Speaker 05

  So I, I got, we got time for one more bit before we have to close. And this one's really interesting, right? Because this is one of my favorite kinds of statistics, which is, how is AI actually being used in companies? What are they using it to do? Is it profitable? Are the pilots successful and so on? The sentiment change isn't limited to tech leaders. This is from the excerpt again. A survey by, by EY Parthenon, found that the percentage of CEOs who believe AI investments will result in significant reductions in headcount, fell from forty six percent in January twenty twenty five to just twenty percent. This May. And.

• 1:01:37Ed Zitron?

  Even even the most credulous worm eventually turns.

• 1:01:41Speaker 05

  Yeah. And like, so it just goes back to, well, if the firms aren't more productive, and they're not able to be the same, a level of product productive with the with um, with a with fewer people, like if these things aren't happening, and the thing is starting to cost what it costs, and what it costs is enormous, and it's still being subsidized, and in order to continue building up the demand that they think that they'll need, even if the thing suddenly goes to a hundred, as everyone needs it for everything, even if all that happens, they still can't build the data centers, then it's just like, in the grand story that that you you that you've been telling, Ed, and that we've been sort of checking in on you with every once in again,

• 1:02:24Speaker 05

  is that like, if the coyotes run off the cliff, he's held up the sign and is looked down and has held up the sign that says, oh, no.

• 1:02:32Ed Zitron?

  Yeah.

• 1:02:34Speaker 05

  Or he's opened, he's opened up the the little parasol and the boulder's falling on top of him. This is the moment where he has looked down.

• 1:02:42Ed Zitron?

  Yeah.

• 1:02:42Speaker 05

  Because that was that like the moment where he looks down, that was going to be when the thing has to start costing what it costs. Right? Not even making a profit, just costing what it costs. And that's now happened.

• 1:02:53Ed Zitron?

  Yeah. And now all the companies are freaking out that it costs a lot of money. And I think it's just that so it, you'll notice we haven't had a revenue update from in a while. And I have to wonder if that story might change too. But honestly, the biggest warning sign, the biggest sign the coyote looked down is when Sam Altman, when asked about these costs, said on stage, yeah, it's become a huge issue.

• 1:03:15Speaker 05

  Yes, so much to look into that.

• 1:03:19Ed Zitron?

  It's like a, it's just like, oh. All right, well, and he basically, I can get the exact quote, but he was like, yeah, someone's gonna have to, industry's gonna have to sort that out. It's just like, you are.

• 1:03:30Speaker 05

  Hopefully, the big problems, hopefully, the big black problem solving box will do that. I shouldn't check what's in it.

• 1:03:37Ed Zitron?

  Sell the computer, who, Sam fucking Aquaman?

• 1:03:42Speaker 05

  Look, um, I know we're, we got a bit of a hard stop today, so I'm gonna, I'm gonna call it there. Ed, joint venture.

• 1:03:50Ed Zitron?

  Joint venture.

• 1:03:51Speaker 05

  19 Staten Islands.

• 1:03:52Ed Zitron?

  Seventeen billion dollars raised. And 18. And we have lost the money already, so we're gonna have to keep doing this. Thanks a lot, everyone for joining us.

• 1:04:03Speaker 05

  We've been TF and Ed's been Better Offline.

• 1:04:05Speaker 07

  I have.

• 1:04:06Speaker 05

  And we will see you on our various... If you're listening to this, you know the deal. If it's TF, we'll see you on the bonus episode. If it's Better Offline, you'll see Ed on Better Offline.

• 1:04:16Speaker 07

  We should. See you on the bonus episode either way.

• 1:04:19Speaker 05

  Yeah, exactly. Thanks, everybody.

• 1:04:21Speaker 07

  Cheers. Bye. Bye.

• 1:04:23Speaker 03

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