"Cycular" Financing w/ GamersNexus

In this episode, Ed Zitron is joined by Steve Burke of GamersNexus to talk about NVIDIA’s “cycular” financing, Trump’s “superintelligence” accord, the growing bubble in the gaming industry, and the Steam Frame VR headset. 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.

• 0:00Speaker 00

  This is an iHeart Podcast. Guaranteed Human.

• 0:04Speaker 01

  Snoring, gasping for air during sleep, daytime sleepiness? I'm Shaquille O'Neal, and this shouldn't be anybody's experience. Ask your doctor about Zepbound Trisepotide, the first and only FDA-approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity.

• 0:20Speaker 02

  Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea, OSA, and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5, or 15-milligram injection. Zepbound contains trisepotide and should not be used with other trisepotide-containing products or any GLP-1 receptor agonist medicines. It is not known if Zepbound is safe and effective for use in children. Don't share needles or pens, or reuse needles. Don't take if allergic to it, or if you or someone in your family had medullary thyroid cancer, or if you've had multiple endocrine neoplasia syndrome type 2. Tell your doctor if you get a lump or swelling in your neck. Stop Zepbound and call your doctor if you have severe stomach pain or a serious allergic reaction.

• 1:06Speaker 02

  Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia, if you're nursing, pregnant, plant-to-be, or taking birth control pills. Taking Zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea, and vomiting, which can cause dehydration and worsen kidney problems.

• 1:27Speaker 01

  Talk to your doctor. Call 1-800-545-5979, or visit zepbound.lily.com.

• 1:34Speaker 03

  Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business further and help build a brighter future for your community. Learn more at chase.com/business. Chase for Business: Make More of What's Yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank, N.A., Member FDIC. Copyright 2026, JPMorgan Chase and Company.

• 2:16Speaker 04

  Even on my antidepressant, I still struggled with depression symptoms.

• 2:20Speaker 05

  You okay, honey?

• 2:21Speaker 04

  I'm okay, ish. My doctor said adding Rexulti Brexpitrazole could help.

• 2:26Speaker 05

  When added to an antidepressant, Rexulti was proven to significantly reduce depression symptoms, more than an antidepressant alone. Elderly people with dementia-related psychosis have increased risk of death or stroke. Antidepressants may increase suicidal thoughts and actions, and worsen depression in children and young adults. Call your healthcare provider right away to report new or sudden changes in mood, behavior, thoughts, or feelings, or if you develop suicidal thoughts or actions. Report fever, stiff muscles, and confusion, which can be life-threatening, or uncontrolled muscle movements which may be permanent. High blood sugar can lead to coma or death. Weight gain, increased cholesterol, unusual urges, dizziness on standing, falls, seizures, trouble swallowing, or sleepiness may occur. Learn about these and other side effects at rexulti.com. Tap ad for PI. Hey, how you doing, honey?

• 3:08Speaker 04

  Okay.

• 3:08Speaker 05

  Okay-ish.

• 3:10Speaker 04

  No-ish. I'm okay, really.

• 3:12Speaker 05

  Ask your doctor about adding Rexulti.

• 3:17Speaker 00

  Your Saturday's packed, and overthinking skincare isn't on the agenda. Simple can still be effective, because going overboard with active ingredients can weaken the skin's moisture barrier. New from Aquaphor, a dermatologist-recommended brand. Hydrating daily lotion. It's lightweight and fast-absorbing on skin. Even though your Saturday's packed, your skin's moisture barrier is supported. Grab Aquaphor Hydrating Daily Lotion at your nearest retailer. There's before, and then, there's Aquaphor.

• 3:47Speaker 06

  Coca-Cola. For the big, for the small, the short, and the tall. Peacemakers, risk-takers. For the optimists, pessimists. For long-distance love. For introverts and extroverts. The thinkers and the doers. For old friends and new. Coca-Cola, for everyone. Pick up some Coca-Cola at a store near you.

• 4:19Speaker 07

  Call Zone Media.

• 4:21Speaker 08

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

• 4:37Speaker 08

  That's right, folks, we are back at it. Subscribe to the newsletter, download the premium. Download this episode, download all the episodes. I need those downloads, or else buy some merchandise, if you must. But today, we are joined by the mighty Steve Burke of Gamers Nexus to talk to us about something called "cycular finance"? Cyc- cycle- cycular?

• 4:56Speaker 09

  It's not a circle. It's a cycle.

• 5:00Speaker 08

  So this is, this is the virtuous cycle, is it? That Jensen Huang has been talking about? Why, why you tell me? It was, it came up in your video, but I want to hear your eloquent way of putting it.

• 5:10Speaker 09

  They said that they, they know that, quote, "Some will refer to this as circular financing," end quote. But if you read some of their posts, they talk about how it's a virtuous, as you said, cycle. And as we know, cycles are not circles. That's

• 5:31Speaker 08

  Yeah. They're cycles. They just go in a shape that might be circular, but it's not the same thing as a circle.

• 5:38Speaker 09

  Right, it's, it's really best you don't think too much about, like, cycle and bicycle, and everything on a bicycle is moving in kind of a circular motion. But it's a specifically different thing. They made that very clear.

• 5:52Speaker 08

  Yeah, this is, and so this is Nvidia in their last earnings, trying to justify what is obviously blatantly circular financing, where they invest in someone, or they provide residual guarantees. Now, I just want to also add that they're saying they'll provide residual guarantees with data centers, but not saying what that actually means. There's lots of articles that are saying, "Oh, it could be this and that." Nvidia is not actually saying anything about what it is. They've said in one post, it'd be up to 25%, but not what that would actually result in.

• 6:23Speaker 09

  I've noticed this with a lot of it. I mean, like, the Superintelligence Accord.

• 6:28Speaker 08

  Oh, Christ. What is this?

• 6:30Speaker 09

  I didn't want to jump the gun, I'm sorry.

• 6:32Speaker 08

  No, please, just let's get to it, fucking.

• 6:35Speaker 09

  So, yeah, I mean, as you know, the Trump administration gathered some of the AI executives, SI, sorry, I fucked that up already. SI, they've issued a, an executive order to rename artificial intelligence to superintelligence for purposes of government documents. And, um, which just to get ahead of it is not binding and does not do anything. And the, I did notice that the company's on there, it's like Anthropic. Elon Musk was on there representing, I guess Elon Musk and whatever he does now. Jensen's signature on there, your friend Nvidia.

• 7:15Speaker 09

  AMD was absent, but AMD did follow up and say that they were happy to support and participate. And it just seemed to, it felt the same as a group project when the one kid in the group who did actually nothing, hands in the paper, you know, and says, "We worked very hard on this." AMD's jumping in there to say, "We're, we're happy to be a part of this too, even though we weren't really fully included."

• 7:43Speaker 08

  Yeah, it's such a bizarre thing, because they also signed this self-regulatory thing as well, where they've agreed to do absolutely nothing legally binding in any way, shape, or form.

• 7:53Speaker 09

  Well, they did say that they would police themselves.

• 7:56Speaker 08

  Oh, good. And as we've seen, look at how well-regulated the tech industry is as a direct result of their regulation of themselves.

• 8:03Speaker 09

  You know the Elmo meme where the background is on fire and he's waiting?

• 8:07Speaker 08

  Yes, yes.

• 8:07Speaker 09

  Yes, that's kind of what I'm picturing right now.

• 8:10Speaker 08

  What I liked about it as well is just how all of these guys who genuinely, I'm saying this without any irony or anything, genuinely, these companies have more power than the United States government. They actually do, if they wielded it. But all of them, the second, the absolute second Trump is like, "Sign the document, I'm gonna, all of you must kiss the ring." They fall over themselves to do so. And I mean, did you see the video of Mark Zuckerberg and him talking?

• 8:39Speaker 09

  Which, which one?

• 8:41Speaker 08

  So, outside of the White House, they were talking, and him and, him and Zuckerberg were yucking it up. And people were like, "Oh, Zuckerberg can barely hold his laughter in." When actually, what happened was the moment Trump turned away, Zuckerberg looked like he had diarrhea. He was just like, he, he looked like he'd seen the face of God. But the best part was in the background of Trump warbling on about some shit that barely made sense. Dario Amade looked like he was being stabbed in the leg by a little man. He was like actively grimacing.

• 9:10Speaker 09

  I did notice, I did notice that Dario, when he was asked to speak to the reporters for a moment, he looked so, I don't know if it was conflicted, or if he's just naturally, like, I get it, like, natural awkwardness, I get, but that didn't really look like what that was to me.

• 9:28Speaker 08

  He just looks strange.

• 9:30Speaker 09

  Yeah.

• 9:30Speaker 08

  He just looks like a weird freak, and I'm willing to call him that because someone from Anthropic in front of the Pope threatened to walk out because he, the Pope would not accept that machines were conscious.

• 9:42Speaker 09

  What, okay, okay.

• 9:44Speaker 08

  This is, this thing, how are you feeling about this? Just on a personal level, how do you feel right now, looking at this every day as I am?

• 9:51Speaker 09

  Uh, it's bad. When, uh, when Nvidia said on their call, you know, the, some will refer to this as circular financing, and they showed this sort of interest, this self-awareness for a second. I, I genuinely had a moment where I paused the call, and I just sat there like, oh, this is gonna be really bad when it goes.

• 10:16Speaker 08

  Yeah, that's, that's how I've been feeling right now, because we've, I think we've gone past the point where anyone rational is disagreeing with the financial argument I'm making. Like, I think that that, that ship has sailed, but no one really wants to accept what it means. And it's like, they, the thing that I don't get with Nvidia as well is when you talk to people about this, and you're like, hey, so, like, half or more of their revenue comes from five companies. Out of those companies, half of them to three quarters of them require debt to buy the GPUs. 10-year treasuries are skyrocketing, which means the cost of borrowing for everyone is going more expensive. At some point Nvidia's revenue has to drop, and people respond by saying, yeah, but you know, things were okay after the dot-com bubble.

• 11:00Speaker 08

  And it's like, okay, but what happened during that?

• 11:02Speaker 09

  Yeah.

• 11:03Speaker 08

  What happened during?

• 11:05Speaker 09

  After is a pretty long window. Yeah, you've got about 26 years, give or take, I guess, a year for the after the dot-com bubble.

• 11:16Speaker 08

  Yeah, and also, I just don't think that that really applies here, because instead of dark fiber, we have GPUs that, as I've established, are not getting installed.

• 11:24Speaker 09

  Right. I mean, so this is, I think, for me, at this point, one of the biggest questions is just like, we've been talking about this, but it's the, where are the GPUs?

• 11:37Speaker 08

  Right.

• 11:38Speaker 09

  And everyone would love to have that story, and I, I don't, I don't think at this point, I mean, let me know what you think on the reporting side, but I don't think someone figures out this, like, oh, what warehouse, or what warehouses realistically are GPUs sitting in unused, unless someone internal comes out and says it, like, hey, I'm a forklift driver, you know, at XYZ warehousing, and, and we have 1,800 GB or whatever GPU, you know, servers here. Because otherwise, I just, I would think all that stuff is so close to the chest that you're not,

• 12:15Speaker 09

  you're not gonna have a leak from the executive circle, and, uh, the, the companies that are warehousing, it's also not clear to me, so if Microsoft buys a ton of GPUs, and then you have Satya Nadella, who actually said on camera that he has more GPUs than he has, quote, "warm shells", and a quote that he can plug them into, right? Like, we know they have more GPUs than they're using, he said that. What I don't know is where do those GPUs sit in that purgatory?

• 12:45Speaker 08

  Yeah, are they in a data center but without power? That wouldn't make sense, though, because if the data center didn't have power, that would actually be dangerous for them.

• 12:53Speaker 09

  Yeah, and, and he also did, he did say "warm shells", which to me, in your situation there, I think the only way that happens, while his "warm shells" statement is true, is if it's a data center that doesn't have power yet, and I, I just don't see that happening. You know, like, because then you're probably, you're not even permitted, right? So.

• 13:11Speaker 08

  It's just, and again, you go to the various journalists about this, and you try and make them talk about it, and they go, ah, you know, it really is, this is actually what jokifies me. It's when you try and talk to your peers, and they're like, eh, yeah, you know, it's bad, I guess, but eh, who's to say? And it's just like, okay, but we've sold possibly 200, 300 billion dollars' worth of GPUs that have gone nowhere, and they're planning to buy more. This, this alone is a story, and they look at you like you're, that, like, you're reading algebra to a dog.

• 13:44Speaker 09

  Yeah, I mean, it's, it's like, I feel like a product physically exists, probably.

• 13:50Speaker 08

  I hope so, legally speaking. League, like, if it doesn't, and this is just literally balance sheet transfers, that's so bad.

• 13:58Speaker 09

  Right, I mean, that's how I feel, too. It's like, I, I think there's a certain level of awareness, and I don't, Nvidia's people aren't stupid, I think, and it seems unlikely that it would be a pure balance sheet type of, uh, algebra.

• 14:15Speaker 08

  I think that they just have, if I had to guess, they're sitting in warehouses in Taiwan.

• 14:20Speaker 09

  Yeah.

• 14:20Speaker 08

  They just, that they get manufactured, and they just get stored somewhere, and that's, like, we're never seeing those things. And I mean, I was, I reported with The Guardian's I should down about this, but their, uh, Microsoft, as of a few months ago, only had less than 2 gigawatts' worth of AI capacity online, and most of that was H100s and H200s, like, the vast majority of it. And it's like, people, people don't realize how bad that is, because it means that most of the Blackwall sold in 2025 have gone nowhere. It means that any of the chips sold this year have gone nowhere. Bryce Elder at the FT reported the other day that, uh, there was an analyst who said that 50% of the chips sold this year and next year have nowhere to go.

• 15:06Speaker 08

  And it's, so it's like, why, I mean, why are we doing this is probably the biggest question right now, and no one really wants to talk about it.

• 15:13Speaker 09

  Well, you know, on the, the consumer side, there's something really interesting. I, we're working on a story on this, which, uh, I can, I can basically, I mean, I can share it in advance, but, um, we got an email from someone about, you're familiar with Micro Center, big retailer?

• 15:31Speaker 08

  Yes.

• 15:31Speaker 09

  Yeah, so for anyone who doesn't know, Micro Center is a gigantic retailer, computer parts. Gigantic, I guess, in a, in a relative sense, for the computer parts world, they're big. And they, uh, have, and we've confirmed, started using forms for customers buying 5090s, which is Nvidia's flagship consumer GPU, um, sort of, it's kind of workstation prosumer consumer. So these forms, they ask the staff to obtain from the customer things like an ID, like a government-issued ID to prove who they are. The purchaser, the customer walking into the store buying this GPU or desktops containing it,

• 16:12Speaker 09

  have to certify that they're the end user, or if it's for someone else, that they've obtained certification from that end user, that this device is not being exported, not being resold, and is in full compliance with, you know, the covered list and export control laws. And, and this is a Micro Center-specific thing right now, like, you go on Amazon and buy a 5090 or Newegg, they don't make you fill out a form like this, so it's Micro Center-specific for at least the time being. But it's interesting to me, I guess, because we're now in a situation where 5090s, which were launched as a consumer part, that's been hard to get because all the silicon's being taken for these data center parts that are probably sitting in a warehouse.

• 16:56Speaker 09

  That part is now so difficult to obtain that you have to potentially provide government ID and certifications in order to buy it, like, a credit card isn't enough, which is wild to me.

• 17:11Speaker 08

  And what is this to do? Is this to stop the sneaky Chinese from taking it?

• 17:16Speaker 09

  I think that's probably the, sort of, the build usage of it, you know, like, that's.

• 17:21Speaker 08

  Really what China is doing to get these GPUs? Feels like slamming a Band-Aid on the side of the Titanic as it sinks upon the ocean.

• 17:29Speaker 09

  Well, I mean, Nvidia had one of its own people detained in Taiwan, implicated in smuggling, right? Not long ago.

• 17:38Speaker 08

  There's more smuggling stuff that came out today that I've yet to even fucking read.

• 17:41Speaker 09

  Yeah, I saw the headlines.

• 17:42Speaker 08

  There's more shit going on, but it is really funny, though, is, I'm paraphrasing the Bloomberg headline about it, but it was, uh, Nvidia's overseas sales of, oh, sorry, Nvidia GPUs getting to China shows holes in due diligence.

• 17:57Speaker 09

  Right.

• 17:57Speaker 08

  Not like, not like, hey, has Nvidia known that this is happening, which is very obvious by now. Like he's, there was the Bloomberg story from end of last year where there was a picture of him with the CEO of a Singaporean data center company that was sending the chips to China, like having drinks with her at a big party.

• 18:15Speaker 09

  Right.

• 18:16Speaker 08

  Like, it was like a professionally taken photo. And people were like, oh, you know, it's still an open question.

• 18:22Speaker 09

  Are you just referencing Bloomberg repeatedly to hurt me, Ed?

• 18:26Speaker 08

  No, no, no. I'm referencing it because the times they do, usually they most, their biggest business is threatening to sue you for using videos of Donald Trump, I realize. But on their off time, they do journalism sometimes.

• 18:37Speaker 09

  Right. Okay, got it. Yeah.

• 18:38Speaker 08

  I feel really bad as well because the legal side is there for them. But nevertheless, that was a bullshit. But it is funny, though, how no, we've, there we go. That's the second one. It's like another thing that no one really wants to talk about. First of all, it's, hey, the data centers aren't really getting built, like they say, and the chips aren't being put in them. And the second is Nvidia is 100% aware that they're getting these chips to China and doesn't appear to be doing anything or alternatively might want it to?

• 19:07Speaker 09

  I think, I think that's the one sort of asterisk I have on that form from Micro Center. I emailed them. They didn't respond, but I emailed them to ask, is this, did Micro Center decide to implement this form? Or did Nvidia apply pressure and say, you need to do this? You know, maybe, maybe the government traced the serial number of a device back to Micro Center supply or something? Or did the government ask you to do this form? And they haven't answered me. But the, in the case of Nvidia, I don't know, maybe there's like a, look, we're trying. Here's this piece of paper. We're making a physical retailer use, right? But, but ultimately, though, yeah, I don't know where the GPUs

• 19:46Speaker 09

  are going. What I do know is that a big component of the GPUs, the memory, has gotten into even worse shape since the last time we spoke, which is these three gigabyte higher density modules. Now.

• 20:00Speaker 08

  What was this?

• 20:02Speaker 09

  So the, the memory supply for GPU VRAM, like GDDR7, has continued to worsen from a pricing standpoint where the, there's two kind of main types of modules that Nvidia uses right now on consumer cards, which I kind of hesitate on consumer every time now because the 5090 is really, it's been bought up by a lot of sort of home AI type of people. But it's, they've got a higher density three gigabyte module. You find those on the RTX 6000 Pro, which has just doubled in price from $8,500 to $16,000 from Nvidia directly. And then there's lower two gigabyte density modules. And so the pricing's gone up and

• 20:43Speaker 09

  availability has gone down on the higher density modules, where you really only have sort of three main suppliers for them. And if you look at Micron's margin on its memory now, I don't know if you saw that the other day.

• 20:59Speaker 08

  Yeah. Did it go, I actually saw it was higher.

• 21:03Speaker 09

  They're at, I think it's 88%. It's about 90% margin on consumer.

• 21:08Speaker 08

  Well, I'm glad Micron is doing okay.

• 21:10Speaker 09

  I was worried about them. Yeah.

• 21:11Speaker 08

  Yeah. Aren't they also taking billions in taxpayer subsidies as well?

• 21:16Speaker 09

  Ah, yeah, but who doesn't do that?

• 21:17Speaker 08

  Good. Good. Well, I'm glad that, and I'm glad that we attack people for doing dodgy things on their taxes. But I mean, people strictly, not companies. Companies must be able to do that. Companies need as many loopholes as possible.

• 21:39Speaker 08

  All right, everyone, I'm back talking about Quince, one of my favorite clothing brands. And as we speak, I'm currently wearing one of their excellent cotton knit overshirts. I wear like a jacket, nice pre fall piece to wear as things cool off a bit. I've also been eyeballing one of their heritage water resistant Harrington jackets too for later in the year to pair with their Mongolian cashmere sweaters I bought. And I have several of them and I really can't recommend Quince's stuff enough. I love Quince because they focus on high quality wardrobe staples made with premium materials, jackets, pants, fitted tees and polos, activewear and even travel gear. Everything at Quince is priced 50 to 80% less than similar brands. And because they work directly with ethical factories and cut out the middlemen, you're getting more for less. Find the four pieces you'll

• 22:21Speaker 08

  reach for most at Quince. Download the Quince app for app exclusive offers or go to quince.com. Get free shipping on your order and 365 day returns. Now available in Canada and the UK too. And when Quince asks where you heard about them, let them know it was on Better Offline. It's the best way to support the show.

• 22:39Speaker 01

  Snoring, gasping for air during sleep, daytime sleepiness. I'm Shaquille O'Neal and this shouldn't be anybody's experience. Ask your doctor about Zepbound Trisepotide, the first and only FDA approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity.

• 22:55Speaker 02

  Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea, OSA, and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5, or 15 milligram injection. Zepbound contains trisepotide and should not be used with other trisepotide containing products or any GLP-1 receptor agonist medicines. It is not known if Zepbound is safe and effective for use in children. Don't chew needles or pens or reuse needles. Don't take if allergic to it. Or if you or someone in your family had medullary thyroid cancer, or if you've had multiple endocrine neoplasia syndrome type 2, tell your doctor if you get a lump or swelling in your neck. Stop Zepbound and call

• 23:37Speaker 02

  your doctor if you have severe stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia. If you're nursing, pregnant, plant to be, or taking birth control pills. Taking Zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea, and vomiting, which can cause dehydration and worsen kidney problems.

• 24:03Speaker 01

  Talk to your doctor. Call 1-800-545-5979 or visit zepbound.lily.com.

• 24:10Speaker 10

  Financial growth begins long before the first investment. It comes from understanding what you're building toward, what's at stake, and what success looks like for you. At Oppenheimer, we bring bold thinking guided by the full strength of our expertise to put capital to work building and protecting wealth that lasts generations. Put the power of Oppenheimer thinking to work for you. Wealth management, capital markets, investment banking.

• 24:42Speaker 11

  What if you could make that stop? With LPL Financial, we remove the things holding you back and provide the services to help push you forward. If you're a financial advisor, what if you could have more freedom, but also more support? Ready to invest? What if you could have an advisor that really understood you? When it comes to your finances, your business, your future, at LPL Financial, we believe the only question should be, what if you could?

• 25:05Speaker 12

  Paid advertisement. Anna Kendrick is not a client of LPL Financial LLC and receives compensation to promote LPL. Investing involves risk, including potential loss to principal LPL Financial LLC member FINRA, SIPC.

• 25:12Speaker 13

  Summer's still going strong. Make a stop at Total Wine & More for white wines, beer, and ready to drink cocktails. Just know, you're getting the lowest prices. Keep the summer celebrations going at Total Wine & More. Spirits are not sold in Virginia and North Carolina. Drink responsibly. Be 21.

• 25:33Speaker 08

  This is all me queuing up. Did you hear about the Meta story?

• 25:36Speaker 09

  Oh, no. Which, what, it was, is it good?

• 25:41Speaker 08

  It's not. Meta has been using a, the R and D tax credit to try and take billions of dollars worth of data centers off of their taxes, basically a tax rebate, by saying that they are an R and D expense for a project that may fail.

• 25:57Speaker 09

  Oh, wow. No, I didn't hear about this.

• 25:58Speaker 08

  New York Times put this out this week. It's just, again, how many dodgy things need to happen for people to be like, okay, maybe this is dodgy, maybe this is bad. Because even the Micro Center thing, sure, those things are getting bought up by, like, whoever. They're getting bought up by whatever, whatever little AI perverts might buy them. And theoretically, the Chinese could get them. I don't know. But we have a real way the Chinese are getting these chips. Like, it's happening. It's probably through Malaysia or Singapore or there's another country.

• 26:32Speaker 09

  Taiwan, Macau, Singapore are pretty common ports of ingress. And yeah, there's a whole question too of like. Is there even any point to try and export control? Or I don't know, I, when we talked about it back last year, the conclusion I came to was, I'm not really sure, I don't feel qualified to judge if there should or shouldn't be a law on it. But what I do feel is fair to say is, if we're going to have them, they should make sense and probably be actually enforced. Otherwise, what's the point? And yeah, it seems like we've got kind of, sort of a lack of follow through, you know, at the government level or a lack of enforcement at the company level, but.

• 27:18Speaker 08

  Yeah, I mean, also, the question, this is just Dario, a great, great friend of mine, who writes, has the single worst, like, I love the guy, he's one of my favorite people, has the single worst design blog I've ever seen, but he now moves stuff off of it. So many ads, it's truly crazy. But the thing that he's done very well is he's been looking at Nvidia very intensely and Kakashi, another guy's been doing this as well, where it's the way that Nvidia has changed how it puts in its sales, how it counts where something was going. It used to be, it'd say, oh, yeah, 10% of, I'm pulling a random number, 10% of our sales went to Singapore. But what they changed a few quarters ago was it's now the eventual, the HQ of the company buying them.

• 28:01Speaker 09

  Oh, yeah.

• 28:02Speaker 08

  That's, so it's like, oh, yeah, like 90% of our sales go to America. And as we all know, it's really hard to start an LLC.

• 28:10Speaker 09

  Right, yeah.

• 28:10Speaker 08

  It's really difficult.

• 28:12Speaker 09

  It's about $200.

• 28:14Speaker 08

  How would I put, it's millions of dollars. It's not $100 and five minutes. Multiple companies that do this immediately. And it's just funny, because if it turns out a sizable amount of this money is coming from China, which I don't know how much it would be, that will eventually go away, once China just copies America and stopping doing the AI bubble, or when they truly move to their own chips. But at the same time, it doesn't seem like China has any trouble getting them.

• 28:39Speaker 09

  You know, not only that, but I also, I've had a, I've seen a lot of the Anthropic and these other LLM company, model company posts, where they complain about how they, well, at least according to them, their models are being stolen. And they'll always point to China and the companies in China as stealing their models. And, which is just like what people have always said forever about manufacturing coming out of China, in terms of sort of the, it's like the scapegoat of, that's just what people point to is copycat. But the truth of matter is, these days, there's a lot of really good engineering coming out of China.

• 29:21Speaker 08

  Yeah.

• 29:21Speaker 09

  But what's interesting to me is how these LLM companies, they, they still draw upon this old image of China and its sourcing for what it's IP, I guess. And these are companies like Anthropic and, you know, OpenAI and Meta, who are in the business of stealing everything made by anybody ever. And they then have the gall to point at literally any other company and say, you're reverse engineering or stealing our IP. I just, I have a really hard time reconciling why I should feel bad. Like, take the China and the US and the whatever out of it, right? Take all the geopolitics out. Why should I feel bad if a company that

• 30:06Speaker 09

  has ingested all these authors and musicians and everyone else's work, then feels like their IP for their LLM has been infringed upon by a competitor? You know, it's like, make me care.

• 30:18Speaker 08

  Well, also, the other thing is, is, I think there's also a fair, fairly large layer of cinephobia to it. I also think, paraphrasing my girlfriend here, America misses the USSR so bad. Oh, oh, we miss having, we miss having like an argument with Russia. Oh, we don't have an adversary anymore. We miss having an adversary so much, we started shit with Iran, who is dabbing on America on Twitter, which is embarrassing for everyone. But this distillation thing. And so, Steve, I assume what you mean is like the models, like Chinese models training off of outputs from ChatGPT and Claude, right?

• 30:54Speaker 09

  That's what they claim, yeah.

• 30:56Speaker 08

  Yeah. So here's two things with this. One, you're completely right. Who gives a fuck? Oh, oh, suddenly the stealing machine doesn't like when it's stolen from? What are you gonna do about it, bitch? Why don't you distill from other people? It isn't theft. It's ridiculous. And it's so silly as well, because the argument is, well, it's our models that created the outputs, and thus we own them. It's like, okay, well, who created the shit you trained on?

• 31:17Speaker 09

  Right.

• 31:18Speaker 08

  Fuck, did it pop out the fucking air?

• 31:20Speaker 09

  I mean, if I break into someone's house, and I do them a favor and steal their LG television, and then a different thief steals that from me, I feel like it's kind of hard for me to cry about it as the original thief.

• 31:34Speaker 08

  Yeah, I mean, well, the answer would be, both of you would be criminals, but one would be the funnier criminal. Right. There was a level of funniness to it. But there's also another thing that no one really can quantify yet, which is, how much of their revenue is a result of distillation? Because Anthropic in their S1 leaked this week, oh, sorry, last week even, is, they are, they're saying that like 20% of their revenue or something comes from overseas. So, and I mean, some of that might be Australia, apparently they have a huge Australian, I don't know why, Australian listeners, if you have any information, please email me, [email protected], or EZ for those of you in Australia. But

• 32:18Speaker 08

  the other thing is, is, I wouldn't be surprised if like hundreds of millions or billions of dollars came from the distillation. And if that's the case, they kind of need this to continue. I will also argue that if it must be quite a large share, in which case, how can they not tell? And if the answer is, the Chinese are too sneaky, well, sounds like they're out innovating you. Sounds like you're terrified of them out innovating you. Why don't you, I don't know, why don't you distill off of their models? In fact, that just occurred to me. Why don't they distill off those models or their own models and make cheaper models, right? They, surely they could. It's almost as.

• 32:53Speaker 09

  See, there's a problem.

• 32:55Speaker 08

  What's the problem?

• 32:56Speaker 09

  Well, you just said the word cheaper.

• 32:58Speaker 08

  Oh, right.

• 32:59Speaker 09

  No, we, yeah, no, that's the wrong direction.

• 33:01Speaker 08

  Yeah. Yeah. Well, and now also, so have you really looked into Broadcom at all? You had a look at?

• 33:07Speaker 09

  I'm afraid of why you're bringing them up specifically right now.

• 33:12Speaker 08

  Well, the reason I'm bringing them up, I'd be looking forward to talking to you about this actually, is Broadcom is currently doing an Nvidia impression. They're really desperate to do Nvidia style. So what they're doing is they have now, so Anthropic's S1, they have $413 billion worth of uncancellable commitments, which is very good for a company that have $4.8 billion in revenue, sorry, $4.6 billion last year, lost $8 billion. Now, 161.2 billion of that is to Broadcom. Broadcom, their largest customers are now Anthropic and Google, both for TPUs, all of them mostly going to Anthropic, and also

• 33:53Speaker 08

  OpenAI's jalapeno chip. The less we think about that, or say that, the better. So, right now, HOKTAN of Broadcom is actually raising $60 billion more to just keep doing more of this. And so, we have this, another pressure on the overall RAM market, more demands of the HB RAM market because of fucking Broadcom.

• 34:17Speaker 09

  Right.

• 34:17Speaker 08

  They, and so, it's weird as well, because Broadcom doesn't really have, they don't have any consumer gear, so you'd think that this would work out better for them. But their margins are worse, they don't have the supply chain that Nvidia has. They have a supply chain, they're pretty good at enterprise chips, but they are still nowhere near as proficient at it as Nvidia, which is interesting in and of itself. But I think we're gonna see HOKTAN try and race Jensen Huang to be the biggest chip company, which is hilarious, because they won't do it. They'll be potentially dead by then. But it's just interesting watching the semiconductor industry kind of eat itself at this point.

• 34:54Speaker 09

  I do wonder who's left standing at the end, you know, if there, or when, if or when there's some kind of collapse, if we just kind of go full doomsday and assume it's, it's a sort of a catastrophic collapse at some point, where maybe one domino falls and then, you know, a bunch of other ones do. I genuinely don't know who is in the strongest position to remain standing. I feel like Nvidia is probably in one of the stronger positions.

• 35:23Speaker 08

  They'll be okay. It would just be 90% smaller.

• 35:25Speaker 09

  Right, yeah. And that's crazy too, because I mean, if you look at their, their revenue, just whatever, four or five years ago, I guess, right? It's like, a fraction of a fraction of what it is today. And most of it was still gaming. So, I'm not sure, I really, I don't know, I, I wish I could say that my hope would be in the event of some kind of drawback of this B2B stuff, if the companies have to go crawling back to consumers, I would hope that consumers would try to not buy from them as a means of, you know, like fuck you for what you've done to our industry. But unfortunately, your options

• 36:07Speaker 09

  are in the GPU space, Nvidia, Intel, which Nvidia, it's like 4% or 5% of, and, and Intel's barely present there, and AMD, which hasn't really done a whole lot to garner much sympathy itself. And so, it just feels like we're kind of, like, what do you, who do you give your money to? I guess Li Xuan coming out of China, or maybe someone else, but there's not really any, it's those three, you know?

• 36:35Speaker 08

  Well, the other thing that I've been thinking about with the gaming GPUs, which it sounds like they no longer, Nvidia no longer discloses on its earnings, which is?

• 36:44Speaker 09

  They group it in with edge computing, yeah. So it's all rolled in.

• 36:48Speaker 08

  Fucking, Jesus Christ.

• 36:49Speaker 09

  And the edge computing category, if I remember correctly, from our, you know, coverage of it, is not even enough revenue to kind of equate the tax bill that Nvidia has. That's kind of how small it is now. And that contains gaming, right? So, and AMD, their gaming was still broken out in one of the previous reports recently, and they had seen something like a 30% decline in that category, which makes sense, so.

• 37:18Speaker 08

  But here's the thing that I've been really thinking about. Which is, okay, let's say AI bubble bursts. I'm sure that's gonna happen. Nvidia and AMD haven't really been working on gaming very much the last few years. Like, no one, really. It feels like the entire intelligence of these companies has been focused on building chips that can sit in warehouses and

• 37:40Speaker 09

  Yeah.

• 37:40Speaker 08

  can bench max. Which makes me wonder, like, what happens to gaming after this?

• 37:46Speaker 09

  I think the good news is, in terms of, like, playing video games as a fun thing to do, it's doing great. You look at Steam's numbers. Steam's a private company. They're a big digital platform, for people who don't know, for games purchasing. And, uh, they're, they're, they're doing more, like, better revenue than ever from some of the reports that have come out. But I think a lot of it's going towards indie as an independent games these days, as opposed to the big studios. And what that tends to mean, although not always, is that things like the graphics fidelity or the demand on the system are lower, because they're more focused on just getting a fun game that's playable out, not necessarily these sort of, like, GPU melting graphics.

• 38:30Speaker 09

  And for the GPU companies, that's uninteresting, unfortunately, right? Because they can't sell more GPUs. If you, like, why are you making a game that's fun when you could make a game that sells graphics cards? Is, I think, their perspective.

• 38:56Speaker 01

  Snoring, gasping for air during sleep, daytime sleepiness? I'm Shaquille O'Neal, and this shouldn't be anybody's experience. Ask your doctor about Zepbound Trisepotide, the first and only FDA-approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity.

• 39:12Speaker 02

  Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea, OSA, and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5, or 15-milligram injection. Zepbound contains trisepotide and should not be used with other trisepotide-containing products or any GLP-1 receptor agonist medicines. It is not known if Zepbound is safe and effective for use in children. Don't share needles or pens, or reuse needles. Don't take if allergic to it, or if you or someone in your family had medullary thyroid cancer, or if you've had multiple endocrine neoplasia syndrome type 2. Tell your doctor if you get a lump or swelling in your neck. Stop Zepbound and call your doctor if you have severe stomach pain or a serious allergic reaction.

• 39:57Speaker 02

  Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia, if you're nursing, pregnant, plant-to-be, or taking birth control pills. Taking Zepbound with a sulphonal urea or insulin may cause low blood sugar. Side effects include nausea, diarrhea, and vomiting, which can cause dehydration and worsen kidney problems.

• 40:19Speaker 01

  Talk to your doctor. Call 1-800-545-5979, or visit zepbound.lily.com.

• 40:27Speaker 10

  Financial growth begins long before the first investment. It comes from understanding what you're building toward, what's at stake, and what success looks like for you. At Oppenheimer, we bring bold thinking guided by the full strength of our expertise to put capital to work building and protecting wealth that lasts generations.

• 40:48Speaker 10

  Put the power of Oppenheimer thinking to work for you. Wealth management, capital markets, investment banking.

• 40:56Speaker 11

  What if you could have more wins? More support? More sound effects? At LPL Financial, we like the sound of that, because LPL offers more. Advisors, what if you could have more ways to help your clients? Ready to invest? What if you could find an advisor that really understands you? When it comes to your finances, your business, your future, at LPL, we ask, what if you could?

• 41:21Speaker 14

  Paid advertisement. Investing involves risk, including potential loss of principal. LPL Financial, LLC, member FINRA, SIPC.

• 41:27Speaker 13

  Summer's still going strong. Make a stop at Total Wine & More for white wines, beer, and ready-to-drink cocktails. Just know, you're getting the lowest prices. Keep the summer celebrations going at Total Wine & More. Spirits are not sold in Virginia and North Carolina. Drink responsibly. Be 21. This is Danielle Fishel.

• 41:44Speaker 14

  Ryder Strong.

• 41:45Speaker 15

  And Will Friedle from Pod Meets World.

• 41:47Speaker 14

  Halloween has a funny way of making you buy things you'd never normally buy. A 10-foot skeleton? Sure.

• 41:53Speaker 16

  Full-size fog machine? Why not?

• 41:56Speaker 15

  Three bags of candy that somehow become six bags of candy? It happens.

• 42:01Speaker 14

  Which brings us to the Chase Freedom Flex card, the savvy decision that will earn you more cash back on the everyday purchases, plus the extraordinary Halloween tricks and treats.

• 42:10Speaker 16

  With Freedom Flex, you earn even more treats on your Halloween and everyday needs. You get 5% cash back on popular rotating quarterly categories, 3% on dining and drugstores, and 1% on all other purchases.

• 42:24Speaker 15

  More ways to earn, more ways to get rewarded. That's no tricks, all treats.

• 42:29Speaker 14

  More ways to earn, more ways to get rewarded. So sign up for the Chase Freedom Flex card. Learn more at chase.com/getflex.

• 42:36Speaker 16

  This is a paid collaboration with Chase Freedom Flex. Cards issued by JP Morgan Chase Bank, N.A., member FDIC. Subject to credit approval. Offer subject to change. Terms apply.

• 42:50Speaker 08

  But the thing is, I'm just, gaming at this point is reaching its own kind of bubble status where games either cost $100 or $1 billion to develop. I'm being dramatic, but you get my point.

• 43:04Speaker 09

  It's not too, it's not too far off.

• 43:07Speaker 08

  And everything is, it's so expensive to buy a new console, and everyone's very unhappy, like Xbox, Microsoft looks like they might, but I don't know if they'll set it off, but it's no longer a foregone conclusion that they'll keep it.

• 43:20Speaker 09

  Right.

• 43:21Speaker 08

  And there, there's rumors about Xbox Game Pass, which was obviously a bad idea, being rolled back, like, what a surprise. Selling hundreds of games for $30 a month wasn't a good idea, kind of like streaming media, except dumber. And it just feels like gaming is kind of accelerating to this point where it will have its own financial, like, I mean, as Nvidia AI bubble ends, AMD, same deal. They have to go back to pleasing gamers at a time when inflation is high and the prices are high and no one can really afford anything. What the fuck are they meant to do? They just,

• 43:57Speaker 09

  Yeah.

• 43:58Speaker 08

  Like, I just don't see how it works.

• 44:01Speaker 09

  I mean, I think, yeah, to your point, I think in that situation, sort of, normal people, as in customers, are probably the last people you're gonna shake money out of if times are tough and they're worried about losing their jobs. Like, it might actually be better to try and stick with the sort of B2B and just hope that you can scrap together enough.

• 44:22Speaker 08

  I don't think there's gonna be a B2B left. I will say, this is my most dramatic statement I'll make on this episode. I think the Steam machine is a better console than the Xbox or PlayStation 5.

• 44:33Speaker 09

  Ooh.

• 44:34Speaker 08

  Perhaps the PlayStation 5 has better, they may have better games, but, and maybe the performance is better, but as far as the experience of using the fucking thing to play video games, I like the controller better. I like the experience better.

• 44:47Speaker 09

  That's cool. I mean, I can, I, I like hearing opinions like that, because it's, it is like, people lose sight of the fact that consoles, although you can compare the performance, and the Steam machine's basically a console, although it's a computer.

• 44:59Speaker 08

  It's also, like, thrice the cost of a PlayStation 5. The economics are, fuck.

• 45:04Speaker 09

  The, yeah, these days, though, I mean, the PS5, if you buy it with a disk drive now, which is a whole

• 45:09Speaker 08

  Oh, yeah, it's like, 7 million, no.

• 45:11Speaker 09

  Yeah, it's, yeah, they're over $1,000, so.

• 45:14Speaker 08

  Jesus Christ.

• 45:15Speaker 09

  Yeah, actually, so they're, like, weirdly, for the Steam machine, their competition's kind of getting closer to them. And, uh, yeah, I do think it's interesting, though. I, I think if you look at where gaming's gone with the lack of the super high-fidelity graphics and towards more of these more playable, more fun games, stuff like the Steam machine or, like, consoles are better positioned for it, because you don't need the crazy graphics. But on the game bubble you mentioned, um, I, I don't know if it may be interesting for your people who watch from the financial industry side, but on the gaming side, a lot of these big studios really are struggling now. I mean, Epic Games is not far away from me. I've heard a lot of sort of talk and rumors from people who work there,

• 46:00Speaker 09

  about, and this relates, actually, to AI, about the internal push to use AI and to add it to sort of the job requirements for people working there. And

• 46:12Speaker 08

  Jesus Christ.

• 46:13Speaker 09

  Yeah, and, and so, you know, this is

• 46:16Speaker 08

  Tim Sweeney.

• 46:17Speaker 09

  Yeah.

• 46:18Speaker 08

  Tim Sweeney.

• 46:19Speaker 09

  Did you know? I, I haven't shared this yet with anyone publicly. This is an exclusive.

• 46:25Speaker 08

  Oh, yeah.

• 46:26Speaker 09

  Did you know that Tim Sweeney has blocked the Gamers Nexus Twitter account?

• 46:30Speaker 08

  No. No. What a, what a coward.

• 46:34Speaker 09

  Oh, it's one of my great honors. I, I need to print that out and frame it.

• 46:38Speaker 08

  Was that because you kept asking him for an interview?

• 46:41Speaker 09

  Uh, yes, and I, I may have, it's because he kept beating the drum about AI, and how you shouldn't need to disclose if a game has AI in it, or AI art, or assets, uh, which is something that Steam has, you know, required, and he didn't like that, because they're investing in AI at Epic. And, um, I repeatedly offered an interview, and I may have, in my last round, said something to the effect of, "Look, I know that town revoked your zoning for the mall that you bulldozed to put your new offices on, but we could do an interview there." Uh, although I suppose the backdrop of gravel and needles is probably not a good backdrop.

• 47:25Speaker 08

  Why would he block you? Why, I just can't, what can I?

• 47:31Speaker 08

  Yeah, it's like, it's like when CZ from Binance blocked me after three months of... Yeah, well, it's like, I kept posting the smiling man image underneath everything he said.

• 47:43Speaker 09

  He blocked you? Wow, congratulations. That is awesome.

• 47:48Speaker 08

  Famous actual criminal.

• 47:51Speaker 09

  That's actually really cool that he blocked you. You should put that on your, your awards and accolades section.

• 47:57Speaker 08

  Yeah, you get people boasting about Mark Andreessen blocking them. That's super easy. No, you need to get actual, you need, you need the big criminals. But as we wrap up, I actually did want to ask you about something positive. The Steam Frame, the VR headset, can you tell me about, like, it's something where I have actually not had a ton of time, like my mate Casey just got it, but I haven't had a ton of time to look into it. What's it like? It's like a fun thing to talk about.

• 48:24Speaker 09

  Yeah, I mean, VR, it continues to sort of have the chicken or the egg challenge, which is just getting enough distribution where developers want to develop for it. But it has matured a lot in the 10 or so years I've been covering the headsets these days. The Steam Frame is expensive with sort of an asterisk I'll come back to. But one of the things it does really well is comfort, where they've kind of finally made a headset that for some of the people on the team, they find just comfortable out of the box without needing to buy a third-party, you know, strap to attach it.

• 49:02Speaker 09

  And so VR has gotten more approachable, I think, no matter what you buy for everyday people, where it's no longer this big mess of like a rat's nest of wires you have to plug in to use. And so it's, it's, it's pretty fun. The thing that I thought was the most interesting with the Steam Frame versus its biggest competitor, which is Meta's Quest, is the Steam Frame, although more expensive, their privacy policy was very clear, like they straight up told us, no, we do not sell or share data for marketing and advertising, like third-party ad purposes. And all of the room scanning data, you know, these VR headsets now, they have cameras on them, they have microphones in them.

• 49:46Speaker 09

  You have to scan or look around your room to use it. And Valve was very clear with us where they said, all of that stays local to the headset for purposes of, you know, processing where you're standing in your house for playing VR games. Whereas Meta, if you read their privacy policies, which are like recursive and nested and tens and tens of thousands of words, they have all kinds of terrifying clauses about the data that they extract and send, you know, exfiltrate back home for who knows what, being a big AI company. So on the positive side, I thought it was really cool. It was like, okay, you say what you want about Valve's pricing or about VR in general, but the fact that they have this thing with cameras and microphones,

• 50:30Speaker 09

  and they're choosing to not sell data that they can collect with those, that's so rare these days.

• 50:36Speaker 08

  Yeah, it's, it gets back to the thing I said about the Steam Machine. One of the things I like about the Steam Machine is that it has a list of my games on it and some games I might like to buy, and it doesn't have an ad for a fucking FX show. It doesn't have Tracker featuring Tracker, the guy who tracks things, or like an ad for Diet Pepsi or whatever. Like, I don't have to go through, it's not even trying to advertise me a new game. It's just like, hey, man, you were playing this. You want to play this? Here is in a small bar at the bottom, some other things you might like, but you should play the thing you want to versus the Xbox. PlayStation 5 is better, but the Xbox is a fucking nightmare.

• 51:17Speaker 08

  It reminds me of the epicenter in Charlotte, North Carolina. Just this big blaring thing and you can't find, North Carolina references around here. But you can't find what you want and it's really loud and it sucks. That is the Xbox now.

• 51:32Speaker 09

  Well, have you seen Microsoft's newest patent?

• 51:36Speaker 08

  What they patent?

• 51:37Speaker 09

  The, they patented the technology to identify the least intrusive times to inject advertising into video games and media that people, and the programs, it's not just games. It could be, it could be Excel for all you know, or it's like, or QuickBooks. Hey, you want to complete that general journal entry? You have to watch this ad first. So that, that was kind of their newest patent.

• 52:02Speaker 08

  Oh, God. I, it truly is, it's such a depressing state where I pretty much, it's actually great to say, I think Valve might have a meaningful chance of dethroning the Xbox. Like, there's, it's crazy to say that.

• 52:16Speaker 09

  Yeah.

• 52:16Speaker 08

  And I used to be a big Xbox head. I used to really, I used to, I love the Duke. I think the Duke is a great controller for those listening who don't remember the Xbox, the first Xbox. Not called the Xbox One, that was a later one.

• 52:30Speaker 09

  You're talking the original controller, the big one.

• 52:32Speaker 08

  One had just this chunky motherfucker of a controller and it is so satisfying. It's just like a big, like you could, if you, if you like used one to defend yourself, it would take a knife. Not really, you shouldn't try that. And then the Xbox 360 was great. And then each one got slightly worse. And then, and now we're at this point when the Xbox One X is just a shittier PC.

• 52:57Speaker 09

  I mean, just their branding is a mess. They went from Xbox to Xbox 360, Xbox One, Xbox Series.

• 53:04Speaker 08

  X, Xbox One X. And I mean, I kind of, Asha Sharma, I kind of feel for her in that she's just been dropped in a post-frat party house with a tiny brush and they're like, clean it the fuck up, woman, go. Go fix it.

• 53:22Speaker 09

  Do you think she is being put in as like an ax person? You know how sometimes the companies will put in a new executive to kind of clean house? And then that person's the bad person, you know, and they get them out?

• 53:34Speaker 08

  Yeah, I, I think that there's a, I think it might be that, but she's not really agreeing with it.

• 53:42Speaker 09

  Okay.

• 53:42Speaker 08

  Because she seems to be doing these interviews. The thing is, if she's doing these interviews and she's saying, oh, I want to make Xbox good. I'm jumping in customer service calls to make it good. And she's just fucking lying, then Jesus Christ, what a monster. But I think she might be put there as a means of chopping things off, but also not wanting to.

• 54:06Speaker 09

  But trying to fix it.

• 54:08Speaker 08

  Yeah, I just watched Margin Call again last night, which I really recommend. And there's a bit in it where Jeremy Irons stands to Demi Moore and goes, I'd really appreciate it if you didn't fight me on this, as he tries to leave everything at her doorstep. I think that may be it with Sachin Adella. I also think that there is a certain degree of having a very public face of something going wrong with Microsoft that they can point at and make everyone focus on. As the AI bubble falls apart, has some use too. But I think that people will also say, oh, that's a really smart move. No, it probably feels smart to them, but is actually a terrible idea. Because what's more than likely going to happen is this Xbox collapse, which is inevitable at this point, they're going to have to start laying even more people off,

• 54:54Speaker 08

  is going to happen around the time of either before or after the AI bubble. So it will be Microsoft getting two hits at once.

• 55:01Speaker 09

  Right.

• 55:01Speaker 08

  And I, it's also, but this is kind of the acceleration of the problem with the game industry, that every console has to get more expensive because of memory. Every AAA game has to be twice or thrice as expensive. Every game can't just be a video game that you buy once. It has to be a live service game.

• 55:19Speaker 09

  Right, yeah.

• 55:20Speaker 08

  Buy fucking, what is it, that Madison Beer, Justin Herbert's girlfriend. You can play as her in Forkknife or whatever. Like, it's like every single game has to be plus plus, go on for 15 years. Like Destiny. I mean, oh, that's a whole other thing.

• 55:38Speaker 09

  I think it's, it's the, we're at peak extraction of money from consumers. You know, like some of these, Sony and Microsoft have that various points in recent years, talked about how they start seeing a plateau on their user base. And so it's time to get more money per user, right? And so, yeah, we're sort of, and I think we've hit the point where like, consumers are obviously have had enough and it's just, okay, this is, you're no longer providing me this super convenient, I can watch movies from the internet. Cool. Thank you. Yeah, like I'll give you $5 a month. We're way past that.

• 56:17Speaker 08

  Yeah. And they don't want to compete for your money. They don't want to do more useful things. They just want to turn the screws on you more. It's genuinely sad as well because gaming is one of the few things that I have replicably enjoyed in my life, along with music.

• 56:32Speaker 09

  And it's a real escape.

• 56:35Speaker 08

  And it's also just the games I've enjoyed the most have not been AAA for years. Like Slay the Spire 2, the raccoon coin game I play. I'm not sure if anyone's familiar with that one. It's a coin machine where you have a raccoon. It's by the Bellatro people. Bellatro, another fun game. And I can't, I don't remember the last time I played a, a AAA game and really stayed into it. I borrowed a copy, which won't be able to do in the next few years, of the, of the new James Bond game, mostly because the bloke kind of looks like me. And I quit five minutes in.

• 57:11Speaker 09

  Jensen said that he looks like him.

• 57:14Speaker 08

  Wait, what? James Bond? In, in the new James Bond game, first light? He looks exactly like me.

• 57:19Speaker 09

  He's, Jensen said.

• 57:21Speaker 08

  Look, he looks like him. Well, he's not Asian, so that's the biggest.

• 57:25Speaker 09

  He said he sort of looks like me. I think it's because he had a leather jacket on.

• 57:29Speaker 08

  Okay, Jensen. It's kind of like the tweet where it's like the guy who's only seen Boss Baby. Oh, this is giving me real Jensen Huang vibes. But I played five minutes of it and the reason I stopped is it begins with a helicopter crash and you were injured. And so you have to slowly shuffle along a beach. And it's just this prestige dog shit. This prestige games, I'm sure you've seen clips of Wolverine.

• 57:54Speaker 09

  Yes, like it looks painful to play.

• 57:57Speaker 08

  Ah, I'm surrounded by guys. I better hit R3 and L3 to activate Wolverine mode. It's just every game, every AAA game is like that now, to the point that, oh, I don't want to fucking get involved. Even if it looks fun, I'm going to have to struggle through the cutscenes and the weird prestige bollocks and it's, and it also costs them a bazillion dollars. Like Wolverine costs hundreds of millions of dollars. How do you fuck up a Wolverine game, man?

• 58:22Speaker 09

  I don't know. It's like the most straightforward superhero game you could do.

• 58:27Speaker 08

  Well, it's, it's just, it's kind of bleak, but I do think there is an opportunity for PC gaming to somehow come out the winner, though.

• 58:35Speaker 09

  I think so. I mean, I think with the smaller development scene and unfortunately, it's just with the shortage of components now.

• 58:44Speaker 09

  Ben, yeah, the, the companies in the space for PC DIY are hurting and I think a lot of them are, I think what's going to happen is these companies won't be able to really truly survive, but you'll see the brand persist as sort of a shell of itself to continue moving through whatever inventory is still in warehouses because to truly close would be to signal to, you know, your distribution and retail partners that they need to stop buying whatever's left. And a lot of that's because people can't, it's not because necessarily the cases of coolers are bad. It's because if a stick of RAM is $250, you know, for half of what you want, then it's just not viable to build a computer.

• 59:30Speaker 08

  Well, with that happy note, I'm going to end it there. Steve, what, what you working on now? You want to hype? What's coming up down the pike?

• 59:38Speaker 09

  Uh, now we're working on even more of the, the smart TVs actually after our LG one. So turns out, uh, yeah, I mean, there's, there's some pretty concerning stuff still with LG that we'll talk about at some point. And, um, right now, one of the things I'm playing around with is connecting the profiles of smart appliances. So if you have a smart refrigerator and a smart TV, connecting those devices to then monitor, how well does the advertising platform know when I've like depleted my supply of Red Bull in the fridge to then start shoveling Red Bull ads in front of me on a TV?

• 1:00:20Speaker 08

  Hmm. Well, tech industry sucks. You heard it here first. This has been better offline. I'm super happy now. Thank you so much for joining me, Steve. We'll have those links in the episode notes and everyone will be back with the monologue. Thank you.

• 1:00:42Speaker 08

  Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matt Osowski. You can check out more of his music and audio projects at mattosowski.com, M A T T O S O W S K I dot com. You can email me at [email protected] or visit betteroffline.com to find more podcast links and of course my newsletter. I also really recommend you go to chat dot where's your ed dot at to visit the discord and go to r slash better offline to check out our Reddit. Thank you so much for listening.

• 1:01:14Speaker 07

  Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedia.com or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

• 1:01:46Speaker 17

  Snoring, gasping during sleep, feeling fatigued? Ask your doctor about Zepbound, terzepatide, the first and only FDA-approved prescription medicine for moderate to severe obstructive sleep apnea, OSA, in adults with obesity. Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea, OSA, and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5, or 15-milligram injection. Zepbound contains terzepatide and should not be used with other terzepatide-containing products or any GLP-1 receptor agonist medicines.

• 1:02:27Speaker 17

  It is not known if Zepbound is safe and effective for use in children. Don't share needles or pins or reuse needles. Don't take if allergic to it, or if you or someone in your family had medullary thyroid cancer, or if you've had multiple endocrine neoplasia syndrome type 2. Tell your doctor if you get a lump or swelling in your neck. Stop Zepbound and call your doctor if you have severe stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Tell your doctor if you experience vision changes before scheduled procedures with anesthesia, if you're nursing, pregnant, plan to be, or taking birth control pills. Taking Zepbound with a sulphonal urea or insulin may cause low blood sugar. Side effects include nausea, diarrhea, and vomiting,

• 1:03:06Speaker 17

  which can cause dehydration and worsen kidney problems. Talk to your doctor. Call 1-800-545-5979 or visit zepbound.lily.com.

• 1:03:19Speaker 11

  With LPL Financial, we provide the services to help push you forward. When it comes to your finances, your business, your future, the only question should be, what if you could?

• 1:03:27Speaker 12

  Paid advertisement. Anna Kendrick is not a client of LPL Financial LLC and receives compensation to promote LPL. Investing involves risk, including potential loss to principal LPL Financial LLC member FINRA, SIPC.

• 1:03:34Speaker 18

  Football season is back. Stop by Total Wine & More before kickoff for cold beer, craft bourbon, and ready to drink cocktails. Get the lowest prices and get your game day lineup ready at Total Wine & More. Spirits are not sold in Virginia and North Carolina. Drink responsibly. Be 21.

• 1:03:49Speaker 19

  Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth. That's why Chase for Business helps small business owners like you by offering personalized guidance and digital tools that can help your business grow. With our guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com/business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JP Morgan Chase Bank, N.A., member FDIC. Copyright 2026 JP Morgan Chase & Company.

• 1:04:23Speaker 20

  If you want something done right, you do it yourself. That's why you change your own oil. You're thinking about the long haul. Penn's Oil Ultra Platinum Full Synthetic Motor Oil offers engine protection for the lifetime of your vehicle. And if you're doing it right, that's a long time. Plus, it's on rollback at Walmart for a short time, so you can save while protecting your engine. Penn's Oil. Long may we drive. Limited lubrication warranty for lifetime engine protection. Other conditions apply, including enrollment and receipt requirements. See pennsoil.com/warranty for full details and terms.

• 1:04:54Speaker 00

  This is an iHeart Podcast. Guaranteed Human.