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00;00;00;06 - 00;00;21;26

Speaker 1

Hey everyone! I'm super excited to be sitting down with Ed Zitron. Ed is the host of the Better Offline Podcast and a leading critic of the current AI boom. What I love about Ed is not just the passion he brings to his podcast, but that he always has the facts and the data to back up his skepticism and has a damn solid case that we should take everything we hear about AI with a grain of salt.

00;00;21;28 - 00;00;33;02

Speaker 1

I want to know what he thinks AI is good for and what's just BS. And maybe most of all, what will happen if he's right and this stuff can't deliver. And what should we be doing to prepare? Let's find out.

00;00;36;05 - 00;01;02;28

Speaker 1

Ed, super happy to have you on the podcast today. You know, you're obviously the host of Better Off Line. You know, certainly one of my favorite. I skepticism podcast. If I can call it that. And, you know, for those who haven't seen it, maybe I'll, I'll start off by, you know, sharing one of the quotes I heard you say recently that I think sort of sums up the whole thing, which was you were talking about the AI revolution, and you said the thing holding back AI is it doesn't fucking work.

00;01;03;06 - 00;01;07;07

Speaker 1

Can you, you know, unpack that statement and kind of the components of it.

00;01;07;10 - 00;01;24;10

Speaker 2

So if you look at what what generative AI was meant to be and large language models were meant to stand for. They kind of were always set up to fail. They were meant to be this panacea of we're going to be the future of consumer software. Were going to be the thing that kind of kind of restarts growth in software as a service.

00;01;24;12 - 00;01;45;18

Speaker 2

As I'm sure you all know, software as a service has been slowing since 2021, actually kind of before that, if I'm honest. People have been freaking out for several years before Covid, in fact. But generative AI was meant to be this thing. You plug it into anything and it just creates new revenue. The problem is that generative AI and large language models are inherently limited by the probabilistic nature of these models.

00;01;45;24 - 00;02;05;06

Speaker 2

What they can actually do is they can generate, they can summarize, you can put a hat on a hat, you can say, oh, they can do some coding things, but that's really what they can do. And they have reached the point where they're not what they can't learn because they have no consciousness. So what they can actually do as products is very limited.

00;02;05;10 - 00;02;24;05

Speaker 2

It's very limited indeed. Because what people want them to do is they want them to create units of work. They want to create entire software programs. You can't really do that. Oh, can you create some code? You can create some code. But if you don't know how to code. Do you really want to trust this. You probably don't.

00;02;24;08 - 00;02;35;07

Speaker 2

So inherently you've got all of this hundreds of billions of dollars of CapEx being built to propagate large language models that don't have the demand and don't have the capabilities to actually justify any of it.

00;02;35;11 - 00;02;49;16

Speaker 1

Right. And I think a lot of the argument that you're hearing is, well, you know, the next version will get even closer and even closer. And, you know, we're just around the corner from being able to deploy this at scale. I was going to ask you, if you buy that, it's it's pretty clear you don't buy that.

00;02;49;16 - 00;02;56;19

Speaker 1

But but, you know, tell me tell me a little bit more about, you know, why you think the inherent nature makes that, you know, decreasingly likely.

00;02;56;27 - 00;03;08;25

Speaker 2

Well, I mean, we've been told that for several years now. We've been told for years it's just around the corner any minute now. It's kind of like waiting for waiting for a bus. Except the bus will never come. More of a waiting for Godot situation.

00;03;08;25 - 00;03;09;07

Speaker 2

Yeah.

00;03;09;07 - 00;03;21;12

Speaker 2

Everybody's been saying all these things are getting exponentially better. They really haven't. They've been getting more powerful based on benchmarks that are rigged specifically for them, because you can't just test them on real things.

00;03;21;14 - 00;03;47;10

Speaker 2

So everyone's been saying, oh, they'll get more powerful, they get more, they'll get cheaper. And while they've got more powerful, the retro capabilities have mostly stayed the same. Other than reasoning models, which have really all kind of a technological hat on a hat, they are oh, instead of saying you ask it to do something and it just spitting out what it thinks is the answer, it will sit there and generate an action plan and execute that as best it can.

00;03;47;17 - 00;04;07;26

Speaker 2

The problem is, the more complex that reasoning effort, the more likely it is to hallucinate. So the upper bounds of coding Lem's getting better has been at the cost of more token burden, because it requires more token bang for reasoning models, but more propensity to hallucinate. So basically, the more complex the work you also get to do, the worse it gets.

00;04;07;28 - 00;04;33;13

Speaker 2

But really, it comes down to a far simpler point, which is where are the new things? Where are the new products? Where are the new products that actually matter? Microsoft has failed. I just reported this out actually very recently, that Microsoft only has 8 million active paying licenses for Microsoft. 365 AI Copilot, which is a product category. I think business and productivity is 29 billion and a quarter, something like that.

00;04;33;18 - 00;04;42;25

Speaker 2

If Microsoft can't do it, nobody can. Microsoft is the software juggernaut. They are the software mob. If they can't work this out, nobody can.

00;04;42;25 - 00;04;44;00

Speaker 1

And it's.

00;04;44;00 - 00;05;09;12

Speaker 1

Copilot is a really interesting example. And, I mean, this is a personal experience. Don't you know, take it as, you know, the standard truth. But my experience with copilot has been like, in a word, underwhelming. I would say, like, I'm still struggling to figure out what it's actually useful for, other than summarizing meeting minutes. And, you know, we put out here a piece of content over a year ago basically saying no, copilot is not ready for prime time.

00;05;09;14 - 00;05;24;11

Speaker 1

And when we put that out, I mean, I'll be the first to say I thought, like, ready for prime time was going to be like weeks away based on some of the hype. And it still feels like we're not we're we're not there. Is that your experience as well? Is that what you're seeing and hearing?

00;05;24;20 - 00;05;43;15

Speaker 2

Yes. And talking to a number of copilot customers as well. People are just underwhelmed. People don't know what to do with it. And I think that that's probably the biggest problem. It's not just that it's underwhelming at the things it's meant to do. It's not really obvious what it is you're buying it for. They just announced a couple weeks back.

00;05;43;19 - 00;06;04;05

Speaker 2

Oh, they've released vibe code sorry. Vibe working for Excel and Word. It's like they're quite literally saying you work out what it is you're meant to do with this. It's very it's actually kind of nasty. I don't like it. I don't like the idea of paying for software that I have to work out the value of. That's not that's not how this works.

00;06;04;05 - 00;06;23;24

Speaker 2

It's not buying a computer. This is a software product. And I mean, the truth is that LMS can't do anything that we really need them to incorporate. Sorry, in word or in Excel. They can't really do that. I can't even think of what I want them to do. Like what? What possible. I'm writing the words I'm filling in the data in Excel.

00;06;24;01 - 00;06;43;16

Speaker 2

I guess the only time I've ever found ChatGPT useful was when I asked it how to do an Excel formula. But how would I work this out in Excel? And then I went back to Excel and I worked out how to do it from scratch. I wouldn't trust in them to do anything with my own data, not even because I think though people really get ahead of themselves on this one.

00;06;43;16 - 00;07;05;25

Speaker 2

I think it's important to say I don't think Microsoft is trading their models with your copilot data in 365. That's not what I'm scared of. I'm scared of not bloody trusting the numbers. Also, I want a human to look at that. When we hire a person, we're not just hiring them to do a job, we're hiring them so we can kind of distribute the risk.

00;07;05;25 - 00;07;24;16

Speaker 1

Well, and with that in mind that, that that's one of the promises of AI that is feeling a little bit dubious or at least that there's a lot of different views on, is there's this view of, oh you know, there's going to be these, this widespread job loss caused by AI and one camp. There's also, you know, the utopians who say, oh, it's going to create a job.

00;07;24;16 - 00;07;29;05

Speaker 1

Boom. Do you believe either of those or do you have a different perspective?

00;07;29;05 - 00;07;49;07

Speaker 2

right now. The jobs that this is replacing, translators, which have already been they've been trying to automate them out for years and years and years with machine read translation and, SEO people who I mean, for the most part, I think that's a job where you're already operating on the fringes of what a job is.

00;07;49;10 - 00;08;08;26

Speaker 2

And I think there are good SEO people and a lot of bad ones, and I think that the good ones will be fine, because good SEO isn't generating copy. It's understanding how the internet works, but nevertheless the the chum level. But I think the only jobs that are being really replaced are jobs where the boss was already trying to fire people and had already been doing it.

00;08;08;29 - 00;08;26;12

Speaker 2

I think that on both sides it's a farce. If you use these models or talk to anyone who uses them regularly, you are not coming away with it. Saying this can replace a person you are not coming at away from it. Saying from six months ago to here I. I'm inspired to believe that this can replace a person.

00;08;26;15 - 00;08;50;06

Speaker 2

Go and sit on any of the subreddits of Replit or loveable or cursor or Claude, and you will see that there is no one on there building their own software just with their lams. The people that are able to build functional software LMS are people who can already code. And there was a study a couple of months ago and came out in the register where it was, people, engineers using large language models were actually slower.

00;08;50;09 - 00;09;09;11

Speaker 2

So it's kind of the whole thing's kind of farcical. And the idea that there will be more jobs again, that's just the kind of wanky way that people go about it. It's like, oh, there will be jobs training. The model already exists. They're already jobs training the models. But it's like, oh, they'll they'll be AI factories. What does that mean?

00;09;09;11 - 00;09;13;07

Speaker 2

None of these people actually think further than one sentence.

00;09;13;07 - 00;09;40;07

Speaker 1

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00;09;40;25 - 00;10;01;18

Speaker 1

mentioned, like, the subreddits and the idea of asking people who are actually interacting with these on a daily basis. And this is one of the that the strange and kind of disturbing things about this to me is it feels like what you hear from CEOs or from business leaders is starting to feel more and more out of sync from, you know, what you're hearing from boots on the ground.

00;10;01;18 - 00;10;14;25

Speaker 1

So when you hear, you know, some of these these clips where a CEO says, oh, well, we're actually doing, you know, mass layoffs because we had AI efficiencies, do you just see that as pure opportunism, or is there is there more under the cover?

00;10;14;29 - 00;10;36;18

Speaker 2

It's opportunism. But I challenge anyone who reads any announcement when they said the CEO says oh we've replaced they will replace people with AI. They actually read what they say because they never say that. Not once. What they say is all the we are being more efficient and using the power of AI to be more efficient. They're not saying they're replacing anyone other than Marc Benioff, who is just a liar.

00;10;36;20 - 00;10;58;01

Speaker 2

He's a liar like I. I really just say that people lie, but I think he says 30 to 50% of jobs inside Salesforce are automated or something. Just nonsense. And I've talked to people in Salesforce, they they back up what I'm saying. And that's the thing these people, they will say what they need to because they know the people investing in the market, they know the big hedge funds and all that.

00;10;58;04 - 00;11;16;04

Speaker 2

They know for a fact that those people don't know anything I don't know shit about. Fuck. They just do that. Everything is a great big vibe for them. And thus people are, though I mean, these are just craven, cynical liars. They're not replacing anyone with AI. They want you to believe that because the media will pick it up and run with them.

00;11;16;21 - 00;11;36;20

Speaker 1

So the let's stick on on Benioff for a while. And you know, for some very direct words there that we should that we should probably unpack a little bit. So so I mean Benioff big thing whether you believe them or not is, you know, going all in on a genetic AI. And they're building these products to help people go and gen tech in your own view.

00;11;36;22 - 00;11;53;14

Speaker 1

Why is that BS. And assuming that it is BS. How do you see the next, you know, handful of months or years unfolding for that organization as they have to cope with not actually having the, you know, the product or service they've been suggesting they do.

00;11;53;18 - 00;12;14;28

Speaker 2

Well, let's start with the most obvious thing, which is that Salesforce, his own CFO, said back in March that they will not see growth from AI this year. That feels like the biggest indictment of all of it. 2nd June 26th, 2025 Marc Benioff says AI is throwing up to 50% of the work at Salesforce. That is a lie like that is that's a lie.

00;12;15;00 - 00;12;36;18

Speaker 2

Like, I'm sorry, he never has to prove himself. He just says this crap. He is lying. That is a lie. There is no way that that's happening. And to say that I'm actually shocked that there is not regulatory action taking place because that's that is nonsense. But Agent Flow sucks. People don't like it. The information is reported repeatedly.

00;12;36;21 - 00;13;00;25

Speaker 2

How people don't like Agent Forced. It doesn't do what they say it needs to. There was an internal Salesforce research paper that came out that said the the agents fail, I think 52. They only succeed 52% of the time on single step things like single set tasks. So I asked the agent to do something and then it does something, and they only succeed 32% of the time on multi-step.

00;13;00;27 - 00;13;09;04

Speaker 2

So that means ask agent to do something. Agent books an appointment agent goes and look something up. That's terrible. That's

00;13;09;04 - 00;13;09;17

Speaker 1

Now.

00;13;09;17 - 00;13;24;13

Speaker 2

runs completely contrary to agents and agent force. And, a few weeks, a few weeks ago, they announced something along the lines of, oh, they've got a new internal AI, an autonomous coding tool called Vibe Code. They're out of.

00;13;24;13 - 00;13;42;12

Speaker 2

I guess everyone's out of ideas at this point as vibe. This vibe that. But if you look in the illustrious history of Salesforce, he's been promising Einstein AI since like 2016. Marc Benioff loves getting on stage and saying that AI is the future, but I never seems to do anything at Salesforce.

00;13;42;19 - 00;14;05;23

Speaker 1

So let's come back to that idea of, you know, again, tech is, you know, all hopped up and, you know, half or more of these a capabilities don't actually exist in your view. We kind of touched on it. But like what are the actual reasonable capabilities or use cases we can expect from it. Like it is clearly in your mind, it's a lot more limited than what it can't do.

00;14;05;24 - 00;14;12;06

Speaker 1

Like, what can you actually expect from this stuff?

00;14;12;06 - 00;14;33;01

Speaker 2

I think the Carl Brown of the Internet of Bugs said it really was great. YouTube covering 35 years in software engineering. It makes the easy stuff easier and the hard stuff harder. So if there are sections of code that you need to very quickly do, if you have a very character heavy coding project, nix the rash of, lutke as well said this.

00;14;33;03 - 00;14;54;06

Speaker 2

If you just need to generate a lot of quick bits of code that you can look over and manually see. Great. That's that's really it. You can't really build entire software projects with coding LMS. I guess Rag Search is kind of useful. It's a slightly more efficient. I don't even know if it's more efficient search. That's the thing.

00;14;54;11 - 00;15;12;28

Speaker 2

I'm not even being a cynic here. I'm really must be clear. I'm not saying here being like, oh, it all sucks just because I like, I don't care. I don't want it to or don't want it to. I'm simply stating what I've seen. I've yet to see one thing that made me go, ooh, that's interesting. And I'm I'm an early adopter.

00;15;13;02 - 00;15;32;13

Speaker 2

I'm sitting in my office right now. I have a tonal workout machine over there. I have a Corsair thousand DB two motherboard thing back here. I've got all manner of tech crap on the floor. I love weird new stuff. I have a GPD win four, which is a tiny little PlayStation portable looking windows PC. The buttons are kind of terrible, but I find it fascinating.

00;15;32;13 - 00;15;57;26

Speaker 2

I can tolerate bad or weird or crappy. If there's something interesting, it's doing nothing out there doing this. I really mean it. That's really, I think, the crowning glory at this era. How goddamn dollar is how really just unexciting and lifeless it feels. Because I am also at my day job on spreadsheet heavy. I mean, the spreadsheets all goddamn day.

00;15;57;26 - 00;16;16;11

Speaker 2

I hate it. I pray for the end sometimes with the amount of links I have to put it in document, you would think that I'd be able to say, look up everything written in the last week by this climb, and I could hit a button and it would spit it out. I tried to get manis, an agent and a genetic AI to do for my own name.

00;16;16;11 - 00;16;39;21

Speaker 2

I said, from the last year or two years, get me every link that mentions me. Should be real easy, right? Should be the thing that this thing is. I watched it right? Constant like lines of Python. Just like crunching numbers, obliterating compute to get me ten goddamn links. I think I've had at least 50 citations and I'm not even due to my own horn.

00;16;39;21 - 00;16;59;23

Speaker 2

I'm just saying very easy to get this right. Like very should be very easy. But even on the block and tackle most obvious use cases, it doesn't do it. I don't have much use for generating text. I really don't, but even if I did the text, the generate sucks. I truly and I've sat here and tried to work it out.

00;16;59;25 - 00;17;27;06

Speaker 2

I can't think of an actual use case that would change my mind anymore because oh, it could organize your calendar, can it? Because my count, the whole reason that you have a calendar organizer, well, you have in a system is it's not so that they can manage your calendar. It's so that you can trust them to it so that you can say, find me a time like Tuesday to Thursday and make sure that it doesn't get in the way of some crap I have on you.

00;17;27;06 - 00;17;49;27

Speaker 2

Don't if you have to hand-hold an assistant. It's not an assistant. It's an intern. At best, it's an intern that never learns. And so I'm really sitting here trying to think, okay, what would be the thing if I guess generative search was really powerful, but even then, it isn't. And I've used the very high end generative search products as well.

00;17;50;02 - 00;17;59;05

Speaker 2

It's just also distinctly underwhelming. And I'm really I'm trying to trying to be fair here, but it's just it's really underwhelming.

00;17;59;11 - 00;18;08;20

Speaker 1

You summed it up, I think really well with the word trust, right? Like it feels like trust is the biggest barrier to this thing being no.

00;18;08;26 - 00;18;18;15

Speaker 2

I mean, it's you're right. But I think it's it's simple. It's you it trust is part of it, but it's the fact that it doesn't work

00;18;18;19 - 00;18;19;26

Speaker 1

Right? Right.

00;18;19;26 - 00;18;33;20

Speaker 2

and even if it never will, because the limitations of probabilistic models. So you can't trust them. So you're right. But I think when you say trust, it's very easy for people to get tied up in that and go well with maybe they could build up trust.

00;18;33;21 - 00;18;53;21

Speaker 2

No, it's that because you can't like if you give them, if you let them off the hook and say, well, build up trust, it means that they can get you to kind of efficacy. No you can't. The whole point of automation is it needs to be unilateral. You can't leave something to control other things if you can't trust it to your point.

00;18;53;27 - 00;19;05;03

Speaker 2

But the reason you can't trust this is because probabilistic models are not operating on defined rules. You can try and they're really trying with deterministic stuff, but damn is it not working.

00;19;05;10 - 00;19;28;18

Speaker 1

Well. And that's, that's exactly where I was going with this that the, the trust is not in your view an iteration away. It's an impossibility of the fundamental structure of how this technology works. Right. The probabilistic model. But to me you know listening to everything you have to say about this, it feels like and you know, you mentioned, you know, your love of technology and early adoption.

00;19;28;25 - 00;19;51;18

Speaker 1

It feels like this not working is only a fraction of what's kind of drawn you into this. Like my sense is that, like what really pisses you off is this layer of what feels like collusion in tech and in the media. So like what's what's going on there and like, how have you seen it develop over the last few years.

00;19;51;18 - 00;19;54;09

Speaker 1

And, and do you have any sense that it's going to get better or worse.

00;19;54;11 - 00;20;13;13

Speaker 2

So collusion I don't think it's happening with I don't think the media is colluding. Just want to be abundantly clear that I don't think the media is doing their job. I don't think the media is sitting here trying to work out what this stuff does. I think they are accepting the company line. I think across the tech industry there is a they've realized they've hit a wall, that there are no more hypergrowth ideas.

00;20;13;17 - 00;20;33;26

Speaker 2

We don't have a new cloud, we don't have a new smartphone, we don't have a new anything. We don't have a new SAS. We don't have a new fuzzy thing to shake at the markets. So everyone shows I the collusion. I would say, is the fact that all of them are agreeing to do the same thing, so that no one has to stop the moment that someone stops the moment, that's when it ends.

00;20;33;26 - 00;20;48;20

Speaker 2

It's the moment one of them says, we don't want to do any of this anymore. None of them want to. They all hate it. It's so obvious you've got all of them saying it's a bubble or an overbuild at some level other than Sundar. I think at this point such a Nadella said it might be an over overbuild to do.

00;20;48;20 - 00;21;08;09

Speaker 2

Aakash Patel. Yes, I think, a few months ago Mark Zuckerberg just said it, if you like, a month ago to Alex Heath. Sam Altman just said it two months ago. I mean, they're all saying it's a bubble, so they want to be dumb. But I think the thing that drew me into it was the fact that the media is acting like it can do things.

00;21;08;09 - 00;21;27;17

Speaker 2

It can. And also the insane numbers, the the billions of dollars burned for bugger all revenue. I think that that drew me in because I think that the way when you look at how this is sold in the media, you look at how they talk about it in the on the earnings calls and such without ever revealing revenue.

00;21;27;17 - 00;21;48;15

Speaker 2

They talk about it is this massive revenue driver. When you look at the underlying numbers, they're insane. They're terrible. For my calculations. Best case scenario, Microsoft's making about and they're definitely not making this much. If they had 8 million paying active users and then 4 million more inactive paying users of Copilot AI, and they were all paying 30 bucks.

00;21;48;15 - 00;22;12;05

Speaker 2

If you're looking about $4 billion of annual revenue, which is piss poor for Microsoft, it's absolute. That's dog shit. Like they've those numbers of Steve Ballmer would throw a chair through you. And yet you've got what, 80 something billion dollars of CapEx this year for this. And by the way, they give tons of discounts. It's more likely they're making like 2 billion on this, which is still piss poor.

00;22;12;08 - 00;22;35;08

Speaker 2

Now, Microsoft also stopped announcing their AI revenue. They said it was annualized January 20th. Whenever they did, their January earnings was the last time they mentioned it, 13 billion annualized. So about 1.08 billion a month. Again, they stopped saying that number. Yet they still say AI is this amazing thing. If you think something's amazing, why aren't you telling me how much money you're making?

00;22;35;10 - 00;22;56;20

Speaker 2

And the answer is they're not making the money. It's very clearly not going well. So what's pissing me off is I'm seeing everyone act like this has been over a year and a half of this. Now everyone acting like this is the next big revenue driver. The next big economic driver. And the only thing it's been driving is hundreds of billions of dollars of CapEx in the datacenters, full of GPUs from one vendor.

00;22;56;26 - 00;23;29;22

Speaker 1

Well, and that's the piece that has me most concerned these days. It feels like more and more you're hearing stories of. Yes, these big CapEx purchases here. But also, you know, it feels like every week there's some new story about, you know, big tech vendor A, you know, promising, you know, however many tens or hundreds of billions of dollars to big tech vendor C and it just, you know, you used a word on your on your podcast that was rattling around in my head and I haven't heard anyone use it yet, which is it feels.

00;23;29;25 - 00;23;34;14

Speaker 1

It feels. And Ronnie, I don't know if you said and Ronnie or you said Enron, but it's just like.

00;23;34;14 - 00;23;36;01

Speaker 2

Enron, Nortel.

00;23;36;19 - 00;23;48;27

Speaker 1

It just feels like what you would expect to see pre a bubble bursting like it or like, I don't know if it feels like a Russian economy or what. Like it just does not feel like healthy. Yeah.

00;23;48;27 - 00;24;12;25

Speaker 2

It's very similar to Enron. But Enron was insane. I don't think people recognize how insane Enron was. Like, this is not Enron. This will never get that, because Enron was making SPV and giving their debt to other companies. Honestly, insane, but kind of impressive how insane it was. Just like, yeah, we're going to make a company just to offload all our debt to and then we're going to get revenue from them.

00;24;12;27 - 00;24;39;14

Speaker 2

Fraud masters. However, one thing Enron did, but more Nortel and the telecoms giants did during that bubble was they would give these generous vendor financing packages to people so they would sell sell their stuff to someone else with generous credit package. When don't worry about paying me for a minute. I just did this for the earnings. I don't know what Nvidia's doing.

00;24;39;14 - 00;25;00;06

Speaker 2

I do not have any privileged access. Their accounts receivable are climbing. If those things don't start coming and to be clear, they are generally climbs. It's not necessarily always a bad sign. In fact, in this case, it could be a good one that Nvidia loves selling chips. It's great, but revenue growth isn't growing at the same rate as accounts receivable.

00;25;00;06 - 00;25;24;06

Speaker 2

So I'm kind of like I'm kind of weird. There's also the fact that 39% of their last quarter revenue came from two resellers, Supermicro and Dell Supermicro last year was, on the massive fraud investigation. So it was good that that's one of your larger customers. So I think the simplest way to put it, I've kind of got myself in a tizzy because whenever I think these numbers, I feel insane.

00;25;24;09 - 00;25;46;10

Speaker 2

It comes down to something simple, which is if there was a healthy market for GPUs, Nvidia would not be doing this. Nvidia seeds companies like core, Wave or Lambda, they get, they invest in them, they become their largest customer, which they they sell them GPUs. Those companies, these neo clouds. So cool wave will take the debt and the contract.

00;25;46;11 - 00;26;06;12

Speaker 2

Sorry the contract and the GPUs use those as collateral to raise debt, which will they will then use to buy more GPUs from Nvidia. That's not that's not good. That's not a good. That's not good at all. That's not what you want to see. But then you get to the much more worrying thing, which is when you go and look at these neo clouds.

00;26;06;12 - 00;26;34;28

Speaker 2

And just to be clear, a neo cloud is just an AI specific compute company. So like there's Microsoft Azure, there's Google Cloud, there's Amazon Web Services. Those companies sell all kinds of compute. The specific neo clouds, the core weaves, nebulas and lambdas of the world. They just sell AI compute. Now the problem with those is when you look at their revenues, their biggest customers are Nvidia, Microsoft, Amazon and Meta and OpenAI.

00;26;35;00 - 00;26;56;01

Speaker 2

That's not good. That's not a diversified revenue base. And also when most of your revenues from hyperscalers that build their own capacity, that's basically them saying we will quit one day, like we are like they are just using this so they don't have to raise their own CapEx guidance. Again, this isn't a sign that the industry is doing well.

00;26;56;04 - 00;27;19;11

Speaker 2

This isn't a sign that people want AI compute. It's a sign that there are hyperscalers that have a vested interest in keeping AI alive that I would call the former. I don't know if it's actual collusion. I don't know what the. That's actually my biggest question right now. What are they doing with all this compute. Because it certainly isn't useful I don't know, it's all very weird to me.

00;27;19;11 - 00;27;32;04

Speaker 1

It is weird and it, you know, you keep seeing these headlines and, to your point, if you read past the headline, it feels like every number you read should have an asterisk beside it.

00;27;32;04 - 00;27;44;02

Speaker 1

Right. Like every time you see something going on, it's like, well, we're going to invest this much money, but it's contingent on A, B and C, and it's actually it's circular and like it's tough to really understand what's going on.

00;27;44;09 - 00;27;50;12

Speaker 1

And maybe the most confusing part is the market seems to be rewarding them for it in general. Like

00;27;50;12 - 00;28;09;13

Speaker 1

That the skepticism doesn't seem like it's permeated the investor layer. And I don't know if that's because there's big institutional investors that are, you know, in on the take or can't have this fail. But, I mean, do you do you have a sense of them that the mechanism there that's allowing this to continue to like grow versus shrink?

00;28;09;29 - 00;28;35;09

Speaker 2

I think that it is far simpler. I think the markets are run by babies. I think that I think that they have the institutional knowledge and emotional intelligence of babies. It's that simple. Oracle announces a $300 billion deal with OpenAI and the market goes psycho $300 billion over four years or five years. That number keeps changing, by the way.

00;28;35;15 - 00;28;59;01

Speaker 2

And the market goes, oh, that's squealing, annoying king and rolling on their backs. It's disgusting. But also unrealistic. OpenAI doesn't have that money, and everyone is saying that now. OpenAI doesn't have the money. Boring. That's dull. That's tired. You know what's wired? Oracle doesn't have the capacity. OpenAI can't afford to pay Oracle. And Oracle does not have the capacity.

00;28;59;01 - 00;29;21;21

Speaker 2

It takes about two and a half years per gigawatt. They need 4.5GW to serve this contract. By my calculations, they will only have 1.2GW by the middle of the fiscal year 2027, when OpenAI should be paying them 30 to $60 billion. I forget which one it is. The point is, if the markets even sat there for a second and thought about it, they would be panicking.

00;29;21;21 - 00;29;40;28

Speaker 2

I'd be panicking. This is panic worthy. And what's crazy to me is I don't have a finance background. I was like the dumbest guy in my privates. I went to a private school in miserable time or worst time of my life. I was the dumbest kid in the year. Every year, without fail, I learned all this stuff myself and this feels very obvious.

00;29;40;28 - 00;30;01;07

Speaker 2

But when I talk to like, hedge fund managers, they go, oh really? Oh, I say, what the fuck do you do? What do you do all day? Do you read anything other than excel? Do you vibe with Excel? You use vibe, Excel? Do you use Copilot? All of these AI boosters. Also, if you ask them whether they use AI, they get very nervous because they don't really have an answer.

00;30;01;07 - 00;30;22;07

Speaker 2

But putting that aside, the markets want AI to exist. They want it to do the thing because once the markets accept, I don't even know if they fully understand this. Once the markets accept the AI is not the thing, they will realize that there are no more hypergrowth markets in tech and they will start punishing every tech stock.

00;30;22;09 - 00;30;45;18

Speaker 2

That's inevitable. But right now, Nvidia is the fastest, most strongest, most biggest company that ever did big company anything. So yay, more number go up. Who knows if numbers will continue going up, but I think the on top of all of that, I think the market has an unhealthy relationship with Nvidia AI. Nvidia's last quarterly earnings, they had 55% year over year growth.

00;30;45;20 - 00;31;11;10

Speaker 2

The markets were pissed mugs like, what is this? What what? Because I think I think 2020 for the same quarter, they had 265% year over year growth. So the markets are babies. Still babies. What's crazy is if Nvidia was to, in a year's time from their last earnings, make 55% year over year growth, they'd be selling $72 billion worth of GPUs in one quarter.

00;31;11;13 - 00;31;17;23

Speaker 2

It's not sustainable. None of this makes any sense. It's all this short termism bullshit and it's going to hurt retail

00;31;19;22 - 00;31;43;01

Speaker 1

So let's talk about those retail investors because there's you know we're talking about words like inevitable correction and end which I completely agree with you on by the way. Assuming there is an inevitable correction and it you know, I'm curious, you mentioned earlier that as soon as the first tech company kind of says, okay, we're like putting our foot on the gas here, that's going to be the first domino in the series.

00;31;43;03 - 00;31;50;26

Speaker 1

Who who is most at risk here? Is it the tech companies as a retail investors? How what kind of impact could this have on the on the broader economy?

00;31;51;08 - 00;31;57;28

Speaker 2

So Nvidia makes up 7 to 8% of the S&P 500. So that's where we should

00;31;57;28 - 00;31;58;13

Speaker 1

Wow.

00;31;58;13 - 00;32;15;01

Speaker 2

then. Yeah it's really it sucks man. The Magnificent Seven makes up 35% of it I think which is Nvidia Microsoft. Net Google Amazon Tesla and Apple I think that's a there's seven of them. Jesus Christ nearly said the Magnificent eight. That very bad.

00;32;15;04 - 00;32;36;12

Speaker 2

No. So first of all it starts there. So if you are invested in the market, you're probably partially invested in The Magnificent Seven. I think that there are also a lot of unfortunate retail them, but I don't know this for a fact, but I get the sense that there are a lot of unfortunate retail investors who may be heavily shored up with Oracle as well because of Oracle's big growth bust.

00;32;36;15 - 00;32;57;18

Speaker 2

So what's going to happen is when these stocks tank that like people's retirements people for our Wang pays peoples. Honestly just people's Robinhood accounts are going to start looking like a dog's dinner. And the tech companies are going to be fine. Other than OpenAI, I think OpenAI dies and gets absorbed into Microsoft. It's the think, Amy Hood I'm hinges her jaw.

00;32;57;18 - 00;33;23;10

Speaker 2

And just because Microsoft owns all of the research and IP and has access to all of their marvels and exclusively sells them anyway. So and they also run all of their infrastructure. So they'll just take the open AI stack of Microsoft One on there. They'll be done. But I think the there is going to be apocalyptic terms for startups, I think because I think I took something like 66%, I thought it was 33%.

00;33;23;13 - 00;33;45;21

Speaker 2

I've got top recently. It was way more than that of a of funding if startup funding in the US. So you're going to find a bunch of venture capitalists who can't raise anymore. They've just their limited partners are going to say go fuck yourself. Because the other unique thing about AI startups is because they're so because it's so resource intensive, because the cost of running these models is so horrible.

00;33;45;28 - 00;34;10;25

Speaker 2

These companies have had to raise all this money and then only to find out that they can't sell because it's really easy to clone the products, because all of these products are just wrappers of GPT three or close to what have you. Because in previous booms, sure, you would be building cloud software and code languages, but your ingenuity as a coder or as a systems engineer, the systems you could build were your own IP.

00;34;10;25 - 00;34;34;13

Speaker 2

You could build really fundamentally strong IP. With LMS, you can't. You'll notice that no one has a profitable company. No. And in fact, no one really appears to be able to sell their companies. I found one AI company, like a true blue generative AI company that actually sold for money. It was cognitively, I want to say cognitively they were a customer support AI company to a public company called nice.

00;34;34;13 - 00;34;55;11

Speaker 2

I've never heard of otherwise. There was one that sold to AMD in 2024, and the rest of them are these weird kind of aqua hire situations like inflection or windsurf, what have you. Kind of a kludgy point. But there is a reason I'm telling you, which is you're going to have all of these startups, these AI startups that are going to be sat there with nothing to do.

00;34;55;12 - 00;35;15;06

Speaker 2

They can get acquired or die. So you'll see a wave of aqua hires. I also think that you're going to see something I call the subprime AI crisis, which is right now all of the rates that you're currently paying with, say, anthropic or OpenAI. They are subsidized heavily. I believe all of them are unprofitable. I think that at some point they're going to crank up the prices.

00;35;15;06 - 00;35;35;09

Speaker 2

This is actually already happened. I reported this back in June. The anthropic June or July. I think that anthropic and OpenAI released service tiers of priority processing, which means the troll toll. You need to pay this, otherwise you won't have proper uptime, which was never a problem before. But it's a problem now. It's a problem we've created for you.

00;35;35;11 - 00;35;55;16

Speaker 2

So that is going to get worse. I think they're going to just start increasing the costs of these models on a per to per million token basis. But that's kind of already happening. And indeed reasoning models make that happen. But again, kind of a cloudy point. But there is just a set up here where all of these AI startups have no they have no horizon.

00;35;55;16 - 00;36;18;05

Speaker 2

They have no future. There will be no way to turn them profitable. There will be no way to get them acquired so they will die. Once that starts happening, it will just become flat out difficult to raise money as a startup, in part because so much venture capital in the US has been jettisoned into AI. So you're going to have venture capitalists who can't raise startups, who can't raise tech companies are going to take a haircut in the public markets.

00;36;18;05 - 00;36;38;08

Speaker 2

This is going to fuck over retail investors retail in a bit like regular people invested in this who believe the headlines, who believe that I was taking jobs, that believe that I was getting exponentially more powerful, settled in Nvidia and Microsoft, those those companies are going to take a real him. I also think we're going to see net after Effects.

00;36;38;08 - 00;36;59;07

Speaker 2

I think core we will die. I really despise core. We've they're they are antithetical in my belief to what technology is. They're not about providing AI compute. They are a debt vehicle wearing computer hats like they are there to raise debt to buy more GPUs. They do not have a ton of real customers. I think they're they're going to be dead.

00;36;59;07 - 00;37;18;15

Speaker 2

I think net bias is going to have similar problems. I think Lambda I think all of these AI specialists are going to start collapsing because they're so core. We've has $25 billion worth of that. They lost $300 billion in the last quarter. They're going to lose more next. None of this makes sense. But those stocks will get completely plowed.

00;37;18;15 - 00;37;39;28

Speaker 2

But we're going to see net after effects with companies like Broadcom. Broadcom meant to get $10 billion from OpenAI next year for AI chips that they built. Special bad news. The information reported a few weeks ago that apparently those chips will have modest rollouts. That's what you want to hear when you spend $10 billion. The word modest is what you're really looking to tell people.

00;37;39;28 - 00;38;07;10

Speaker 2

Modesty, everyone. So on a grander level, once the illusion breaks, because this has all been vibes. It's funny, they use the word vibe so much because that's really what this is, because it has been vibes the entire time. Once the vibe shifts, once it floats, when fully everyone accepts what they know to be true, what they see in front of their eyes, the collapse will be thorough and horrible, and I think everyone that touched AI is going to get burned on some level.

00;38;07;13 - 00;38;26;27

Speaker 2

And I think there were, I don't think any of the the problem is that all of the ultra rich people will be fine. They already got their money. They already cashed out, I think section at dealers on the way out. I think Amy Hood boot boots him hard. I think Judson Althoff, who took over a few weeks ago, is the CEO of Commercial Applications.

00;38;26;29 - 00;38;42;26

Speaker 2

What's that you do anymore? I think that we're going to see him get booted out and I think the I reckon Metta is going to be the first to pull out of CapEx. But long story short, retail investors get folks is they always do. It's always, always, always regular people.

00;38;43;16 - 00;39;19;18

Speaker 1

So with the regular people in mind and with this forecast, which, as I said, like to me, inevitable is a word that is in my vocabulary for as well. If you're a business leader right now or you're an investor right now, like is there anything you can do differently to, you know, limit your exposure or make this less bad or even help, like at an individual level or even at a broader level to try and make the, you know, the popping of this less dire for the broader economy.

00;39;19;18 - 00;39;38;14

Speaker 2

are. I don't have any stocks I'm a psychopath. I live in cash people now people like you should have short positions now. It's far weirder when you know that I just do this for the, for the thrill. But my general thing is like batteries and EVs and solar, like they are the actual future. I don't know.

00;39;38;14 - 00;39;58;09

Speaker 2

For this, the current tech industry is so divorced from actual value creation that I don't know what the hell to do with them. I think the on an organizational level, it's time to walk away from AI commits. There's no reason to be doing this anymore. It's a waste of time and money. If you have said the words train people for AI, you are being conned.

00;39;58;13 - 00;40;22;29

Speaker 2

The wallet inspector has got your wallet. This whole thing of we need to train people for AI is gaslighting. You are being gaslit by software. The software it is. It is inadequate. You are training yourself. So it's kind of like occasionally you'll get like, people talking about their dogs, training them. This is what's happening. You are learning bad habits because the software sucks.

00;40;23;01 - 00;40;40;06

Speaker 2

Your dog is also more intelligent. So the thing to do, I think, on a very basic level is to say, yeah, walk away from these AI commitments, stop pushing them. If anyone says AI training, say, why do I have to be trained to use this? What is the outcome? That is actually the big question to ask anyone. Just what's the outcome?

00;40;40;06 - 00;40;59;08

Speaker 2

What do you think? How will we measure the success of this? And if they can't come up with that, say, we shouldn't do this. This is expensive and bad. I think the any talk I've written, I just put out a few weeks ago an 18,000 word kind of compendium of what the case against generative AI. I read it.

00;40;59;10 - 00;41;19;27

Speaker 2

I know it's kind of selfish, but it's free. Like it's literally I don't like read it or not, it doesn't really matter. But I go through it in there. But it's learn the talking points, which are these these models are unreliable. These products don't do much. And honestly, everyone's saying AI is the future doesn't use them. That really isn't.

00;41;19;29 - 00;41;40;19

Speaker 2

Bill McDermott from ServiceNow. Around the launch of chat, GPT said everything had to be AI, AI. And that is a quote from the information. Anyone speaking like that just immediately think this person doesn't use it, because if they did, in pretty much every software revolution, you can point to them saying, and then I did this with this.

00;41;40;19 - 00;42;02;05

Speaker 2

Go and watch the original iPhone announcement. Steve Jobs horrible monster of a person, deadbeat dad sued by the California District attorney for child support for his kid and I'm not kidding. It's wild. Nevertheless, his first presentation, he goes, oh yeah, I've got an iPod. Got him, I got this. Now, the one device the iPhone's coming out here, he just says what it does.

00;42;02;07 - 00;42;21;05

Speaker 2

He just says what it does. He says the the functions. And then you go, wow, I use function wow I too listen to music and use email website. Wow. You didn't have to do you didn't have to solve the riddle of the Sphinx to you to know why the future was here. Like, that's the biggest insult of all of this to me.

00;42;21;08 - 00;42;40;09

Speaker 2

It's you can't just have someone go. You've got to use this. It does this. Every single product I've ever used, I've been excited for. Someone said, you've got to fucking see this, man. Like I mentioned. So TONAL it's this, workout machine has magnetic resistance. It can check your form with a camera. You can adjust it for the lifting.

00;42;40;09 - 00;42;59;24

Speaker 2

When I show people this, they go apeshit. It's like, wow, that's really cool. It's insanely expensive. If you don't use it. It's a terrible waste of money. But the point is, I don't have to explain it much. They see it and they go, wow, that's sick. Even like the iPhone Air, iPhone Air is awesome. It's awesome because it's it's thin, like an iPad Pro and it's got a big screen.

00;42;59;26 - 00;43;20;28

Speaker 2

It looks nice. Wow. How great. I don't have to advertise. Every person I talk to about AI is emphatic in trying to convince me, and it feels like a MLM. It feels like MLM or talking to a polyamorous couple. Like they're constantly trying to convince you that their way of life is is the right one, and that you are.

00;43;21;00 - 00;43;42;04

Speaker 2

You simply don't get it. You need to practice compassion so that you can use ChatGPT. It's utter bollocks. I shouldn't, I like I said earlier, I'm an early adopter. I love new tech shit. I'm willing to look past Wonkiness because I'm like all of the current handheld gaming PCs, for example, like the ROG Ally X or the Lenovo Legion.

00;43;42;04 - 00;43;59;10

Speaker 2

I think they're wonky. They have wonky. This them, but they're cool. You love, you're like, wow, I can see the future in this. It's like a PC, but it's like a game console. Wow, how amazing. The new AirPods three. While they fit better, they sound good. Oh, they can measure my heart rate. I know what I do with that.

00;43;59;11 - 00;44;31;04

Speaker 2

ChatGPT, analyze data. Indeed. When you go on OpenAI's website and you try and read what they say, it's like, oh yeah, ChatGPT could be, brainstorm AI ideas. You can, analyze documents. I guess we need $1 trillion. We need $1 trillion because more. Even their own literature, they say like 90% of people just use it to chat.

00;44;31;07 - 00;44;34;06

Speaker 2

It's not a product, it's a parasite. parasite.

00;44;34;06 - 00;44;36;24

Speaker 1

It feels.

00;44;36;24 - 00;44;55;03

Speaker 1

There's a word that caught my attention earlier. That to me encapsulates the best use case for it in you know, business or commerce which is you said, you said it's like an intern and it feels like that's what we've built. We've built this like army of free interns. And they're not very good. They don't really know what they're doing.

00;44;55;06 - 00;45;01;11

Speaker 1

But they're free. So everybody should have their own free intern. Do you buy that logic or is

00;45;01;11 - 00;45;23;20

Speaker 2

I, I think that that is the closest you'll get. And I think it's an insult to interns because an intern, even the dumbest intern you've ever met who does not understand anything, understands more than this. Because these models don't understand anything, people, or so even the silliest morons can learn. You can learn. I'm not even insulting.

00;45;23;21 - 00;45;41;08

Speaker 2

I don't not calling interns morons. If interns don't know stuff, it's because you a shitty boss. Your job is to teach an intern. That's the whole point. That's why they're free. They're free because you are giving them something in return, which is the value of your experience, so that they can do a job and potentially do a job for you in the future.

00;45;41;11 - 00;46;00;18

Speaker 2

So you can say, these are like interns in the sense they're useless, in the sense that you need to handhold them on everything. But guess what? Even in tech, like I started as an intern at a games magazine, I built shelves, I got tea, and indeed I tried to make the tea rom once and, they, they showed me how they knew that scam.

00;46;00;21 - 00;46;23;14

Speaker 2

Respect to MCA over at CVG magazine. But it's about as close as you get, but not close enough, because an intern can learn, and also an end into the very existence of an intern is that it will grow, that an intern will grow. That's the whole point of having them, an intern that stays trapped in Amber at a certain level of incompetence is useless.

00;46;23;17 - 00;46;40;05

Speaker 2

And also, and it's gonna look antithetical to what an intern is. Like I said, it's about investing in the in the future. But I guess if you're an asshole and you think an intern is just a vessel that you allocate outputs to, fine. But I think that that's actually the overall problem. I said this in the article from a few weeks ago.

00;46;40;08 - 00;47;01;21

Speaker 2

It's the people, the these executives see every job as a unit of work. We are not on a podcast talking. We are just talking for a certain amount of time. There is no the value here is the fact that our mouths open and noises come out. It's not really about the noises themselves. When you are writing, it's just about making 800 words and there's meaning in there.

00;47;01;21 - 00;47;21;07

Speaker 2

I guess it's not really about they see everything is outputs. They see software engineering is just coding. When that's not true at all. It's software engineering. It's systems architecture. It's making sure things work now, and you leave enough comments so that things work in the future, and you build things in a logical way that doesn't break when you add stuff, when you.

00;47;21;07 - 00;47;43;20

Speaker 2

And of course, people would think, oh, that's what an intern is. They're just units of work that happens to have a heart and a body and a brain allegedly. When in fact an intern is promise and opportunity and hope. And if you see them as something else or an asshole, but you're also just wrong. So, yeah, if you see interns, as this empty vessel for your theoretical job, great.

00;47;43;22 - 00;48;05;17

Speaker 2

But I don't know, man. I, I've never taken on an intern. I've mentored a few people. But generally the most exciting and fun thing about having a young person working for you on any level is that they want to learn that they're excited to, that they grow with you and grow for themselves, and then eventually leave you and go and do their own thing, having a trapped in Amber

00;48;05;22 - 00;48;22;27

Speaker 2

intern, that vaguely resembles a work product that's useless. But I guess when you're an asshole, it doesn't do any real work. Not saying this is you, by the way, just to be abundantly clear, just really want to not insult you, because it's not what I mean. It's. Yeah, of course that is it. But it's so weird as well.

00;48;22;27 - 00;48;50;07

Speaker 2

It's like, wow. Even if even if that was true, even if this intern thing was true. Wow. We've given we've given these companies think OpenAI is effective cost. If you include Microsoft's investment in CapEx, it's like 100 and something billion dollars. Wow. That's a really expensive intern, man. That's so expensive. We we made crappy interns. We we made freeze like flash frozen interns.

00;48;50;07 - 00;49;13;07

Speaker 2

Jesus Christ, how depressing. We 20 years ago, we had the ability to condense computers into little, little, frames. We had laptops are incredible. Like, we've actually had innovations in the last 20 years that are insanely amazing, but this is a actually a side rant, which I'll stop. But like, we've had amazing innovations. This isn't one of them. them.

00;49;13;07 - 00;49;16;13

Speaker 1

So I, you know, I.

00;49;16;13 - 00;49;24;27

Speaker 1

I want to talk about amazing innovations. I think the intern piece, I mean. Well, well said. I think we've probably beat that topic to death at this point. So. We鈥檙e aligned.

00;49;24;29 - 00;49;47;19

Speaker 1

I think so too. Innovations, you know, you mentioned things like batteries, like solar power. You know, you're you're you're someone who's obviously very passionate about new and emerging tech. What technology that's up and coming actually excites you. That's not, you know, AI related. And what tech companies, if any, do you actually see it doing really interesting work?

00;49;47;19 - 00;50;10;00

Speaker 2

So the I like Anker. A N K E R because they keep making interesting and fun things. They've got these little back. They like. Look I didn't really understand woman buying shoes before until Anker. Now I understand because I do it with batteries. They release a new battery. I'm like, I, credit cards out because they keep making using. I was gallium nitride.

00;50;10;00 - 00;50;27;18

Speaker 2

They found a way to basically condense power to a way that you can get a little power break. I'm trying to think like half the height of width of a Diet Coke can with a retractable cable. The charges at 45W. This sounds minor, but I can charge Nintendo Switch. I can charge a MacBook. I think a MacBook air.

00;50;27;20 - 00;50;53;18

Speaker 2

That's cool. That's cool as hell. They have this thing called the Soundcore X1 Pro, which is just a giant wheelie projector like, and it can keystroke leak. You can put it at weird angle, it can project onto things. It has the speakers built in. It's all like wireless. That's cool. I think that was a bid. Well, like the electric car company in China, the cars aren't nice, but driving down the price of electric vehicles is cool.

00;50;53;21 - 00;51;16;27

Speaker 2

I also think I have complex feelings about Waymo, but I've been in one and it's the first time in a while I've gone, oh wow, that's new. That's cool. I mean, that's something. And I also think the I don't know, you've got what is it framework? There is a laptop company that I really wish I remember the name of where you can put the laptop together yourself.

00;51;17;00 - 00;51;38;06

Speaker 2

It's built specifically for right to repair. Cool as hell. I love it. And I also think that the new generation of, I think within five years we're going to have insanely good handheld PCs. I think handheld PC gaming is going to be huge. I think it is way too expensive right now, but even now it's so cool. It's so cool.

00;51;38;06 - 00;52;01;08

Speaker 2

We're in the we're in the golden age of mobile gaming right now, which is insane. I thought it was dead because I thought cell phones with microtransaction crap had ruined it. But no, that it's exciting, it's cool. And I think just batteries all getting smaller and more powerful with that, we will have new form factors. We will learn new things about what we can build.

00;52;01;10 - 00;52;20;02

Speaker 2

And I'm going to say something really controversial. We are not there yet, and I don't know how long it will take, but the Apple Vision Pro proved that there is a new computing form coming. I think there were entire ten minute periods with the Vision Pro where I was like, wow, this is the future. And then there was the rest of the time.

00;52;20;04 - 00;52;42;23

Speaker 2

Then there was the rest of it. When the thing moves slightly and you can't see properly, or it's slightly out of focus and you're dicking with it and you're not sure if it works properly. Sometimes the poking doesn't work, but when it does, and to be clear, I'm very clear this product should never have been released. It's way too early, but man, you see it and you're like, oh, these are surmountable problems.

00;52;42;23 - 00;53;03;04

Speaker 2

These are like, these are things that they can work out. You can see the promise. I don't see any promise in generative AI. Nothing that's happened is maybe go, ooh, what could they do next? Vision pro yes, even I haven't tried them yet. The meta Ray-Bans. I don't think anyone should wear them. I think they are just cruisin for a bruisin鈥� wearing them.

00;53;03;06 - 00;53;24;18

Speaker 2

I think the idea is sick and I think that there are accessibility options. Like a friend of mine works on a company that does accessibility stuff where they are. I think that that is incredible. I don't think AR is ever going to scale, but I truly think like for like front lawn or whatever you call it. Like, I want to say wearables because that can mean anything.

00;53;24;18 - 00;53;43;20

Speaker 2

But I think the AR has possibilities. I don't know if it's a hypergrowth market. I'm none of these things I think are $100 billion market cap companies. What I do think they are is cool. I think they are cool. I think it's an interesting way of looking at the world. I don't know, I'm excited to see some new stuff.

00;53;43;27 - 00;54;08;07

Speaker 2

I just and it kind of to wrap it back around. That's kind of the depressing thing about AI. It's so dull. It's so boring is so I've never been more bored with the tech revolution in my life. And I used to do I used to represent power platform as a service companies. I don't I've not had to say Kubernetes in a long time, but even thinking about it makes me slightly sad.

00;54;08;07 - 00;54;20;24

Speaker 2

That was more exciting than generative AI. At least that's like, oh, we're gonna get it. Oh, sorry, I'm rambling. It's just the tech industry is capable of doing cool shit. It's not doing it right now at scale.

00;54;21;13 - 00;54;44;04

Speaker 1

Right. So there's there's one more angle I wanted to take kind of around the AI thing, which is one of the one of the quote promises of, of AI is that it's going to in some way transform the future of work. And work is going to look so different and, you know, 6 or 18 months and it does right now, and you know, we've we've debunked a bunch of that, you know, in the past hour.

00;54;44;07 - 00;55;00;15

Speaker 1

But I did want to ask you, Ed, is there like from where you're sitting, what does the future of work look like over the next handful of years? If it's at all different from now? Like what? What do you think we'll see more of? What do you think we'll see less of? And how is that going to evolve with or without AI?

00;55;00;29 - 00;55;20;26

Speaker 2

I think it's going to look much the same. I think the biggest problem that they have right now is that on top of that this is good. It's just an idea. Right. But I think on top of that there is no innovation within business software left. And maybe there maybe there is somewhere. But to innovate business further like really this is scary to say.

00;55;20;26 - 00;55;50;29

Speaker 2

I realize to actually like enterprise software and stuff like that, they're out of innovation because enterprise software was never about innovation. It was about taking industries and disrupting them. There was all that. That was there was never it was modernizing rather than innovation. So the future of work is a problem that they've had for a few years with the remote work era, because they desperately wanted people back at the office, because they realized, oh, crap, that's remote work, makes it really obvious who doesn't do anything at my company.

00;55;51;05 - 00;56;12;00

Speaker 2

I comes along and they're excited because, well, it means they can fire some people, but it also means that they can make some of their useless people useful. Problem is, AI doesn't do that. AI actually doesn't really do anything. So the future of work is going to look very much the same in a few years. I truly think the I truly think the AI is not having a meaningful effect on the enterprise.

00;56;12;00 - 00;56;43;22

Speaker 2

It's going to be proven through multiple studies at this point. And that's because the modality of all jobs have stayed mostly the same. We have the ability to record stuff thousands of miles away, hundreds of miles away. We have the ability to send large documents and process large documents in the cloud. We have the bits and pieces. What we don't have is technology that makes us better at our jobs, for the most part, because a lot of the jobs that actually humans or the jobs that humans do within software are very much human driven.

00;56;43;24 - 00;57;04;05

Speaker 2

The actual tasks are not the output itself. They are the ability to understand all of the stakeholders and all of the context and all of these things, and bring them together in a task that might seem simple, but is actually a combination of institutionalized knowledge and context. You can't automate that. You can't automate person to person. You can try and they've been trying, but it doesn't work.

00;57;04;08 - 00;57;24;21

Speaker 2

So I think that we're going to see very possibly a kind of existential crisis within the world of work. I think once the AI boom goes away, CEOs are going to sit there and not really know what to do next, because the big thing and the reason that CEOs love AI as well, is when you're a CEO, it's not really obvious what you do unless it spend money.

00;57;24;23 - 00;57;34;03

Speaker 2

If you spend money as a CEO, that means you're doing stuff. AI lets you spend money. And once AI is gone, what the hell are they going to do? I don't know,

00;57;34;21 - 00;58;00;27

Speaker 1

Well, and it, yeah. The the picture you paint, I think in some ways like comes full circle of why the promises of AI and its capabilities are so alluring because they present there's this. Oh, we know what the future of business or the future of work or the future of enterprise software looks like. And it's going to be so much more efficient, and we're going to have so much more, you know, capability or quality.

00;58;00;27 - 00;58;08;28

Speaker 1

And, you know, if the alternative to that is, is saying, you know, putting up your shoulders and saying, we've got nothing. That's, that's a hard pill to swallow, right?

00;58;08;28 - 00;58;26;26

Speaker 2

Yeah, and I think the remote work in the Covid era really showed how many bosses don't do a goddamn thing. And I think it showed a bunch of managers that didn鈥檛 either AI gives them the exciting idea that they can pretend they do work, which is what they've been doing already. But actual work would come out, and I don't think they have an answer.

00;58;26;26 - 00;58;33;09

Speaker 2

I don't think anyone does. I think that this is this is everyone's caught with their pants down here because no one was thinking too hard.

00;58;33;20 - 00;58;43;13

Speaker 1

Well said. Ed I know we're kind of at time here. I want to say a big thank you for coming on the program today. Really insightful. I love the conversation and, I really appreciate it.

00;58;43;26 - 00;58;44;25

Speaker 2

Thank you.