Monologue: AI's Compute Demand Story Is A Lie
Better Offline
Cool Zone Media and iHeartPodcasts
4.6 • 687 Ratings
🗓️ 1 May 2026
⏱️ 21 minutes
🧾️ Download transcript
Summary
In this week's Better Offline monologue, Ed Zitron runs through how 70-80% of Amazon and Microsoft’s AI revenue and capacity is taken up by OpenAI and Anthropic, and how capacity constraints across the industry are a result of hyperscalers sacrificing their infrastructure to the least-profitable startups of all time.
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Transcript
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| 0:00.0 | This is an I-Heart podcast. |
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| 0:32.1 | live on disney plus and hulu call zonearZone Media. |
| 0:40.4 | Hello and welcome to this week's Better Offline monologue. |
| 0:43.2 | I'm your host, Ed Zittron. |
| 0:49.6 | It's an offline. |
| 0:52.3 | It's earnings season and a quarterly jaunt through the psychosis of financial analysts that have worked for years to prop up an AI industry with questionable returns. |
| 1:00.9 | Spending now over $750 billion in this year, I believe, on CAPEX for, well, no real return on investment. |
| 1:09.3 | In fact, all of them seem to be losing money. I know, |
| 1:12.3 | I know, though, some of you are going to say, but these businesses had great quarters, but your |
| 1:15.7 | notice is that said quarterly growth does not actually seem to be coming from AI when you read their |
| 1:20.6 | results, where they actually share the AI ROIC, return on invested capital. So while Meta and Google |
| 1:27.3 | refused to actually explain their |
| 1:28.7 | AI returns, because that would require admitting how bad they were, Microsoft revealed that it had |
| 1:33.0 | $37 billion in AI revenue run rate, about $3.08 billion a month or so, and Amazon had $15 billion |
| 1:39.8 | annualized or around $1.25 billion a month. Do not be fooled. These are bad numbers. Based on my own |
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