This is an I-Heart podcast.

Guaranteed Human.

Callsome Media.

Hello and welcome to this week's Better Offline monologue.

I'm your host, Ed Zittron.

Better Offline.

In August of last year, I put out a podcast called How the AI Bubble Burst, where I ran down what I thought would be the signs that things were collapsing, my pale horses of the AI apocalypse, if you will, which is something that reads really well, but when you say it out loud, not so good.

The reason I put these together is that the bubble is unlikely to have one specific

moment where things explode. Things like Bear Stearns has collapsed during the great financial crisis

were such significant moments in part because that was a public company. Mortgages were a massive

part and are a massive part of the economy and indeed there was billions and indeed I think

trillions of dollars resting on them. And I don't really think

there's a situation like that, nor is there one where a public company collapses as a result of the

AI bubble bursting. This bubble is different because it's so thoroughly based on vibes.

I'll end up at some point doing a longer episode about this, but the long and short of it is that the

actual core of the system,

the real weak point, is actually Nvidia.

Invidia's continued success comes from the reliable quarter-over-quarter or year-over-year growth from selling GPUs, the graphics processing units that power generative AI, and that

people take and put inside of servers so that they can immediately start losing money.

More than 40% of their GPU revenue comes from the other six companies in the Magnificent

Seven, Microsoft, Google, Meta, Tesla, Apple and Amazon.

And Nvidia deeply depends on their continued and growing hunger for GPUs.

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