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Hello, I'm Ed Zittron, and this, of course, is Better Offline.

Better Offline. Welcome to the second part of our four-part series where I give you my most comprehensive, most up-to-day explanation of why we're in a bubble, and what that even means. The reason why I'm taking my time to be descriptive and comprehensive is because I want this to make sense to those who listen to it. Having written hundreds of thousands of words this year

about the AI bubble, so many of the arguments I've made and the secrets I've exposed that

contained in their own discrete little episodes or newsletters, this is my series to consolidate

all of the information I put out there in one place. And I want to make it make sense to anyone who listens to him. I want anyone, even someone who doesn't even know that much about AI, to listen to the arguments I've been making for the past three years, to understand why things are dire and to feel the same alarm I'm feeling, or at least understand why I'm alarmed. because I don't like to tell you how you feel.

Old school bit of feedback I got from a listener once, and I appreciate that to this day.

Now, today I'll make the case that Generative AI's fundamental growth story is flawed,

and explain why we're in the midst of an egregious bubble. This industry is sold by keeping things vague, and knowing that most people don't dig much deeper than a headline, a problem I simply do not have. This industry is sold by keeping things vague and knowing that most people don't dig much deeper than a headline, a problem I simply do not have.

This industry is effectively in service of two companies, Open AI and Nvidia, who pump headlines out through endless contracts between them or subsidiaries or investments to give the illusion of activity.

Open AI has now promised over $400 billion in the next four years, though honestly,

they might owe about a trillion dollars with all the data centers they signed up for. All of these

are egregious sums for a company that have already forecasted billions in losses, with no clear

explanation as to how it will afford any of this beyond we need more money, and the vague hope that

there's another soft bank or Microsoft waiting in the wings to swoop in and save the day. Now I'm going to walk you

through where I see this industry today and why I see no future for it beyond a horrible, fiery

car wreck. While everybody reasonably hops on about hallucinations, which to remind you is when a model authoritatively

states something that isn't true, the truth of why that's bad is far more complex and actually

far worse than it seems. You cannot rely on a large language model to do what you want. Even though

it's highly tuned models on the most expensive and intricate platforms can't actually be relied upon

...