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I'm Clayton Nackard, in 2022, I was the lead of ABC's The Bachelor.
“But here's the thing, Bachelor fans hated him.”
If I could press a button and rewind it all, I would. That's when his life took a disturbing turn. A one-night stand would end in a courtroom. The media is here, this case has gone viral. The dating contract.
Agreed, a date mean, but I'm also suing you. This is unlike anything I've ever seen before. I'm Stephanie Young, listen to Love Trapped on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts. That's Monday, our 2026 iHeart podcast awards are happening live in South by Southwest.
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Thank you to all the other nominees, you guys are awesome. Watch live next Monday at 8pm Eastern 5pm Pacific Free at feeps.com or the Veeps app. Aigo Woda is your host for the 2026 iHeart Podcast Awards, live at South by Southwest. Hello, is anybody there? Race by a single mom, Aigo may have a few father-related issues.
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Get to know Aigo, follow thanks dad with Aigo Woda and start listening on the free iHeart radio app today. Hello and welcome to Better Offline. I am of course your host Ed Zitron. Now, we're in hate a season.
Hate a season is when I bring people on a lounge to get rude, because you know this podcast is usually so reserved and nice in the way we refer to people, especially tech
executives, which we've never referred to as fuckwits or morons or dumbasses or shitheads
or shit heels or asswipes or fuck nuts or nobens. We've never done any of that ever. Nevertheless, joining me today is Chief Cloud economists that Doug Bill Corey Quinn Corey, how are you doing? I have delighted to be here, because normally in all the other places I find myself
I have to be so reserved.
“I have to, you have to pull your punches, Corey, I today's hate a season.”
Tell me about your feelings on Amazon web services. Oh dear Lord, it's weird, it's weird, I don't actually hate Amazon. People think I do, because of the things I say and the things that I do. But if I hate it, then this is my option. But 10 years in, I write a newsletter about it.
If I actually hate the company and want nothing but ill things to happen to them, first off, that's a pathology and I need a restraining order.
And secondly, it always bugs me when people think that I have an axe to grind against
the company, because 10 years in, are you seriously suggesting this is the best I would be able to do if I actually want to date them where it hurts. Come on. But yeah, they've been annoying the piss out of me lately. So AWS is weird, because maybe you can explain this to me, over my entire tech career,
I've heard this constant story that your AWS bill just goes up. It's not really in creases, it's not really clear whether they're doing pricing creases, though I know those exist too rarely.
“But occasionally these days, yes, but why, what is it that makes the bill go up?”
Why? And why does this happen so often? I used to think it was a conspiracy and then I realized Amazon is in no way shape or form organizationally competent enough to pull something like that off. It is the nature of charging per usage and honestly, assholes, where, okay, we're
going to launch a service and we're going to charge you for every gigabyte you put in it. That's all we're going to do. Great, straightforward. Humans can rationalize around that.
Crazy peasy.
They did that when they first launched S3 in beta back in 2003 storage, right?
It's a big object store, picture it as an infinite size disk in your pretty close, but they would, the original, they only charged for the data you stored there. Great. So people stored a bunch of objects that were zero bite in size. So they just used the names of those objects and the ability to query with an object
existed or not and what its name was as a free database. This, at the time, also, according to legend, didn't just, it wasn't just about taking free services. It was also just crippling the performance of S3 at the time.
What they did is they started also charging every to request you make with ja...
fee.
“I think it's something like a penny per thousand requests, if memory serves to put me on that.”
I look it up when it matters and that solves that problem, but then you have things like that that are patched on and tied to things and tied to things and tied to more things. And in any complex organization, what happens is, is now suddenly you have this morass
of a hundred million dollars a year in spent.
Great. What's in there that's costing all the money? Well, everything. But if you look at anything individual and you don't think it's being used. Okay.
Am I going to turn it off? If I'm right, it's going to save me a bit of money. If I'm wrong, it's going to take down production and now I have a serious problem trying to serve my customers. So the safe bias is, don't turn things off.
Also, you're an engineer, hypothetically. I realize that can be an insult to your part of the one that I'd roll with it for. Right. Exactly. You're an engineer.
You want something to spin up and no one is letting you spin it up. You will take up residents, annoying the hell out of them every time that it's not until you get the access that you need. Right. You do your job.
Things are done.
Two things now work against you.
One, you had to ask and beg and plead them to spin that up. You want to hang onto it in case you need it again, because you don't want to go through that. But this is internally an organization. Exactly.
Exactly. This is not Amazon's fault. This is human nature's fault. They haven't patched that yet.
“Though they're, I think they're trying to lay the iteration of Alexa plus it.”
Why not? I'm kidding. Nothing just sells ads. We're good. But why? So I'm an engineer and I've advocated for my thing.
Yes. And now you're done using it. No one is going, there's no, there's no call to action to get you off your ass to go. No one off.
No one will come and badger you about it.
It just, it tends to exist. It's, it's why people cynically say you're not charged for the things you use in the clouds. So much as you're charged for the things you forget to turn off. And Amazon loves this.
I'm guessing. They love the fact that there's just this cloud anchor system. I would say that on some level contrary to popular belief, they don't love it as much as you'd think. Well, all right.
I'm trying to run on my blog and I've spun up eight attempts at this blog. So it now costs eight times what it should. Great. And the narrative becomes if they're not careful with all that wasted usage of doing nothing is, huh, the cloud is pinched, shittingly expensive.
We should go back to data centers. There's really no one on the other side of this issue. So why doesn't Amazon help people turn these things down and turn it off? They made some a board of attempts in part of the organization, but this is going to surprise you.
Amazon is not the most organizationally competent company you're ever going to meet. But what does that mean in practice? Is it just that they don't know they're awesome. They airhole. They don't really know how things work, all of the above.
silos. It's all silos. There are over 200 services and we longer go across the point where I can speak incredibly convincingly about AWS services that do not exist to Amazon employees and not get called out on it.
Because who in the world knows everything that Amazon does? And so that's just like, I sound as plausible as I eye these days. Yeah. So it's just an elaborate the Leviathan of different SKUs and product categories that we'll be.
“Well, if you want to be precise, yes, Jesus and those are all just different kinds of virtual”
machines and the like, okay, we'll start there. Sure. Virtual machines. You want to spin up a virtual machine in Virginia, US East One, okay, which one are you going to pick?
Because there are approximately 700 different types you can spin up. Are you going to pick the right one? Of course you're fucking not. Also, how do you pick the right one? How late?
This is the thing. Because it seems that the people making these decisions of which virtual machines the gap or whatever spin up on AWS are engineers, right? Usually. Software engineers aren't necessarily infrastructure experts, are they?
You've noticed. Yeah, I'm very often companies will standardize on one particular size of instance across the board. Why? Well, because in development, it's the one that the original founding engineer picked and will
come back and revisit this later 10 years ago by no one is revisited. I'm take that. They do have a tool that I like. It's even free, which I'm sure someone loses sleep over, called Compute Optimizer that looks at your running workloads and says, hey, this one should be bigger, this one should
be smaller. I was extraordinarily skeptical when it came out. It is better at figuring that out than I am with the tooling that I built internally. So once again, I'm thrilled to turn it off. It's one of the Amazon ads.
The best things, I can only assume that the people responsible for that are being eyed for layoffs or tips because that's just Andy Jesse and several MBA snipers outside at their location right now. It's fantastic. I like to put it in AWS truly, something change.
He got a job that no one in the right mind could possibly want, but also could not refuse. And I feel as a soul to soul. Yes, absolutely. And he just, he was the CEO of AWS and he was, he, when he gave Keynote talks, when
He gave presentations, when I was fortunate enough to basically sneak my way ...
you could see the irrepressible humanity leaking out around the edges.
He was a person. Now he is a figurehead. He doesn't get into this. I'm going to tell him this. Just to be clear.
Congress. This shift was when he became CEO of Amazon, we'll see you over at AWS. CEO of Amazon. Big WS was his own fife to him, and he could do whatever he wanted to my understanding within that company.
It was the only people that mattered there who had an opinion on this. We're Andy Jesse and God, and God was sort of absent. So great. We're just going to leave it to Andy. Andy went deep.
Andy understood every aspect of this stuff. Exactly. There we go. He went to reinvent and Las Vegas and gave a talk on stage.
“I think because he missed it, he missed being able to get out there and talk about computers”
with people because now he has to ship underpants all over the world instead. Right. But is he technical? Because he's an MBA, is he not? This is one of the dangerous things that I found people underestimate Amazon leadership
on is it is never the smart bat to assume that they don't understand the technical nuances
of the things that they are working with. They go so sarcastically deep in so many different ways that it is never a smart move to say that they don't understand. It is unlike virtually any other tech company I've ever spoken with, other than small scale ones with technical founders, he very clearly understands the technology and used it
to build things himself. Right. But here's the reason I question that. He's talking about generative AI. I just pulled up his notice.
Oh, no one understands that works under the hood. Let's be very clear on that and he lost the fucking plot when it came to genera. That's the thing. We're also using generative AI broadly across our internal operations and our fulfilment network, we're using AI to improve inventory placement, so not generative AI, demand forecasting,
definitely not generative AI and the efficiency of our robots, not generative AI. I don't know. Maybe he doesn't know what he's talking about. He's just a fucking carnival barker now. He's doing the same thing.
It all seems to be and the trick to just prove everything you just said about everything he said that you relayed to us is very simple. Go out with an Amazon employee for several drinks and then ask them about their experience of using AI within the company. Oh, I have two different companies, the other is no, there is no congruity between those
two perspectives. So, Corey, maybe you can help me with this, because you, certainly, without saying exactly what we're talking about, you knew about a contract that I knew about way before I knew and I knew about it months early with a large company we discussed. So, you're very well connected.
It seems up until generative AI, like AWS was at least a somewhat sensible operation that it was something that we had, if not focus, at least a focus on scale and useful cloud computing. Yes.
“What the fuck is it about GPUs that's driving everyone insane?”
I want to point something out that I think is being lost in distress. Please. Because I've talked to folks at AWS about this and folks who have left AWS, who I used to dabble working in data centers, which means I know just enough to know what I don't know.
And I've talked to these folks. When Amazon commits to being able to bring certain amounts of capacity online, it is real capacity.
It is, the each data center they build out, each region they build out is a multi-billion-dollar
investment and it takes years to go from sign contract to its serving customer traffic. They are real when it comes to this stuff. They're a number of other companies. Reals are real. Yes.
And they're really running it. They've operationalized how to run these things better than you or I would ever be able to do. That is their superpower. Other companies, and they're just spinning up a data center, do not do this.
They are, well, we've rented a warehouse out, we round up, throw them some generators in the back and we're going to call Comcast and see what they can do to get it hooked up to the internet next. But when you say other company to go, yeah, but you say other companies, you don't mean Google and Microsoft.
I'm talking, well, I am talking Oracle, but yes. Microsoft. Microsoft is shitty at building data centers. Azure has been a disappointment across the board. Capacity shortfalls plagued them for a long time during COVID.
They tend to generally tend to view two racks in a data center somewhere as a region, which is weird and messed up. Google is real, but Google has made other interesting technical trade-offs that I can see why they did it. But I would say when it comes to infrastructure in my experience, AWS's number one,
Google is a close. I have heard some crazy shit about Google that they're doing these things called stalks, where they just like create these pop-up data centers in the data center. >> We're going to let for a long time. >> Every company does that for a point of telling stuff.
>> Yes. Anyway, but back to the major question, which is AWS seems like a sensible business that does real things and not disputing that. >> Yes. >> It prints money.
Let's be clear on this.
“Despite all, remember, I help companies to go see money.”
Cloud contracts and understand what they're spending and where the money is going, which
Means that companies can say a lot.
People say a lot of things, but one of my prime rules about this stuff is that customers lie, mostly to themselves. They're not intentionally trying to mislead me when they tell me what's going on, but I find the bills of the ultimate source of truth because if you're not paying for it, it doesn't really exist.
And the AI spend in most of these companies hovers in my experience with a few outliers between five and seven percent of their total infrastructures spent. >> Right? >> It is not three times.
I companies that are doing a $300 million a year contract with AWS are not turning
on saying better make it 400 because of all the Gen AI. That is not happening. [MUSIC]
“>> Run a business and not thinking about podcasting?”
Think again. More Americans listen to podcast than add supported streaming music from Spotify and Pandora. And as the number one podcaster, I heart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message.
Plus, only I heart can extend your message to audiences across broadcast radio. Think podcasting can help your business think I heart streaming radio and podcasting. Call 844, 844, I heart to get started. That's 844, 844, I heart. >> I'm Clayton Eckard, and in 2022, I was the lead of ABC's The Bachelor.
[MUSIC] >> Unfortunately, it didn't go according to plan.
He became the first bachelor to ever have his final rows rejected.
The internet turned on him. >> If I could press a button and rewind it, all I would. >> But what happened to Clayton after the show made even bigger headlines?
“It began as a one night stand and ended in a courtroom with Clayton at the center of a very”
strange paternity scandal. The media is here. This case has gone viral. >> The dating contract. >> Agreed a date me, but I'm also suing you.
>> Will search for this is unlike anything I've ever seen before. >> I'm Stephanie Young, this is Love Trapped. This season, an epic battle of he said she said, and the search for accountability in a sea of lies. >> I am done nothing to get pregnant by the f*cking bachelor.
>> Listen to Love Trapped on the I-Heart Radio App, Apple Podcasts, or wherever you get your podcasts. [MUSIC] >> Next Monday, our 2026 I-Heart Podcast Awards are happening live in South by Southwest. >> This is the biggest night in podcasting. >> We'll honor the very best in podcasting from the past year and celebrate the most innovative
talent and creators in the industry. >> And the winner is no. >> Creativity, knowledge, and passion will all be on full display. >> Thank you so much. >> I-Heart Radio, thank you to all the other nominees.
You guys are awesome. >> Watch live next Monday at 8pm Eastern 5pm Pacific free at feeps.com or the feeps app. >> Hey, I'm Jay Shetty, host of The On Purpose Podcast. My latest episode is with Hillary Duff, singer, actress, and multi-plattener artists. Hillary opens up about complicated family dynamics, motherhood, and releasing our first record in over 10 years.
We talk about what it's taken to grow up in the entertainment industry and stay grounded through every chapter. It's a raw and honest conversation about identity, evolution, and building a life that truly matters. >> You desire in family like this picture, and that's not reality a lot of the time it's for people.
My sister and I don't speak, it's definitely a very painful part of my life, and I hope it's not forever, but it's for right now. >> Listen to on purpose, with Jay Shetty, on the iHard Radio app, Apple Podcast, or wherever you get your podcast. >> That's kind of my point, though.
It's like, Amazon Web Services doesn't seem like a business that traces fans, or if it does it chase them in a more sustainable way, they're not just credit they docked. They docked blockchain almost entirely, and I was worried they were going to fall down that rabbit hole.
>> But I mean, they do in $200 billion in capex this year.
Is it they see an AI because to your point, just now, what, like, seven to eight percent of a 300 million contract, that's dog shit.
“That's not going to pay back that capex, and I believe, this is my belief here.”
I can't base it on anything other than what I've seen Amazon do. What I've seen from customers, the Amazon is selling the capacity that they are spinning up, they are spinning up as fast as they can spin it. >> The question that I have is twofold, one, okay, you invest in all these AI data centers in the AI bubble, pops, deflates, whatever, how repurposible are those facilities and that
capital expenditure. If it's data centers and networking, yes, very repurposible, GPUs, while we're all going to get really into online gaming in a few years, I don't have video out, they don't have display pool. >> Yes, we still call them graphics, which I love.
I like the people, I've also heard people say general purpose units, which is...
of what a GPU is, like it is very much not general purpose.
>> It became public through a press release, that they have signed a $38 billion contract
with, oh yeah, with insane, there is zero doubt in my mind that because I did some digging on this, is their line of site for AWS to bring on online, $38 billion of capacity to provide to open AI, yes, yes there is, where my doubts come in, is open AI good for the money? >> No, I have some questions here, mostly from reading your work.
>> And that's the thing, it seems like something about GPUs and large language models to broken everyone. That's kind of the point I'm getting to, because like everything I've read about AWS and I read, because I'm a dickhead, I went and I read all of the previous coverage of the lead up to AWS becoming profitable, Kevin Ruse, by the way, literally a month before
they did so wrote an article saying it would be a, wow, what fucking three points in that ask why, anyway, everything I read was everyone saying, oh Amazon's being really spending,
they're spending six to seven billion in capex, a quarter, oh no, and then the total
capex of 69 billion, but everything from Amazon was like we're building something sustainable, we see the revenue potential behind it, it was all very boring, now with AWS, everything they talk about with large language models it sounds like they will be an offing Iowa score or something, they sound insane, they do, which tells me one of two things is true or
“honestly, this is the, this is the real world, unlike on Twitter, two complex competing things”
can in fact be true at the center of time. One of them is they're still doing a lot of that boring stuff, but the publicity all accrues to the things that are far flung, this is also $200 billion across the entirety of Amazon, that includes distribution centers, that includes low earth orbit, and it basically, Amazon basic starlink, I think they're calling it Leo now, it includes, yes, they're AI nonsense,
they're factory boom doggles, they're robotics stuff, office buildouts, et cetera, et cetera, et cetera, they don't give clear breakdowns on how much of that is AI services and frankly, they wouldn't trust them if they did, not since I saw a job at a few years back, on Amazon dot jobs, saying experience with other AI services like S3, S3 storage service, that's not AI, you can use it to eat AI, but I hear anthropics and thropics, one of the largest S3 customers
I've heard, I've heard that I've heard from seven different companies so far that they are the largest customer. Oh, really? Yeah, it's funny how that tends to work out. God, I miss working in cloud software so much, where everyone is the, everyone's the exclusive
partner, everyone's the number one partner and everyone's the largest, it's so, but qualifiers get to like, we're the largest S3 customer in Australia, great in the Northeast in the Northeast region between the hours of six a.m. and 12 a.m.
“Okay, so here's the thing with the capex, I'm sure a lot of it is for, is for AI, just because”
if you look at their pre VCs of capex, it's like 456, yeah, 461, 63, 52, 83, 131, 200 billion.
I don't see general over platform economics has been tracking capex spend to the hyperscalers for a long time now and he was one of the first people to call the cloud pretenders, IBM and Oracle specifically because they're making all the cloud noises, but they're not spending anything on capex and you kind of have to build the data centers for this to work, not to worry, Oracle's taking care of that, what I want to know, my question is when you start, okay, we're
going to spend even assume it's all AI, whatever, fine, $200 billion on AI spent, how much of that is just in the form of a chat written to Nvidia? And that's the question because from my understanding, my understanding, the, I should bring up the chart, I'm just going to do something live on air, I'm just bringing up an image and of course, I can't find it. Nevertheless, there is an image I have, the Amazon, well, Amazon builds its own, the training GPUs, and then they still use inference, yeah,
or they just, I was like, that's my grandpa got diagnosed with. Yeah, but do they, like, inference, yeah, I thought was there. Oh, they talk about it a fair bit, they talk about training and the thing is is what you don't see is people using it in the wild. I looked at a bunch of stuff with Olamma, that's the run your own stuff there. I searched about a year ago for the term in Forensia. It showed up once in a pull request that had been closed after 60 days because
no one responded to it. No one is using this in the real world. A year ago, year and a month now,
“they had with training him too, I think it was, they had speakers from Anthropic on keynote stage”
talking about it, which, yeah, okay, they invested how many tens of billions into Anthropic? Yeah, I'm sure there's a contract requirement around sending it exact to talk on stage. And the other one was Apple. Apple doesn't admit what they're doing to their own employees, to their other
Let alone publicly.
but those are the only two companies I've seen doing anything with it. So based on this chart,
“I've got, which involves various stars and company names. It looks like Amazon gets their GPUs through”
Foxconn, also known as Honhai Precision Corporation Limited. I love Chinese and Taiwanese names, but the same C as I'm certainly in there. No, TSMC isn't, because they haven't been able to do the design, but they don't do the fact. So they ship the I assume the Anaperna, which is the internal place that Amazon makes its chips, ships them. It looks like the Foxconn, quantum computing, and jubbel. And then they put them in the servers. So really, it's them cutting the checks to them. I'm going
to be watching the monthly earnings of those companies in Taiwan quite viciously, because here's the
thing. If it's all $200 billion of capex, if they really think they're going to get paid that much,
but what happens? Has Amazon ever faced the situation where they did an overbuilt? Has that ever happened to them? What did they do? Yes. They made a bunch of noises about it during the pandemic. They overbuilt their distribution centers. But that's people buy stuff. Exactly. That was my position on it. It feels like, okay, like they slowed it down, and they didn't shut them down, but they waited for people to grow into it. The thing is is a warehouse that you use to ship out
underpants. Great. That has the same utility more or less five years from now, as it does. Yes, exactly. A lot of these chips are depreciating assets. But yeah, man, I can't wait to get that seven-year-old computer in here, so I can do some real work, says no one ever. Well, also, training them, especially, they've got what they're on generation two, three now. They're now shipping three, right in time to pre-announce four, and then it's just for attempt to Osborne computer themselves.
Yeah. Explain that reference. Oh, Osborne computer was a company back in the 80s. They launched the Osborne one, and they're CEO went out into the whole press junk, and he's like, yeah, this is great, but Osborne two is going to blow the crap out of it. I'll look in video. And they'll go, everyone's like, great. We're not going to buy the Osborne one, then the company
went under and never shipped the Osborne two. Well, okay, not like in video. Then this is the thing.
Surely that sets Amazon up for a big problem with those training and chips. Like, even if in some wood, well, the training in four or five was amazing, I don't think it will be, but just saying, doesn't that mean they're going to be sitting on a bunch of obsolete training them? It just feels very questionable. You know, you can say a lot about OpenAI, and you do, but that's really, it's where they announced that 38 billion dollar contract. They didn't mention
training him. They didn't did they, which tells me that if it were have as good at this at the model training as they say it is, OpenAI would be all about it. Yeah, I'm not seeing that to be true.
“Well, clammy Samoltman is a sign to think with a cerebrus. You remember, you're cerebrus?”
Is there any other Samoltman is not signed deals with? Oh, let's think a grok. Amazon one with grok, yeah. Okay. Good, good. I mean, actually, sorry, just to be clear, hasn't signed with either. Well, I guess it wouldn't, he wouldn't, someone with grok has technically grok is a competitor. I mean, GROQ, the annoying fast inference. I don't know, at this point,
my hated German people are going to say this episode was too technical, and the answer is calm down.
This is my podcast. I'm just, I'm wondering at what point they say uncle, because okay, $200 billion and let's say 125 billion of that is AI. Right, AI chips takes four or five years probably to install all of that. To what end? What happens in for for are they going to make? Well, I mean, that's what no one is able to explain to me. What use cases today? Do are we looking at where, wow, if we had 10 times as much inference as we do today, then x would be possible,
solve for x. I'm not hearing it. No, I'm not even, I'm not even being my usual Haiti self, even though this site is a season. It's, I genuinely can't get that answer out of anyone, even the boosters. It's like there's this, in sociable demand for compute. We're going to summon God through Jason and step one and step two is we're going to ask God what to do. I mean, that's the thing.
“I do think that they, I think that, have you seen the revenue projections for these companies?”
Have you ever seen like Oracle's cash flow? So, if you see this thing right, put that also known as, there's a reason that every time Larry Ellison co-founder of Oracle goes and gives a keynote or talks somewhere, they preface it with a disclosure that is the lawyer version of everything you are about to hear is a fanciful imagining of reality. Don't listen to him. He's, he's at a long day. He hasn't taken his nap. Fuck, if HR guy goes, Jerry Stiller. The thing is, you look at these
cash flow posts, these cash flow diagrams, ranthropic, open AI and Oracle. They all follow the same
Thing, which is terrible cash flow, negative cash flow for years and years an...
2029, everything changes, number go up. And I, at this point, genuinely think that they think
“they're going to invent AGI in 2029 that that's the only plan they have because they're not,”
they're not doing the things that, they're not, if they genuinely believe that, they would not be doing these things. We think that we are three years away from launching AGI that will change everything. So what are we going to do? We're going to find a way to put ads into chat jippity. But that's not the play when you, when you think you're on the verge of the singularity. I mean, nobody, it was a demo. Demis, I don't know, it's, I don't like him to such an extent.
I refuse to lend this name, the deep mine blog. Paper, paper, paper, I try not to, I try not to anthropomorphize either AI or it's creators. Yeah, at deepestment beepers, he's the one that every few weeks doesn't interview and he's like, and then God is going to come out. I'm really scared of what the computer will do. He doesn't sound like that. He wishes. And it's just, you
“make it sound exciting. Yeah, exactly. It sounds fun and interesting and comical when these people”
are just boring, boring people, boring motherfuckers. But it's just these massive over promises and these weird fucking, like, these weird things where I, like, looking, let's look at this, there are $650 billion in capex being spent this year, just by alphabet Amazon, Microsoft. Where is it going? Genuinely, actually, simple question. I actually don't know where it's going. If they do a giant hole in their balance sheet at some point, you'll notice that all of the
hyper scalars, all of them that have succeeded, even the pretenders, have other businesses that
finance this. Yeah, there has never been a successful hyper scalar that launched as a hyper scalar.
The closest story you've got to that, and I, I question whether you'd call them a hyper scalar, is cloud flare because they start as a CDN and then just added the rest of the cloud stuff. And let's see how big that stock is. I've got a 59 billion dollar market cap. Well, there are real company. Yeah, you wouldn't want to, I won't want to invest in a company that wasn't making it grieges promises, but it's just, it's just, it's just,
so strange because even if they think AI is going to be big, surely all the money they're spending today is not going to do that. Like all of these chips I'm going to do it. The models they train today aren't going to do it. It's like trying to put a strap from thing to thing. The story that concerns me is I, okay, you take a look at these companies and their subscription plans. Top end of it is 200 bucks. Great. I, I pay it myself just so I can dispatch a winged monkey
to build me a shit post website, which is awesome. And sometimes it works and sometimes I have to prompt it to do different things. Great. It's better at shitty front end than I am at shitty front end. Terrific. I'm not going to spend five grand on that. Yeah, that's the model of resumes that not and not just talking me here. We're talking effectively everyone. It's like the unspoken message of a lot of these folks is that your boss is going to fire you and then take
your salary and split it with the AI company. Right. And also the, you will be able to code everything with AI versus what people love that I quote the same thing. Call Brown saying uh, makes the easy things easier in the heart things harder. Like we are building software at Duckville. We are hiring engineers. Is this because we're stupid? I don't believe that to be true. Run a business and not thinking about podcasting. Think again. More Americans listen to podcasts
than ad-supported streaming music from Spotify and Pandora. And as the number one podcaster, I Heart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only I Heart can extend your message to audiences across broadcast radio. Think podcasting can help your business. Think I Heart. Streaming, radio, and podcasting. Call 844, 844, I Heart to get started. That's 844, 844, I Heart. I'm Clayton Nackard,
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with Jay Shetty on the iHeart Radio app, Apple Podcasts, or wherever you get your podcast. Yeah, and that's kind of the thing. It's like, I don't know, people still seem to be hiring software engineers. The engineers are getting fired in a place for the AI story doesn't seem to work. And also, every time I go and read someone who claims that Claude code changed their entire life, it mostly comes down to, yeah, it took something from a few hours to an hour.
And it's like, cool. Great. Okay. But it's my life. What did it do? It taught me to clearly explain what I wanted. Yeah. But also, I still had to fix things. It's like, if all of this money just went into creating slightly more efficient software engineers and even then the data suggests they're less efficient, I don't know. Was this worth it? And Amazon certainly isn't Amazon certainly isn't. I guess they're getting the chunk out of Anthropics from this, like they can claim Anthropics success.
They can have them pay for training, I mean project creation and platform company where when people build interesting things on top of you, how do you, how do you take credit for that without being of notches? I mean, that's that ever been a problem for Amazon? Well, not the, it's not that they're worried about being of notches, they're bad at messaging. Well, I mean, they, they, I'll mention you Melio, it panos pané is panos pané came over from Microsoft from the Surface team to lead
Amazon's Alexa Plus. I mean, now there's something obnoxious. Now there's some real gender if AI bullshit. They've got lost like billions on Alexa now as well. Oh, God, what a strange company
Amazon's become. They've always been peculiar. The problem is is at some point of scale, like we're
a little weird, no longer carries water. It's great. You're now one of the lynch pins of the
“global economy. You have to explain what you're doing a bit more effectively. Yeah, I, I, what do”
you think, you've known, you've known Amazon for a hundred years now. What do you think happens if the AI bubble bursts? What do you actually think they do? Like, what do you think, are they the types to actually mothball this stuff, what they just pretend like this never happened? As specs of it. But they're, again, they're making money hand over fist on the actual nuts and bolts of cloud computing. That's not going away. They, they will, they're stockable tumble because they're
not posting massive growth numbers, but they have a, a banging business of providing computers to the world. The question is, is what happens when there's a giant hole in their balance sheet? Because, well, it turns out that hundreds of billions of dollars in contracts every one side, they suddenly, they don't got the money. What do we do? That's going to be a systemic problem.
“It's not going to just hit Amazon. It's going to hit them out of folks. And I think that the”
answer everyone's sort of hoping for in that space is government bailout? No, but a vamas, though, I would be so irritated. Well, also, what are they bailing out? Amazon's not going to go bankrupt, or even if Amazon had to take a massive impairment on elder trading chips. And it was like
30 billion dollars. But the shareholders had the shareholders. They'll be mad. Don't get me wrong,
but it's not going to destroy Amazon. Like, it's not, I mean, it might destroy Andy J. Jesse's asshole. Like, it might be might send Andy Jesse in an iron ball into the sun. But it doesn't
Feel like it will kill them.
I had a great hopes when Andy took over. But it seems like the company is just continue down the institution curve. They're not doing surprising things. The reason I started the last week in AWS newsletter in 2017 was that every week, they were fixing a massive customer facing problems and it was hard to keep track because they were just as bad that as they are now.
What do you saw last things? 2017. Right. Now, they don't do that anymore. It's basically a
inertia. I would not be able to start the newsletter and build an our readership today, the way that I did back then, just because people do not care nearly so much about the platform as they once did. So when did you notice the shift happen? It was first gradually and all the ones
“I think is probably the way to frame it. When I realized that I went from every week having the”
problem of there's so much stuff here which which ones make the cut to there's so much filler here, where's anything actually worth writing about? And when you say filler, what do you mean? They used to say these to talk about things like AWS Lambda, a transformative shift in how a compute could be run. They put that out with the same enthusiasm corporate voices. There's now a third Cloudfront Edge location in Dallas, which even people in Dallas do not give
it to us about. Right. What does Lambda do? In effect, you give it its code. It runs the code when certain trigger events happen. Be it a web request, be it a time being hit, be it something something other event hitting, and it only charges you for while it runs. And massively scales up and you don't have to worry about any of the care and feeding of the infrastructure around it, which is really cool. It is. It was cool. There's beta in 2015. But now the ones truly great
things Amazon put out that change the way I thought about how this could work. Except now, Amazon doesn't really put out fun new updates. It's just incremental updates. We have a new thing. We've launched our own large language model called Nova. It's not as good as the ones you currently use, but it's less money. Right. What's the key of C stage? They don't care. What's great is if you look when over is, wow. It's in the top 25 below,
cat code of pro kimi 2.5, grock 4.1, mimo mini max, quenthin, kimi k2, basically every other model. Right. Exactly. They're racing neck and neck with Ed's taxidermy and frontier AI lab. At this, it really is that, though. It's something called Ernie from Bido. Every Chinese model appears to cry. That's so funny. What a horrible situation we found ourselves in. Amazon tried to sell fun being frugal and it turns out that when I have to assume the reason
the titan models that were so bad they never really saw brought release and light a day was that
“it's okay. It's going to cost a billion dollars to train this model. Why can you do for 20 million?”
Like that is the Amazon ethos. It's fail is the answer. Unless it comes to capex, though. Like that's the thing. It feels like what you say there goes directly against how they're dealing with AI. It feels like AI is just poison their brains. Oh my god. Yes. I want to do a, so I back when these stuff all started coming out. I had fun with it. I ran a bunch of custom questions against these things. Like rank the US presidents by absorbency and then see
how long as I'm going to bully them and do doing it. Or give me some criticisms of Corey Quinn. And what are the early chat GPT things made me question like aspects of my life and go home and drink heavily. Whereas I asked one of the early Amazon models that question and it would have been like exhibit A in the defamation case except I'd have to prove that anyone took anything Amazon said even slightly seriously. Right. It's, it's just weird. There's something that I think the,
I don't know if AI psychosis is it, but I mentioned this with David Gerard. It's like people
“getting one shot it by this. It must one shot executives. I think, oh, it absolutely does.”
I use it myself and the curation of my newsletter. For example, because this is, this is a terrific use case and I think it encapsulates my philosophy on this. Where Amazon, I consume all the RSS feeds every week and there are roughly 150 items that come out. So what I do is I have a scoring thing
that pops up two columns. Here's what, here's the good ones. Here's the crap ones. And I have
a whole rubric that I have put into this. It stays me a tremendous amount of time. I go through and I put some from, I move some back and forth as I read down the list and increase this it learns from my decisions. It's getting it mostly right. It speeds up my workflow. It is convenient. Is this worth changing the entire world? No, no, it is not. But I'll make hay while the sun shines. Besides, if I'm going to make fun of something, I should be using it. So I can understand it
to make fun of it more effectively. Right. But would you pay the real rates for it? Because that's what I think is going to break this as well. It's when these companies start having to charge
The real costs when they have to start getting paying the margins.
me 7 cents a month. I am glad to pay that. I would probably pay as high for that as I don't know
“20 bucks a month, which again, that's a significant increase there. Sure. But too much beyond that.”
No, I spent seven years going and doing this by hand. I don't feel the need to stop. I did use Cloud Code for several weeks to rebuild the entire interface. Because I was, I had this janky, horrible newsletter publication thing that I kept meaning to replace. I looked into what it would take to have an engineer do it between 20 to $50,000. This was just three weeks over the holiday break of prompting the thing and it finally got it dialed in and correct. Now, in practice,
if neither one of those two things is a viable option, there's a bunch of stuff off the shelf these days that didn't exist back then that I could have worked with and had a much better base. But this was fun. This was, I could use some software in this small place. The cost of generating this software now for my time perspective is minimal and it fills in a gap. And these things are good at solving, at building tools to solve one very specific problem. Where these things fall
down, software is always falling down on this is as soon as the requirements change. I said
on a linked list every Monday, I built software myself to handle this. When I started sending out blog posts with it as well, I had to go back to the drawing board and redo an awful lot because, oh, it's a different model, the entire flow changes when I introduce the requirement downstream. When software becomes free, it's all over the bottleneck, more or less, you can build custom tools for any given situation far more effectively. I started writing a bash script to give someone
access to run, run this one command in your terminal, give you access to this thing. And I started writing it myself through it into one of these things. It came out with a much better script as a one off that I don't need again. Could I have done it myself? Yeah, I had about four hours, but what I have no, it's all things. It's all those small problems. They're point solutions, but I'm not firing people for this. I'm not replacing segments of the economy with this. I have my brother is one of the
few people I've heard about being definitely impacted by the rise of AI. Until last year, he was a freelance translator. I'd believe that. That feels like it's something that is easily prone to disruption. I buy less stock photography when I can have shit post images of giraffes on fire and data centers now. But they're not going to love that. They're not. They're not going to love that. The
“list is not going to love that. Oh no, I don't even, I think AIR is just genuinely ugly. You know,”
even, they would suck the life out of the, out of the post. And I pay for artists to do things correctly. Okay, good. By stickers, for I gave out a free invent for shitposting.ai, and it was bad AIR in a 1950's style, like a dog with an extra leg, people with extra hands and whatnot, that we hired an illustrator as a human to draw in the style of bad AI. I thought that was a lot of fun. For something like this, yeah, I am paying artists that I'm making it work. I'm building a
shitpost meme to throw on Twitter and never think about it. I think posting is an odd. Posting is
an odd and you're, it is, you're bringing, there is no Bashito in, in generating images. But let's move on from the subject because I have one final question. Please hit me with it. So you've seen this thing about how everyone's freaking out about. And I know you're going to love this. Everyone's like, Claude Code is replacing software. How funny is it? How ridiculous is it to you? I'm leading question. I realize the idea that instead of buying on a Percy basis, people are going to just
“replace SaaS with their own internal shit. I think it's one of the funniest and stupidest things”
of the herd. Oh, I think it's a terrific thing that is totally happening, because obviously, again, I am building software for enterprises. Well, they can just write this code overnight to do it. Yes, they can easily generate a website that reports to do something. But what if they needed a thing
to be correct? What if they're, oh, I don't know, signing a billion dollar contract on the
result of what that software spits out. Maybe Yolo of slamming it isn't the right answer. We're going to just replace all the software with custom bespoke stuff. Great. Terrific example I saw is that for payroll and thropic, the company uses ADP. Well, why would they do that? They can clearly build their own pages. Oh, they're all built internally. Because you're not buying the software. You're buying the compliance. They're keeping up with all the different jerseys that
can get you operate. Someone who is going to certify with their reputation that this is going to solve a problem. There are a bunch of things out there. There's some software that will be disrupted by this. Picture a bunch of the obnoxious stuff. I just want to convert this from one video type to a different video type. And you'll find some like random thing for 10 bucks. Yeah. Well, now, cloud code or whatnot is going to fix that. Because I don't know how FMPEG command line flags are
supposed to work. It does great. It's easier than looking it up. Am I going to go and replace actual
Business line of business?
thing as well. People think the people pay for like sales for what have you because they're like,
oh, because I have to pay for it. And also, just because it's a simple piece of software. No, they're these intricate API racking things that roll around in their own fills. And then you they get they maintain them on the back end. Even if even the shittiest cloud software you use has some weird back end stuff. They have to constantly maintain because things break and the big of the company, the more things that break. Yeah. And it's just the gen one of all of Salesforce
is just an Excel spreadsheet. It is who am I contacting? What is the last thing I did in the house? And it gets complex quickly. And where the leap happens is, okay, now it's not just you.
Now it's an entire sales team. Now you're going to like have you have some turnover in that sales
“team over the course of doing business. How do you wind up having a provable chain of issue on this?”
Someone pops up for out for three years from now. They said they talked to someone here. We have no record of that because cloud rebuilt at five times this week. Where does that going to live? How is that going to exist? And even then it's like, auditability, auditability even. Jesus Christ. But this is not an AI phenomenon. When Dropbox launched the number one comment on hacker news was this just is just our sync with some extra bells and whistles. This isn't a product. Yeah. Yeah.
Yeah. I mean, even then Dropbox is like, it's not just storage. It is the support services around it. I don't know. Well, if a Dropbox doesn't want to do a Dropbox does any more every time
I, it's a folder that sinks everywhere is what I loved about Dropbox. Now it's trying to basically
compete with Zoom in Google Docs and all the other stock. Hello, they are quite a slow file. Well, Gory, let's wrap it up there. We've done some good hitting. Have some good links for you. We'll link to Drop Bill link to last week's Amazon was there. Last week at AWS.com with an obnoxious sarcastic platophos. That's right. Use of AI before we go that I think you'll appreciate. If people email me, Cory. Quinn at duck bill HQ.com and I don't like what you're doing and you're trying to sell me
something. I now have an AI powered executive assistant in the form of Billy the platophos who will tell you in corporate appropriate ways to go fuck yourself, which is just chef's kiss. Because I can't say that to people. I have a reputation. The obnoxious platophos responding to sales people does not have this constraint. This is the one liability chef that I found that actually works and you can blame AI for things you personally approved. Well, I don't endorse the
“plat, AI plat a pussy. You should get a real one. You should get a real one, you should get a real one,”
you should get a real one. That customs officials had many questions. I did not wish to answer. Trade the platophos, Cory. All right. You've been listening to better offline. I'm Ed Zitron. You have a monologue this week. I guess thank you so much for listening, everyone. Thank you for listening to better offline. The editor-in-composer of the better offline theme song is Mattersouthsky. You can check out more of his music and audio projects at mattersouthsky.com
MATTTOSO WSKI.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.wizyoured.at to visit the discord and go to ask/betroughline to check out all Reddit. Thank you so much for listening. 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 iHard Radio app, Apple Podcasts, or wherever you get your podcast.
.com. I'm Clayton Nackard. In 2022, I was the lead of ABC's The Bachelor.
“But here's the thing. Bachelors fans hated him. If I could press a button and rewind it all I would.”
That's when his life took a disturbing turn. A one-night stand would end in a courtroom. The media is here. This case has gone viral. The dating contract. A great a date mean, but I'm also suing you. This is unlike anything I've ever seen before. I'm Stephanie Young. Listen to Love Trapped on the iHard Radio app, Apple Podcasts, or wherever you get your podcasts. Next Monday, our 2021 6 iHard Podcast Awards are happening live in South by Southwest.
We'll honor the very best in podcasting from the past year and celebrate the most innovative talent and creators in the industry. Creativity, knowledge, and passion will all be on full display. Thank you so much.
I heart rate you.
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