AI Is In The Craziest Loop

So, we talked about Sora also last week. You've probably seen some Sora videos. These are like AI generated videos. It seems like making funny AI videos is not generating a lot of money for them and it costs them a lot of money to make those videos and people are also not using their app. They just generate the video and take it out and share it on social media somewhere else. So yeah, at the end they are losing money and there is this good example that came to my mind like comparing it to this meme generator. I shared this on on the stream before. Uh I think you've used it as well. Let me zoom in on this. This tool doesn't make money. Well, maybe a little bit with ads, but not really. So meme generator, we use it for memes like on our Discord. We we use it all the time. Okay. Uh, and what this is, this is essentially we have some like internal jokes with friends or like we make fun of a friend and this is how we do it with a meme. We put each other's heads on characters or write each other's names depending on the situation. And to me, honestly, like Sora too today is just that but animated and like fun. So yes, there is this idea that you can create like advertisement and like movies and like crazy with it and theoretically get paid for it. Yes, you can do that, but it's the quality is still not there to be that good in most cases. Yeah, in some cases you could, but in most cases it's not there to do everything that you want reliably. Um, so what people ended up using Sora for is just essentially creating memes that is a glorified uh version of meme generator and it's causing open AAI to lose. Yes, the meme was a part of it, but we were promised uh AGI like we were promised, you know, cancer treatment. And what we have now is quite literally a bubble. Like I don't know how else to call this if not a bubble and as you mentioned it earlier in the show, maybe it won't burst. maybe or even even if it does maybe the burst is not so huge to take down you know society or like any industry with it but it's probably going to burst because the way it is now it's kind of like very funny Nvidia is uh giving OpenAI money and OpenAI using that money to buy chips from Nvidia okay and OpenAI is buying chips from AMD and AMD is giving Open AAI 10% of their stock and now we have Oracle somehow that is going to use AMD chips to build something for OpenAI. Open AAI promising to give them money. You see it's all a selfperpetuating situation where a few companies are you know taking the shareholders money essentially because when they talk about it the the value goes up they are taking that money and they are putting it back in each other and it's just this loop and the issue is who is making money like none of the okay Nvidia is making money. Nvidia is absolutely making money. But who else is like Nvidia is not uh OpenAI sorry is not actually making a lot of money. Oracle we don't know how the deal will be. Uh but a lot of the focus is on Open AI releasing something, promising us and releasing it and delivering it and the idea that if they do they will make money on it but they haven't yet and I'm not saying they will never but they haven't yet. the they they are making money but their costs are significantly more than the you know the amount of money they are making and they are running really hard trying to get to the point that they can keep the users in because open-source is growing as we saw with N8N and we see with AI uh you know um models there are not a lot of incentives to stay indefinitely with open AI. So all I'm saying is if AGI comes along, if like these agentic things get like truly amazing, Open AI might not be in the best position to to to get money from users. And all we have then is, you know, a bunch of deals, a bunch of chips and warehouses that cost a ton. And then Nvidia in this cases, yes, they are making a lot of money and it seems like they will be they will continue making a lot of money. But if this is a bubble and if this bursts, Nvidia is going down with it as well because then people won't buy like companies won't buy their um extremely expensive chips anymore. They won't be able to buy because nobody's paying for their services. And right now it's it's just like paying each other and the share goes up and more money pull. The question is why do we care? Why do we care? Yeah. Uh if we are in a bubble and if it bursts bursts uh will well a lot will go down with it if in the best case. So uh I I believe it was Jeff Bezos talked about it. We we have like two types of bubbles that we could be in. One is like the financial crisis in 2008. If we would have something like this, the whole society will not collapse but will have challenges. We'll have like difficulties with jobs, with money, with everything, right? Day-to-day life will become difficult at least for a few years. But another type of bubble we could have is like the dotcom bubble. So the dotcom bubble is the early internet bubble where there were a lot of um we had a lot of startups uh trying to do something with the internet and they had not they had not figured out at that time how to make money with it. So they were like internet startups and investors were pouring money in it but nobody was making money kind of similar to what we have today. We knew we knew for the fact even at that time even people who were like pessimistic about it they knew that the internet and that you know the idea of it is amazing and we will eventually make money out of it. It's connecting a lot of people and services and companies but we didn't know how. It's the time before like Google. I I don't know if it was before Google but uh I'm sure it was before Google making like money anyway. So it we had this com burst a lot of companies um went down essentially they went to zero uh well they went to minus like they they lost all the money that investors uh put in them but a few came out of the ashes and rose to the top such as Amazon. Amazon one of was one of the survivors who become a giant. Now you could say well even if it's a bubble and it bursts and it's not the end of the world but actually at that time a lot of people a lot a lot a lot of people lost their jobs a lot of people had difficulty so it's not going to be easy that's one reason another reason is again I'm I'm I'm repeating myself here but we were promised AGI I want to see AGI I don't want to see a bubble I don't want to see I honestly I don't like seeing Sora, yes, it's fun and I would use it for meme generation, but I would like to to see like true AI agentic that can do things and not this increment that we see here, like this increment improvement that we've been seeing in the past three years. That has not been really what we maybe maybe we're just not looking out for. I'm sure, you know, I'm sure we can find some very optimistic sounding articles like we're we're we're just a bunch of kids. I say we're a bunch of kids. We're not really, but like, you know, I bet there's some pretty optimistic looking articles about um AI. You know, we talked about the um mind password thing. We talked about like there's going to be stuff going on, but how do you make money with these? like we're talking about an industry that costs a lot of money and we we still don't know how to make money with it because uh I believe it's like 3% of the US uh electricity is going to AI that is insane like the amount of uh the the new deal that I believe I don't know which company was the the new deal that they made to generate energy is like enough energy for 5 million houses. It's the investment we save the energy thing. I I actually watched a Dave was it Dave Shapiro or something? He echoed my sentiment. I think the whole economic e economic I think no not economic ecological impact of AI isn't exactly like yes it can power all these houses that's fine but how many like where is that got it's probably taken that energy from elsewhere right it's not people aren't driving as much people aren't spending so much time on the whatever it is anyway that's just yeah and and there ways to make energy and it's kind of like a different topic but I don't know are you familiar with Kardashov I believe it's called Kardashov scale. Yeah. Yeah. And we we are not even close to level one societ uh civilization and we want to go there. So I'm actually looking forward to have reason like proper reasons to use more energy and build more ways to generate more energy, right? Because it means we as a society as as civilization we are advancing, right? I like that. I like that idea, but I don't want that to be used for Sora to to generate toilet salmon old man in the toilet videos. Let people have their fun. Why are you such a party pooper kabaza? Let people have their fun. I I will I will contribute to the fun and will make some videos like this out of my friends once I get access. Got to buy Yeah, got to buy your um How much are they going for on eBay? Did I ask you that? I don't know. I I I think I asked Chris if he can find me a deal. Invite only and people are selling their invites on on eBay which is um Yeah. Anyway, let's let's move on. We both This is part of a larger conversation on my show Command AI which we stream live every single week. We discuss the news and all things related to AI in the world of design and web. Catch us next week and join in the banter.