Also media.

Hello and welcome to Better Offline.

I'm, of course your host ed zitron and today I am joined for a dot com special by Matt Rosoff, the editor in chief of the Register, who has been in Silicon Valley.

I believe three hundred years.

You said it was three hundred and twenty five.

Yeah, so I'm actually a vampire.

That's nice.

Oh, what like Kevin O'Leary and Martin Supreme.

Sorry, Martin Supreme.

That's a thing he says in it.

Have you heard about that?

No, I don't know, but I haven't seen that yet.

Ping Pie doesn't really do it for me.

I didn't really like it, but there is a bit in it where Kevin O'Leary goes, I'm a fucking vampire.

I've lived for this many years and I read about this.

I did not like the movie, but I read about it.

I was like, oh, I would actually love it if this was true.

And apparently they did film it with fangs, and they should have done that.

They should have just had him be a vampire at the end.

However, he's regularly in the sun, so I'm not sure how they would have squared that circle.

AnyWho, my time only computers.

So Matt, you were what were you We're just going to go straight into it.

What were you doing in the dot com bubble era?

Like?

Where did you begin and where did you find yourself as it progressed?

Yeah, it's an interesting blast from my very distant past.

But I moved to San Francisco in nineteen ninety two, sort of the tail end of the Gulf War recession, so there wasn't much.

Going on then.

I was interning doing different kinds of od jobs, copy editing, doing some of those kinds of things, and then in nineteen ninety five I joined a little startup that was going to publish content on the World Wide Web.

They didn't call it content then, I guess it was.

They called it.

An online magazine.

They already had a TV network and that was Senet, So cnet is still out today in a very different format.

But I was employee number forty two there.

Started off as an editorial assistant, and my very first task there was to come up with an email newsletter, which we called Digital Dispatch, and it was mostly summaries of stuff that we were publishing on the site, and then occasional snarky commentary.

I remember a couple of years later, we did ten reasons why Wired's IPO failed, and one of them was the prospectus was printed on neon green and red paper, which we thought was OK, funny and cute at the time.

So anyway, that was a lot of fun.

We were, you know, growing at a very rapid pace.

I think I was there from ninety five to ninety nine.

Like I said, I was employee number forty two on the way in, and I think when I left there were over five hundred people working there with that.

One was owned by Zif Davis at the time, it was not Cnet, was an independent company.

It had a number of early venture investors, including Paul Allen, the Microsoft co founder.

I don't remember the other ones.

The CEO was guy named Halsey Minor, and no, it was it was completely you know, it was privately held and weipo'd in ninety seven or ninety eight, I'm not, oh.

Just before that was just before things started to fall apart, right.

Well, ninety eight was still go go go.

I think it really kind of went on until two thousand and two thousand and one was when things started to turn.

So, you know, it was fun being a company that was growing fast.

I was able to do a.

Whole bunch of different kinds of things.

I was writing TV scripts and doing CD ROM reviews back when multimedia was a thing, and writing features and I interviewed a two way pager from this little company called Research in Motion before the BlackBerry was out, and I interviewed one of the first MP three players.

I think it was the Rio, and I was like, Wow, interesting idea, but it can only hold like twelve songs, so this is a complete waste time.

It'll never go was before the Creative Nomad.

Then I think around the same time.

I don't remember which one was first, but yeah.

I remember the Creative Nomad could have like three hundred songs on it.

I felt like, oh, yes, Sultan of BRUNEI I was the fanciest man ever, three hundred songs.

How would I ever choose?

Yeah, that's it, that's right.

Yeah.

No, this was a lot less than that.

I mean, we had to sort of do math and go backwards and we're like, wait, that's only twelve songs.

That's worthless.

So anyway, and then you know, took some filthy dot com Luker went backpacking for a little bit with my girlfriend at the time, who later became my wife.

And then when I moved back, moved back to Seattle, and I think we came back on the day that Microsoft lost a verdict during its big antitrust case.

Yeah, the MS one.

Right, Yeah, this was well, this was anti trust.

Basically they had a whole bunch of different charges against them.

Tying the browser to Windows was kind of the big one, you know, and making deals with PC makers to bundle certain software and not allowing them to bundle other software and all kinds.

And incentivizing bundling MS dos.

Yeah, I vaguely know this story.

Yeah, it was.

It was really about like Netscape Navigator was the thing, and you know, that's what we were all using in nineteen ninety five.

It started with Mosaic and it was Navigator, and then Microsoft built Internet Explorer in the Windows ninety five and four years later Navigator didn't really exist for all intents and purposes.

So it was But anyway, that was the day.

It was Judge Thomas Penfield Jackson, and he ordered them to be broken into two companies, an APPS company, which is office and all those products, and an OPS company, which was Windows.

I believe now maybe remembering this slightly wrong and I don't have a resource in front.

Of YEA very recently covered this and you will back on.

Yeah.

So but I think that was kind of the peak, and I think that was actually perhaps the beginning of the end.

So it's even though Microsoft had had very little to do directly with the dot com bubble, there was sort of this sense that, oh, the tightest turning anyway, long story short, I moved back to Seattle and I found work with this startup.

At the time, they were called a Cadio and the idea was that they were going to do online education, so they wanted to have articles written and I was the computers tech guy.

We were going to you know, training people on computer technology.

And it was the most incompetently run company I have ever seen been a part of.

I walked in immediately realized that I needed to get out.

So by way of example, they didn't have so you know what.

Yeah, it was this was.

Early two thousands, so this is still this was when companies were getting funding on a promise and going public on powerpoints.

Still it was still still at the peak, but we could see it starting to turn.

So you know, these guys had enough money to hire a bunch of people, and they had a cool loft in Pineer Square, which is you know, brick building and all this kind of stuff.

But they didn't.

So they you know, they hired me, and they're like, go get some freely, you know, fine, start hiring freelancers, and we need to get some content up.

They had no way to put the content on the internet.

They didn't have a CMS, they didn't know what a CMS was.

And we were using Visual Source Safe, which is a Microsoft product used for you know, creating code and sharing code.

It was that level.

And I remember later here over, you know, hearing secondhand that somebody had overheard a very tense meeting between the CEO and the investors where one of the investors yelled through a closed door, we might as well just sell the servers back to the investment bank.

So I quickly got out of there, found a job at Directions on.

Microsoft did that for ten years, and they were out of business by I believe, early two thousand and one.

So about when did it become obvious something was wrong.

So it was never obvious that something was wrong large scale, but it was obvious that a lot of the specific individual companies that were part of this were completely hot air.

There was nothing there.

There weren't revenues, there weren't customers, or they were you know, selling dollars for seventy five cents basically.

So you know, pets dot Com was a big one, Cosmo dot Com was another one, And all these ideas came around later and were more nearly profitable in the second go round.

So Cosmo dot Com was just home delivery.

It was like Instacart.

It's basically Cosmo was Instacom, and pets dot Com was Chewy.

And I looked at Chewy's revenues recently, three point one billion dollars in a quarter fifty million dollars of profit, which is good.

But also one of those business is what I hear metrics like that, I get scared.

Yeah, it's fine, it's a you know, it's a low margin retail business.

That's fine.

Retail retail's good, you know, it's it's okay, it's real.

Yeah, it's it's you sell things for more than you make them for.

That's that's how it's supposed to work.

So I think there were just so many of those.

The other one was there was a business and I think they were only based in Seattle, called Lackeye dot com.

And I remember my uh my boss at directions at the time said that, you know, this is when I knew that the revolution was impending.

Is when you have a website called Lackeye dot com that is basically a personal assistant.

I guess it was kind of like task Rabbit, that kind of thing.

Yeah, but even toss grab it has never really is tosk grab it even profitable.

They got bought by Ikea, so it's buried now.

I don't I don't think they ever were.

My lackey dot com.

Okay, I I hate to interrupt to read a Wikipedia page, but it was founded in April not you know, you know, by a guy called Brian McGarvey and another guy called Brendan Bonnacle.

I remember that name.

Yeah, I remember that name with an I right correct, yes.

Yes, yeah.

In the memo he had a memo that was on fuck Company.

It said this is still a startup.

And he complains that it is now six forty five PM and they're only twelve people in our office.

We have sixty four people who work here in Seattle.

It's totally unacceptable.

So the more things change, the more things stay the same.

I think that's true.

Yeah, there are there are absolutely some similarities and some differences between today and them.

But what about the the telecom side though, was it did everybody just think that was going to work out until it didn't?

What was their a point when the Loosens and the wind stars of the world got scared or scary?

Yeah.

I was less close to that at the time.

I was pretty focused on end user consumer stuff.

But I remember having friends who were sort of retail trading and talking to me about Siena, Siena Networks, It's going to be huge.

And I think those busts came a little bit later, right with WORLDCLM.

I think that was maybe a bit after the doc Bom bust.

And I'm a little bit less familiar with how all of that worked.

But as I understand it, there was a lot of circular There were a lot of circular deals and deals that weren't really deals, and deals that were agreements but actual no money changing hands.

Yeah, it's interesting because as I dig into this, and I've spent the last week or two digging into kind of how we got to this conversation, I realized it seems like there were two very specific The dot com bubble was actually like two bits.

It was the dot com website stuff, and then the follow up of the the the what was it the telecommunications fiber.

Boom fiber boom, Yeah, it was, you know, it was the it was the the websites.

There was definitely some circularity there too.

Everybody knew that everybody was buying advertisements from each other.

But you know, you remember AOL bought Time Warner and then that valuation collapsed.

I mean, there were some really huge deals that turned out to be in the end worth almost nothing.

And then I think once you're once, you know, once all of those things fell apart and the end user picture wasn't there A lot of the infrastructure valuations came crashing down as well.

What was the moment you knew?

Like, when was the moment?

What was was there an event where you went, oh shit, and yeah?

When I joined that startup and I wasn't I couldn't believe they had any money, So that was that was a spring of two thousand.

I was like, it felt like they were just sort of handing money out to anybody, and I mean, this guy had a record.

I think he had had a CRM company that competed with Salesforce that either sold or went public, So he wasn't a total nobody.

It's just they couldn't hire enough people to actually get anything smart done on time.

It just wasn't It just wasn't working, and everybody was kind of showing up to the office and play acting.

There were some moments during the nineties that were, you know, kind of crazy, like see it they funded this party.

I played bass and I was playing base and sort of this pickup band at work, and they basically rented out the.

Film more for our holiday party.

And you know, we played on a stage in front of twelve hundred or however, maybe the film is not that big, five hundred people.

And then they had a I can't remember the name of the of the you know, they had an actual working band come on after us.

But it was a lot of fun.

The singer we were playing with nailed, Janis Joblin.

She did a really spectacular job.

We had a couple of good songs.

So but that was those kinds of things were regular, like that was just expected these big parties, and nobody really asked where the money was coming from.

I do remember after Senet went public.

I don't remember what year this was, ninety eight or ninety nine.

I actually looked at an earnings report and I was like, oh, we're losing money.

I didn't know you could stay in business and lose money.

How naive I was.

That's so see, that's the thing I admit as I've got further into finance in general and learned stuff the amount of companies that just burn cash and then die, but also the ones that are burning cash right now, and the amount of people who just say, yeah, it's actually fine, it's good that happens.

It's like a completely like a completely different world that has only worked a few times in the past.

It's actually not worked many many more times.

Right, most of the time it doesn't work.

But I think the bet is when it does work, it pays off spectacularly.

Right.

And the question, I don't think Google was ever losing huge amounts of money, but Amazon did for some years.

Yeah, I've I've looked into it, and the companies that have actually grown and been successful have never burned anywhere near as much money as these AI companies.

AWS was like sixty nine billion over nine years, and that was all of Amazon's Capex, not just AWS focused.

Yeah, yeah, no, they yeah, And again there was to me, the Internet at large and the World Wide Web as we used to call it, was a lot more immediately obviously huge, and it was going to change a lot of things and how business was done and how media was distributed.

It was it was clear.

It was just a question of when and where the technology had to go in which parts had to evolve.

You know, you needed consumers to have much more bandwidth before video became a realistic thing and so forth, and you know, they were gonna be fits and starts, but I think everybody pretty much knew that it was not fake like these things, some of these companies were going to succeed.

Something was gonna happen.

When I look at AI, to me, it does not seem nearly as revolutionary.

I don't even really like to call it AI because it's not intelligent, but that's the that's the term that we use.

But it's you know, it's right, uh, you know, matrix math, determinating determined, you know, basically auto complete.

So it's interesting.

It can do some stuff that can be valuable in certain situations.

But it doesn't to me feel immediately massively obvious that this is a huge change the internet did.

Yeah, web browsers did the iPhone.

The first time I played with one of those, I was kind of a skeptic because I mean, I had a palm pilot and I'd been yeah, yeah, I had around, Yeah, I had a compact them, so keep going no, no, you know, and you're you're you're playing with that stylist.

And then someone brought an iPhone into work and I was like, oh, Apple, whatever, they're not going to do this, and I was like, oh, responsive, touch screen, email, autocomplete maps, I'm like, this thing's cool.

And then it got better from there.

So yeah, I haven't felt that, and I've used all the chatbots.

I've played around with them.

I don't code, but you know, from what I understand from people who do, is if you're a non coder, it can create some serviceable apps just based on your ideas, which seems pretty magical.

But if you do code and you actually look under the hood, they're not maintainable.

You know, you can't deploy them like they you know, they they tend to have a lot of problems unless you sort of know what you're doing.

And I certainly know as a writer, you know, I can immediately detect AI generated writing and it's not good.

That's actually a really good thing to focus on.

So when you got into the internet industry, was there that sense of wonderment.

I'm not even being like a shield.

I'm just like because I remember when I first used the internet in like nineteen ninety seven, I want to say, yeah, like a child and being amazed by it, but even like the iPhone moment as well.

But when you were getting into it in like the mid to late nineties, was there that sense of wonderment and excitement?

Oh?

Absolutely.

So.

There had been online services for a while.

People used AOL compu serve, and you know, you hang out in chat rooms and you do these keywords and it would call up sort of a specific I don't even remember what they were called, but i'd call them apps now.

But the web was interesting because it was immediately accessible to everyone.

Anyone could theoretically set up a website, and it was yeah, immediately huge, and it was a little hard to separate some of the hype from legitimate excitement.

But I remember in San Francisco even in nineteen ninety five, and you know, you had had wired magazines sort of sounding sounding the bells for it for several years by that point.

But in nineteen ninety five, everybody was online, everybody was getting online, and you know, you had tons of TV commercials, and everybody was talking about the World Wide Web on the evening news, and it just it was immediately clear that this was a new thing and it was a new way that we were going to do a lot of stuff.

Right, So, yeah, there was there was massive excitement over it.

Was there any kind of AI sorry, I same leading question then?

Were there dissenters?

Were there people other than the obvious news we call call that everyone sends me every time, you know, the one I'm talking about the dynalltics, weird gloss things now.

But it was that descent there was, and I think a lot of the descent, interestingly, was centered around some of the same kinds of criticisms that we've heard over the last five, six, seven years.

So it wasn't that this is stupid or this isn't going to work.

It was you know, there are no guard rails, there are no there's no regulation.

This thing is going to run a muck.

It's gonna you know, how how are we going to protect against fraud?

How are we going to protect against people, you know, using it for crime?

How are we going to protect against you know, this kind of information that maybe shouldn't be available to everybody.

So there were those kinds of questions, and people were, you know, maybe we should slow down a little bit and put some guardrails and pass some laws around this thing.

Most of that's that, Yeah, most of it didn't get done.

You know, the Telecoms Act, you know whatever, Section two thirty whatever, the big Omnimus Bill that that was a part of that was an attempt to deal with some of that stuff.

But it was pretty it was pretty lenient.

It was more about sort of protecting companies from from liability.

But there were some yeah, there was some at least some thought around it, but.

But there wasn't just people saying this won't work in the same way.

Very few, very few, I mean there, you know, I suppose you could go into the boardroom of a newspaper at the time and probably would have heard some arguments that now in retrospect sound insane.

But you know, who wants to read on a screen that was one that you sometimes heard people want to have a piece of paper in their hand and you know, print is print is the way nobody wants to read on a screen, or you know, this is this is this is sort of a nerd toy.

This is never going to take off among you know, mainstream people.

There were issues with internet access.

It wasn't available everywhere, especially high speed.

I mean we were using pretty low speed modems for a very very long time, particularly in rural parts of the country.

So there was some skepticism around that, you know, And part of it, I have to be honest, is I was in my twenties at the time, so I think people at that age tend to be much more go go about the future than perhaps old cynics as as we are now.

But there wasn't any kind of well maybe there was, you can tell me.

There wasn't a kind of bifurcation between people who were like pro internet anti internet in the same way.

Nah.

No, I don't remember that anyway, No, I really don't think so.

Yeah, it was all it was all hands on deck.

I mean, I mean again, like this was on TV.

This is like you know, advertisements, there were there were commercials.

There were people on that evening news, you know, reaching, reaching mom.

You know my parents who are boomers, They were fully aware and gung ho about the web by ninety seven or ninety eight, and that's I think that's who was investing.

So, you know, one of the big differences between then and today it was these companies were going public and it was really fueled in large part by retail investors.

You know, you wanted to buy stocks on the stock market in these new companies that represented the future.

So you know, you had doctors and dentists and you know, professors with a little money and people putting their retirement savings into these things, and they were the ones who probably got wiped out the most in you know, two thousand and one through two thousand and four.

Yeah, And I mean, was was that before e trade?

Was it?

Do you start to call a stockbroker?

I literally don't know how they bought stock back then.

I realized, Yeah, I think E trade started in the dot com boom, if I recall late in.

Nineties, because I remember in England at the time, the story is about how E trade led to people losing tons of money, and there was one thing I'll credit the press with at the time as being like, yeah, you shouldn't bet on the stock market unless you know what you're doing, right.

Yes, index funds hold forever.

That's the that's the random walk down Wall Street, the only investment strategy that works.

But yeah, people were playing, you know, they wanted they saw these ridiculous returns and they wanted a piece of it.

So yeah, I think online trading was definitely a thing.

You know, you had the Yahoo Chat forums that's where people would pump and dump these penny stocks.

They were all clad and.

Really they were like there were actual pump groups back then.

Oh yeah, I mean yah.

Yahoo Chat was sort of infamous for it.

Like you would hear about something, you'd hear it was a lot like what happened with crypto in twenty one twenty two.

You know, someone issues a new time and everybody rushes in to buy it and then it crashed.

You know, there's a rug pull and it crashes, like it was.

Those kinds of things were happening.

But Yahoo, I remember being that was the forum that I was the most familiar with back then.

It was probably going on on AOL too.

That's magical.

Oh, the innocent days.

It was the I remember when I I'm Gonna do the It was a Rockahaua speech and the end of Blade round of the things I've seen in telegram groups about icos.

But it's it's kind of it's adorable to hear that stuff happening, until you remember people lost lots of money.

But it doesn't feel like it doesn't sound like maybe it was a different media climate, like there was that kind of almost have There wasn't the noxious part of it where it's like, oh, if you don't get on the internet, you're gonna be left behind, You're an idiot, or maybe I'm wrong.

Not so much of that, but it was it was just presumed that this is the future and if you don't want part of the if you don't want to be part of the future, that's fine, But you know, why don't you go be a survivalist and live off the grid in the woods?

Kind of right, It was just assumed.

I mean, it's like, you know, do you watch TV.

There was a time when if you said I don't have a TV you were very pretentious and very special.

Now it seems like everybody's cutting cable.

But so it was sort of like that.

It was just presumed that everybody was eventually going to get on board.

I mean, who needs a personal computer in their home?

That was a real question in the late eighties, right, Oh PC on every desktop?

Yeah, sure, bill, whatever you say.

Who wants one of these things?

And then you know, you find justifications for it.

Oh, well you can you know, you can pay your bills automatically, and you can do this and that.

And suddenly when Internet Explorer was built into Windows and everybody could get online, that was the thing, like that was, oh, of course, everybody has to have a PC and we're all going to be on the web, surfing the web.

It also feels like it was a genuine too, like a lot of these things would just too early and run too crazy because the actual fundament of it, it sounds like, was people were excited to get on the internet, which was which was obviously a beneficial thing and had immediate returns, like people could use it and say this is useful in my life in this manner, right.

I think the initial thing was access to information.

You could you could find out a lot of things very fast and actually and there were some communication aspects, right, You could talk to anybody anywhere in the world pretty easily, pretty quickly.

And then other things.

You know, e commerce was very early, but you know, suddenly you don't have to go to the bookstore and ask them to order.

I worked at a bookstore for a year in nineteen ninety, and you know, it was a thing if you don't have the book in stock, they come in and you order the book, and then they come back a week later, and suddenly you just press a button and the you know, the book will come.

And then they started adding music.

There were a lot of you know, again, the lack of bandwidth among a lot of consumers did sort of stall the idea of digital video, but it eventually came around in two thousand and one or two.

That's when YouTube really took off.

Real networks had streaming video and Microsoft.

Oh real real player.

Yeah, buffer, Remember we're all buffering.

I interviewed Rob Glazer a couple times.

You know, he had the right idea.

But again, Microsoft sort of, you know, took that market pretty quickly with Windows Media Player, and then Apple came along and I they kind of blew everybody else away.

So, yeah, all of the ideas were there, and I think most of what we were sort of experimenting with later became real businesses.

I mean, you know LimeWire and all the sort of music MP three trading sites that was later late nineties, I guess, early two thousands.

That all eventually became legitimized through Spotify and Apple Music and so on.

So every idea was already there.

It was just maybe it's a little bit underground.

Maybe it doesn't work quite right, it's a little clunky, it's a little cluegy, or maybe the companies were just you know, they borrowed too much money too fast and couldn't turn it around.

Which feels almost entirely different to the AI bubble, like it's they such in a Dela on the morning of recording this, uh At Davos was saying, Yeah, the thing that might make the suspeculative bubble if nobody but if nobody buys it.

But if nobody buys AI.

Not really, he's so cool.

I love that we live in this area.

I'm going to read you this sentence actually because this really got me.

Microsoft chief executive Search and a Delas warn that AI risk becoming a speculative bubble unless its use is spread beyond big tech companies and wealthy economies.

For this not to be a bubble, by definition, it requires that the benefits of this are much more evenly spread.

He knowed that a telltale sign of it's abobble would be if only tech groups are benefiting from the rise of AI rather than the companies and other sectors.

Yeah, that's good, good shit self evident.

Yes, correct, he's not wrong.

Creative perhaps if no one uses also, isn't his job.

But nevertheless, there was a question I had.

So something that frustrates me with this whole conversation is how flippantly people say, oh, it's a bubble, but sometimes bubbles are good.

What was the aftermath like?

So this is where things get a little bit complicated, because I don't think that you can really fairly separate events from other events that happen at the same time.

So, the the dot com bubble did burst, but then you had nine to eleven happen in September of two thousand and one, sort of in the late middle of it, and that literally changed everything.

It changed confidence, it changed where everybody's attention was going.

You know, you had money flowing into completely different places.

Everybody got much more conservative and so forth.

So I think.

The real effect of the dot com bust, I mean, you had a lot of people my age, people who were in their twenties and the go go nineties, suddenly lose their jobs or suddenly not have the great paychecks that they.

Had become accustomed to.

And you had a lot of retail traders get wiped out.

You know, some people lost their lost their life savings or a big portion of their life savings.

And you know, my attitude toward investing has always been caveat empt or you shouldn't be betting if you can't afford it.

You should put your money in an index fund, and you should hold on to that until you retire.

That's the safest thing to do.

But you know, some people say, hey, I've got ten percent of this of my holdings are play money, and I'm just going to make some bets and see what happens.

And then you find other people who who go too far with it.

But what about people in tech?

You know, in tech, most those skills didn't become useless, right, so the technology was always changing.

If you were you know, learning HTML and JavaScript and Java programming, and then you could transition into new different kinds of things.

The technology continued to evolve, so people who had those technical skills could continue forward and find other interesting things to do.

And then, you know, honestly, after the sort of telecoms bus two thousand and four, two thousand and five, you had a pretty long boom.

I mean, there was the financial collapse of eight around the housing market, but the tech industry independently was building a lot of stuff.

Tons of companies got started in the wake of the dot com bust, and many of those companies are still around today.

So I don't feel like people in the tech industry were permanently hurt.

You know, there was a couple of years set back, and then they generally were able to learn new skills, apply what they'd already learned, and go find other things that some of which turned out to be really lucrative.

Right.

But I think, I think, how can I phrase this?

I think that people are very flippant about the consequences of a potential bubble collapse.

I think that that's really what I'm that's where my concern you're talking about today today, Yes, because people compare it to the dult com bubble, and they say, well, after the dult kombubble, there was that value, which is completely correct.

But yeah, again, I think the other thing is about today.

So the circumstances around the world are very different.

You know, ninety two ninety three, the Cold War was over.

There was this peace dividend.

They were turning army bases into national parks.

Everybody was sort of enjoying, you know, good times.

There was a book called The End of History by Francis Fukuyama that's sort of posited.

Hey, this is it.

You know, we're here in this permanent utopia world.

Of course, events intervened and I think nine to eleven was the big turning point there, and there's some other stuff around that time, you know.

The contested election of two thousand.

Now, contested elections are such a common thing we don't really think about them anymore, but that was the first big one in my lifetime.

The situation today, I think you would agree, is very different.

You know, we have an unprecedentedly chaotic leader in the United States who seems to be bent on ripping down old world orders that have enabled stability since World War Two.

I mean, if you're talking about seizing land from a NATO ally, and you're seeing Europe strike all these free trade deals with the rest of the world, and so forth, and so on.

We could go on and on about this, but I don't.

I'm not an analytical expert.

But the background scenario is very different, and I think you could almost make a case for AI being sort of the logical outgrowth of a certain number of years of rot in the business and in the economy.

And I think you've made that argument.

You know, you can decide where that started.

Did it start in the eighties and nineties when the US started off shoring and outsourcing everything to China and other countries.

Did it start after that?

But it's been somewhat clear for some time that a lot of the easy sort of technological gains that we got from the mobile revolution and from the cloud, those have mostly been gathered like those.

Yeah, and there's not that much more upside.

You can get a little efficiency here and a little efficiency there.

Everybody kind of knows how the internet works, you know, what advertising looks like, you know, so this sort of to me seems like it's it's sort of the last big push.

And you know, you have a lot of people in big bureaucratic jobs who you've written about this, they don't really produce much day to day.

They produce a lot of emails and a lot of presentations, and they sit in meeting occasionally they got to make a yes no decision and they got to you know, mune some data together and say, Okay, it looks wiser if we do this instead of doing that.

But you know, a lot of it is performative, and I think, you know, AI is great for that.

I don't have to create the spreadsheet anymore.

I don't have to create the presentation anymore.

I don't have to write the email that no one's going to read, and then they don't have to read it because they can have AI summarized for them.

I think it's good for that kind of good enough stuff.

And there are a lot of jobs that are good enough.

But I want to it's a bigger problem with the economy.

I don't think it's all about AI.

I think AI is a symptom rather than perhaps a cause.

But even then, it's like, can it do presentations?

Because I've never been a like I've genuinely tried just to see if it could do it.

It's never been able to do it.

I think it's an interest.

Yeah, I mean I've seen presentations created with AI that are pretty good.

I think you get it, gets you.

A certain percentage of the way there, and then you tweak it a little bit.

Okay, yeah, it's just that.

But but then you kind of look at it and say, great, did we really need to spend however, many hundreds of billions of dollars to get a spreadsheet maker.

I also think that people are just being flippant about the idea of a financial collapse as well.

That's what that's what's worrying me as well.

Right, But again, I think that there are a lot of potential reasons for a potential financial collapse, and AI is one of some number.

I don't think it.

Again, the dot com bust was not entirely attributable to ridiculous valuations.

There were things going on in other parts of the world.

There was a change of in confidence, and I think here again, you've got you've got a lot of disruption and a lot of disorder and a lot of chaos.

So there are many many things that could happen.

But I agree, I think people maybe underestimate how how deep this is.

Then again then again, you know, who are the big investors in this?

I mean it's mostly really large tech companies with massive, massive revenues and massive.

Cash maybe highly anymore though one hundred and seventy eight point five billion dollars of data center credit deals, you've got venture capital is actually they yeah, venture capital is also half a venture capital is going into it.

But the other thing that shocked me as well was back then in the dot com boom, venture capital was so much smaller.

Oh it was tiny, but yeah, you need it was investment banking is where is where you found the money.

So venture capital though, you know, that's not their money.

They're they're playing with somebody else's money.

So whose money are they playing with?

Who are the LPs, Well, we don't really know, but it's it's personal wealth funds, it's sovereign wealth funds, you know, it's it's Middle Eastern and other country sovereign wealth funds.

Sure, there's teachers pensions, and there's university endowments, and there's some other things that that that those LPs are holding that will actually harm you know, normal working folk.

But I think a lot of it is.

Massive excess wealth at the top of society where people are looking for new, new kinds of returns, they're looking for outsized returns because all the easy all the easy money is sort of already taken.

So I don't know if that.

I think where it hurts is when you think about, Okay, the you know, the real estate carry on effects, all the people who are employed now and will be suddenly unemployed.

Those those kinds of things could really hurt.

But I just it doesn't seem to me like you have the retail trader exposure as you did during the dot com boom.

Yeah, okay, if there's a huge AI bust and Nvidia loses a massive portion of its value, sure people are going to hurt who have invested in in video, but they're not going to get wiped out.

I don't see Nvidia disappearing.

I don't see Amazon, Microsoft, Oracle.

I don't see any of those companies disappearing as a result, and.

Neither do I.

I think the thing that people need to understand is that a wipeout isn't going to be what hurts.

It's going to be a draw down.

It's going to be because in Vidia eighty eight percent of the revenue's data center like and I even looked back for a premium I date a few weeks ago where it was the amount of revenue that like Loosened or Corning or whomever had in those specific segments, or how weighted they were on their customers, Like I think Loosen's top customers were eight and T and Verizin, but those only represented thirteen to fourteen percent.

In Nvidia has customers that make up fifteen to twenty percent of their revue new each quarter.

They have massive centralization around four to five customers that diversified revenues dropping.

It's just it isn't that in video is going to die.

It's the half to eighty percent of their revenue is going to disappear.

It happened with crypto with them, yeah, I'm really worried.

They were never as Yeah, they were never as dependent on Crypto.

They've tried a lot of things over the years.

I mean right, they were doing so chips for self driving cars and all kinds of things.

I do.

I am not as technical as the writers on the registers staff to bias Man, for example, does a great job covering GPUs and data centers.

It is positive that there are other potential uses for GPUs that could be very interesting with in terms of high performance computing and some other things that are AI adjacent, you know, different kinds of data processing and so forth.

So it may not what we call AI.

Even if that you know that those end use cases and turn out to be eh, you know, vibe coding, eh, chatbots eh, even though those aren't it.

Some of these, some of the some of the hardware may be repurposable into other functions.

I don't think it.

It's just not at this.

But not at the scale that they're building.

Though.

No, no, again, I would be stunned if all of the data centers that are being promised by twenty thirty are actually built.

But maybe I don't know.

I also just don't think that that will be happening.

I just don't see it happening.

I am looking through the old dot com companies, though I really can't find anything like open AI.

They are truly special.

They are.

It's like they took a bit of Global Crossing, a bit of Enron, a bit of loosen but also a bit of pets dot Com just kind of amazed what Silicon Valley can still spoot out.

No like innovations but financial collapses like these, We've never seen one this big, folks.

It's massive.

Yeah, it's it's there.

There are there are a lot of commitments there in The value is massive, massive, massive.

I do think their announcement last week or their acknowledgment that they're finally getting into advertising is interesting.

And I know we've talked about this offline before, but when I think about all of the information that a chatbot has about a heavy user, they actually should theoretically be able to target ads at least as well as Facebook and at least as well as Google.

Right, so good to know.

About that, because Google and Facebook have very hard demographic data and very like a nuanced layer of cookies that can track I don't know if, especially as these are free users, we don't know how much actual personal data.

Like Facebook's big advantage was that when you registered, you gave them the demographic data they needed to target right right.

I don't know how much they're collecting, but if they can still say, well, I know everything that you're interested in, everything that you've been talking about for the last year, they should be able to track that back to an individual user.

I don't know.

I don't know the.

Details maybe, but they've said low billions of revenue.

But it is.

It is just interesting because in any I maybe you know this, I looking through the history of the computer, have never seen a point when everybody was just screaming that something that didn't work would work.

Yeah, it's uh wow, it's hard to it's hard to remember something that has been you know, this hyped.

And again I always leave.

I always try to approach this with.

An open mind because I am, you know, older, so I tend to be more cynical with experience.

But yeah, I sort of shrug and I'm like, I don't quite understand the big deal here.

Doesn't seem to really do what it's supposed to do.

I mean, I'm still you know, Gemini has foist it on me every day when I try to do Google searches, and it's nearly almost always slightly wrong, which is kind of worse than being completely wrong, because it lulls you into this false sense of security and you're like, wait a minute, that doesn't seem right, and then you go to the source link and it just got it wrong.

Like yeah, the beginning of the Google chapter of my book that's coming out next year is I went to look for how many people, how many users Google has, and it's just me going insane as I get an AI generated answer that's generated based on two SEO articles that do not cite their sources.

Right, there's a lot of that, so it's taking what all this kind of garbage data.

And I mean, as an editor, I'm I have for the last fifteen years been hounding reporters who try to source stuff off the internet.

I'm like, where'd you get that from?

How do you know that's a reliable source?

And AI just sort of absorbs it all and presents and Lodi da, here you go.

They don't have any you know, they don't care, they don't have any checks.

It just comes from wherever.

So yeah, the one, the one thing I would what you were saying about never seen sort of this much happen.

I do remember before the Segue came out and people were saying I can't remember who, if it was Steve Jobs or somebody, but somebody was saying this is going to revolutionize transportation and change cities.

And we were like, WHOA, what could this thing be?

And then it was the Segue.

Maybe not, but that was one very small, isolated thing I don't.

Yeah, I don't recall sort of large scale where everybody in the industry was saying this is going to revolutionize everything, and end users are kind of going, I don't know how many times a day, co pilot comes up on my Windows PC and I dismissed it immediately because I didn't really want it to show up.

It just sort of pops up.

I hit a key combo too fast.

I'm like, thanks, Nah, I'm good.

I keep thinking about the thing you said, though, It's like the conditions that different.

But at the same time, we've read like it's not like we're in a new frontier of new ideas where everybody has something new that might work.

It's where it almost feels like the end of something.

It feels like the dot com bubble was created by the excitement about a beginning rather than this.

It is people trying to pretend that something's happening and that we're not at the end of an ela.

I should say, I don't think we're at the end of society.

Yeah, I mean, I think we are probably seeing probably the beginning of new pretty major global shifts and power, and you know, some of the guiding societal philosophies that guide that will change.

And yeah, there's there's there's a lot of different things going on right now.

You know, I started a climate section at the NBC and was very deeply entrenched in climate tech and some of the climate politics.

And things around that.

And you talk to the green piled folks and they think, you know, eighty years from now, we're all doomed.

So do I believe that?

No, not necessarily, but I do feel like things are changing pretty rapidly and pretty dramatically on a lot of different fronts, and AIS just kind of this, Hey, let's let's keep this, let's keep this playbook running this place.

Yeah, let's keep doing That's really it.

It's like keeping let's keep doing what we've done the whole time during the dult kombubble, people would trying new shit.

It was.

It goes all the way back to semiconductors.

I mean, this, this tech boom has been going on since the since the nineteen sixties, really in different waves, but it's been going on and on and on.

I mean, I do think like when Bill Gates said a computer on every desktop whenever, that was in the eighties, that was nuts.

And then it was a computer on every desk and in every home, and that was even more nuts, but it happened.

So, you know, I think that it's been I don't want to say easy, but it's been running so well for so long that I think everybody just kind of wants it to keep running.

And I'm not.

I don't know, I'm not.

I'm with you.

I'm not seeing it yet.

I'm not seeing a ton of day to days.

I mean, I mean, you know, you look at the teenage demographic.

That's kind of who I always go to.

And my son is fifteen, and he's very cynical about like he jokes about obvious AI writing and like they make fun of phrases and terms that are so AI.

And he'll see a you know, a poster and advertisement he's like, that's so AI and it's it's something that you scoff at and make it.

Oh they're fuck, No, okay, AI is fuck.

Then I'm sorry.

If you've got teenagers who are making fun of calling bad stuff AI, right, I don't.

I'm actually serious.

That is legitimately lethal.

Teenagers dumb people.

I'm I'm thirty nine years old now, like I was, I've never been cooler a year of my life.

But I know that when if, because that's in because you read a lot of things that people try and say, well, young people love AI not be my experience either.

I don't young people love TikTok.

Young people love Instagram reels.

You know, they're on they're on vertical they're scrolling vertical video all.

Day and and commony.

I don't even want to say they love you know, Snap or any social media because it's all you know, it's all text change, right, It's all you just get your different text strings.

Like.

There's a lot of stuff that they love.

Games, huge online games, you know, participatory games.

But yeah, I don't see them hanging out all.

Day with their chatbot.

You know, once in a while, if you have something you really want to you're curious and you want to experiment with something, it'll prototype something quite quickly for you.

And I think people do that sometimes and find it useful.

It's like, Okay, this is a prototype, this is cool.

This would have taken me six hours of grunt work to generate.

Thanks for doing that for me.

So there are some you know, I don't want to I don't want to slam and say it's totally useless in all scenarios because it's not it's a it's just it's sort of an extension of a compute.

It's just a better computer.

In some ways it helps you do certain things, some fast.

But some times it's a better that's the other thing.

It's like, I have this growing theory about AI psychosis being far more common than people think, because I think that there is something that happens when people use a large language model and what they extrapolate from there that makes some people do insane things like I don't know by two hundred billion dollars worth of data centers and GPUs.

And on one hand, you might argue, oh, that's just business idiots being business idiots.

No, I think such An Adela and sun Dar Pashai used an LM and went, holy shit, I need to do this.

I mean I got told once that such An Adella's whole reason that he started this facade was because he saw chat GPT and wanted it in Bing.

I think that there is that everyone is experiencing micro versions of Kevin Bruce's Chat GPT told me to leave my wife thing.

It's just what do you believe AI will do next, Like what do you think it will do?

And what do you believe will happen if you don't use it today?

And it's just very bizarre.

Sorry that was that was more of a point than a question, I should be clear.

But how many people are subject to that?

I don't think it's a huge number.

Yeah, to some degree.

The folks who are, you know, the sachun Adelas of the world, are I should say, someone insulated from the trials and tribulations that most of us experience.

They're insulated from their money.

And if you are someone like Sam Altman or Elon Musk who is surrounded by a cadre of people who always say yes to everything you suggest and and you know, are constantly saying you are a genius.

You're a genius, man, You're a genius.

I think, you know, some of these chatbots almost duplicate that mentality, like it's like, yeah, I want someone to tell me that whatever I'm doing, I am great and I am special and I have inside knowledge that nobody else has.

That's a nice but that's kind of what I'm getting at.

Using a large language but convinces some people that they are in the field future and creates this kind of religious feeling around it.

I don't know.

I hate to explore this idea more.

I've just never I've seen it in like game FAQs, when people would argue between PlayStation and Nintendo and Xbox.

I've seen, but not like that.

You don't have people just saying the Xbox can do things things it can't.

But it's part of what we're seeing.

I think that feeling it's pervasive in our society right now.

Regardless, we have this sort of strong current of anti expert right the people who've studied this for years are no smarter than me.

I'm really smart because I have my own special knowledge and.

Nobody else has it.

And I'm going to tell you the secret that I've learned that's, you know, really important.

I think that.

Whatever if you want to call it psychosis or that narcissism that comes out of fifteen years of social media, like that's old enough to remember.

In fact, Facebook didn't come out until I was already an adult and and had a child.

I mean, Facebook didn't really become mainstream.

I had a two year old kid.

So I'm old and I remember how sort of society changed and how people interacting with one another changed dramatically as social media became popular, and it was much more about you're on stage all the time and look at my life, and your life is better than my life.

We I mean, there's some of that that's always been around, but it just wasn't so easy to indulge.

That side of oneself pre social media.

So I think, you know, again, everything that was set in the past just continues along its way.

Like I think again, I don't think AI is necessarily, you know, the one thing that is different.

It's a natural outgrowth of a lot of different trends that have been happening for a long time.

Yeah, I mean, I keep thinking a long term jok I make is posting it's the beginning of history with a big smiley face, because I actually worry that that that's what like, It's not that everything's coming to an end.

It's that one era is ending and another is beginning aggressively and loudly.

This is the.

Dawning of the Aquarius.

All right, I think that's a great place to end it.

Matt rose Off, editor in chief of The Register, Thank you so much for joining me.

All right, Thank you ed a lot of fun.

Thank you everyone to listen.

Thank you everyone to listening.

I'm not going to edit that out.

You'll have him on log this week as well.

Maybe I'll chuck you an extra one if I'm feeling generous.

Thanks everyone for stomaching the four part of last week, and yeah, catch you soon.

Thank you for listening to Better Offline.

The editor and composer of the Better Offline theme song is Mattasowski.

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