Hater Season: Corey Quinn

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Listen to Bleep with Adam Navarro on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Call Zone Media. Hello and welcome to Better Offline. I am, of course, your host, Ed Zitron. Now, we're in hater season. Hater season is when I bring people on and allow them 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 shitheels or asswipes or fucknuts or knobends. We've never done any of that ever. Nevertheless, joining me today is chief cloud economist that Doug Bill, Corey Quinn. Corey, how are you doing? I am delighted to be here because normally in all the other places I find myself, I have to be so reserved. You have to pull your punches. Corey, today's hater season. Tell me about your feelings on Amazon Web Services. Oh, dear Lord. It's like, 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 hated them this much. Because of your actions. 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 wanted to hit them where it hurts? Come on. But yeah, they've been annoying the piss out of me lately. So AWS is weird because, and 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 just arbitrarily increases. It's not really clear whether they're doing price increases, though I know those exist too. Rarely, but occasionally. Increasingly these days, yes. But what is it that makes the bill go up? 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. Great. Easy peasy. They did that when they first launched S3 in beta back in 2005. S3 is storage, right? It's a big object store. Picture it as an infinite sized disk and you're pretty close. Right. But originally they only charged for the data you stored there. Great. So people stored a bunch of objects that were zero byte in size. So they just used the names of those objects and the ability to query whether that 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. So what they did is they started also charging every request you make would charge a small fee. I think it's something like a penny per thousand requests, if memory serves. Don't quote 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 $100 million 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 world, but roll with it for a moment. 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 10 minutes 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 on to it in case you need it again because you don't want to go through that. And 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 I think they're trying. They're working on it. iteration of Alexa plus it why not I'm kidding that thing just sells ads we're good uh but wait so I'm an engineer and I've I've advocated for my thing yes and now you're done using it no no one is going there's no there's no call to action to get you off your ass to go and turn it off or 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 cloud 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. Because, all right, I'm trying to run 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 that's doing nothing, is, huh, the cloud is pants-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 tune these things down and turn it off? They made some abortive attempts and 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 their ass from their ear hole? 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 I'm a white guy. I sound as plausible as AI these days. Yeah. So it's just a labyrinth, a leviathan of different SKUs and product categories that may or may not- Over 2 million SKUs, 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 uh virtual machines you want to spin up a virtual machine in virginia u.s 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 like this is the thing because it seems that the people making these decisions of which virtual machines to get or whatever spin up on aws are engineers right usually software engineers software engineers aren't necessarily infrastructure experts are they you've noticed yeah 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 we'll come back and revisit this later 10 years go by no one has revisited 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 it's one of the amazon at its best things i can only assume that the people responsible for that are being eyed for layoffs or pips because that's andy jesse and several nba snipers are outside of their location right now it's frustrating i i I liked Andy Kwanek when he ran AWS, truly. Something changed. He got a job that no one in their right mind could possibly want, but also could not refuse. And I feel like he sold his soul. Yes, absolutely. He was the CEO of AWS. He was? When he gave keynote talks, when he gave presentations, when I was fortunate enough to basically sneak my way into them, you could see the irrepressible humanity leaking out around the edges. He was a person. Now he is a figurehead. He doesn't get to talk to customers. Just to be clear, this shift was when he became CEO of Amazon or CEO of AWS? CEO of Amazon. AWS was his own fiefdom, 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 were Andy Jassy 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. In fact, a year ago, he went to reInvent in Las Vegas and gave a talk on stage, I think because he missed it. He missed being able to get up 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 bet 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. Please. He's talking about generative AI. I just pulled up his notice. Oh, no one understands how that works under the hood. Let's be very clear on that. And yeah, he lost the fucking plot when it came to Gen AI. That's the thing, because he's like, we're also using generative AI broadly across our internal operations and our fulfillment 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 does know what he's talking about. He's just a fucking carnival barker now. He's doing the same. It all seems to be. And the trick to disprove everything you just said about everything that 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. It is two different companies. There is no congruity between those two perspectives. So, Corey, maybe you can help me with this because you, 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 yes with a lot 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 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 because i want to point something out that i think is being lost industry-wide 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 signed contract to it's serving customer traffic. They are real when it comes to this stuff. There are a number of other companies- Real for building it. Well, yes, and they're really running it. They have 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 spinning up a data center, do not do this. They are, well, we've rented a warehouse out. We wound up throwing 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 companies- Data center ready to go. Yeah, but you say other companies. You don't mean Google and Microsoft here. No, I'm talking- Well, I am talking Oracle, but yes. Microsoft kind of. Oracle just agrees. 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 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 that I can see why they did it. But I would say when it comes to infrastructure, in my experience, AWS is number one. Google is a close second. I have heard some crazy shit about Google that they're doing these things called stalks where they just create these pop-up data centers. in the middle of nowhere. For a long time. Every company does that for points of presence. Fascinating stuff. Yes. Anyway, but back to the major question, which is AWS seems like a sensible business that does real things. I'm not disputing that. Yes. But it prints money. Let's be clear on this. Despite all, remember, I help companies negotiate their 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 are 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 7% of their total infrastructure spent. Right. It is not three times. Companies that are doing a $300 million a year contract with AWS are not turning around saying, Better make it 400 because of all the gen AI. That is not happening. 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, iHeart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. 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Listen to Charlie's Place on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. a ambitious well-intentioned ferocious and wealthy mother looks like in the black community this woman's history month the podcast keep it positive sweetie celebrates the power of women choosing healing purpose and faith even when life gets messy love it's not a destination you have to work on it every day keep it positive sweetie creates space for honest conversations on self-worth love, growth, and navigating life with grace and grit, led by women who uplift, inspire, and tell the truth out loud. I have several conversations with God, and I know why it took 20 years. To hear this and more, listen to Keep It Positive, Sweetie, on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. That's kind of my point, though. It's like, Amazon Web Services doesn't seem like a business that chases fads, or if it does, it chased them in a more sustainable way. To their credit, they ducked blockchain almost entirely, and I was worried they were going to fall down that rabbit hole. But I mean, they're doing $200 billion in CapEx this year. What is it they see in AI? Because to your point just now, what, like 7% to 8% of a $300 million contract, that's dog shit. Like, that's not going to pay back that CapEx, Andy. I believe, this is my belief here, I can't base it on anything other than what I've seen Amazon do. And what I've seen from customers, Amazon is selling the capacity that 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 and the AI bubble pops, deflates, whatever. How repurposable are those facilities and that capital expenditure? If it's data centers and networking, yes, very repurposable. GPUs, well, we're all going to get really into online gaming in a few years. I don't know. Except they don't have video out. They don't have DisplayPort. Yes, we still call them graphics, which I love. I think it's insane. I've also heard people say general purpose units, which is the opposite 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 OpenAI. Yeah, insane. There is zero doubt in my mind that because I did some digging on this. Is there line of sight for AWS to bring online $38 billion of capacity to provide to OpenAI? Yes. Yes, there is. Where my doubts come in, is OpenAI good for the money? 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 have 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 roost by the way literally a month before they did so wrote an article saying it would be a while what fucking three points in that ass wipe anyway um everything I read was everyone saying, oh, Amazon's being really spendy. They're spending six to seven billion in capex a quarter. Oh no. And then the total capex was 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've all been huffing ayahuasca or something. They sound insane. They do. Which tells me one of two things is true, or honestly, this is the real world. Unlike on Twitter, two complex competing things can, in fact, be true at the same 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, basically Amazon Basic Starlink. I think they're calling it Leo now. It includes, yes, their AI nonsense, their factory boondoggles, their robotic 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, I wouldn't trust them if they did. Not since I saw a job ad a few years back on Amazon.jobs saying experience with other AI services like S3. S3 is a storage service. That's not AI. You can use it to feed AI. I hear Anthropics, one of the largest S3 customers I've heard. I've heard from seven different companies so far that they are the largest customer in S3. Yeah, it's funny how that tends to work out. God, I miss working in cloud software so much where everyone's the exclusive partner, everyone's the number one partner, and everyone's the largest. And the qualifiers get there like, we're the largest S3 customer in Australia. Great, good region. in the northeast region between the hours of 6 a.m. and 12 a.m. Exactly. Okay, so here's the thing with the CapEx. I'm sure a lot of it is for AI, just because if you look at their previous years of CapEx, it was like 40, 50, 60, yeah, 40, 61, 63, 52, 83, 131, 200 billion. Gerald Fitzgerald over at Platform Anomics has been tracking CapEx spend of the hyperscalers for a long time now. He was one of the first people to call out 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, OK, we're going to spend, even assume it's all AI, whatever, fine. Two hundred billion dollars on AI spent. How much of that is just in the form of a check 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 can't find it nevertheless there is an image i have that amazon doesn't well amazon builds its own the tranium gpus and do they still use inferentia or is it just sounds like something my grandpa got diagnosed with you yeah but do they like inferentia i thought was there oh they talk about it a fair bit they talk about tranium and the thing is is what you don't see is people using it in the wild uh i looked at a bunch of stuff with olama that's the run your own stuff there i searched about a year ago for the term inferentia 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 uh a year ago uh year and a month now they had uh with tranium 2 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 an exec to talk on stage. And the other one was Apple. Apple doesn't admit what they're doing to their own employees, to each other, let alone publicly. So, yeah, that looked about as natural as an oral bowel movement. Nice. 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, by the way. TSMC is almost certainly in there. No, TSMC isn't, because TSMC builds the chips. These are the server manufacturers. I wonder if it makes the training on chips themselves, because they have Annapurna. They bought and do the design, but they don't do the fab. so they ship the i assume that annapurna which is the internal place that amazon makes its chips ships them it looks like the foxconn quantum computing and jabil 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 dollars 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 overbuild has that ever happened to them what did they do yes uh they made a bunch of noises about it during the during the pandemic they overbuilt their distribution centers ah 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 uh 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 like oh 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 trainium especially they've got what they're on generation two three now uh they they're now shipping three right at the time to pre-announce four and then a desperate attempt to osborne computer themselves yeah explain that reference oh osborne computer was a company back in the 80s there they launched the osborne one and their their ceo went out and did a whole press junk and he's like yeah this is great but osborne two is gonna blow the crap out of it oh like nvidia and everyone's like great we're not gonna buy the osborne one then the company went under and never shipped the osborne two wow okay not like nvidia then this is the thing surely that sets amazon up for a big problem with those Tranium chips success, like even if in some weird world that Tranium 4 or 5 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 Tranium? It just feels very questionable. You know, you can say a lot about OpenAI, and you do, but that press release where they announced that $38 billion contract, they didn't mention Tranium. They didn't, did they? Which tells me that if it were half as good 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 Sam Altman is he signed a thing with a cerebrus you remember your cerebrus uh is there anyone that Sam Altman has not signed deals with uh let think uh Grok I haven signed one with Grok yet okay good good I mean actually sorry just to be clear hasn signed with either well I guess it would he wouldn someone with grok as technically grok is a competitor i mean g uh the annoying fast inference i don't know at this point my hate of dome and people are going to say this episode was too technical and the answer is calm down this is my podcast um 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 four or five? Are they going to make? Well, I mean, it would be- That's what no one is able to explain to me. What use cases today 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 either. I'm not even being my usual hatey self, even though this is hater season. It's, I genuinely can't get that answer out of anyone, even the boosters. It's like there's this insatiable demand for compute. I don't know if that's true. We're going to summon God through JSON is 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 cashflow? So if you see this thing where it's like- The ones that they put out 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 had a long day. He hasn't taken his nap. Fuck, HR Geiger's Jerry Stiller. The thing is, you look at these cashflow dumps, diagrams for Anthropic, OpenAI, and Oracle. They all follow the same thing, which is terrible cash flow, negative cash flow for years and years and years. And then in 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 doing the things that, 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-gippity. That is not the play when you think you're on the verge of the singularity. I mean, nobody... Demis... I don't know. I don't like him to such an extent. I refuse to learn his name. The DeepMind bloke. Peepus Dembibus. I try not to anthropomorphize either AI or its creators. Yeah. Deepus Dembibus. he's the one that every few weeks does an 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 dollars in capex being spent this year just by alphabet amazon meta and microsoft where is it going genuinely actually simple question i actually don't know where it's going anymore it's leading to a giant hole in their balance sheet at some point right you'll notice that all of the hyperscalers, all of them that have succeeded, even the pretenders, have other businesses that finance this. There has never been a successful hyperscaler that launched as a hyperscaler. The closest story you've got to that, and I question whether you'd call them a hyperscaler, is Cloudflare. Because they start as a CDN and then just added the rest of the cloud stuff. And let's see how big their stock is. They've got a $59 billion market cap. Well, they're a real company. Yeah, I wouldn't want to invest in a company that wasn't making egregious promises. But 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 aren't going to do it. The models they train today aren't going to do it. It's like they're trying to bootstrap from thing to 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 pay it myself just so I can dispatch a winged monkey to build me a shitpost 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. But the model for Zoom is not, and we're not just talking me here. We are 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. Right. And also that you will be able to code everything with AI versus what people love that I quote the same thing. Carl Brown saying makes the easy things easier and the hard things harder. We are building software at Duckbill. 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. 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To hear this and more, listen to Keep It Positive, Sweetie, on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. 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 and replaced with ai story doesn't seem to work and also every time i go and read someone who claims that clawed 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 changed 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 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 Anthropic from this. Like they can claim Anthropic success. They can have them pay for Tranium in Project Rainier. It's the curse of the platform company, where when people build interesting things on top of you, how do you take credit for that without being obnoxious? I mean, has that ever been a problem for Amazon? Well, it's not that they're worried about being obnoxious, it's just they're bad at messaging. Well, I mean, I mentioned him earlier, Panos Panay. is panos panay came over from microsoft from the surface team to uh lead amazon's alexa plus i mean now there's something obnoxious now there's some real generative ai bullshit they've 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 linchpins 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 100 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 would they just pretend like this never happened aspects of it but there are again they are making money hand over fist on the actual nuts and bolts of cloud computing that's not going away uh they they will their stock will tumble because they're not posting massive growth numbers, but they have 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 everyone signed, 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 a lot of folks. And I think that the answer everyone's sort of hoping for in that space is government bailout. No. But of Amazon, though? I would be so irritated. Well, also, what are they bailing out? Amazon's not going to go bankrupt. Even if Amazon had to take a massive impairment on elder Tranium chips, and it was like $30 billion. 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 Jassy's asshole. Like, it might send Andy Jassy and an iron ball into the sun. But it doesn't feel like it will kill them. I just don't know what a bailout would be. I am so annoyed that I had great hopes when Andy took over, but it seems like the company has just continued down the inshittification 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 massive customer-facing problems, and it was hard to keep track because they were just as bad then as they are now at messaging these things. And when did you start that? 2017. Right. Now, they don't do that anymore. It's basically inertia. I would not be able to start the newsletter and build in 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 happened? It was first gradually and all at once, 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 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, they used 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 voice as there's now a third CloudFront Edge location in Dallas, which even people in Dallas do not give a toss 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, some other event hitting. And it only charges you for while it runs. Huh. and massively scales up and you don't have to worry about any of the care and feeding of the infrastructure around it which that's really cool it is it was cool it was beta in 2015 but now the last truly great things amazon put out that changed 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 launched our own large language model called nova it not as good as the ones you currently use but it less money Yeah what great though Whenever it still POC stage they don care What great is if you look where Nova is wow it in the top 25 below Catcoder Pro, Kimi 2.5, Grok 4.1, Mimo, Minimax, Quen Thinking, Kimi K2, basically every other model. right like exactly it's like like they're racing neck and neck with ed's taxidermy and frontier ai lab there's it really is that though it's like it's something called yeah ernie from baidu like every chinese model appears to cry that's so funny what a what a horrible situation we found ourselves in well amazon prides itself on 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 broad release in light of day uh was that it's okay it's going to cost us a billion dollars to train this model what can you do for 20 million like that that is the amazon ethos 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 has just poisoned their brains oh my god yes i i wound up doing a so i back when these stuff all started coming out i had fun with it i i ran a bunch of custom questions against these things, like rank the U.S. presidents by absorbency and then see how long it's going to bully them into doing it. Or give me some criticisms of Corey Quinn. And one of the early chat GPT things made me question 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 just weird. There's something that I think that, I don't know if AI psychosis is it, but I mentioned this with David Gerrard. It's like people getting one-shotted by this. It must one-shot executives. I think- Oh, it absolutely does. I use it myself in the curation of my newsletter, for example, something, 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 saves 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 increasingly 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 for? 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, 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 paying the margins. Right now, this is costing me seven 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 $20,000 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, And 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, from 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 has always fallen down on this, is as soon as the requirements change. I set out 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 a requirement downstream. When software becomes free and is no longer 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 just run, run this one command in your terminal, give you access to this thing. And I started writing it myself threw 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, in about four hours. But would I have? No. It solves 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. My brother is one of the few people I have 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 shitpost images of giraffes on fire in data centers now. Well, they're not going to love that. They're not. They're not going to love that. The listeners are not going to love that. I don't know. I don't even think AI art is just genuinely ugly. It would suck the life out of the shitpost. Oh, it is. And I pay for artists to do things correctly. Okay, good. I have stickers. I gave out a re-invent for shitposting.ai. And it was bad AI art in a 1950s 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 and I'm making it work. I'm building a shitpost meme to throw on Twitter and never think about again. That's the thing though, posting is an art. Posting is an art and you're bringing, there is no Bushido in generating images. But let's move on from this 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 oh claude code is replacing software that everybody how funny is it how ridiculous is it to you i'm leading question i realize the idea that instead of buying on a per seat basis people are going to just replace sass with their own internal shit i think it's one of the funniest and stupidest things i've ever heard. 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 purports to do something. But what if they need that 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? Exactly. Maybe YOLO slamming it isn't the right answer. We're going to to just replace all the software with custom bespoke stuff great a terrific example i saw is that for payroll anthropic the company uses adp well why would they do that they can clearly build their own payroll systems internally because you're not buying the software you're buying the compliance the keeping up with all the different jurisdictions in which you operate you're someone who is going to certify with their reputation that this is going to solve a problem uh there are a bunch of things out there. Like there's some software that will be disrupted by this. Picture a bunch of the obnoxious stuff. Like 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 Claude Code or whatnot is going to fix that because I don't know how FFmpeg 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 line of business software? I wish, but no. And that's the thing as well. People think that people pay for like Salesforce or 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 rat king things that roll around in their own filth. And then they maintain them on the backend. Even the shittiest cloud software you use has some weird backend stuff they have to constantly maintain because things break. And The bigger the company, the more things that break. Yeah. And it's just. I mean, 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 and the rest? 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 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 three years from now. They said they talked to someone here. we have no record of that because Claude rebuilt it five times this week. Where does that going to live? How is that going to exist? And even then it's like audibility, auditability even. Jesus Christ. But this is not an AI phenomenon. When Dropbox launched, the number one comment on Hacker News was, this is just our sync with some extra bells and whistles. This isn't a product. Yeah. Yeah. Well, yeah, that turned out. Yeah. I mean, even then Dropbox is like, it's not just storage. is the support services around it. I don't know. Well, even Dropbox doesn't want to do what Dropbox does anymore. Every time I use it, a folder that syncs everywhere is what I loved about Dropbox. Yes, same. Now it's trying to basically compete with Zoom and Google Docs and all the other stuff. No, no, no, just sync the files. Well, Gory, let's wrap it up there. We've done some good hating. We have. I'll have some good links for you. We'll link to Duck Bill, link to last week in Amazon, was it? Last week in AWS.com with an obnoxious, sarcastic platypus. That's right. One more use of AI before we go that I think you'll appreciate. If people email me, Corey.Quinn at DuckBillHQ.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 Platypus 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 platypus responding to salespeople does not have this constraint. This is the one liability shift I have found that actually works. And you can blame AI for things you personally approved. Well, I don't endorse the AI platypus. You should get a real one. You should get a real one. You should train it. The customs officials had many questions I did not wish to answer. Train the platypus, Corey. All right. You've been listening to Better Offline. I'm Ed Zitron. You'll have a monologue this week, I guess. Thank you so much for listening, everyone. Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matt Ossowski. You can check out more of his music and audio projects at mattosowski.com. M-A-T-T-O-S-O-W-S-K-I dot com. You can email me at ez at betteroffline.com or visit betteroffline.com to find more podcast links and, of course, my newsletter. 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