0:00 Modern Silicon Valley
6:42 Sponsor Break (Kajabi)
8:29 Post Dot-Com Beginnings
17:22 Data-Driven FOMO
28:19 Shovel Economics

Tech is a sector unlike any other – it’s an industry where individuals can turn into billionaires overnight, ideas supersede fundamentals, and leaders are rewarded for showmanship. In today’s Silicon Valley, innovation is crowned and not earned. Venture capitalists and founders are symbiotic. Unprofitable companies are kept alive with injections of capital, gamed valuations, and manufactured hype with the goal of surviving long enough to IPO. Starting in the early 2010s, Silicon Valley had championed big data as a revolutionary technology that could unearth deep insights, hidden patterns, and innovation from massive amounts of data. Yet the market started to question in the early 2020s if any of these promises had even been real as nearly all consumer and SaaS startups were still bleeding nearly a decade later. Out of nowhere, ChatGPT was released and AI became Silicon Valley’s next big thing. Every tech company is now an “AI company”, every Fortune 500 needs an “AI strategy”, VCs are only investing in AI startups, and every product is an “AI” product. This is a deep dive into how artificial intelligence is just the latest tale spun by Silicon Valley to sweep prior failed trends under the rug, keep valuations high, and outlook positive. Before AI, there was crypto, web3, blockchain, virtual reality, big data, IoT, and wearables – all supposedly revolutionary technologies that have never lived up to the hype. In this video, we’ll dive into the market dynamics that push companies and individuals to jump headfirst into tech trends, how this all started with big data, and why AI is ultimately just another pump-and-dump.


If AI Is So Great, Prove It: Eliminate All Surveillance, Spam and Robocalling

Judging by the near-infinite hype spewed about AI, its power is practically limitless: it’s going to do all our work better and cheaper than we can do, replacing us at work, to name one example making the rounds. It’s going to revolutionize everything from science to marketing, all the while reaping trillions of dollars in profits for those who own the AI tools, apps, etc.

By Charles Hugh Smith on SUBSTACK

AI will be for the peons, access to humans will be reserved for the wealthy.

All the extravagant claims made for the coming AI revolution make good clickbait, but let’s set a higher standard: if AI is so great, then prove it by eliminating all the surveillance, spam and robocalling that’s making daily life such a chore. If AI is so powerful and can do pretty much anything a human can do only faster, better, cheaper, then why doesn’t someone assign it a simple task: make all surveillance, spam and robocalling go away and become a thing of the dreary, dreadful past.

I mean, come on, how hard would that be? Humans can spot spam and robocalling a mile away, so shouldn’t AI be even better at completely eliminating these miseries from our already-digitally-overloaded lives? as for surveillance, how hard would it be to identify and block every tracker, data vacuum, etc. on all our connected devices?

How hard would it be for AI to identify the entities and humans profiting from ruining our lives with surveillance, spam and robocalling? Wouldn’t a publicly updated list of those responsible, including names, business addresses, email accounts, etc. be transparency in action?

As I outlined in Is Anyone Else’s Life as Stupidly Complicated by Digital “Shadow Work” as Mine Is? (May 22, 2024), we’re squandering our lives dealing with completely needless, useless complexity imposed on us by monopolies, scammers (oh wait, isn’t that a redundancy?), rapacious tech platforms, fraudsters and marketers.

If AI is so great, why doesn’t it do all this stupidly burdensome “shadow work” for us? When yet another corporate monopoly’s products and/or services fails miserably, then why can’t AI get on the phone with a tech-support person halfway around the world and get it sorted?

We all know the reason why AI will only add to our misery and shadow work: there’s no profit in making our lives easier unless we pay for the “privilege” of not being surveilled, spammed and robocalled to death. This is the price we’re paying for allowing tech/corporate monopolies and cartels to dominate our economy, society, political order and daily lives: the only way AI will reduce our shadow work is if reducing our misery is more profitable than adding to it.

If we lived in a truly well-ordered economy / society, every individual participating in surveillance, spam and robocalling would be renditioned to Devil’s Island where they could enjoy the company of all the other grifters and scammers who profited from our immiseration.

But alas, we live in an economy / society that has been optimized for parasitic predation and exploitation. And so AI will be deployed not to eliminate the obvious sources of our immiseration but to increase them, until our desperation reaches such an extreme that we’re willing to sign up for a special deal, only $99.99 a month (for six months, then the price reverts to $399.99/month, plus applicable taxes), a service that comes with an AI app to fix everything that’s broken and dysfunctional.

If you want to actually fix what’s broken, well, that requires speaking with a human being, and that’s going to cost you extra. AI is for the peons, access to humans is reserved for the wealthy.

Here’s Why the Biggest Winners Behind the Growing AI Trend Are Not What You Think…

Perhaps the biggest winners of the AI revolution will be the companies supplying the commodities to produce all the extra electricity that will be required.

by Chris MacIntosh for International Man

If you thought we’d suggest Nvidia, you’d be as wrong as Miley Cyrus swinging naked on a wrecking ball. Nope, it’s not that! Here, take a look

An interesting piece from the IEA:

Electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026. Data centres are significant drivers of growth in electricity demand in many regions. After globally consuming an estimated 460 terawatt-hours (TWh) in 2022, data centres’ total electricity consumption could reach more than 1 000 TWh in 2026. This demand is roughly equivalent to the electricity consumption of Japan. Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption from data centres.

We wonder where all that extra electricity is going to come from? Even if the IEA is only half right, a bucket load more electricity will be required.

Data centres require a consistent supply of electricity, so forget solar and wind. Nuclear power plants run at full capacity most of the time and it takes 10 years or so to build a nuclear power plant. So that only leaves natural gas and coal with realistic spare capacity.

Perhaps the biggest winners of the AI revolution will be the companies supplying the commodities to produce all the extra electricity that will be required.

The Deepwater Boom

Stuff we already knew about, but just a reminder how offshore is coming back into vogue.

A 12-year high in capex:

Next year, capital expenditure (capex) on new deepwater drilling is set to jump to the highest level in 12 years in 2025, Rystad Energy reckons. At the same time, capex on all-new and existing deepwater fields could surge by 30% in 2027 compared to 2023, to $130.7 billion, per the consultancy’s estimates cited by Reuters.

We don’t see “12-year highs” in offshore oil focused service companies (yet). We reckon that the crowd hasn’t woken up to the genuine long-term boom in offshore oil and gas that is coming.

The crowd probably also doesn’t appreciate how decimated offshore service companies were from 2018 to 2022. Most went bankrupt or had massive equity capital injections to stave off bankruptcy. Helix and Oceaneering were two companies that emerged from the devastation of the sector with their capital structure intact, so there is some meaning in looking at their long-term charts. The point of discussing this is the lack of capacity that offshore oil and gas service companies have to deliver services compared to 10 years ago.

Once again…

Uranium Outlook

Kazatomprom, world’s largest uranium producer, flashes red

Kazatomprom is the world’s largest and, arguably, most important uranium producer, accounting for 23% of global supply in 2022. To put in context, that’s double the next largest producer, Cameco in Canada.

The company has now warned production will be 20% below levels allowed by permits in 2024, with production impacted possibly into 2025. The warning comes just as uranium prices are approaching historic highs with significant fallout across the global energy and nuclear sector.

But this may not even be the biggest challenge facing Kazatomprom’s uranium supply to the West, with geopolitical tensions threatening to spillover into Kazatomprom’s joint venture partnerships across Kazakhstan, which make up a staggering 43% of global supply.

We remain long.

End of Coal?

You can’t make this up.

The Biden administration has just signed an economic suicide pact that would require the United States and six other Western democracies to shut down its coal power plants by 2035, while China, India and the rest of the world currently have more than 1,000 new coal power plants in the planning or construction phase. The no-coal pact allows all nations but the Suicidal Seven to continue using as much affordable coal power as they like.

Speaking of that dirty old coal and myopic ignorant woke government policies and how they transpire, rest your eyes on this hilarious short video clip from the New Zealand government propaganda channel.

Before you watch it, some background information — the New Zealand government, entirely captured by the Malthusianists at the World Economic Forum, banned oil and gas and went as far as cementing gas pipelines, an act of industrial sabotage. They did this so that they can NEVER be used again (cement paid for by taxpayers, of course).

“What we’ve seen this year is a 30% decline in natural gas and so the only fuel we have left to back it is coal”…

It is a situation of, if you don’t have the gas unfortunately we need to use the coal until we can transition to a lower carbon solar fuel in the future like biomass…”

It’s worth reminding folks that “biomass” is wood pellets. Yes, it’s true. Burning trees is “green.” Fucking idiots! I suspect this energy “transition” is going to go as well as this ugly man’s transition went.

Something else: You’ll notice this trend now across the Western world. All the video clips on YouTube from government propaganda channels have comments “disabled.”

The irony is that Western media outlets disable the comments section while Russian, Chinese, and Middle Eastern ones don’t. Imagine that!

Riding the wave or risking the crash: navigating the AI bubble

From Google’s new AI Overview suggesting people eat rocks to Humane putting its company up for sale following the disastrous launch of its AI Pin, the news surrounding AI does not always inspire confidence.

By Shiv Rajagopal  for Red Shark News

AI is everywhere you look—it’s the reason your phone suggests cat videos when you’re thinking about them or why your smart fridge knows you’re out of ice cream before you do.

In the relentless race of technological advancement, artificial intelligence (AI) stands as the new frontier. Promising to transform industries and everyday life for billions, startups and conglomerates are heralding an AI-driven future. Yet, behind this digital gold rush lies a darker reality—Wall Street and venture capital firms pushing for rapid returns, often at the expense of genuine innovation for consumers.

Are we on the brink of a groundbreaking AI revolution or teetering on the edge of an investment bubble primed to burst?

Not all AI is created equal

The AI industry is experiencing a massive surge in investment, with Wall Street firms and venture capitalists pouring billions into the sector. Sequoia Capital was an early investor in OpenAI, giving $1.2 billion in backing for its cutting-edge research and development. Already an existing investor in OpenAI, Microsoft has pledged to invest nearly $3 Billion in Japan’s AI industry. Elon Musk recently raised $6 billion in funding for his OpenAI competitor, xAI. When such large amounts of money are being deployed, we must ask ourselves an important question: is this unprecedented amount of investment a reflection of a promising product or mere hype?

The first discrepancy we must discuss is whether something is genuinely AI or simply labeled AI for promotion purposes. Genuine AI products are systems that autonomously perform tasks typically requiring human intelligence. They rely on machine learning, natural language processing, computer vision, and other advanced technologies to function. And they’ve been in development for decades. This refers to your self-driving cars, preference algorithms on streaming services, and customer support chatbots.

On the flip side, many purported AI products rely on significant human labor, particularly for tasks that current AI technology can’t handle. And most of the time, these workers aren’t compensated very well. Companies might market their products as AI-driven while relying heavily on human workers behind the scenes to perform tasks like data input, image recognition, and content moderation.

For instance, Amazon’s “Just Walk Out” technology, promoted as a revolutionary AI-based checkout system, actually relies heavily on human workers in India. Despite the technology’s claims of using computer vision to allow customers to bypass traditional checkouts, approximately 700 out of every 1,000 transactions are manually reviewed by human workers.

Similarly, Presto Automation, a company providing AI-powered drive-thru technology to fast food chains like Del Taco, Hardee’s, and Carl’s Jr., recently revealed that over 70% of its orders actually require human assistance. This reliance on human workers contrasts with their earlier claims that 95% of orders were processed without staff intervention.

In a sense, these “advances” in AI highlight a systemic problem where investment hype around AI often derails the development of genuine AI products, favoring the use of AI as a marketing buzzword to attract customers and investors.

AI Hardware: Pressure to Deliver 

AI hardware is rapidly advancing, with AI assistants emerging as the leading product class. Start-ups and venture capitalists are heavily investing in AI-powered assistant products, envisioning them as potential successors to the iPhone. These AI assistants promise to revolutionize daily interactions by offering seamless, intuitive support across various tasks. However, despite the considerable potential and excitement surrounding these products, their execution often falls short.

Take the Humane AI pin, for example. The Humane AI Pin had a disastrous launch, primarily due to its lack of functionality and a steep price point that deterred potential buyers. The product, which aimed to be a cutting-edge AI assistant, failed to deliver on its promises, leaving users unimpressed and frustrated. Only two months post-release, the company’s founders are already exploring the possibility of selling the business. This swift move toward a sale reflects the risks of overhyping a product without ensuring it meets consumer expectations.

Then, there’s the infamous Rabbit R1. This device was first pitched as a more affordable AI agent and positioned as a high-powered alternative to traditional AI assistants. Unlike many AI products, which are Large Language Models (LLMs) capable of text-based communication (ChatGPT) but not executing commands, Rabbit sought to introduce the concept of a Large Action Model (LAM). This model promised to perform real-world actions like calling a taxi or ordering food. Additionally, Rabbit R1 boasted a unique feature called “Learn Mode,” designed for users to teach the AI assistant to perform specific tasks, making it a versatile and practical tool for everyday use. But the reality was from expectations.

Not unlike the Humane AI pin, Rabbit R1 launched as an incomplete product riddled with bugs and limited features. Users can only connect to a few apps, and the basic search function often produces inaccurate results. Upon closer inspection, it turns out that the hardware is essentially powered by an Android app, leading many to question whether Rabbit R1 could have simply been an app instead of a standalone device. This revelation has sparked criticism and disappointment among early adopters, who expected a more polished and capable AI assistant.

So, although the company promises continuous updates and the eventual release of all the initially promised features, the current iteration of the product is almost unusable.

These products exemplify how VC-backed, hype-driven items are often launched prematurely to be first to market. Even the major players can fall foul of this, witness Google’s much-reported problems involving AI Overview in its latest overhaul of Search.

Industry Leaders 

AI industry leaders are no strangers to controversy either. OpenAI, the world’s leading AI company, has seen its ChatGPT model become wildly popular, driving unprecedented growth. However, this success has not been without scrutiny. The rapid expansion and influence of OpenAI have raised questions about its technologies’ ethical implications and societal impact. A big piece of this controversy surrounds OpenAI’s convoluted governance structure.

OpenAI’s unusual corporate governance structure, which combines non-profit and for-profit entities, has generated significant confusion and internal conflict. The core issue revolves around balancing safety concerns with profitability, leading to numerous controversies. This ongoing struggle has overshadowed the company’s rapid growth and technological advancements, highlighting the challenges of maintaining ethical standards while pursuing financial success.

Final Thoughts

The potential of AI technology is immense, promising to revolutionize our lives in countless ways. However, the drive for profitability, fueled by venture capitalists and Wall Street, often overshadows consumer interests.

To navigate these challenges, AI companies must prioritize transparency, conduct external audits, and uphold strong ethical standards. Founders must adopt a balanced approach, focusing on technological integrity and consumer well-being over short-term financial gains. By doing so, they can ensure that AI development progresses responsibly, benefiting society while maintaining trust and accountability.