Monologue: OpenAI and NVIDIA's Deal Is BS

Summary

Better Offline — Monologue: OpenAI and NVIDIA’s Deal Is BS

Host: Ed Zitron
Release Date: September 26, 2025
Podcast Network: Cool Zone Media / iHeartPodcasts

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Episode Overview

In this solo monologue episode, tech industry veteran Ed Zitron launches a pointed, expletive-laden critique at the highly publicized “$100 billion” partnership between OpenAI and NVIDIA. Through detailed financial analysis, historical context, and insider industry commentary, Zitron debunks media buzz and lays bare the contradictions, impracticalities, and hype surrounding the deal. Ed argues that the entire arrangement is built on unrealistic promises, misleading headlines, and a disregard for fiscal reality, raising bigger questions about the future of the AI boom and tech investment as a whole.

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Key Discussion Points & Insights

1. The NVIDIA–OpenAI “Investment” is Largely Theoretical

(03:13–05:00)

• Headline Discrepancies:
  • Media reported a $100 billion “investment,” but in reality, Ed emphasizes that NVIDIA has “not wired OpenAI a single goddamn dollar.”
  • The only hard number is a possible $10 billion, “allegedly” to be transferred in monthly tranches, but “nothing’s actually been signed.”
• Conditional Funding:
  • Most future funds are contingent on OpenAI building unprecedented new data center capacity — a process that is slow, expensive, and largely unproven at this scale.

2. Data Center Construction — Unrealistic Assumptions

(05:05–08:20)

• Physical and Financial Constraints:
  • Ed describes OpenAI’s lack of direct experience: “OpenAI really has built nothing themselves. Everyone else is building it for them.”
  • The so-called “Stargate” locations are mostly re-packaged announcements: “One of them is...already chosen to be one of Oracle’s data centers. This was already announced. They’re re-announcing stuff.”
• Building Timeline Realities:
  • Construction of major sites (like Abilene’s 1.2 GW facility for Oracle/OpenAI) is taking “about two and a half years per gigawatt.”
  • Headlines ignore how slow and capital-intensive this all is.

3. The Ludicrous Economics of the Deal

(08:20–10:40)

• Cost Calculations:
  • The Abilene venture needed $15 billion for 1.2 GW capacity. OpenAI would need “$125 billion just to build the data centers to get the [NVIDIA] funding, which will require another $200 billion in GPUs.”
  • OpenAI’s reported deal with Oracle: “promised to spend $400 billion over the next five years.” Realistic cash requirements over five years: approximately $600 billion.
• Complex Financing Structures:
  • NVIDIA may not sell but “lease” GPUs to OpenAI, through “a special purpose entity to buy the GPUs from themselves that they would then lease to OpenAI...that’s straight Enron shit.”
• Revenue Myths:
  • Media repeats OpenAI’s projections of $100–$145 billion revenue (not profit!) by 2028–2029, but the company’s current actual revenue is much lower (“about $6.26 billion” for the year).

4. The Immense Capital Drain and Industry Bubble

(10:40–12:20)

• Market Distortion:
  • Estimated total available capital in the top 10 private equity funds: about $477 billion; US venture capital: about $164 billion; another ~$150 billion in other funds.
  • Zitron: “Are we really going to carve out half to two-thirds of available global capital for one fucking company that burns a billion fucking dollars every two fucking seconds? ... There’s no parallel in history for any company...that’s ever spent this much.”
• Downstream Effects:
  • OpenAI consumes “33% of US venture capital last year,” and likely more this year. “None of these companies are profit generating. None of these products are popular.”
  • Estimated total AI industry revenue (counting all major providers) is just $55 billion in 2025, versus capital expenditures exceeding $400 billion.

5. Industry Delusion and Potential Implosion

(12:21–13:30)

• Hype and Misaligned Incentives:
  • Ed’s biting assessment: “Is anyone having fun? Does this feel like the future? Or does this feel like the future of how we’re going to blow hundreds of billions of dollars on nothing?”
• Market Consequences:
  • When the bubble bursts, “it’s going to fuck retail investors and a ton of venture capitalists too. Ton of private equity people as well, which will be kind of funny. But the financial apocalypse will hit everyone and it’ll be grisly.”

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Notable Quotes & Memorable Moments

• On the “Investment” Reality:
  • “Nvidia has not wired OpenAI a single goddamn dollar.” (03:33)
• On Recycled Announcements:
  • “As a PR professional, when you’re re-announcing shit, it’s because you run out of stuff to announce... This is real.” (04:42)
• On Data Center Economics:
  • “OpenAI will need $125 billion just to build the data centers to get the funding from Nvidia, which will require another $200 billion in GPUs.” (08:50)
  • “I’ve really hesitated to bring up any Enron comparisons...that’s straight Enron shit.” (09:50)
• On AI Revenue Fantasies:
  • “OpenAI is projected to make $13 billion this year. From my calculations, they made about $6.26 billion. It’s wank. And that’s the technical term they use.” (11:10)
• On the Bubble:
  • “Are we really going to carve out half to two-thirds of available global capital for one fucking company that burns a billion fucking dollars every two fucking seconds?” (11:50)
  • “There’s no parallel in history... I’ve never seen a company less deserving of any investment than OpenAI.” (12:10)

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Episode Structure & Key Timestamps

• [03:13] — Monologue introduction; deconstructing the NVIDIA-OpenAI “investment”
• [04:20] — Data center PR hype and realities
• [05:05] — Timeline and financial needs of data center construction
• [08:20] — Detailed cost breakdown; GPU and data center cost estimates
• [09:50] — Special purpose entities: “straight Enron shit”
• [11:10] — Revenue claims vs. reality; OpenAI’s actual financials
• [11:50] — Capital availability; math on global capital allocations
• [12:21] — Insight into the scale of the AI investment bubble
• [13:20] — Closing thoughts and preview of next episodes

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Tone and Takeaways

Ed Zitron’s monologue is sharp, acerbic, and laced with careful industry analysis and sarcasm. He exposes hype-driven narratives, questions the logic behind multi-billion-dollar bets on “AI,” and calls out both media complicity and industry self-delusion. Ed ultimately warns of an imminent reckoning in tech finance, positioning this NVIDIA-OpenAI deal as the latest — and perhaps most egregious — example of the sector’s bubble dynamics.

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For listeners and readers:
This episode provides a brisk, biting, and data-driven takedown of one of the most-hyped tech deals of the decade, challenging both the numbers and the narratives that dominate tech reporting today.

Transcript

[Ed Zitrona]

This is an iHeart podcast.

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[Ed Zitrona]

Call zone media. Hello and welcome to this week's Better Offline Monologue. I'm your host, Ed Zitrona. As I wrote while drafting this, I'm Yao's house. A line I'm leaving in as I'm being accountable to you, the customer. Foreign Anyway, you've heard about the Nvidia Open AI deal by now that Nvidia will, and I put this in air quotes, invest $100 billion in OpenAI. And I want to start out by being explicit that Nvidia has not wired OpenAI a single goddamn dollar. Alright, so the deal is that Nvidia is investing $10 billion upfront, according to CNBC, despite the fact that the day before it said that they would be investing $10 billion with the first gigabyte. Anyway, they're investing $10 billion in a month, allegedly, and I quote here, once the deal is finalized, which means in simpler terms that nothing's actually been signed, Nvidia will then invest $10 billion in tranches for each gigawatt of capacity that OpenAI builds. That's right. That's right everyone. Most of this funding is gated behind OpenAI, a company that burns billions of dollars building huge amounts of data centers, something they have never done and that also costs billions of dollars. And just as an aside, OpenAI really has built nothing themselves. Everyone else is building it for them. These fucking Silicon Valley libertarians. They love themselves in welfare, don't they? Anyway, how does OpenAI afford to build these data centers? I don't know. Nobody else seems to know. Where are they being built? Who knows? It's unclear. Has the land been purchased? Also unclear. There's some sort of crap announcement about oh, Stargate. We've got a list of different fucking new places. And I had someone on the Reddit suggest I was wrong. I just want to be clear of the list of the five new Stargate locations. One of them is in Shackelford, Texas, which was already chosen to be one of Oracle's data centers. This was already announced. They're re announcing stuff. As a PR professional, when you're re announcing shit, it's because you run out of stuff to announce this real. But look, let's let's be explicit about one thing. Data centers take a long, long time to build. Right now, Crusoe is building a data center in Abilene te up of eight buildings, which will amount to about 1.2 gigawatts of compute capacity. This is the one for Oracle and OpenAI, and at the current rate of development, it's taken about two and a half years per gigawatt. Look, I realize it's easy to get drowned in big numbers and ridiculous promises and media headlines where the writers don't seem to bother to learn even the simplest fucking things, but data centers are expensive and take forever, and this entire plan hinges upon OpenAI building data centers. In fact, look, I've seen lots of people suggest that the $10 billion that OpenAI is getting from Nvidia will let them build data centers. And again, can somebody please actually learn the basics here? The Abilene data center venture required Crusoe, Blue Owl and Primary Digital infrastructure to raise $15 billion in debt just for the data center itself, the construction, the people, the water, the power, and all that good stuff. With Oracle footing the bill for the hundreds of thousands of GPUs to go inside at a price of, I think about $24 billion, it works out to. By my calculations, OpenAI will need $125 billion just to build the data centers to get the funding from Nvidia, which will require another $200 billion in GPUs. By the way, the information also reports that Nvidia is going to be potentially leasing GPUs to OpenAI, setting up a special purpose entity to buy the GPUs from themselves that they would then lease to OpenAI. I've really hesitated to bring up any Enron comparisons. I've kind of flirted with one with Cor Weave and them that's. That's straight Enron shit. Like, man, they haven't confirmed they're going to do it. It's an information report. I'll put a link in there, you'll complain that you have to pay for it. I recommend the information. I just. Every, every day, every day, these new pieces of news where everyone kind of like trumpets them, like Jesus just woke up from behind that big fucking rock, when in fact I think something far worse is happening. But I really want to break something down for you, and you'll likely hear this again in a future episode. I want to get into the actual economics here. Crusoe's 1.2 gigawatts of compute for OpenAI is a $15 billion joint venture, which means a gigawatt of compute runs about $12.5 billion. Abilene's eight buildings are meant to hold about 50,000 Nvidia GB200 GPUs and their associated networking infrast. So let's say a Gigawatt is about 303,333 Blackwell GPUs. Yeah, this math is a little bit funky due to Nvidia promising to install their new Rubin GPUs in these theoretical data centers. But I really do think that they require about just a little under $200 billion worth of GPUs. And this is on top of the $400 billion that OpenAI has promised to spend with Oracle over the next five years, when OpenAI had already leaked that they'd be burning 115 billion DOL next four years. This math does not make any sense. It. It's complete nonsense. For OpenAI to survive, they're going to need around $600 billion in the next five years. It's ridiculous, astonishing and insulting to the general public that the media keeps acting as if these deals are signed or promoted in good faith. And I'm shocked that more people aren't doing the very simple maths. That and I've seen a disgraceful amount of people talking about OpenAI's revenue projections, which involve them making $100 billion in 2028 and $145 billion in 2029, and revenue, not profit. They're losing tens of billions of dollars both those years. And they're acting as if these are serious, meaningful statements rather than egregious lies from a gaggle of charlatans. It's a fucking joke. It's sickening. Oh, by the way, OpenAI is projected to make 13 billion this year. From my calculations, they made about 6.26 billion. It's wank. And that's the technical term they use. It the financial analysts put it, when you pay JP Morgan to see their private shit. Yes, it's all wank. This is wink. Okay, I'll keep going now for the next three part episode I'm going to put out next week. I've done a lot of digging into how much actual money exists to invest in general, and we're genuinely running up against the limits of private and public capital. By my calculations, there's only about $477 billion of available capital across the top 10 private equity funds. And I'm deadly serious. I will be publishing the links and maybe $164 billion of US venture capital left and maybe let's call out another 150. Billy. In other funds sloshing around, are we really going to carve out half to two thirds of available global capital for one fucking company that burns a billion fucking dollars every two fucking seconds? I know it's slower than that. Shut up. I'm just, I'm a little bit ornery. I'm not going to lie. You can hear it in my voice. And I'm even more ornery than ever. More ornery than ornery as Rob Zombie once sung. I'm just pissed off because when you look at these numbers, they do not make sense. There's no parallel in history for any company or any industry that's ever spent this much money. There's never been one company that has been the focus like this. And honestly I've never seen a company less deserving of any investment than OpenAI. They burn billions of dollars. Their product is questionably useful, it's incredibly commoditized. They have yet to create anything really exciting or new since. And if I'm being kind, reasoning, but let's be honest, GPT4 oh, they are washed. And yet everybody's sitting around them clapping like they're a gifted child, an insult to children and startup founders. And that really is something that pisses me off as well because I took 33% of US venture capital last year and I think they're probably taking more this year. And what's insane is nothing has been proven. None of these companies are profit generating. None of these products are popular. Every single day it feels like a study comes out saying, yeah, no one really likes this stuff, no one wants to pay for it. And by my calculations, I think the whole industry's revenue of include core weave and all those shits, maybe $55 billion in 2025. That's on 400 billion plus capex. Is anyone having fun? Does this feel like the future? Or does this feel like the future of how we're going to blow hundreds of billions of dollars on nothing? And the longer it takes for people to walk away from OpenAI and the longer it takes for this company to die, the more damage that's going to be caused. Because right now Nvidia is putting everything on OpenAI. If we had functioning regulatory boards, we'd actually have something done about this. But instead what's going to happen is they're going to inflate this bub just a little further and then when it bursts, it's going to fuck retail investors and ton of venture capitalists too. Ton of private equity people as well, which will be kind of funny. But the financial apocalypse will hit everyone and it'll be grisly. But I'll be here to talk about it. I'm having the time of my life doing this show. Next week's three part is completely insane. I wrote it in kind of a two day, 15,000 word, kind of like ejection I was going to say. I was going to say another word which wouldn't have sounded quite as good, but nevertheless, that's the fun, ranty part of these monologues. But I'm really excited for you to hear it because I pulled together a lot of numbers that show how farcical this industry has become. And I think as the bubble approaches its eventual burst, a lot of you are going to feel really good about how right you are. Maybe some of you still disagree with me and I will work to compel you. And even if I don't, I hope you have a good time listening. Got great episodes coming up in the future as well. Gonna be gonna see Stephen Burke and of Gamers Nexus do a long interview with him. Some fun radio, better offline and then I'm already working on some big guests. It's gonna be a really fun few months. I don't know for anyone else, but I'm definitely enjoying doing this podcast. Thank you as ever for listening.

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