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Ed Zitron
Hello and welcome to this week's Better Offline Monologue. I'm your host, Ed Z. Tron.
Podcast Title Announcer
Better Offline
Ed Zitron (continued)
it's going to be a double monologue week.
Ed Zitron
After last week's dramatic exclusive, I've been slammed with interviews and personal life stuff
Ed Zitron (continued)
that made it feel like I was
Ed Zitron
being hit in the head with a pool noodle. 247 feeling a lot better now, but nevertheless, this is where I need to focus myself.
Ed Zitron (continued)
I've also been enjoying a lot of
Ed Zitron
the responses to my exclusive about OpenAI's 2024 and 2025 financials.
Ed Zitron (continued)
Now, some have been mighty confident about
Ed Zitron
inference being profitable due to a $7.5 billion cost of revenue on $13.07 billion
Ed Zitron (continued)
in revenue but but overlooked my reporting from last year, verified by the Financial Times, by the way, that showed OpenAI spent $8.67 billion specifically on inference in
Ed Zitron
the first nine months of 2025.
Ed Zitron (continued)
It's very, very clear that OpenAI moved
Ed Zitron
around numbers to make things look better than they are, and I believe that inference costs are being dumped into sales and marketing.
Ed Zitron (continued)
How else can you explain how a company spends more than 43% of its
Ed Zitron
revenue, $5.73 billion on sales and marketing,
Ed Zitron (continued)
more than the Coca Cola Corporation, which has three ad agencies and a V web of different print, digital and physical ad spend?
Ed Zitron
I think they do some influencer things as well. Honestly. If the Diet Coke Corporation wants to get in touch, please do.
Ed Zitron (continued)
Nevertheless, Microsoft also had $500 million of
Ed Zitron
sales and marketing spend too, via OpenAI.
Ed Zitron (continued)
What do you think that is? OpenAI spending $500 million on sales and marketing through Microsoft? Or is it them itemizing promotional spend or the inference from free users as
Ed Zitron
a sales and marketing cost? Now, if you disagree, and I'm sure
Ed Zitron (continued)
some of you do, please explain in
Ed Zitron
any detail, any level of detail really,
Ed Zitron (continued)
how OpenAI has spent $5.67 billion on sales and marketing.
Ed Zitron
Otherwise, its first major advertising campaign was in September 2025. If it's spending, let's say, $250,000 a year on its 500 sales staff, that's
Ed Zitron (continued)
still only $125 million. Unless OpenAI is one of the single largest accounts in digital advertising.
Ed Zitron
And speaking with people all over the shop, I don't think that's true.
Ed Zitron (continued)
I think it's far more likely that
Ed Zitron
there are actual costs being hidden.
Ed Zitron (continued)
And this is the kind of thing a company does when it has utter loathing for its investors, the media and the general public. A brazen attempt to bury costs to make things look better for an audience that's directly incentivized to take any shred
Ed Zitron
of proof that things are okay.
Ed Zitron (continued)
Nowhere is this more obvious than in the FT story.
Ed Zitron
And I'm specifically referring to a quote
Ed Zitron (continued)
where where a source familiar with the matter suggested that somehow OpenAI only lost
Ed Zitron
$8 billion in 2025 rather than the $20.9 billion it actually lost.
Ed Zitron (continued)
Accountancy voodoo doesn't work on me, Clamuel.
Ed Zitron
I'm better than that.
Ed Zitron (continued)
But this comment, in my opinion, was not actually meant for the readers of
Ed Zitron
the FT but for the larger AI cargo cult.
Ed Zitron (continued)
As I wrote in my free newsletter
Ed Zitron
this week, Silicon Valley, as exemplified by the AI bubble, has abandoned its supposed principles of rationality and meritocracy and now more closely resembles a cargo cult desperate to recreate bygone eras of growth.
Ed Zitron (continued)
OpenAI and Anthropic are not interested in
Ed Zitron
operating with honesty or integrity, nor are
Ed Zitron (continued)
they particularly concerned with building real companies.
Ed Zitron
They lose billions of dollars. They always have and they always will. Nothing changes that.
Ed Zitron (continued)
They must keep the mythology of their
Ed Zitron
companies going so they can keep raising money in perpetuity until someone works out to build a real company.
Ed Zitron (continued)
Not that that will happen, but nevertheless, the things that they say, they exist to feed the tech media and AI boosters symbolic proof that the great prophecy
Ed Zitron
that OpenAI and anthropic will grow and be the biggest companies in the world, they'll be profitable and AI will be
Ed Zitron (continued)
the next big thing. Well, they need that. They need you to believe these things. So the great prophecy will come true. It must come true. Don't you understand if it doesn't come true? Well, Wario Amade can't be an elder statesman forever. And this is why both companies have used annualized run rates and never really addressed the profitability question outside of Dario Amadei's stylized facts. Because they know that Silicon Valley is a monoculture dominated by people who don't interact with society outside of Sandhill Road, who they believe are gullible enough to accept and promote any rationalization that confirms their beliefs or indeed the great prophecy.
Ed Zitron
And I mean, they've been completely right so far.
Ed Zitron (continued)
The AI industry doesn't feel the need to prove itself because it has complete contempt for its customers, the media and the markets believing they'll slurp up whatever slop they get and take it as proof that that great prophecy, my friends, will come true and all of us, all of us will be purified.
Ed Zitron
And why wouldn't they?
Ed Zitron (continued)
The media has accepted basically every single narrative the AI industry has created. AI boosters will accept effectively any proof that things are going well and will actively attack and ostracize any non believers. And if I'm honest, there are members of the media who do this too. And if you're listening, I'm not scared. You only make me Stronger. You only make my posts longer too. But really this is how it all works. This is how it's worked with AI.
Ed Zitron
It's how they tried to make crypto in the metaverse work.
Ed Zitron (continued)
But it really worked with AI because
Ed Zitron
LLMs too do that kind of cargo. Cultish evidence generation.
Ed Zitron (continued)
Oh, it could potentially replace software engineers because it can burp out some code. Oh, it can look at my taxes and say stuff. That means it can do my taxes. Just enough symbology to push this bullshit through for an indeterminate end. Let's be honest, it's not going to
Ed Zitron
be a government bailout. I've covered that in a previous monologue. Go back and listen to it. Not repeating myself.
Ed Zitron (continued)
But this is Silicon Valley, and Silicon Valley stands for rugged individualism, rationality and meritocracy.
Ed Zitron
Unless of course, everybody in Silicon Valley agrees that an idea is good, at which point all that bullshit goes out the window.
Ed Zitron (continued)
Any singular piece of information that even slightly rings positive is proof of the grand prophecy of growth that AI promises.
Ed Zitron
And chosen are those who take said proof.
Ed Zitron (continued)
And cursed are those who question it. You dare to report on OpenAI's actual revenues? No. Non believer. Out with him. We're going to put him in the Wicker Man. We're going to put the man with the revenues in the Wicker Man. Except this is. This is more like. Yeah, I guess this would be the
Ed Zitron
Wicker man, except I'm not like a sexless British policeman.
Ed Zitron (continued)
More on that later.
Ed Zitron
I'll go deeper down the Wicker man hole.
Ed Zitron (continued)
Nevertheless, this is Silicon Valley now. Silicon Valley is just a cult.
Ed Zitron
It's a cargo cult where everyone's trying to shuffle shit around, put things in the right order to try and usher in the next Steve Jobs or the next Bill Gates.
Ed Zitron (continued)
You ever notice as well that that's
Ed Zitron
all they talk about? It's always the guys, it's never the product.
Ed Zitron (continued)
You also ever notice that all of
Ed Zitron
these extremely well paid AI guys like Noam Shazir, who got bought, he left Google and got bought for $2.7 billion by Google to go back to Google, then went to OpenAI a month ago. What do you think he did at Google?
Ed Zitron (continued)
What do you think Barret zoff, who
Ed Zitron
left OpenAI to went to Thinking Machines and he came back to OpenAI, now he's left OpenAI. What do you think he's done?
Ed Zitron (continued)
And that Andre Karpathy, he just went to Anthropic and he wasn't doing anything for two years. Isn't it weird that Andre Karpathy One
Ed Zitron
of the co founders of OpenAI, formerly of Tesla.
Ed Zitron (continued)
He sat around for two years and really didn't do anything yet. That Eureka Labs education startup. Nothing happened with that. It's almost as if the Valley moves around different forms of symbology, hoping that when they're in the right place, the
Ed Zitron
next era of growth will begin.
Ed Zitron (continued)
And doing this allows them to get away from the horrible fact that they're
Ed Zitron
out of hypergrowth ideas, that they don't have the people who have the ideas anymore. The original iPhone was created by a competing team, Tony Fadell and John Forstel, I believe the software and hardware teams
Ed Zitron (continued)
coming together and actually building something, people
Ed Zitron
with real industrial expertise.
Ed Zitron (continued)
The Valley now is just, I don't know, trading different kinds of AI, scientist and mathematician in the hopes that one of them can usher in the digital God. It's fucking depressing. It's depressing and make no mistake, it will lead Silicon Valley to its ruin.
Ed Zitron
Faith can't fill your belly or cover $1.1 trillion in spending commitments or magic up the more than $2 trillion in revenue that Big Tech needs to make AI worth it by 2030. I don't think it can pay Larry Ellison's bills either.
Ed Zitron (continued)
In fact, faith can't really do much other than create speculative wealth. And speculative wealth can't pay for everything forever. I'll catch you on Friday. This has been better offline and I beat Ed Zitron.
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Podcast Host
This is an iHeart podcast guaranteed human.
Host: Ed Zitron
Date: June 24, 2026
Podcast: Better Offline (Cool Zone Media & iHeartPodcasts)
In this monologue episode, host Ed Zitron explores how the AI industry—and Silicon Valley as a whole—has devolved into what he characterizes as a "cargo cult." Zitron critiques the financial reporting and myth-making of companies like OpenAI and Anthropic, arguing that the valley is no longer focused on genuine innovation or transparency, but on sustaining a mythology of endless growth. Through sharp, critical commentary, he likens the behaviors of tech leaders and investors to ritualistic belief, divorced from reality and rational business fundamentals.
"How else can you explain how a company spends more than 43% of its revenue, $5.73 billion, on sales and marketing—more than the Coca-Cola Corporation?"
—Ed Zitron (03:14)
"Silicon Valley, as exemplified by the AI bubble, has abandoned its supposed principles of rationality and meritocracy and now more closely resembles a cargo cult desperate to recreate bygone eras of growth."
—Ed Zitron (05:11)
"They must keep the mythology of their companies going so they can keep raising money in perpetuity until someone works out how to build a real company. Not that that will happen..."
—Ed Zitron (05:38)
Ed makes a tongue-in-cheek reference to being cast as "the man with the revenues" in a Wicker Man ritual for questioning the cult:
"You dare to report on OpenAI's actual revenues? No. Non believer. Out with him. We're going to put him in the Wicker Man."
—Ed Zitron (08:13)
"Faith can't fill your belly or cover $1.1 trillion in spending commitments or magic up the more than $2 trillion in revenue that Big Tech needs to make AI worth it by 2030."
—Ed Zitron (10:23)
Ed Zitron’s monologue delivers an unflinching, often biting critique of Silicon Valley’s current state, especially through the lens of AI’s economics and mythology. The episode is sharp, skeptical, and laced with dark humor—a must-listen (or must-read) for anyone skeptical of tech industry hype cycles and hungry for clarity behind the curtain.