Monologue: Silicon Valley is A Cargo Cult

Summary

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Better Offline – "Monologue: Silicon Valley is A Cargo Cult"

Host: Ed Zitron
Date: June 24, 2026
Podcast: Better Offline (Cool Zone Media & iHeartPodcasts)

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Episode Overview

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.

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Key Discussion Points & Insights

1. OpenAI’s Financial Reporting Shenanigans

• Questionable Profits: Zitron challenges widespread confidence in OpenAI’s reported profitability, scrutinizing how operational (inference) costs are obscured within sales and marketing budgets.
• Moving the Numbers: He references verified reports showing OpenAI’s $8.67 billion inference costs for the first nine months of 2025, versus public numbers that understated losses.
• Burying Costs for the Sake of Optics: "OpenAI moved around numbers to make things look better than they are, and I believe that inference costs are being dumped into sales and marketing." (03:08)

Notable Quote

"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)

2. The Media and the AI "Cargo Cult"

• Media Complicity: Zitron accuses media and boosters of uncritically accepting corporate narratives, enabling the perpetuation of questionable business practices.
• Symbols Over Substance: The repetitive use of annualized run rates and stylized facts, rather than transparent profit/loss details, is judged emblematic of a cultic system of belief.
• "The comment was not actually meant for the readers of the FT but for the larger AI cargo cult." (05:06)

Notable Quote

"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)

3. Rituals, Failures, and the Myth of the Great Prophecy

• Perpetual Losses, Perpetual Promise: OpenAI and Anthropic, Zitron argues, must keep their "mythology" alive to attract fresh funding, despite their billions in losses.
• Faith Over Facts: People prefer symbolic proof over hard evidence; dissenters are shunned or attacked.
• Comparisons to Previous Tech Hypes: Zitron draws direct parallels with hype cycles around crypto and the metaverse.

Notable Quote

"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)

4. Cult-Like Behavior in Silicon Valley

• Monoculture & Ostracization: The valley is run by a monoculture that attacks non-believers while fetishizing "prophets" (e.g., Steve Jobs, Bill Gates), not actual innovation or products.
• Swapping Gurus: Big-name scientists and engineers shuffle between companies, often with little true impact, simply to sustain the narrative and speculative value.
• "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." (08:42)

Memorable Moment

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)

5. Loss of Engineering Culture & Vision

• No More Hypergrowth: Zitron laments the loss of the valley’s original makers and doers—contrasting old-guard innovation (the first iPhone’s cross-disciplinary team) with today’s surface-level talent shuffling.
• "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." (10:06)

6. The Inevitability of Reckoning

• Faith Isn’t Capital: Ritual belief and symbolic optimism cannot pay real financial obligations.

"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)

• Speculative Wealth Has Its Limits: The episode closes with the warning that “speculative wealth can’t pay for everything forever” (10:37), highlighting the unsustainability of the current system.

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Notable Quotes & Moments (With Timestamps)

• "Accountancy voodoo doesn't work on me, Clamuel. I'm better than that." —Ed Zitron (05:01)
• "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." —Ed Zitron (06:55)
• Humorous: "[Silicon Valley is] more like… yeah, I guess this would be the Wicker Man, except I'm not like a sexless British policeman." —Ed Zitron (08:36)
• "It's almost as if the Valley moves around different forms of symbology, hoping that when they're in the right place, the next era of growth will begin." —Ed Zitron (09:44)
• "It's fucking depressing. It's depressing and make no mistake, it will lead Silicon Valley to its ruin." —Ed Zitron (10:17)

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Structure & Flow (Timestamps for Key Segments)

• [02:09] – Start of monologue; reflecting on exclusive OpenAI reporting
• [03:03] – Analysis of OpenAI financial maneuvers
• [05:06] – Introduction of the AI "cargo cult" concept
• [06:34] – Critique of the tech/media monoculture
• [08:42] – Silicon Valley compared directly to cargo cult rituals
• [09:44] – Criticism of talent movement and lacking real innovation
• [10:23] – On the coming reckoning: faith vs. financial reality
• [10:37] – Episode conclusion: speculative wealth’s ultimate limits

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Final Thoughts

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.

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Transcript

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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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