Better Offline – "The Enshittifinancial Crisis: Part Two"

Host: Ed Zitron (Cool Zone Media/iHeartPodcasts)
Release date: January 21, 2026

Episode Overview

In this fiery and insightful episode, Ed Zitron continues his exposé on the financial fabrications and illusions driving the so-called "AI boom." Building from Part One, "The Enshittifinancial Crisis: Part Two" dissects how the tech industry's growth-at-all-costs mindset has mutated into a cycle of reckless financial promises, media complicity, and looming venture capital disaster. Zitron, a tech industry veteran, argues that much of the recent market hype—that has seen billions pour into companies like OpenAI, Anthropic, and various chip manufacturers—is built on non-binding deals, wishful thinking, and flat-out deception.

Key Discussion Points and Insights

1. The Era of Financial Bullshit: Tech's "Growth" is Smoke and Mirrors

• Key Point: Major tech companies are no longer able to sustainably stimulate growth and have resorted to "lying"—obfuscating the truth through technicalities and hopeful language (02:49–04:20).
• Quote: "They will claim we're not lying. We used words to vaguely avoid telling you the truth...it's just bullshit." (02:53, Ed Zitron)

Case Studies of Astounding Hype:

• Oracle & OpenAI's $300B Deal

  • Announced in Sept 2025: Oracle claims a $300B deal with OpenAI, a sum neither company could afford or deliver on, yet stock jumps 30%+. CEO Safra Katz resigns with little media notice (04:38–05:51).
    • "Oracle announced its unfillable, unpayable $300 billion deal with OpenAI...this led to a 30% or more bump in stock price. Analysts...called it momentous." (04:44)

• Nvidia, Samsung, SK Hynix, and the Power of Letters of Intent

  • Nvidia announces a "strategic partnership" to invest up to $100B and build 10GW of data centers with OpenAI—based on a letter of intent, not a binding deal (05:52–08:27).

    • "It was a letter of intent. It said so in the announcement...It turns out the deal didn't exist and everybody fell for it." (08:11)

  • Samsung & SK Hynix

    • Similarly, "strategic" DRAM supply partnerships are announced—again, only letters of intent, yet share prices soar (08:27–11:10).
    • "No mention of OpenAI in any earnings presentation...analysts do not appear to have noticed a lack of revenue from an apparent deal for 40% of the world's RAM." (11:06)

• AMD and the Imaginary $100B AI Windfall

  • AMD announces a multi-year "definitive" agreement to build 6GW of data centers for OpenAI, supposedly generating $100B+ in revenue. In reality, only $279M of performance obligations are recorded in filings (12:39–14:34).
    • "I didn't do well at maths in school, but $279 million seems lower than over $100 billion." (15:23)

2. The Culture of Nonsense: Analyst and Media Complicity

• Key Point: Financial and tech analysts, as well as business journalism, tend to amplify unsubstantiated bullishness, treating PR fluff and "announcements" as fact (13:30–17:40).
• Quote: "Every single stock you see growing because of AI, outside of those selling RAM and GPUs, is actually growing because of something else." (28:37)
• Blunt, pointed frustration at this collective failure: "My frustration you hear in my voice is that I'm a guy with a Google Doc...I appear to be able to do what they're doing because I'm able to fucking read." (11:43)

3. Broadcom, Anthropic, and the Problem with ‘Backlogs’

• Broadcom’s announced $10B order from a "mystery customer" sparks stock hops; later revealed not to be OpenAI, but Anthropic, another money-losing startup (19:32–22:41). Similar non-binding promises, no financial substance.
  • "The 2026 timeline set out by OpenAI for the build out is aggressive, but the startup is also best positioned to raise [the money]... Hogwash. Just complete, complete bollocks." (21:37)
• CEOs dodge questions on earnings calls, echoing the episode’s central theme: empty posturing built on vapor (23:01).

4. “Letter of Intent”: Tech’s Favorite Magic Phrase

• When companies use "letter of intent," "agreement," or "deal" (vs. “contract”), the only rational response is skepticism; these often mean nothing substantial (24:00–25:24).
  • "Whenever a company says letter of intent...stop taking the deal seriously until you get to a specific word: contract." (23:54)

5. The Venture Capital Doom Spiral

• Funding is increasingly flowing not to a wide range of startups, but mainly to capital-hungry giants like OpenAI and Anthropic—who then hand it over to hyperscalers like Microsoft, Google, and Amazon for compute and chips (32:50, 37:16–40:23).
• As AI startups hoover up capital and remain unprofitable, VCs are left holding illiquid, overvalued equity, and have little chance to exit via IPO or acquisition (29:45–36:45).
  • Quote: "The longer it takes for a company to either go public or be acquired, the more likely it is the VC...will have to mark down its value to something more realistic." (30:56)
• Memorable Analogy: The secondary market has turned into a game of "hot potato," with VCs desperate to offload their holdings to anyone willing to take them (40:23).
  • "You're seeing where the problem might be. Eventually someone's going to be... it's like Bomberman. It's not good." (40:34)

6. AI Startups: Burning Billions, No Business Model

• Astonishing capital raises (Cursor, Perplexity, Cohere, Cognition, et al.) for unprofitable companies whose only assets are "prompts, their staff, and whatever they can build around the models they don't control" (37:16–40:23).
• The "doom spiral": As model costs rise, dependence on VC grows, costs for startups mount, and losses deepen for all involved (44:20–48:40).

7. Ed Zitron’s Call to Skepticism and Reckoning

• Analysts, media, and lawmakers must demand contracts and concrete financial details—not press releases or intentions (25:25, 46:40).
• Quote: "It is irresponsible and actively harmful for analysts in the media to continually act as if these deals will actually get paid when you consider the financial conditions of these companies." (25:41)
• Zitron warns the coming burst will be “worse than the dot com bubble bursting by several echelons,” and points out that the real victims will be regular people and institutional investors who were misled by misplaced optimism (28:37, 36:03).

Notable Quotes & Memorable Moments

• On Oracle’s Fictional $300B Deal:
  "Analysts who should ostensibly be able to count, called it momentous and said they were in shock." (05:06)

• Highlighting Absurdity:
  "There are people that study JoJo's Bizarre Adventure that have more economic analysis than any of these fucking people." (10:55)

• Evergreen Guidance:
  "Whenever a company says letter of intent...it's important to immediately stop taking the deal seriously until you get to a specific word: contract. Not agreement or deal or announcement, but contract." (23:54)

• Systemic Problem:
  "Venture capitalists are sitting on piles of immovable equity in companies worth far less than they invested in, and the answer, it appears, is to find somebody else who is able to buy the dead weight. I assume because they're stupid." (42:23)

• On ‘Startup Purgatory’:
  "If you want a good business that people like and it's profitable and...your employees like it, your customers like it, that's a good company, that isn't hell. And if you think that way, you're a psycho, you're an actual nutter." (49:51)

Timestamps for Major Segments

• [02:49] – Episode theme and setup: lying vs. “bullshit" in tech financial reporting
• [04:38] – Oracle’s $300B OpenAI deal, CEO resignation, and media’s credulity
• [05:52] – Nvidia's AI partnership announcement and media/analyst reaction
• [08:27] – Samsung & SK Hynix “letters of intent” and analyst naivete
• [12:39] – AMD’s giant deal announcement and real financials
• [19:32] – Broadcom’s mystery $10B order & subsequent reveal
• [23:54] – Letters of intent vs. contracts: the importance of skepticism
• [29:45] – The shrinking viability of venture capital liquidity and returns
• [37:16] – The ruinous costs of generative AI startups and funding glut
• [40:23] – The rise of secondary markets and "hot potato" equity moves
• [44:20] – The doom spiral of AI startup burn rates and VC dependency
• [49:51] – Critique of "startup purgatory" and Silicon Valley's growth obsession
• [52:34] – Final warning, preview of Part Three

Conclusion & Forward Look

Ed Zitron concludes by sounding the alarm: the current system is unsustainable, and the current “AI boom” is not building an enduring tech future but emptying the coffers of the venture capital system into a few unprofitable giants and their cloud providers. Unless hard questions are asked and answered with transparency, a more vicious repeat of the dot com crash looms—one that could leave investors, workers, and the innovation ecosystem worse off than before.

Stay tuned for Part Three, where Zitron promises to reveal what happens when the doom spiral can no longer be ignored.

Essential Takeaways for New Listeners

• Much of the current AI financial hype is based on PR, not real contracts.
• Tech analysts, major media, and investors have failed to ask hard questions and verify financial reality.
• AI’s capital demands are draining the VC system, locking up investor capital, and risking a catastrophic collapse.
• The real business of AI today is not sustainable, and blind faith in “growth” could hurt millions when the bubble bursts.

For further reading, Ed Zitron recommends checking out his newsletter and the resources linked in the show notes.