3579 - The New Economic Nationalism; AI Bubble Already Bursting? w/ Jostein Hauge, Ed Zitron

Summary

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The Majority Report With Sam Seder

Episode 3579 – The New Economic Nationalism; AI Bubble Already Bursting?

Date: September 11, 2025
Host: Emma Vigeland (in for Sam Seder)
Guests: Dr. Jostein Haga (political economist), Ed Zitron (tech writer & podcaster)

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Episode Overview

This episode features two deep-dive interviews:

1. Jostein Haga discusses the global resurgence of economic nationalism and how industrial policy, particularly in China, is reshaping the U.S. and European responses, with cascading effects for the rest of the world.
2. Ed Zitron offers a critical look at the AI industry, warning that the speculative bubble around AI—especially generative AI—may be on the edge of bursting.

The hosts also provide real-time analysis of breaking news, including the political assassination of right-wing activist Charlie Kirk, gun violence in the U.S., political fallout, and the state of U.S. law enforcement under Trump.

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Key Discussion Points & Insights

1. Breaking News: The Assassination of Charlie Kirk

• Context: Right-wing media figure Charlie Kirk was assassinated during a Utah college event, drawing immediate political responses before any facts emerged about the perpetrator.
• Gun Violence: Vigeland and Bender emphasize the United States’ unique policies on gun access as fundamentally enabling both random and targeted political shootings.
  • “Anybody that's talking about this story outside of the context of the insane amount of guns and the lethal guns that we have in this country... is doing a disservice to the truth.” (Emma Vigeland, 05:39)
• Moral Complexity: While acknowledging Kirk’s harmful rhetoric and activity (anti-trans, pro-January 6th), Vigeland re-centers the conversation on empathy, despite ideological divides.
• Escalating Political Violence: The episode references data showing a doubling of political violence compared to the previous year (Reuters) and notes the lapse of the assault weapons ban as pivotal.
• Media & Political Reactions: Trump immediately blames the “radical left” for rhetoric fueling violence (13:22), while the hosts highlight the lack of evidence and broader trends showing a predominance of right-wing violence in the U.S.
  • “Right wing extremists are responsible for the great majority of extremist related murders. 75%.” (Emma Vigeland, referencing ADL data, 16:02)

Notable Segment

Zoran Montani's Statement [17:39]:
A model for leadership in tragedy—Montani refuses to politicize Kirk’s murder, focusing instead on shared humanity and the epidemic of gun violence:

“It cannot be a question of political agreement or alignment that allows us to mourn. It must be the shared notion of humanity that binds us all.”
—Zoran Montani (17:39)

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2. U.S. Institutional Chaos & the State of the FBI

• Contemporary Corruption and Incompetence: Cash Patel, a former podcaster heading the FBI, tweeted misinformation about the shooting suspect—an emblem of political cronyism and incompetence under Trump.
  • “This is what you get when you get a podcaster as the head of the FBI.” (Emma Vigeland, 02:13)
• Epstein Files & Political Retaliation: Simultaneous suits by former FBI officials over “political retaliation,” as well as Congressional drama over releasing the “Epstein files,” are emblematic of a politicized, dysfunctional law enforcement apparatus.

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3. Interview: Dr. Jostein Haga on Economic Nationalism ([26:43–52:43])

The New Economic Nationalism

• Definition:
  • “Economic nationalism... is the drive to develop the national and domestic economy... prioritizing economic sovereignty and the development of the sovereign state.” (Haga, 28:00)
• The Shift From Neoliberalism:
  • Reaction to the failures of global free trade, the disruptive shock of COVID-19 (exposed supply chain vulnerabilities), and—centrally—the meteoric rise of China as a manufacturing and technological superpower.
  • “Rich countries simply are realizing that free trade aren't benefiting them as much as it used to.” (Haga, 29:01)
• Comparison: U.S., China, European Union
  • China: Long-standing state-led industrial policy, now turning to self-reliance in advanced sectors like semiconductors and clean energy.
  • U.S.: Turn to tariffs, especially under Trump (“sweeping tariffs everywhere”) and to a lesser extent, Biden (“more focus on subsidies and maybe more strategic tariffs”).
    • “There doesn’t seem to be as much of a strong rationale behind Trump’s tariffs. He even puts tariffs on his allies.” (Haga, 32:17)
  • Europe: More cautious, balancing autonomy and “strategic openness,” but beginning to invest more aggressively in military and industrial capacity (e.g. Rearm Europe project).
• U.S.–China “New Cold War”?
  • The “new Cold War” framing oversimplifies; U.S. and China are deeply economically intertwined, unlike the U.S. and USSR.
  • “There are some interesting things to take from this branding... but the U.S. and China are highly economically interdependent.” (Haga, 34:37)
• China’s State Capitalism:
  • “State controls the direction of credit, the direction of investment...” (Haga, 43:55)
  • The U.S. private sector cannot replicate China’s decisive, long-term national planning.
• Impacts on Developing Countries:
  • Powerful countries engaging in economic nationalism “benefits those countries that have deeper government coffers.”
  • Silver lining: China’s rise enables more beneficial deals and infrastructure investment for developing nations, increases “South-South cooperation,” and moves toward a more multipolar world.
  • “The world is complicated... If India and China can resolve their differences... move towards an international order where power is more broadly distributed, that I think is unambiguously good.” (Haga, 51:23)

Notable Quotes

• On Empathy and Political Violence:
  • “The best antidote to this moment right now of fascism, nihilism, casino capitalism, violence, genocide... is empathy.” (Vigeland, 07:21)
• China’s Unexpected Ascent:
  • “The pace at which China has developed entire supply chains domestically... surprised many people.” (Haga, 40:47)
• Developing Countries’ View of China:
  • “79% of countries around the world have a more positive view of China than of the United States... [China focuses] on infrastructure investment... and respects the sovereignty of these countries more so than the U.S. has done.” (Haga, 47:06)

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4. Interview: Ed Zitron on The AI Speculative Bubble ([54:15–75:34])

The AI Bubble: Built on Hype and Unstable Economics

• Oracle/OpenAI Episode as Symptom:
  • Oracle claimed $317 billion in new revenue, $300B of which is from OpenAI—a company “that loses billions of dollars a year and has never had more than $16B in the bank.” (Zitron, 55:01)
  • “They will not have the money [to pay for this compute]; there is literally not enough venture capital to fund this.” (Zitron, 56:51)
• Venture Capital and Business Model Issues:
  • "If OpenAI cannot go public, they turn into a functional Ponzi scheme." (Zitron, 56:51)
  • Even the infrastructure providers (themselves massive, like Microsoft/Amazon) are making little to no profit on AI compute.
• AI Product Disillusionment:
  • Real-world enterprise usages of generative AI are not delivering returns. “95% of generative AI integrations have 0% return on investment.”
    —MIT study (cited by Zitron, 64:46)
  • “These products cannot learn... they do not have human thinking, they are just probabilistic models.” (Zitron, 64:46)
• Tech Bubble Distinct from Uber/Amazon:
  • Unlike Uber, which burnt capital but ultimately created a service with a path to profitability, generative AI is “taking on the burden of classical industrialization without any path out.” (Zitron, 62:08)
  • “It would be like if Uber's cars ran on giraffe blood, and you had to blow them up at the end of every ride.” (Zitron, dramatizing risks, 63:33)
• Wall Street’s AI Frenzy—Nvidia and Oracle:
  • Nvidia is currently “the only company making real profit from this” but the growth expectations are unsustainable (67:34).
  • If Nvidia’s growth slows, the house of cards wobbles; Oracle is at especially high risk because of risky bets on AI income that may never materialize.
• Potential for Collapse:
  • “This will end because OpenAI will probably die. And once that happens everything else falls apart.” (Zitron, 55:01)
  • “This boom has come from building capacity for a revolution that never even started arriving.” (Zitron, 74:06)
  • Retail investors are at risk of being left “holding the bag.”
• Big Tech Will Survive:
  • “None of these big tech companies are dying... there will be no government bailout. There's nothing to bail out.”

AI Reality Check:

• Despite immense investments and hype, generative AI hasn’t found significant real-world applications or revenue. AI adoption (in business) is actually declining, not surging.
• “We still don’t have any tangible examples of anyone doing anything interesting or large-scale disruptive [with generative AI].” (Zitron, 64:46)

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Notable Quotes & Memorable Moments

• “It must be the shared notion of humanity that binds us all... this is not just about the murder of a prominent political figure, but of a wife who grieves her husband, of children who will grow up without a father.”
  —Zoran Montani (17:39), on Kirk’s assassination
• “China is advancing rapidly with artificial intelligence... more and more people are saying that US trade policy against China is backfiring.”
  —Jostein Haga (42:56)
• “This crap don't work. It's not that useful. These people going on podcasts saying it's going to do this... it's fantastical, ridiculous, and ultimately dangerous.”
  —Ed Zitron (59:09)
• “Retail investors... are going to invest heavily in Nvidia, heavily in Oracle and get their asses kicked when this falls apart.”
  —Ed Zitron (73:53)

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Segment Timestamps

• 00:00–02:11: Show introduction, breaking headlines
• 02:11–19:46: Analysis of Charlie Kirk’s assassination, U.S. gun culture, Trump/FBI response, domestic violence statistics
• 19:46–26:43: Zoran Montani on political leadership and gun violence; segment wrap-up
• 26:43–52:43: Dr. Jostein Haga interview (economic nationalism, U.S./China/EU, impacts on developing countries)
• 52:45–54:15: Brief ad break / transition
• 54:15–75:34: Ed Zitron interview (AI bubble, tech economics, business models, and market dynamics)
• 75:34–end: Fun half / listener engagement (calls, live chat), show wrap-up

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Tone and Style

The conversation is irreverent, passionate, and intellectually rigorous, blending sharp political commentary with genuine empathy amid tragedy, and clear-eyed skepticism toward media and business hype.

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Summary

This episode delivers a dual critique of American political culture and global economics:

• It chronicles the human and political costs of America’s failed gun policies and rising political polarization, refusing to sanitize the real-world toll of partisanship and violence.
• The interviews with Jostein Haga and Ed Zitron provide an accessible but rigorous examination of two major trends: the global retreat from neoliberalism (with China’s rise as the key driver) and the likely bursting of the speculative AI bubble, set off by unsustainable economics and tech hype.

Listeners leave better informed about not just breaking news, but about the long-term, systemic forces shaping the world’s economic and technological future.

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Transcript

[Emma Vigeland]

You are listening to a free version of Majority Report with Sam Steater. To support this show and get another 15 minutes of daily program, go to Majority FM please.

[Ed Zitron]

The Majority Report with Sam Cedar.

[Emma Vigeland]

It is Thursday, September 11, 2025. My name is Emma Vigeland in for Sam Cedar and this is the five time award winning Majority Report. We are broadcasting live steps from the industrially ravaged Gowanus Canal in the heartland of America, downtown Brooklyn, usa. On the program today, Jostein Hage, professor at the University of Cambridge, will be with us to talk about the rise of industrial policy being tied to economic nationalism and how China is kind of doing it better. And later in the show, Ed Zitron will be with us to talk about the AI speculative bubble and how it may finally burst. Also on the show, right wing activist Charlie Kirk was killed yesterday, shot from long range while speaking at a Utah college. The suspect is still at large, but that has not stopped Republicans from uniformly blaming Democrats. In response, Trump threatens to collectively punish anyone who has called the Republican opposition Nazis. FBI Director Cash Patel tweeted that they had the suspect and then had to backtrack two hours later. This was the same day that three former FBI officials sued Patel and Pam Bondi over their firings, alleging political retaliation and incompetence. No, I mean it's pretty incompetent to tweet out that you have the suspect. He said subject to we'll talk about this. I mean clown show up there.

[Matt Bender]

I saw that subject thing.

[Emma Vigeland]

I was like, it's suspect, you idiot. This is what you get when you get a podcaster as the head of the FBI. On the same day as this killing, there was another school shooting in Colorado injuring two kids and the shooter died as well. Israel bombs Yemen killing at least 35 people and murders at least five more. Palestinians trying to get aid in Gaza as it rains fire down on Gaza City. Qatar says Netanyahu killed any hope of a hostage release by bombing the mediating country, which was Netanyahu's goal by the way. Inflation rose last month, the biggest monthly increase since January. Trump reportedly begged the South Korean workers whom ICE illegally arrested to please stand and help train US Workers like they were supposed to be doing. And they were like, no thank you. The House passed the National Defense Authorization act with some anti trans add ons and Senate Republicans block Schumer's amendment to try to release the Epstein files. Senate Republicans beating Chuck Schumer. That's day in the life. And lastly, Thomas Massie though, says he's close to having the 218 signatures needed to force a flow floor vote on releasing the Epstein files. All this and more on today's Majority Report. Welcome to the show, everybody. Obviously, yesterday, towards the end of the show, we were getting this breaking news about Charlie Kirk and we signed off. We didn't want to speculate on air, but now we have the news and once again, Sam is out. So, you know, these major stories, forgive me if I stumble, still learning on the fly in this industry, in this field, but I'll try to kind of give you my thoughts in the best way I can about yesterday. So basically yesterday, right wing activist, podcaster, media personality, founder of the conservative group Turning Point usa, Charlie Kirk was shot dead at an event at Utah Valley University. The video is horrific, gruesome. This shooter fired a single shot from long range and is still at large. I think, like I saw that the shooter was further away than even the assassination attempt on Donald Trump.

[Jostein Haga]

What did they.

[Matt Bender]

Last I heard was 200 yards.

[Emma Vigeland]

Yeah, I mean, these are weapons of war.

[Matt Bender]

And you know, I am curious what your position on this is, Brian, but, you know, 200 yards is a long shot, but these guns with scopes are made to do stuff like that.

[Emma Vigeland]

Yeah, yeah.

[Brandon]

It's easy to learn, I guess.

[Jostein Haga]

I was never very good.

[Emma Vigeland]

I want that repeated. I was never very good.

[Matt Bender]

I have deer hunted before as a teenager as not exactly Davy Crockett. Only practicing every once in a while with my dad. 176 yards, I think is when where I hit a deer from. And that was probably the upper limit of where I'd shoot from. But that was a moving target. Like guns do. This, this is.

[Emma Vigeland]

And that's the story here. And I want to get to that because anybody that's talking about this story outside of the context of the insane amount of guns and the lethal guns that we have in this country is not doing a. Is doing a disservice to the truth, the truth behind this story, because there is mental illness everywhere, although in other countries they have universal health care to treat mental illness and we don't. But there are not guns like this everywhere in every country for people to commit these heinous acts. And just to back up for a sec, Charlie was not a person who did good things for the world in his professional career. And I'm not going to police the way that anyone chooses to react to this. Obviously, he has said horrific things about trans people, Palestinians, black people, among other groups. He, you know, was a part of busing people to January 6th and was a Major Trump supporter. But, you know, he got started at TPUSA at 18. And I'm not saying it was a good chance that he would have had some redemption arc or changed his tune. But as people on the left, I think everybody deserves that chance. And that's why we're against things like capital punishment, especially in the civilian context. I think it's obviously a very different matter when we're talking about war criminals. This is a matter of political speech.

[Matt Bender]

But even with criminals, you would take them to the Hague, right?

[Emma Vigeland]

And it is right. There should be a process. And it's absolutely insane that we live in a country like this where people have such easy access to the weaponry that gives them the ability to commit political assassinations like this. And Kirk once said, we saw this clip that empathy was a made up New Age term at one point. And I disagree. And I want that to kind of come through, I guess, in the coverage or to try to get people to think of it in that way, because I do think that the best antidote to this moment right now of fascism, nihilism, casino capitalism, violence, genocide that has consumed the world just in terms of what you can, how you orient yourself internally. Like, we're so desensitized by the Internet, separated by screens, and we're lacking connection. But it was horrific to see Charlie Kirk, a person who we are obviously very familiar with, and covering him, have blood pouring out of his neck like that. Kirk was 31. That's how old I am. It's hard not to think of his children and his wife. That was really what I thought of initially. And so outside of that, the policies that the Republican Party and Kirk advocated for are very much why we are in this situation today. Reuters reports that acts of political violence are double what they were in the first six months of last year. And I am not shocked by that. We also know that violent incidents like this, well, mass shootings in particular, although this was a targeted assassination, but similar weaponry dramatically, exponentially increased after the Republicans let the assault weapons ban expire in 2004. And nobody should have access to weapons like this to do this kind of act. It's horrible.

[Matt Bender]

And it's people who are pointing out that Charlie Kirk used his platform to say that, I'm sorry, it's just an unfortunate byproduct that people have to be gunned down by gun violence. The exact same time that he was being pronounced dead, kids were being were 18 kids huddled in one house next to a school in Colorado after two kids were shot during lunchtime. That's just the price we have to pay that stuff. We don't have video to that because that's not covered for. There's no like camera shooting high school lunches for, you know, content later. Which is why we have this horrific image of Charlie Kirk dying. But this, that what happened to Charlie Kirk happens in schools because of the world that is created by people who have no interest in and just sit to say no to any sort of sensible gun control. This does not happen in other countries.

[Emma Vigeland]

Exactly right. And then we'll just turn to the insanity in the White House for a second because as I mentioned in headlines, we have a podcaster running the FBI. He tweeted this out like, I mean the level of incompetence. He's being sued by former employees for political retaliatory firings. But the lawsuit paints a picture of just like this is a total clown show the likes of which we basically have never seen in the history of the FBI. But also Bondi is in this lawsuit in the Attorney General's office because their job is just to respond to the whims of Donald Trump essentially. And this guy got put in place because he was podcasting about Jeffrey Epstein and is now participating in the Epstein cover up. I mean his FBI was found by Wired to have cut out minutes of the footage that they said was unedited when they released of Epstein cell. Which like also the angle of it isn't necessarily clear that it was but the metadata, they were so sloppy that they left it there for Wired to uncover it and showed like they put this in Adobe and cut it out. This is Cash Patel's FBI for you. This is the, the agency that's supposed to be finding this killer and he's still at large at the time of us recording the show. So Last night at 6:21pm he tweeted the subject. Okay, I'm, I think he means suspect. But the subject for the horrific shooting today that took the life drunk like that took the life of Charlie Kirk is now in custody. Thank you to the local and state authorities in Utah for your partnership with at FBI. We will provide updates when able to. Here's the Update less than 2 hours later. Go to the next tweet. Okay, here it is. The subject in custody has been released after an interrogation by law enforcement. Our investigation continues and we will continue to release information in interest of transparency. They didn't even have the guy. Why are you tweeting that out? And they still don't. So there's been some information released about what was written on the ammunition to the Wall Street Journal from this FBI. I'm not going to run with that yet because we don't know the identity of the shooter. And some of the messages could be written for a variety of different reasons. So let's, we'll hold off on that here. But you know who's not holding off on making political conclusions immediately? You'll be shocked. Donald Trump delivering remarks from the White House. Our president. This is what he has to say about what happened to Charlie. Kirk immediately blaming people without any evidence about who actually committed this act.

[Donald Trump]

It's a long past time for all Americans and the media to confront the fact that violence and murder are the tragic consequence of demonizing those with whom you disagree day after day, year after year, in the most hateful and despicable way possible. For years, those on the radical left have compared wonderful Americans like Charlie to Nazis and the world's worst mass murderers and criminals. This kind of rhetoric is directly responsible for the terrorism that we're seeing in our country today, and it must stop right now. My administration will find each and every one of those who contributed to this atrocity and to other political violence, including the organizations that fund it and support it, as well as those who go after our judges, law enforcement officials and everyone else who brings order to our country. From the attack on my life in Butler, Pennsylvania last year, which killed a husband and father, to the attacks on ICE agents, to the vicious murder of a health care executive in the streets of New York, to the shooting of House Majority Leader Steve Scalise and three others.

[Emma Vigeland]

That was a long time ago.

[Donald Trump]

Radical political violence has hurt too many innocent people.

[Emma Vigeland]

Okay.

[Donald Trump]

And taken too many lives.

[Emma Vigeland]

So he's immediately blaming the left.

[Matt Bender]

Two Minnesota lawmakers were assassinated in Brooklyn.

[Emma Vigeland]

Park and Trump said nothing. And based on the Mike Lee, the Republican senator was joking about it, laughing about it, and now he's like clutching his pearls about this.

[Matt Bender]

Republican partisans literally are running with. It was a Tim Walls sleeper cell. They're lunatics. We're dealing with lunatics.

[Emma Vigeland]

And there is no evidence. He basically listed all of the incidents that I can remember of it being, according to him, this left wing extremism. Again, we don't have evidence about this here because all empirical data, and this is, I know this is the anti intellectual administration on steroids, but there are actually academic studies about this and right wing violence. And right wing extremism is infinitely more responsible for violence. Here we go. Thank you, Matt. This is the adl. I know, but this is so I mean, this is 20, but it's not about anti Semitism. Right. This is 2022, prior to October 7th, when they decided like antisemitism. Well, they'd always felt that way. But this was a.

[Matt Bender]

Again, it's not an anti Semitism, so you can trust somewhat what they say.

[Emma Vigeland]

Exactly. But domestic extremist related killings in the US over the past, like from 2013 to 2022, right wing extremists are responsible for the great majority of extremist related murders. 75%.

[Matt Bender]

I mean, if it was going by the ADL's bias, you would see the domestic Islamist extremism bumped up and it's only at 20% compared to right wing extremism.

[Emma Vigeland]

And my guess is that's, yeah, probably for the adl, they cast a wide net on the Islamic part. But there's also just countless studies. I mean, this is well established. I mean, Don Jr. This like his son was tweeting out my Halloween costume will be a hammer. And the Pelosi stuff said that that.

[Matt Bender]

Guy should be bailed out.

[Emma Vigeland]

Right. The guy who attacked Pelosi or tried to attack Pelosi and hit her elderly husband with a hammer in his home.

[Matt Bender]

Ended his brain, cognitive brain functioning for the rest of his life, as far as I've heard.

[Emma Vigeland]

Really?

[Matt Bender]

I think he's not recovered. Maybe I'm wrong about that.

[Emma Vigeland]

I mean, that's horrible. Yeah.

[Matt Bender]

And Charlie Crook was saying, bail that guy out.

[Emma Vigeland]

Right. It's all, all horrendous. We are in a very dark moment, and one of the only people that gives us all hope here is Zoran Montani. And so this is his. These were his remarks last night upon finding about finding out about Charlie Kirk being killed. And this is the blueprint, folks. So here's Zoran speaking last night.

[Zoran Montani]

It is a real honor to be in a room so full of love and solidarity. And I have much of those very feelings and emotions and commitments that I want to share with all of you. But before I begin, I do want to take a moment to address the horrific political assassination that just occurred today in Utah. Charlie Kirk is dead. Yet another victim of gun violence. In a nation where what should be a rarity has turned into a plague, it cannot be a question of political agreement or alignment that allows us to mourn. It must be the shared notion of humanity that binds us all. And that, that humanity.

[Emma Vigeland]

It reminds us.

[Zoran Montani]

That this news is not just that of the murder of a prominent political figure, but also the news of a wife who grieves her husband of a one year old and a three year old who will grow up without a father. And the fact that there are families feeling that same anguish right now in Colorado as they wait for their children, also shot at a certain to emerge from surgery is the same anguish that too many across our city and our nation reckon with in silence every day as we contend with an epidemic of suffering, we can and we must do more to challenge a status quo that has allowed this pain to become routine, that has allowed the question of which mass shooting to respond to the news of one that is shared. And it is incumbent upon all of us to repair the tears in our shared civic fabric and to make our nation one that is worthy of its greatest ideals.

[Emma Vigeland]

So that's how you actually are a leader. I thought the juxtaposition of that reaction with Trump's kind of says it all right. Yep. What more to add, but hopefully we see more. Zoron's a special politician, but this is the kind of leadership we need in the Democratic Party and in the country. We're not there yet, but I believe we can be. In a moment we'll be talking about economic nationalism and industrialization with Jostein Haga. But first, a word from some of our sponsors. You know, I'm the kind of person that likes to be incredibly prepared, like planning for my honeymoon, for example. The Google spreadsheet was a little bit psychotic, but it makes me feel like I have a sense of control. So I love that. You know, our sponsor, Trusting Will provides that for people. For things that are a little bit more serious than planning your honeymoon or your vacation, to get most out of your life, you have to be prepared. And a lot of us don't realize that a will doesn't cover everything. When it comes to estate planning, Trusting Will can help ensure that your loved ones are covered. When it comes to things like medical decisions and power of attorney, go to trustandwill.com majority to get 20% off their simple secure an expert backed estate planning services. Now, I know Sam has used this. He's got kids. He's got to think about it. I'm thinking about, you know, eventually that happening and nobody wants to think about, you know, why I need a will or anything like that. But you've got to because it leaves a mess sometimes for your family, your friends. And it can be very difficult or not friends, but your family and people in your life. Trusting Will is really simple and easy and straightforward. You can just go to the website and figure it out there. It doesn't have to be this overwhelming process. It gives you peace of mind so that you know that your assets and your wishes are secure and you have that locked down. Their easy to use website is easy and simple to navigate. All of your information and documents are securely stored with bank level encryption. Each Will or Trust is state specific, legally valid and customized to your needs. An overall rating of Excellent and thousands of five star reviews on trustpilot. Make it so that Trust and Will is the kind of company that you can know and get behind. It's used by hundreds of thousands of families and counting. We cannot control everything, but Trust and Will can help you take control of protecting your family's Future. Go to trustandwill.com Majority and get 20% off. That's 20% [e-mail] Majority link below in the video and YouTube description, episode description and blog. You get 20% off@trustandwill dot com Majority and lastly, current affairs, one of my favorite magazines is has an offer right now for Majority Report listeners and subscribers. If you like deep, thoughtful, progressive analysis, which you know, we love our audience here. You do. You guys are smart. Love sucking up to you as well. And you'll get smarter if you read Current Affairs. You'll love the print or digital edition of Current affairs magazine. Current affairs combines intelligent commentary, biting political satire and gorgeous artwork to produce one of the country's most elegant and informative magazines. And it's all ad free. I mean, I love some of my favorite publications, including Current affairs have artwork in part because like art is beautiful and a form of resistance too. And it's the reason why people on the left are always the best artists. But it's just, it's kind of like an old school lovely way to about magazines that I really appreciate. Also, it's all ad free. Current affairs is a fantastic complement to our work here at the Majority Report, delivering hard hitting, totally independent and entertaining coverage of the most important political, social and economic issues of our time. Nathan Robinson has been one of the best people in our space for a really, really long time, I trust.

[Matt Bender]

Yeah, but he gets too much attention. Nathan gets too much attention. I want to shout out Alex Skopic who has some really great article, including the Nazis on Aisle nine, which came out last fall, which I talked to him about on Left Reckoning. But yeah, you can say what you want about Nathan too.

[Emma Vigeland]

All right, well how about Nathan catching astray in his own ad read? How about Lex Sid, who published one of my most circulated articles among people about the media, loves the experts until it's time to count Gaza's dead. I have not seen yet since then a better piece explaining how there are hundreds of thousands dead in Gaza unaccounted for. And that's incredibly important work to be reminding people of that. Use code MAJORITYREPORT for 30% off on a year of any subscription of your Choice. Go to CurrentAffairs.orgSubscribe and enter the code MajorityReport one word at checkout. The offer expires October 31st. Again, that's got CurrentAffairs.orgSubscribe and Enter the code MajorityReport at checkout for 30% off for a year on any subscription of your choice. The offer expires October 31st. All right, quick break and when we come back, we'll be talking to Jostein Haga. Sam we are back and we are joined now by Jostein Haga, political economist, assistant professor in development studies at the University of Cambridge, Cambridge, publisher of the Global Currents Newsletter. And his latest paper is entitled the New Economic Industrial Policy and National Security in the United States, China and the European Union. Jostein, thanks so much for coming on the show.

[Jostein Haga]

Thank you for having me on the show. It's a pleasure to be here.

[Emma Vigeland]

Of course. Your paper, you co wrote it with two other people. I don't have their names written down. If you want to plug, you can say that now.

[Jostein Haga]

Yeah, of course. The paper the New Economic Nationalism, was just published in a journal called Geoforum. And my two co authors, two of my PhD students, Bruno Hatzager and Alessandro Julian Herman, have also contributed to the paper.

[Emma Vigeland]

It's great. And I've been meaning to kind of send it around to other nerdy people because it explains this moment and this change in honestly our economic landscape in a way that I haven't seen articulated yet. So you look at These kind of three powerful large economies in your analysis, the U.S. china and the European Union, and how all three are implementing their kind of industrial policies by using national security as kind of the framework for it. But before we get to that, can you define the term economic nationalism for us and what that means, what the new economic nationalism might mean in 2025?

[Jostein Haga]

Sure. So by economic nationalism, we broadly talk about the drive to develop the national and domestic economy, the drive to formulate policies that prioritizes securing domestic industries, that prioritizes national development to some extent at the expense of international cooperation. So it's all about domestic economic development and prioritizing economic sovereignty and the development of the sovereign state.

[Emma Vigeland]

And why is this a significant shift? We Know, neoliberalism, that era kind of being ushered in and dominating the global economy for decades. Where do you see that kind of beginning to turn?

[Jostein Haga]

So obviously, the world economy has been organized around nation states seeking to develop their national economies for decades and centuries. And, you know, we had a period of neoliberalism where this belief in the liberal international order emerged and the idea that free trade and globalization would lift all boats. But now there's been a bit of a pushback against that. And this is due to many factors. You know, one is, as I said, this. This liberal international order and this idea of free trade lifting almost has to some degree crumbled. Rich countries simply are realizing that free trade aren't benefiting them as much as it used to. So they're seeking to some degree to change how things work internationally. The pandemic was also another important driver. It kind of reminded a lot of countries of the dangers of being very dependent on a lot of imports. And it drove a lot of countries to reshore production, to try and produce more things domestically and become a bit more strategically autonomous. And another one, and probably the most important one, is the rise of China and the global economy. I don't think it's actually an exaggeration to say that the rise of China as a global superpower is the most significant economic and political event of this century. And this obviously relates to this, this idea of rich countries not believing in free trade that much. But the rise of China, and also China, US Competition is very much at the center of this new wave of economic nationalism.

[Emma Vigeland]

Right. And that's the most, I think, central part of our conversation. And I want to get to that. But first, let's just. I would love to stay with, like, kind of this, the failures of neoliberalism for just a second, because your paper talks a lot. And you just mentioned how the COVID 19 pandemic was like this accelerant of all of this. I mean, in the United States we had naturally occurring inflation, and I think across the world too. Of course the world did, but it was due to these supply shocks that were caused because of the pandemic and these bottlenecks and these really complicated supply lines causing major issues for the rest of the world. And it seems like we're still dealing with the implications of how the pandemic affected our political systems. But this one is. It's quite rapid, really, how quickly, you know, that kind of disruption shifted the conversation. And here in the United States, it's both parties that are like, having a more protectionist or on shoring bent to their economic agenda. Trump's is completely counterproductive with tariffs, but it still is analyzing the same problem that you're describing or reacting to it.

[Jostein Haga]

Yes, certainly. What's, you know, it's very fascinating to look at what's happening in the United States in the past 10 years or so. And I would say this turn towards more protectionism, towards a heavier hand of the state, towards a more active industrial policy started in the first Trump administration in 2016, 17, 18, with Trump's tariffs on China. In particular. It's continued during the Biden administration in somewhat of a different form. More focus on subsidies and maybe more strategic tariffs. Biden also imposed particularly tariffs on imported imported energy products from China. And now, of course, we're seeing it with Trump 2.0 with sweeping tariffs everywhere. And a difference here, I would say, in terms of Biden's, in terms of Trump's pursuit of national security and industrial policy compared to Biden's pursuit, is that there doesn't seem to be as much of a strong rationale behind Trump's tariffs. He even puts tariffs on his allies, supposedly. You know, what did Canada ever do. Do to the United States?

[Emma Vigeland]

They recognized the Palestinian state, so. And fentanyl, I guess.

[Jostein Haga]

And even, you know, recently India was very. People were shocked that India was slashed with such high tariffs as well. So. So we're seeing somewhat, you know, of a mayhem in the, in the scene of international trade right now, which is with these sweeping tariffs and we don't really know where it's going.

[Emma Vigeland]

I've heard some other analysis of like, US China competition being so central to this as like a new Cold War. A lot of people will describe it in that way. And the usage of national security as like a driver for competition is, I guess, very reminiscent of the Cold War. But kind of your analysis bringing the European Union into this is. It's much more multifaceted. Can you explain why you think that is a more accurate picture of the dynamic here than a little bit more of the retreading Cold War analysis?

[Jostein Haga]

Yeah, I think there's some accuracy and I think there are interesting things to take from this branding of the US China competition as, as a new Cold War. Obviously, there are some differences here. First, let's talk about the US And China in that the US And China are highly economically independent of one another. So there is already strong economic relationship here that binds the two countries together in a way that's different from the original Cold War between the Soviet Union and the United States. So I don't think when we had the Cold War, there was a lot of fear that this would develop into full fledged war between the Soviet Union and the United States. And because of the strong economic relationship now between the US And China, I don't think we need to fear that just yet. But obviously there are tensions between the two superpowers. Europe is interesting because they're stuck a bit in the middle. They're a close ally of the United States, yet they're also seeking to decouple a little bit from Trump. For a while now they signed a trade agreement with, with the US that's very important. So they are still trying to find their feet between China and the US Ideologically and also historically they're more tied to the United States. However, they seem more open to building relationship with China. At the same time when they are seeing what's happening between the US And China. And you know, a lot of European countries kind of being the third wheel here in this technological race and competition, they are also trying now to put money into industrial policy and national security. For a long time the European Union had been a bit more careful and hadn't intervened as much or put in subsidies as heavily. But with, for example, this Rearm Europe project, a huge, a huge bill that essentially aims to put lots of money into military spending in Europe is a sign that also Europe is in. The European Union is serious about, about national security and industrial policy.

[Emma Vigeland]

You mentioned that the Europe or the EU is trying to kind of meet in the middle of some of these different tactics. The United States is being hawkish. What a shock. China is really focused on building up, industrializing and has been for nearly like two decades really. And they're well ahead. So they're kind of an example of less harsh hawkishness and more investment internally. And then you kind of have the EU in a bit of a middle space. Just explain all three of those examples and why they're distinct from one another in terms of their approach.

[Jostein Haga]

So it's, I think it's easiest to start with China because the role of the state has been central to China for, for many decades. The role of state in economic development has been central in China for many decades. So you could argue that industrial policy has, you know, and the state owned enterprises and subsidies and active trade policy and so on has been a part of China's strategy for a long time. And in the United States we started seeing, as I mentioned, the role of the state and industrial policy becoming more Central in 2016, focusing on subsidies and trade policy. But we say in the paper what characterizes the United States is especially this hawkish approach to trade policy. And right now we're really seeing the pinnacle of this, and this is the tariffs we're seeing by Trump are really unprecedented in terms of the aggressiveness and kind of as a foreign policy tool in negotiations, simply more than kind of.

[Emma Vigeland]

Economic planning policy that's very economic national. It's very much economic nationalism, as you describe. Yeah, I hadn't thought of it that way. Go on.

[Jostein Haga]

Yeah, yeah. And you know, in the European Union, what we find, based on our reading of government documents, is that they've tried for years to balance having some autonomy with also being strategically open to both the United States and China and the rest of the world. But now we are seeing more emphasis on trying to be economically competitive, trying to put more money into the military. But in the European Union, and obviously it's a, you know, there are some caveats here because it's a collection of nation states that have autonomy within the European Union. European Union, we need to keep in mind that. But we aren't seeing as clear of a sort of economic nationalist strategy in the European Union as in the United States.

[Emma Vigeland]

And the economic nationalism of the. Or, sorry, let me backtrack for a second. The China piece that you mentioned there. How much of this is a belated reaction to China with an understanding that China has gotten so far ahead of the rest of the world as not just being, as it has been derisively called previously, the factory of the world, but as a major economic, multifaceted superpower, basically at this point that has like an industrial kind of base that isn't just about, you know, exports and making money that way to the rest of the world, but they have developed the capacity internally to be much more self reliant than the United States.

[Jostein Haga]

Yes, yes. And I think this has surprised many people the, the pace at which China has developed sort of entire supply chains domestically. Yeah. So, you know, China is still exporting a lot and China still dominates international trade to a degree. And I think it's, you know, the picture of China's quote, unquote, dominance is nuanced. We see dominance in a lot of manufacturing industries. We see China's dominance in the international trade of goods. At the same time, it's still Chinese workers and firms in US Supply chains and not the other way around. So the United States still has structural power in a lot of industries and they have the companies with the largest market capitalization in the world, et CETERA So the picture is nuanced here, but certainly China is now for sure dominating the manufacturer of clean energy devices like electric vehicles, wind turbines and solar panel. There's no question that they're the world leader there. They're starting to develop entire domestic supply chains in semiconductors, arguably the world's most technologically advanced industry. And we're also seeing that China is advancing rapidly with artificial intelligence. What's also very interesting about China's rise is that more and more people are saying that US Trade policy against China is backfiring because China realized and started realizing that US Actively, you know, a lot of US Economic policy right now very broadly is about countering China and also preventing. So they started actively focusing more on trying to develop capabilities across all across supply chains, both vertically and horizontally within China. So they really have had this drive to develop technological capabilities across all industries for some time and it's proving to be quite successful.

[Emma Vigeland]

Can you speak about China as a country? That is when we talk about here in the United States, like the CHIPS act, which was an industrialization bill, basically was the acronym is is about hawkishness with China. And that's how you can get both parties on board. I mean, it's a very bipartisan kind of way that we. That competition with China is viewed here in this country. And you'll hear every Republican refer to China as the Chinese Communist Party over and over again. But in fact their kind of strategy is one under Xi Jinping of state capitalism. Can you explain that as an economic concept and how China kind of exemplifies it through the structure of their government?

[Jostein Haga]

Yeah, yeah. So China, you know, China has embraced many elements of capitalist markets. They have a huge and thriving private sector, there is wage labor there. They opened up to international trade and international capital flows in the 80s 90s. So in that sense they embrace many aspects of capitalism. But you know, the, as you said, U. S politicians refer to as a communist country, etc. So ideologically China is different. And it's important to realize while China, you know, has embraces these capitalist elements, still has very much roots in socialist and communist ideology. And the political party, the ruling party in China, the Chinese Communist Party, is very proud of this. And in practice we see this especially when it comes to state control over the economy. And I think this is a very crucial point because this is something that separates China from capitalist western countries in that the state controls the direction of investment, the direction of Credit. In the U.S. for example, you could argue that the private sector controls investment, the financial sector, etc. Private banks are very, very important in the US but in China, whereas you have a private sector, the state is really in control over the direction of credit, the direction of investment. They oversee everything. And this is also why you can have this kind of aggressive, tactical long term industrial policy, for example, in clean energy. This would not be possible in a country where the top 1% of private sector and financial firms control the means of production. So state capitalism is a fitting label of China. And, and the economy is organized in a way that's quite different in that sense from a lot of Western capitalist countries.

[Emma Vigeland]

And what also strikes me, struck me about this kind of, and you speak about this in the paper, economic nationalism also as like an ideological, ideologically consistent with neo mercantilism and how there was that, that it's a viewpoint that also was reflected kind of in some anti colonial movements, like the Pan African movement for example. And to see now like major economic powerhouse countries adopting some of that framework, it's fascinating because this also isn't going to exist in a vacuum, this strategy. This will have an impact on developing countries. So I guess as we kind of wrap up here, what will that impact be and what can we anticipate for countries that aren't big major powerhouses, obviously like the us, China or the eu?

[Jostein Haga]

Yeah. So this question, the impact of this new economic nationalism on the global economy and on developing countries is in my view the most important aspect of this paper and one of the most important questions we should discuss. So on the one hand, when we see these major economic powers implement nationalist policies, this to some degree has detrimental impact on developing countries. Why is this? Well, when you see countries with huge financial muscles or the world generally moving towards more economic nationalism, this obviously benefits those countries that have deeper government coffers more money to spend on industrial policy. Essentially, if it's one big competition, those with more money and those ahead in the game will do, you know, are the ones who will do the best. And recent research also confirms that, you know, this return of national security and industrial policy is mainly seen in the world's wealthiest countries. But there are, there is a silver lining to this and there are certain benefits that I think this, this new, this new world order brings to developing countries and that revolves around the rise of China. So China is a country that has emerged from the periphery. It's a huge global power now. But a lot of research suggests that the relationship that China is building with other developing countries is more beneficial for those developing countries. There's obviously a lot of nuance here. And China has different strategies in different countries. But I looked at a really fascinating report published by a Danish NGO called the alliance of Democracies, and it found that 79% of countries around the world have a more positive view of China than of the United States. And Most of these 79% of countries are developing countries. Why do most developing countries in the world like China more than the United States? Well, a lot of it has to do with the way China invests in these countries. They focus a lot on infrastructure investment, manufacturing investment. And China also respects the sovereignty of these countries more so than historically the United States has done. So, you know, in some ways, the rise of China means stronger south south cooperation and a larger voice for the global south in the international order. To the degree we view China as part of this block of developing countries, which, for example, if we think about China being part of brics, it is.

[Emma Vigeland]

Right. And that is, I guess, where I will end with you or a final question here. I mean, we also saw the images coming out of, of Modi and Putin and Xi kind of embracing, and it felt like a very clear signal to the United States like, you want to be hawks. You want to isolate yourself. Here you go. What was your reaction to that show of kind of unity in the face of Trump?

[Jostein Haga]

It's, it's, you know, I would say ambivalent, ambivalence, because to some degree, you know, I don't. If we, you know, if you see Putin and Modi and Xi coming together, China's diplomatic relationships in the world is not unambiguously positive. I do not support Putin's, Putin's actions in Ukraine. And to the degree that China, although China tries to have a, you know, tries to not explicitly support Russia, there is implicit support there.

[Emma Vigeland]

Yeah.

[Jostein Haga]

And that's not completely unproblematic. But at the same time, I think it's, you know, okay, we could criticize China for supporting, supporting Putin, but at the same time, we're seeing, you know, Trump.

[Emma Vigeland]

You know, we have no credibility. We are, we're funding a genocide. We have no credibility on the world stage on this matter.

[Jostein Haga]

Yeah, that's the thing, you know, to what degree should the United States not lecture China on this, given that, you know, they're funding and directly funding and supporting a genocide in Gaza? So the world is complicated. If we, you know, seeing more international collaboration between China and India, the two world's most populous countries, and within those countries, a lot of development still needs to occur. That is something that I love to see and, you know, if India and China can, can resolve the differences and come closer to, and if we can move towards an international order where power is more broadly distributed and where developing countries are represented more, that I think is unambiguously good. To move towards a more multipolar world order and one where poorer countries get more power is something that I think is a direction that we should celebrate.

[Emma Vigeland]

Completely agree. Yo. Stein Haga, political economist, assistant professor in Development Studies at the University of Cambridge, publisher of the Global Currents newsletter. We'll put a link to your newsletter and your latest paper in the podcast and YouTube descriptions wherever people are listening to or watching this and at Majority fm. Thanks so much for your time today. I really appreciate it.

[Jostein Haga]

Thank you so much for having me on.

[Emma Vigeland]

Of course. All right, folks, quick break and when we come back, we're going to be talking to Ed Zitron of the Better Offline podcast and the where's your Ed At? Newsletter on Substack about the AI bubble and when's it going to burst and how is it going to look? Sam, we are back and we are joined now by Ed Zitron, host of the Better Offline podcast and publisher of the where's your Ed at On Substack. Ed, thanks so much for coming on the show today.

[Ed Zitron]

Sorry, Ghost, I don't. Sorry everyone makes this mistake.

[Emma Vigeland]

It's okay, it's okay. I mean, our newsletter is on Ghost too, right? And I, I never even remember. But yes, that's the one that isn't, I guess, funded by a bunch of.

[Ed Zitron]

Isn't recommending things with swash stickers.

[Emma Vigeland]

No, no. Yeah, that's, that's helpful. Ed, thank you so much for coming on the show.

[Ed Zitron]

Of course.

[Emma Vigeland]

So I know you're asked this every single day, so I won't. I will ask this question, but then amend it. You're probably asked every day, when is this damn AI bubble going to burst? So my question to you is not when, but how is it going to burst?

[Ed Zitron]

So thanks to Oracle, we are now set up for a very obvious collapse which is so yesterday it was announced that Oracle day before yesterday during their earnings where they missed on everything, they said they had $317 billion of new new customer revenue incoming over the next from F financial year 2027. Turned out that $300 billion of that is from OpenAI, a company that loses billions of dollars a year and has never had more than $16 billion in the bank. So Oracle's stock jumped 40 and a bunch of others jump with him. So just to Be clear. Also, it came out from the Financial Times a couple weeks ago that OpenAI's non profit conversion is going to be delayed until next year because Microsoft is not really moving on the negotiations. So it's a very complex way of saying that this will end because OpenAI will probably die. And no one likes this story, no one wants to talk to me about it too much in the tech media right now because when you really think about it, everything lies on top of OpenAI. They are the most, they're the largest compute client in the world. They're $10 billion of Microsoft's Azure cloud revenue. They represent pretty much all paying users of generative AI. 20 million paying customers, 5 million business customers though I add 500000 of those are from the Cal State University. 50 million annual contracts, about 2.50 a user losing a bunch of money just like OpenAI tends to. In any case, OpenAI does not have the money to pay this contract. They're meant to start paying Oracle about 20, sorry, $30 billion in 2027. These servers are not even in like the data centers, there's only an eighth of them built. So Oracle neither has the capacity ready to serve the revenue and OpenAI doesn't have the money. And the thing that no one seems to want to say is where the hell are they getting it from?

[Emma Vigeland]

So right.

[Ed Zitron]

And the answer is there is literally not enough venture capital to fund this. Venture capital will run out all that the dry powder available venture capital will run out in six quarters at this current rate. And Open AI to do anything close to what they need to do will need more than is currently available. Even if they move into private credit it will not be sufficient. So the answer is there's a good chance that OpenAI just does not convert to a for profit entity. And if they don't, by the end of the year their current funding round from SoftBank gets cut in half. If they can't convert at all they will die because they cannot go public. And other at that point if OpenAI cannot go public they turn into a functional Ponzi scheme where the only way for any investor to cash out is for other investors to enter the system. And this is not an accusation of fraud or anything, that's just how it will work if they can't convert because they are this weird non profit hybrid. So yeah, I think sometime in the next year or two OpenAI simply falls over and dies of and gets pecked to death by carrion birds. And once that happens everything else falls apart. Because OpenAI represents pretty much all the revenue they make more than everyone else combined. There's probably $40 billion of active revenue in generative AI, which is nothing. And OpenAI represents I think like a third or half of that. They represent all of the compute. They're most of Microsoft's compute, they're going to be most of Oracle's revenue. If any of that was true, OpenAI disappears, there's not that much business here. It's a fugazi. It's all, it's all made up. It's genuinely disgusting.

[Emma Vigeland]

Yes. And that is. But, but all of this fugazi kind of runaround stuff is just there to create more investment. I mean, that's what's been agonizing about this whole discussion is, is that the so much of the AI discussion, even the, you know, the guys going on podcasts to talk about how it's going to take over the world and be like robots. That's how great our product is. It could take over the world. Anyone want to invest? It's all been so much billions and billions of money that's gone into this and basically wasted because it could disappear, as you say, overnight. Because they cannot create right now a model that is profitable.

[Ed Zitron]

Well, it's not just the lack of profitability, it's not just the fact that these companies in general don't make much money. I mean, perplexity AI startups, search engine type company that has raised $300 million in the last two months, two separate rounds, they spent over 140% of their revenue last year just on compute. These companies do not function in the way that regular startups do. And on an operational level, the whole point of cloud software, the whole reason that tech has its valuations is that these are asset light businesses where the biggest costs are salespeople and customer service generally. Infrastructure has not been a problem. It is insane. But tech has now taken on the burden of classical industrialization without any path out. And what's crazy is I did an article called why Everybody's Losing Money on AI last week. It's not clear that even the people providing compute, as in the people building the data centers with the GPUs in them, are making any profit. And if they are, it's going to take years. But on top of all of this, this crap don't work. This, it doesn't do that much. It's not that useful. These people going on podcasts and saying, oh, it's going to do this. Oh China. Not to insult previous guests, but China's building powerful AI. Are they, Are we talking about generative AI? Because when it comes to large language models, so the underlying tech behind like Chat GPT and Claude and all that, that's not powerful, it's not doing much. And indeed a ton of other AI stuff that isn't making that much money but is far more interesting is unrelated to this, but they want to conflate it because the actual products that are underneath what are, that are built on top of large language models are kind of crap. They like, they're good. For Casey Newton of Platformer, his best he's got was to say, oh yeah, we should take this seriously. AGI is coming because it turns out that Chat GPT can do most kinds of homework. That's not why we send children to, to school. We don't send people to university to do homework so that the homework's complete. It's not like there's a goblin we feed the homework to. We do it so that people learn. It's just, it's fantastical, ridiculous, and ultimately dangerous.

[Emma Vigeland]

And can we just even back up to how we got to this point here? Because so much of what you're talking about, the, the, the way that the model is completely not profitable was a lot of how tech and some of these like gig economy companies were spoken about. And I know it's different and I want you to explain how that's different because I know, like, is Uber even making money? Like, I feel like they're still, I'm not sure, maybe it was like last year or two years they started making money, but like a lot of these tech companies started operating at a loss and, and some have gotten over the hump especially because, you know, they're, they're now some of the most highly traded companies on the stock market and things like that. But this, you lay out how it's different in your piece, if you don't mind explaining to our audience.

[Ed Zitron]

So it's very simple. So Uber there. Well, Amazon Web Services is a comparison point that people make they shouldn't. Over the course of 10 years, Amazon Web Services cost about 10% of the global investment from AI in the last two. So Amazon Web Services has nothing to do with it. It was also cash flow positive. Within a couple of years. Uber, I think they burned about $30 billion between 2019 and 2022. Now most of that was between R and D and sales and marketing. They just burned a bunch of money to get people out. And then we're taking a loss on drivers too. They Cranked up the prices, horrible labor abusers. But the classic mistake here, and this is actually, I'm not saying you're doing this, but a lot of people posing that Uber was just like this are doing so in bad faith. Because the thing that nobody wants to admit is that Microsoft, Amazon and Google paid for OpenAI and anthropics infrastructure. So people can say, oh, OpenAI's raised 60 billion, or what have you. Anthropic's done the same. Oh, it's. And they look. Uber burned a lot of money, too. No, the actual total amount. When you really look at how much Amazon and Amazon and Google handle anthropic, Microsoft handles OpenAI, they've put between them hundreds of billions of dollars of infrastructure just for these companies. So it's not anything like Uber. The timeline is smaller. And on top of it, Uber's costs were not running the cars. This would be if, like, Uber's cars were running using giraffe blood.

[Emma Vigeland]

Right.

[Ed Zitron]

And you had to blow them up at the end of every ride and build a new car by hand. And I sound like I'm being facetious, but it really. The economics of this are completely and utterly insane. And they are getting worse because people have been saying, oh, the cost of inference is coming down. It's actually going up. There's a story by Christopher Mims about this in the Wall Street Journal is everywhere now. So this crap is getting more expensive to do the same things. It's still doing the same crap. And what they like to do is say, well, look, it's going up on the benchmarks. The benchmarks are made to make the models look better because you can't test these things on actual things that people do because they cannot do them.

[Emma Vigeland]

Well, we have some data showing that at least these, like larger firms here are starting to agree with you because there have all these promises of how I can help basically replace a workforce. But this is an article in Fortune magazine. AI adoption rates are declining and kind of have been for these larger firms who are beginning to realize this since basically the middle point of this year. Explain why that's happening, Ed.

[Ed Zitron]

Well, it's quite simple. It doesn't do enough like the enterprise will. And there was a paper that came out of MIT Nanda as well that said 95 of generative AI integrations have 0% return on investment. Now, within that, there was this statement that's very valuable, which is that adoption is high in the enterprise, but disruption is low. These products cannot learn because these do. Generative AI has no brain. They do not think, they have, they do not have human thinking. They are just probabilistic models. And as a result they are limited in what they can do to pretty much the same things. They summarize, they can generate text, they can generate images, they can sometimes successfully generate a PowerPoint, but even then you can't do it every time. And at some point I imagine enterprises rolling out these big integrations, spending all this money going okay, does this do anything we actually need? And at some point, why would they continue? You'll note that we're three years into this. We still don't have any really tangible examples of anyone doing anything interesting or large scale disruptive. I mean, within a few years of the iPhone, we had tens of millions of smartphones. You had entire organizations adopting smartphones across the board. You had bring your own device companies growing literally just to provision iPhones and similar devices for corporate clients. You had growth within the enterprise that you could map out year by year. We have a line trending down, that's not good. And that people really would love to say, oh well, the dot com boom, the line went down too. There was no line go down when it came to the growth of cloud, compute and Uber. Completely different consumer company, not relevant. But nevertheless their burn was still significantly lower over time. And they were also a necessary product. I think they're horrifying labor abusers, but still the product made sense. But in Generative AI, the returns are not there on a financial level, but the actual product still does functionally the same thing it did two years ago. Since GPT4, there really hasn't been a significant thing that's changed even reasoning models. It's just kind of putting a hat on a hat at this point.

[Emma Vigeland]

You speak a little bit about in one of your pieces on your site, Nvidia and how this bubble could burst if their growth begins to slow. You point out there's this thing called the Magnificent Seven, basically these big seven companies that make up so much of the US stock market's value. And you posit that Nvidia is the weakest of these seven at this point. Can you explain why that's the case and what these weaknesses are?

[Ed Zitron]

So the funny thing is, is that Nvidia is the only company I think, that's making any real profit from this. They are doing so well to the point that the market has a fundamentally unhealthy relationship with them. Nvidia's revenue, 88% of it comes from data center revenue, which is selling these GPUs and the associated bits with them. Of that revenue, around 42% of it comes from six other companies, really mostly four. Amazon, Google, Microsoft and Meta. In all four of those cases, they're making bugger or revenue. But in this case, the market has come to expect Nvidia to grow anything from 70 to 150% every single year, year over year, every quarter. They must grow that much. And then you look at it right now and they slow to a ridiculously high, but not high enough, 55% I think it was. Year over year. It's unsustainable. There is no way that Nvidia is just going to be able to go, okay, we'll sell 70 billion, then 100 billion, $150 billion worth of GPUs. And if you're worried, you should be more worried because that's actually what needs to happen to keep this rally going. Because nobody's making any real money.

[Emma Vigeland]

Yeah. And I think just for people that don't know, can you explain Nvidia's place in the market and why they have it cornered? Just even like, you know, spelling it out very simply, just because, like, what GPUs are and what, what, what their product is. And even if you don't mind explaining, like Taiwan's role in, in also all of this.

[Ed Zitron]

So Taiwan's role will be with tsmc, which is the, basically the chip manufacturer, or they do everything. TSMC does way more than GPUs. They just, they are, they do more than this. Nvidia makes a gpu, a graphics processing unit, but the ones that they sell a lot of are these AI GPUs. And they're not kind of like the ones you put in a computer. They're much bigger. You serve, I think you put 72 of them in a rack. You need these massive cooling rigs and servers to make, make them run. And they run something called cuda. C U D A. Now, this language is exclusive to Nvidia GPUs and is functionally the only way to run generative AI. There are other examples, but no one else can scale like G, like Nvidia. And indeed no one can really run Cuda. So you either have to make a large language model specifically for another language and another gpu, which is incredibly hard to do. China's trying to do this right now. Or you can just buy from Nvidia, which is what everyone's doing. The problem is these GPUs are insanely expensive. We're talking 50,000 to 70,000 a piece and you need to buy 72 of them each rack and you need to buy a lot of racks like and so you're in this situation where there's this massive expenditure, this insane amount of money you're spending and then you install them and they immediately start losing you money. And based on semi analysis analysis it probably take it they cost about $2 an hour to run. Which is may not seem too bad when you're making, I don't know, $3 an hour. But that's if you're at 80% or higher utilization as in like it's being used for 80% of the time. Most of them are not because the demand is not there for generative AI services and where it is available, well it's with Microsoft and OpenAI and all of that business has been taken. So I believe that most people that are actually installing these GPUs at scale are losing tons of money and their customers when they get these generative AI services are going why do I care? And I believe most of OpenAI's actual existence within the market is not legitimate. It's based on a three year long marketing campaign by a tech and business media that's lost the plot. And the society that and markets that needed a new growth pick, they needed a new thing to point out and say this is the future.

[Emma Vigeland]

Except big tech was behind it too. Right? Like I mean they're deeply invested. And then and another thing that you write in your piece about what could happen if the bubble burst is these big tech companies abandoning some of this stuff. Can you speak a little bit about that and why that could be on the horizon?

[Ed Zitron]

So all of these companies, these big tech companies have been spending, Microsoft spending $80 billion of capital expenditures this year. Amazon $105 billion of capital cattle expenditures. The market quite liked this when the market had the brains of babies and went oh, AI is every. I've heard AI mentioned a few times, I like that number go up. Here's the thing, now that the market is saying wait, is there any actual return on this investment? They're starting to say, well is your revenue going to keep growing? Because this whole time, and this is where the business media really screwed up, every time these companies saw revenue growth, the media would say and that proves that AI is working. Now what's missing from all of these earnings is any actual explanation of how much money they're making from AI because they're not, they're not making any. Well that's not True. Microsoft's making $13 billion and they stopped reporting their AI revenue in January for some reason. Projected to make $13 billion this year. $10 billion of that is from OpenAI's compute which is sold at cost on an already money losing thing. Meta expecting to make $3 billion. An analyst predicts that Amazon will make $5 billion from AI. This is not a lot of money for companies that make over $100 billion a year. Microsoft Azure made I think 70 something billion in the last year and all that. This is chump change and as you have shown adoption is going down. The only reason we're seeing this spike right now is, is honestly it's not quite Enron but it smells a little bit about it. The Oracle saying Yeah, we got $300 billion of revenue coming may it's going to be amazing. Yeah, it's one company that loses billions of dollars a year that doesn't have any money right now and needs to convert to a for profit. But yes, everyone go nuts. It's going to be great. I just hate it because in the end retail investors, so regular people that are investing with this, who have been lied to, who believe people in the media, who believe senior officials that say AI is so powerful, that don't do their, that are not actually being given the full story, are going to invest heavily in Nvidia, heavily in Oracle and get their asses kicked when this falls apart.

[Emma Vigeland]

And Nvidia like just in terms of its lack of sustainability, I mean there are going to be new technologies and new different like GPUs that might be more efficient like maybe.

[Ed Zitron]

But the thing, even if, whether there is or there isn't, Nvidia will survive this. None of these big tech companies are dying. Which is why by the way, there will be no government bailout. There's nothing to bail out. None of these companies are going to die. Oracle however, is going to be, is actually in systemic problems because they are taking on $38 billion of debt I think just to complete one part of the compute to serve OpenAI a company that doesn't have the money. Nvidia generally because of that coding language Cuda and it's a coding language and series of libraries and such to run compute on GPUs that, that they've, they started working on that over a decade ago. Everyone has been trying to work that out and crack that. None. I don't think anyone's going to do it but I don't think it really matters because ultimately this boom has come from building capacity for a revolution that never even started. Arriving. And I think everyone, the sources of information that people rely on, everyone's been let down.

[Emma Vigeland]

Well, if people read your newsletter on ghost, where's your ED at? You'll not be kept in the dark. So I really appreciate your work on this ed. Obviously, we'll put a link to your newsletter, where is your ED at? In the description below. Wherever people are listening to or watching this. Ed Zitron, thanks so much for your time today. Really appreciate it.

[Ed Zitron]

Thanks for having me.

[Emma Vigeland]

Of course. With that, folks, we'll end the free part of our program and head into the fun ish part of our program where we will read your IMs, maybe take some calls. We'll see how our call machine is even working, if it is at all. We've been having some issues with it recently.

[Matt Bender]

Might be a good day to have issues with it.

[Emma Vigeland]

Yeah, we'll see.

[Matt Bender]

Oh, It's a damn McDonald's. The damn McDonald's Blizzard machine ain't working.

[Emma Vigeland]

Yeah. Oh, McFlurry machine, I'm calling you as a reminder. Oh, hello. Hello, Brandon.

[Brandon]

Hello.

[Emma Vigeland]

This show relies on your support. Jointhemajorityreport.com Please, if you would like to support our work. Brandon, what's happening over on the Discourse?

[Brandon]

Well, in honor of 9 11, which happens every year, we are doing two days, one for each tower on 911 conspiracy theories. So today we went over the official story and just a few of like the more grounded in reality stuff. You know, the Israeli involvement, the Saudi involvement, the Bush family's involvement with the Saudi royal family.

[Emma Vigeland]

Hell yeah.

[Brandon]

Building Building seven control demons.

[Matt Bender]

You don't do a sort of third half day for Building seven. You just do the two days for the two towers.

[Brandon]

Do you believe in Building seven? Do you believe. Are you, do you, Are you one.

[Ed Zitron]

Who believes in building.

[Emma Vigeland]

Stupid?

[Brandon]

So tomorrow we'll be doing some of like the remote controlled planes. No planes, no buildings. Pentagon hit by missile. You say that, you know, space lasers, dustification, the dustification of the twin towers, Howard Lutnick's involvement, predictive programming, the ways in which the twin towers being. Well, I guess we can't say what for sure happened to them. The way in which it was predicted or like planted in the media up until the event. So yeah, we're gonna have.

[Emma Vigeland]

Honestly, you might actually need Nick Mullen would say, Brandon, you are one of a kind. I'm gonna check that out later. I need a little bit of a laugh. All right, check out the Discourse for all that fun stuff. Matt, what's happening on Left Reckoning?

[Matt Bender]

Yeah, Left reckoning on a Tuesday night. We talked about Zoran responding to like being compared to Trump by cnn. Weird stuff going on cnn. Also Nilo Tabrizi talking about women's liberation movements in Iran. And yeah, we also talked about James Talarico and how we both sort of prefer him over Allred but also are pretty wary of the Miriam Adelson gambling money that he takes and would probably welcome Beto to jump into the race.

[Emma Vigeland]

I'm staying in the race. Hello, Matt Bender.

[Matt Bender (alternate or same as C)]

Hello, how are you?

[Emma Vigeland]

I just got an IM saying that you were on Navarro media just now.

[Matt Bender (alternate or same as C)]

I was. Damn. I can't do anything without people reporting on what I'm doing. Yeah, tattling on me. I'm cheating on the majority port on Thursdays.

[Emma Vigeland]

No, no, that's good. You gave your American perspectives to our friends over there in the uk. What's happening in your neck of the woods other than that?

[Matt Bender (alternate or same as C)]

Yeah, did a stream, very long late night stream that went to like 2 or 3 in the morning on my [e-mail] Matt Bender last night had a lot of people calling in. Check that out if you're interested. The Navarro media hit I just did a couple of minutes ago and tonight at the same YouTube channel, Leftist Mafia. Be sure to tune in to all that.

[Emma Vigeland]

All right.

[Matt Bender]

I just want to get this note in the main show senior law enforcement officials as the ATF report claiming ammo was ammo with the rifle was engraved with certain slogans that to do with the left has not been verified. Conflicts with other evidence summaries and quote might turn out to have been misread or misinterpreted. Pretty crazy.

[Emma Vigeland]

Insane. The Wall Street Journal has been on a hot streak and getting a lot of scoops of the Trump administration. But that is crazy that they published that and rushed to publish that thing about these anti trans or these pro trans and pro antifa slogans. I mean we didn't even say what it said at the beginning of the show because I knew that this don't believe it that why would I believe this? It's clearly the FBI led by fucking Cash Patel leaking this stuff. I'm not saying that that wasn't the case but we just don't know until we know who the suspect is and the frickin FBI head is a lunatic who's not on top of it and is more worried about getting ahead of the narrative to blame trans people.

[Matt Bender (alternate or same as C)]

This stuff stays out there. By the way. People should really understand a big media company, even the Wall Street Journal with their leanings still, they're a large legacy media company. To any of them, putting this stuff out there is insanely dangerous. I see time and time again shootings from years ago. People still cite things that were reported in the, in the first hours that were debunked within minutes that were completely false. That these people still believe and refuse to not believe because they already saw it and it's already ingrained in their brains. This stuff, no matter what this ends up being about this, whatever falsehoods out there are going to remain. I still see people sharing the pictures of the two individuals who were detained and released. No matter how many times the FBI has said these people are not suspects, people are still sharing their pictures.

[Emma Vigeland]

I mean Cash Patel vacuum called it a, called him a subject. He didn't even say suspect. This is amateur hours is putting it mildly. We actually do need like functioning federal law enforcement to find someone like this.

[Matt Bender]

Crazy to say but ProPublica has their profile on this guy here. This is Thomas Fugate III, a 22 year old Trump intern who was pointed to leave counterterrorism and threat prevention at DHS. He gutted the department firing 70%, 75% of the staff. Look at him. I mean we have his picture up here.

[Brandon]

No character.

[Matt Bender]

He literally, he gutted. He also doesn't look 22. I mean but anyway he gutted the department fire and 75% of the staff suggesting domestic terror and domestic born shooters weren't the problem. I heard somebody say dismiss it as gang violence to warrant the problem and that the department needs to quote focus on illegals. The department coordinates cross agency tips, helps power online monitoring programs for proactively catching things like mass shootings before they happen. But you know they give you no staff and it's the illegals we need to go after. We need to have everyone on the Home Depots to see who wants to do some shingling and not who's like maybe going to assassinate somebody with a deer hunting rifle or whatever gun. I don't know if they found the rifle.

[Emma Vigeland]

I think yeah, they said it was like a long range rifle and they weren't specific. But we will talk about this. Obviously this major story, more in the fun half, whatever, you know, the not free half.

[Matt Bender]

We've been doing the fun half for two years through Gaza. We're not going to stop calling it that now.

[Emma Vigeland]

Yes, well said Matt. All right, see you on the other side. I mean and not dying. Seeing you in the fun half, you are in for it.

[Donald Trump]

All right folks.

[Jostein Haga]

646-257-4920.

[Emma Vigeland]

See you in the fun house.

[Donald Trump]

Are you ready?

[Emma Vigeland]

Who sent us this?

[Caller or Sound Clip]

Alpha males are back. And the alpha males are back Just.

[Matt Bender (alternate or same as C)]

As delicious as you could imagine the.

[Caller or Sound Clip]

Alpha males are back, back, back, back, back Boy, back And the alpha males are back, back, back, back Just wanna degrade the white man Alpha males are.

[Emma Vigeland]

Back, back I take all of it to my throat.

[Caller or Sound Clip]

Alpha males are back, back, back, back Snowflake says what? The alpha males are back.

[Jostein Haga]

You are a madman.

[Caller or Sound Clip]

And the alpha males are back. Bye, bye.

[Emma Vigeland]

Oh, no. Sam Cedar. What a. Wow.

[Ed Zitron]

What a nightmare.

[Emma Vigeland]

Yeah, or a couple of them.

[Matt Bender (alternate or same as C)]

Just put them in rotation.

[Ed Zitron]

DJ, dinner.

[Matt Bender]

Well, the problem with those is they're like 45 seconds long, so I don't know if they're enough breaks.

[Ed Zitron]

That's nonsense.

[Jostein Haga]

See, white people doing drugs that look worse than normal white people. And all white people look disgusting.

[Caller or Sound Clip]

And the alpha males psych.

[Emma Vigeland]

Them.

[Ed Zitron]

Snowflake says, what?

[Donald Trump]

What, what? What? What? What? What?

[Emma Vigeland]

What?

[Donald Trump]

What? What? What? What? What? What?

[Emma Vigeland]

What?

[Donald Trump]

What? What? What? What?

[Emma Vigeland]

What?

[Ed Zitron]

Snowflake says, what.

[Caller or Sound Clip]

A hell of a lot of banks.

[Emma Vigeland]

Hell of a lot of bank.

[Caller or Sound Clip]

A hell of a lot of bank.

[Jostein Haga]

Okay, I'll help.

[Emma Vigeland]

Help.

[Caller or Sound Clip]

Hell of a lot of bank. A hell of a lot of bank.

[Emma Vigeland]

All lives matter.

[Matt Bender]

Have you tried doing an impression on a college campus?

[Jostein Haga]

I think that there's no reason why reasonable people across the divide can't all agree with this. Psych.

[Caller or Sound Clip]

And the alpha males are. And the Africans are black, black, black, black, black, African. And the alpha males are black, black, black, black, black, black. And the Africans are back, back, back, back.

[Jostein Haga]

When you see Donald Trump out there, doesn't a little part of you think that America deserves to be taken over by jihadists? Keeping it 100. Can't knock the hustle. Come on. Bigger game plan.

[Emma Vigeland]

By the way, it's my birthday. My birthday.

[Jostein Haga]

Happy birthday to me, Jew boy. I have a thought experiment for you.

[Caller or Sound Clip]

And the alpha males are back. Africans are black, Black Alpha males are black black Africans are back, back.

[Emma Vigeland]

Come on, come on, come on.

[Jostein Haga]

Someone needs to pay the price for blast to be around here.

[Donald Trump]

I am a total.