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Jan. 28, 2025 - The David Knight Show
10:11
Wall Street Realizes It Was Fleeced by Bloated AI Costs
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And how they're going to build new infrastructure for themselves, not for us.
These people won't even fix the potholes for us.
But they're going to create their own private infrastructure, just like their own private jets.
None of this climate MacGuffin means a thing to them.
None of it.
The AI is their tool, and they're willing to spend anything to make it happen.
And folks, this is a lesson about how the government...
Destroys our society.
Destroys our technologies.
Not only has it taken over our technology, as Eisenhower warned, the military, industrial, and academic complex that he talked about, but it is also destroying innovation with so much money.
We can see this when we look at things like universal basic income.
These people said, you know, we'll do all the work for you.
We're going to take your job.
You're not going to have a job.
Now we've got to figure out how we're going to keep these people from coming after us with guillotines, said Bloomberg, when he was running for president.
And when he was running for president, and talking about universal basic income, how they're going to put you on universal welfare, that was in 2020, and of course we'd already gotten a big taste of that with Trump's...
Lockdown and stimulus checks, that was the beginning of moving that Overton window towards UBI for the public.
And it was amazing to me how far that little bit of stimulus check went to move people over to that kind of mindset.
What Trump was planning with his big tech bros is 100,000 times more expensive, and that sent a shockwave through the markets.
The reality of the waste and the fantasy.
And I would say these people have been hallucinating like their own chatbots.
They've been believing their own press.
And I've said from the very beginning, you know if you listen to this program, I never bought into this hype about AI. I said it's going to end in tears just like the dot-com.
It's not that I'm a genius.
It's that I got burned really bad in the dot-com thing.
And I knew that the internet was going to be a real thing.
It's not whether or not AI is a real thing or not.
But it's really not even about the performance of the chatbot.
There hasn't really been that much time for people to evaluate it.
And what Whistler was telling me was they had six different benchmarks that they use.
And he says that they've got to constantly change these benchmarks because when they use these benchmarks, then the AI learns the test, essentially, right?
So you've got to keep coming up with different ones.
But in three of them, it was as good or better.
And in three of them, it was worse.
But the issue is, as we talked about, and I forget what the numbers were.
I mentioned them on the show, I think.
Melissa and I were talking about how astronomical the costs were for open AI. You know, how much each prompt cost them.
And how much money they were losing.
I mean, for their professional model.
It was something like, wasn't it thousands of dollars or something?
He doesn't remember either.
But when I first told him the figures, he said, no, they can't be right.
I said, no, this is what they're saying.
Now, that's for the professional one.
They're top of the line open AI. And it's like, how in the world are they going to make money if their expenses are this much?
And here's another issue.
The advantage, because of energy, and because we have given a tremendous advantage in terms of energy to China for energy cost, because of the Paris Climate Accord, their cost effectiveness is going to continue to soar.
And I said this as well.
I said, when you look at China, the way they got them established originally was with slave labor.
Intellectual property theft and currency manipulation, but also slave labor.
And I said, as they're moving more and more to automation, and everybody is moving more and more to automation, giving them an advantage of cheap coal and not telling them that they got to do anything to clean it, nothing at all.
Giving them that cost advantage for energy means that you're not going to catch them, even if you build your own robots, even if your robots are better than them.
The robots feed on electricity.
I think we've had a massive bubble in search of a pen for quite some time.
Whistler says, I think the one that costs thousands of dollars per prompt is the O3 model, which isn't available to the public yet.
OpenAI is talking about creating a $2,000 per month subscription to use it when it comes out.
The Chinese government has announced much less investment in AI funds, just $8.2 billion.
According to the South China Morning Post.
There you go.
Only $8 billion.
That's why this $6 million looks credible.
A tech advisor told the BBC that DeepSeek could potentially derail the investment case for the entire AI supply chain, which is driven by high spending from a small handful of hyperscalers.
So the business model has been, we can weaponize our fiat currency and our...
The issue really is the development time and the amount of money that was invested in it.
That's the key issue.
So what was the fallout?
NVIDIA lost about $600 billion in market cap.
Stock price dropped so much.
The biggest one-day loss in U.S. history.
And this is happening so quickly after Stargate.
Did these AI experts like Sam Altman and Elon Musk know anything about this?
No, they're haggling over the price, as they say in the joke.
We know what they are, and they were haggling over the price.
A couple of prostitutes.
NVIDIA lost close to $600 billion in market cap on Monday.
Stock price plummeted 17%.
After NVIDIA surpassed Apple last week, To become the most valuable publicly traded company, the stocks drop on Monday led a 3% slide in the tech-heavy NASDAQ index.
And so NASDAQ was down 3%.
They were down 17%, or $600 billion.
In late December, DeepSeek unveiled a free open-source large-language model that it said took only two months and less than $6 million.
Again, Apparently, that news was not only lost on all the financial experts, but it was also lost on all the experts around Stargate.
The multi-billionaire banker, his last name is Sun, Maya Yosha Sun, or something like that.
His last name is Sun.
Larry Ellison at Oracle.
Sam Altman.
Elon Musk.
What did Elon Musk say?
He says, well, they don't have the money.
See, it all came about money.
This is all about weaponizing money, even more so than technology.
And so China, Elon Musk says, hey, they don't have the money.
China says, we don't need the money.
We can't do it without the money.
And so then the money guys in Wall Street freak out.
It's like, we've been pouring money into this thing unnecessarily.
We've been had.
Big tech.
It's bloated tech.
That's what it is.
It's a pump and dump.
NVIDIA's graphic processing units, the GPUs, have been dominant in the market.
Analysts at Cantor, I think that's Cantor Fitzgerald, where Lucky Lutnik is, reported on Monday, the release of DeepSeq's latest technology has caused a great angst, quote-unquote.
As to the impact for compute demand and therefore fears of peak spending on GPUs.
Yeah, maybe it's not just simply a hardware issue.
Maybe you can solve this with software.
NVIDIA's huge run-up.
The stock soared 239% in 2023, 171% in 2024. Broadcom.
The other big U.S. chipmaker to see giant valuation gains from AI fell 17% also on Monday, pulling its market cap down to about $200 billion.
Data center companies that are reliant on NVIDIA's GPUs for their hardware sales saw big sell-offs as well.
Dell, Hewlett-Packard, and Supermicro Computer dropped at least 5.8%.
Oracle!
Oracle!
Larry Ellison is the second richest man in the world after Elon Musk.
Oracle lost 14%.
I'm so sorry, Larry.
Must have been a blow.
Hello, it's me, Volodymyr Zelensky.
I'm so tired of wearing these same t-shirts everywhere for years.
You'd think with all the billions I've skimmed off America, I could dress better.
And I could...
If only David Knight would send me one of his beautiful grey MacGuffin hoodies or a new black t-shirt with the MacGuffin logo in blue.
But he told me to get lost.
Maybe one of you American suckers can buy me some at thedavidknightshow.com.
And David is giving a 10% discount to listeners from now until 2025. At that price, you should be able to buy me several hundred.
Those amazing sand-colored microphone hoodies are so beautiful.
I'd wear something other than green military cosplay to my various galas and social events.
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