Monologue: Amazon Is Warehousing Billions In GPUs

0:04 Greetings, salutations and hello, I'm Ed Zitron and this is this week's Better Offline Monologue. Congratulations to Eugene Kim of Business Insider for getting one of the biggest scoops of the AI bubble. confirming my estimate that billions of dollars of Nvidia GPUs were being warehoused in an incredible story about Amazon's early rack receipt program. According to BI, some Amazon Web Services data center sites had room for more racks, but not enough available power to turn them on, leaving the equipment to be staged at intermediary warehouses until the facilities were ready. BI adds that Amazon used to not have to pay for those racks until the gear was put into the data center, but that, and I quote,

0:51 the intensity of the AI data center building boom has made this type of coordination harder, with Amazon having to compete more for scarce resources as it jockeys with rivals for access to NVIDIA GPUs and other AI components. Very strange for one of the largest buyers of GPUs to be talking about scarcity of an object that it has so much of. that it can't install all of them.

1:17 And that's because what appears to be happening is that NVIDIA, who previously did not charge customers until they actually needed these GPUs, is now forcing them to take early receipt and pay them, despite the customers in question not actually being able to use said GPUs. Now, I know that there are going to be some people who hear this and say, oh, that's very common. Oh, they get them in advance anyway. Oh, that's totally normal. It's not normal.

1:41 It's not normal at all, and anyone acting that way is a, a bootlicker as I'll get to later, because from what I can tell it appears that Nvidia is channel stuffing, when a company forces inventory onto its customers prematurely as a means of boosting revenues. Usually this is done by offering deep discounts in exchange, but in this case, Jensen Huang is using the desperation of hyperscalers against them, and while I'm guessing, I believe that he's saying that if you don't buy them in advance, the GPUs won't be available when you finish the data center, even if that's 3 to 6 to 12 months in the future.

2:12 And this is not the first time we've heard stories like this. There was a story in the Wall Street Journal a few months ago from, I think, Robbie Whelan and Catherine Blunt that said that neoclouds, the core weaves of the world that bought AMD GPUs or other competing GPUs, will be put in something called Jensen Jail, which is where all the NVIDIA fans wish they could be put with a dog collar around their throat, but also refers to this thing of if you piss off Jensen Huang, you don't get your GPUs. The distance between delivery and installation is so severe that Business Insider found an email where an engineer said that they saw no clear forecasted path to install an indeterminately sized order of GPUs, and

2:53 another saying that Amazon would be taking delivery of $ 3 billion worth of GPUs every month for the foreseeable future. Now, some will dispute my accusation of channel stuffing, suggesting that hyperscalers are the ones making the early purchases for planning reasons. But that just doesn't make sense to me. And the phrase compete more for scarce resources is the tale. Riddle me this, Batman. If Amazon, Google, and Microsoft, and many other companies do not have the power to plug in the chips or the data centers aren't being built, why are the GPUs scarce? What's making them scarce? If companies cannot install the chips, or put another way, don't need them yet, what is creating the scarcity other than something

3:38 that Nvidia itself is demanding of its partners? And by the way, what really fucking turns my stomach about all of this is that it means that the increased price of RAM and consumer electronics... was a result of an artificial supply chain crisis created by Jensen Huang pushing Nvidia's customers to take early delivery of GPUs. And that means building all of these bloody things months in advance of when he needed them, which in turn meant buying out capacity from Micron, SK Hynix, and Samsung, and buying hard drives, and buying all the things for the servers months, if not years in advance, all to increase revenue growth for Nvidia.

4:23 Jensen Huang is responsible for making life worse for everyone. He is a greedy, joyless, soulless oaf of a man, and doing this required him to be a certain kind of low that no money or status or fucking leather jacket can ever fix. Jensen Huang is a piece of shit. Fuck Jensen Huang. Fuck every hyperscaler CEO too. These scumbags drove up the price of everything so that they could all help Jensen Huang with his no-IT-loads-refused party and make everyone more money in theory, but really just make Jensen more money and make maybe the RAM companies as well.

5:00 We did not need him to build all these GPUs. He just wanted to sell them to boost earnings for the beaten RAZE machine. Everyone who participated in the early shipments of GPUs is a fucking scumbag. And I know that someone's going to say, well, there's good reason to get them early. No, there's not. There really isn't. I get a month early. I get just beforehand. But if you know this shit isn't turning on for three to six months, fuck you. And I also want to say something to all of the freaks out there who are defensive of these companies and think that any emotion or disgust towards them is an overreaction. You're a pathetic bootlicker and a bitch and you have the mindset of a peasant.

5:39 You want to kiss Jensen Huang's asshole. You want Jensen Huang to be your father and your boyfriend. You love him. You love capitalism and you love GPUs. You want to fuck one of them. I know I sound all right. Fuck you. I'm sick of this. I'm sick of having to treat these companies without contempt, to be professional about it.

5:57 Everything is more expensive now. Everything is worse because of what these people did. And people expect me. And the fact that people can actually, in the round, not act with this level of anger genuinely shocks me. These have global consequences. Unless, of course, you're just someone that loves the market. You want to kiss the Nasdaq. You want to fuck the New York Stock Exchange. Maybe you're one of those people and the market's all that matters. You're pathetic to me. You're subhuman. If all you care about is the market, if you don't see the effect on real people as a problem, you're just pathetic. And what these people have done is morally reprehensible, on top of the already vast damage done by the very existence of

6:35 generative AI. This destructive, pointless void of an industry has made everything it touches worse, all to prop up the vague dreams and excesses of the wealthiest and most powerful and utterly fucking dull pieces of shit I've ever had the misfortune of witnessing. Everything is more annoying, more expensive, and worse on some level because of generative AI, down to the price of fucking US treasuries. And everyone who aided in the ascent of generative AI should know that they have profited off of making the world worse. As I wrote in this newsletter this week, I believe a divide has emerged that is much, much larger than data centers.

7:15 There's going to be some questions people are going to have to answer. How into AI were you? How defensive of the industry were you? Were you normal about LLMs? Did you talk about them as useful software that you used for something that perhaps you were encoding? Or did you act strangely defensive of them? Did you constantly talk about them non-stop? Did you attack people who weren't sufficiently excited?

7:37 If you did that, why did you do that? How gullible were you about the financial or technical promises of AI? How many times did you publish an analyzed run rate from Anthropica or OpenAI? How many times did your story, directly or by proxy, defend these companies doing unethical things? How many times did you hand wave away the financial or social or socioeconomic problems? How defensive were you of capital?

8:02 And how not defensive were you of regular people and the lives of regular people? Because I personally find it morally objectionable to have helped elevate this industry. And now we know that the pre-sales of GPUs, which ran up the price of basically every consumer electronic, is a direct result of only stock market growth and of only quarterly revenue growth. I think everyone involved should feel fucking ashamed of themselves. And yet still modern journalism keeps chugging along.

8:29 Nothing wrong. No problem. Put the story in the bag. AI so big. AI so huge. In any case, the answers to these questions will likely be quite illuminating. about the people we meet in the next few years. I don't know when this explodes. You all know that. But I know it will now. I'm sitting here watching another day of blood on Corweave's stock. Because everything ultimately comes down to the value of the stocks. Because it's not like we know the AI revenues of the hyperscalers. It's not like we know how many GPUs are actually in operation.

9:00 It's not like really anyone outside of Eugene Kim, respect Eugene, has really gone to the mat to try and find out whether these things are being warehoused. But now we know We know that everyone's life got made worse pretty much just to help Nvidia. And the apes and hogs oinking online and beating their chest over every quarterly earnings with Nvidia, I think I'm going to enjoy the first one of those that doesn't go well. And not because I wish harm on anyone, but because I can't wait to see the bootlickers eat shit. I'm just fucking sick of it. People might say I'm overly emotional. People might say I'm taking this too seriously. But I take hundreds of billions of people's lives being made worse pretty much

9:46 to help a coterie of GPU sellers feel better about themselves and beat earnings. I find that disgusting. I'm not going to pull my punches and I'm not going to pretend it doesn't bother me. And if it doesn't bother you, I'm not sure what you fucking care about. But it's clearly not other people. And this is what the show is going to look and sound like. So, buckle up.

10:07 It's going to be fun. And even if LLMs somehow survive in some sort of open source form, I think the AI industry as it exists today is being held together through cultism and private equity excess and is rigged to blow. And if It's going to explode. And the world will be different afterwards. And it's going to be difficult.

10:25 But I think it will be better. And the way we can all make it better is once it explodes, making it clear to those who overly defended the industry, who chose Jensen Wong over their fellow man, it's going to be hard to treat those people particularly seriously. And as you well know, I've been taking very, very detailed notes.

10:48 I'll be back next week. I hope you've enjoyed listening I love you all