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I'm convinced that the studio forced the change to 'human batteries' out of concern over a conflict with Hyperion.
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Probably the idea is broad enough to get away with borrowing it or putting their own spin on the general idea (I mean, it is expected that stores will influence each other and ideas will spread). I’d rather guess that a studio executive thought the battery idea would be more understandable to people (if that is the case though, I think they were dramatically wrong, the computing idea makes much more sense and I think all of us in the audience would have been fine with it).
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Remember that all critiques of Hollywood require you to think like you’ve just consumed a massive line of cocaine. Because that is how they think and live. So, empathy reduced to zero, all your ideas are great, everything else is dumb, etc. Making decisions under the influence of strong narcotics is a recipe for idiocy.

Source: me, I had a huge cocaine problem and worked many years in the tech side of music and movies

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I saw a YouTube video where they said this was more-or-less the original backstory but then they changed it. I think it said that the People In Charge thought the 'living power source' would be easier for the audience to understand?

I don't have the link handy, and don't trust everything I read on the Internet, etc, etc.

But yeah - this makes so much more sense than breeding, raising, and feeding humans just to harvest their body heat.

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According to Reddit…so, grain of salt…that is an urban legend, related to a Neil Gaiman short story that appeared on the Matrix promo website.

https://www.reddit.com/r/movies/comments/1amree7/theres_a_wi...

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It exists and is a great read – https://matrix.fandom.com/wiki/Goliath

Check the archive.org link at the bottom!

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I think we the urban legend really sticks around because the compute explanation just makes much more sense and we all want this beloved movies not to have a sill (albeit inconsequential) plot hole.
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Oh, totally, it’s my head canon as well.
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Mine is either that, or, the idea I mentioned in this post:

https://news.ycombinator.com/item?id=47185076

Machines trying to be benevolent, but overly controlling.

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That's very good.
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I like to think the machines actually were using them for processing power, and the humans themselves just misunderstood (or oversimplified for Neo) what was actually going on.
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Processing power is my second favorite explanation.

My first favorite would have been: they don’t use the humans for anything, the pods are just the most efficient way to store humans. The machines think they are being benevolent, just want peace and quiet and for humans to stop doing dramatic things like scorching the sky. But I don’t know where the plot would go from there.

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There is backstory that the films could have gone into, though I don't know if it was written before or after the first film. The humans in the matrix were allied with the machines and they put them in the matrix to protect them from the war. They were being benevolent.
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They benevolently feed the dead to the living
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What the humans thought they knew came from the Zion archives mostly. And guess where the Zion archives came from…
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I like how the other story that has this premise is Hitchhiker's Guide to the Galaxy.
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Hitchhiker's Guide had a slightly deeper philosophical implication though, in that the premise is that powerful computers already existed to solve complex problems. Earth was created to pose powerful questions.
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don't forget Sirens of Titan!
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I'm sure that one Star trek episode had the same premise, together with something from Lem. The connection human/machine brain is rather old and human brains being used for computation is so reused, it is practically public domain.
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