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AI has busted before and will bust again. It happens so often with AI that there is a standard metaphor for it: AI winter. The current technology of AI is not

AI has busted before and will bust again. It happens so often with AI that there is a standard metaphor for it: AI winter. The current technology of AI is not going to produce profits to justify the gargantuan levels of investment. Generative AIs excel at creative tasks, which is undoubtedly amazing, but creative industries have already had their margins beaten down by the hordes of humans who want to work in creative industries. You’re not going to create hundreds of $billions of revenue by replacing stock photography and blog post authors. In objective contexts, generative AIs struggle with reliability, which makes it hard for folks to build them into the critical systems necessary to generate huge revenue. There is a reason Google did not deploy generative AI into search until OpenAI basically forced them to. And now that Google has rolled it out, does anyone think it is driving huge new revenue for them? No. The reality is that much—maybe even most—of the current levels of investment are predicated on the idea that someone among the current crop of AI companies will create a “general intelligence” which will be intelligent and reliable enough to transform “hard” industries like energy, manufacturing, transportation, health care, etc. Let’s recognize that investment thesis for what it is, a speculative bet. No one even agrees how to define AGI, let alone understands the concept rigorously enough to calculate how to get there from ChatGPT.

FrustratedMonky 2y ago
This is the view of a year ago. This take is already outdated. There are already jobs being lost. You don't need to make "Billons", you just need a model cheap enough to be cheaper than the human being replaced. So if I can take one of the off the shelf models, and it costs me $20/week to replace a human that costs $1000/week, then there you go. It is already disruptive. People forget that there was a shit ton of investment in the early internet that also didn't pay off, but nobody would say that the internet didn't have some winners. Edit: Lot of people with head in sand. https://tech.co/news/companies-replace-workers-with-ai https://tech.co/news/companies-replace-workers-with-ai I'm already having to deal with AI when making reservations at Delta. Where do you think the people that used to take phone calls went? That is one company, one role.
- actsasbuffoon 2y ago
  I think there are complicating factors. Investors are throwing unfathomable amounts of money at AI right now, and frontier models are very expensive to build. There’s also the issue of these AI-as-a-Service companies requiring an ever increasing amount of GPUs and electricity, and because frontier models keep getting bigger, the problem keeps getting worse. There is a serious risk to these companies. A frontier model doesn’t sit at the frontier for very long. Given a year or two, open source models can catch up for less than 1% of the money spent to build a frontier model. The moat doesn’t last long, so you need to keep burning tens of billions to stay ahead. But as open source models continue to improve, we run the risk of reaching a moment that looks like the current smartphone market. People aren’t upgrading their phones as often anymore because a 4 year old smart phone is still pretty great. There’s no need to buy every year. Well, at some point an open source model will be close enough to a frontier model that many users will just stick with it. They’ll prefer it because there’s no monthly fee to run it on their own hardware, because there are no rate limits, and because they prefer the privacy and flexibility. Right now you need a big cluster of GPUs to run top tier models. But with every passing year we get closer to good-enough open source models running on gaming GPUs. And when that happens, would you want to be one of the investors shoveling tens of billions of dollars into building frontier models with declining subscription numbers where you’ve got no moat? I don’t think the economics of this are going to pan out in the long run. Everyone is still hyped about ChatGPT, so investors are happy to throw money at it. But I think we’re in a very big AI bubble right now. The economics only make sense if someone achieves AGI within the next couple of years. If they don’t, this whole thing is going to decline sharply as open source models provide a better free alternative.
- toomuchtodo 2y ago
  > There are already jobs being lost. What jobs are being lost? Show us the data. https://en.wikipedia.org/wiki/Brandolini%27s_law https://en.wikipedia.org/wiki/Brandolini%27s_law
  - apwell23 2y ago
    only ones I heard were Klarna customer support but i call BS on that too.
comeonbro 2y ago
o1 can already do your job. Have you tried it?
- golly_ned 2y ago
  I tried it. o1 cannot do my job, and hallucinated immediately.
  - FrustratedMonky 2y ago
    So you are using the old-stand-by-argument: "my job is safe, so if society collapses around me, I'm still all good, pass the beer". It can't do my job, so it can't do any jobs?
- almatabata 2y ago
  It can take responsibility for production code and get fired when it produces sub-standard work?
  - visarga 2y ago
    We need to invent AI punishments to get it to be responsible. /s Accountability requires that you have a body.
- bee_rider 2y ago
  Everyone thinks AI can do somebody else’s job. I dunno, maybe they are right, but it seems like there might be some bias. Can AI do your job?
  - giardini 2y ago
    Suppose AI can do anyone's job. Then, after massive layoffs, no one would receive a paycheck. How would that produce a burgeoning economy? Or indeed, any economy.
    - bee_rider 2y ago
deleted 2y ago
[deleted]

FrustratedMonky 2y ago

This is the view of a year ago. This take is already outdated. There are already jobs being lost. You don't need to make "Billons", you just need a model cheap enough to be cheaper than the human being replaced. So if I can take one of the off the shelf models, and it costs me $20/week to replace a human that costs $1000/week, then there you go. It is already disruptive. People forget that there was a shit ton of investment in the early internet that also didn't pay off, but nobody would say that the internet didn't have some winners. Edit: Lot of people with head in sand. https://tech.co/news/companies-replace-workers-with-ai https://tech.co/news/companies-replace-workers-with-ai I'm already having to deal with AI when making reservations at Delta. Where do you think the people that used to take phone calls went? That is one company, one role.

actsasbuffoon 2y ago
I think there are complicating factors. Investors are throwing unfathomable amounts of money at AI right now, and frontier models are very expensive to build. There’s also the issue of these AI-as-a-Service companies requiring an ever increasing amount of GPUs and electricity, and because frontier models keep getting bigger, the problem keeps getting worse. There is a serious risk to these companies. A frontier model doesn’t sit at the frontier for very long. Given a year or two, open source models can catch up for less than 1% of the money spent to build a frontier model. The moat doesn’t last long, so you need to keep burning tens of billions to stay ahead. But as open source models continue to improve, we run the risk of reaching a moment that looks like the current smartphone market. People aren’t upgrading their phones as often anymore because a 4 year old smart phone is still pretty great. There’s no need to buy every year. Well, at some point an open source model will be close enough to a frontier model that many users will just stick with it. They’ll prefer it because there’s no monthly fee to run it on their own hardware, because there are no rate limits, and because they prefer the privacy and flexibility. Right now you need a big cluster of GPUs to run top tier models. But with every passing year we get closer to good-enough open source models running on gaming GPUs. And when that happens, would you want to be one of the investors shoveling tens of billions of dollars into building frontier models with declining subscription numbers where you’ve got no moat? I don’t think the economics of this are going to pan out in the long run. Everyone is still hyped about ChatGPT, so investors are happy to throw money at it. But I think we’re in a very big AI bubble right now. The economics only make sense if someone achieves AGI within the next couple of years. If they don’t, this whole thing is going to decline sharply as open source models provide a better free alternative.
toomuchtodo 2y ago
> There are already jobs being lost. What jobs are being lost? Show us the data. https://en.wikipedia.org/wiki/Brandolini%27s_law https://en.wikipedia.org/wiki/Brandolini%27s_law
- apwell23 2y ago
  only ones I heard were Klarna customer support but i call BS on that too.

comeonbro 2y ago

o1 can already do your job. Have you tried it?

golly_ned 2y ago
I tried it. o1 cannot do my job, and hallucinated immediately.
- FrustratedMonky 2y ago
  So you are using the old-stand-by-argument: "my job is safe, so if society collapses around me, I'm still all good, pass the beer". It can't do my job, so it can't do any jobs?
almatabata 2y ago
It can take responsibility for production code and get fired when it produces sub-standard work?
- visarga 2y ago
  We need to invent AI punishments to get it to be responsible. /s Accountability requires that you have a body.
bee_rider 2y ago
Everyone thinks AI can do somebody else’s job. I dunno, maybe they are right, but it seems like there might be some bias. Can AI do your job?
- giardini 2y ago
  Suppose AI can do anyone's job. Then, after massive layoffs, no one would receive a paycheck. How would that produce a burgeoning economy? Or indeed, any economy.
  - bee_rider 2y ago

deleted 2y ago

[deleted]