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As I understand it, OpenAI loses billions of dollars every year, and it receives preferential treatment for cloud credits. Does any gaming company make similar

As I understand it, OpenAI loses billions of dollars every year, and it receives preferential treatment for cloud credits. Does any gaming company make similar total losses year after year?

Lerc 2y ago
>As I understand it, OpenAI loses billions of dollars every year, and it receives preferential treatment for cloud credits. The absolute values or the deals performed are irrelevant to the principle. The principle is that revenues and expenditure go up in a way that never results in a profit, but if you broke each generation of development into a separate company it would be a series of profitable investments requiring increasingly larger investment for the next company. If serving ChatGPT stays profitable enough to cover the training of the model that they are currently serving then they are financially secure. It will only become a problem if they cannot recover the cost of training each model by serving it. We don't yet know if that will happen. There is insufficient data in this area, Without knowing the capital expenditure on hardware, the costs of running the hardware, and the breakdown between how much of that hardware is running inference and how much is training, we just don't have a reliable way to calculate potential profitability. It's been a long time since GPT4, and all releases since then have been improvements on that generation. Some of those improvements have significantly reduced the cost of inference. There is evidence that they are spending on the next two generations already. We don't yet know how capable the next generation model will be, in the absence of that data point, almost all of the speculation is relatively meaningless. >but I don't see any indicator that OpenAI will not go the route of enshittifiaction if it gets the opportunity There is a very significant indicator. We live in a world where it is commonplace to offer free services paid for by advertising. This is the model where the user is not the customer, it is the product. That is the most common path to enshitification, because pleasing your customer takes priority. OpenAI has not yet taken that path (and they have had the opportunity). Both the API and ChatGPT plus work on the old fashioned model of give us some money and we'll give you a service. That is a model that disincentivises screwing over your customers. It may not stay this way, but they certainly have had opportunities for enshitification that they have chosen not to embrace.

As I understand it, OpenAI loses billions of dollars every year, and it receives preferential treatment for cloud credits. Does any gaming company make similar total losses year after year?

Lerc 2y ago

>As I understand it, OpenAI loses billions of dollars every year, and it receives preferential treatment for cloud credits. The absolute values or the deals performed are irrelevant to the principle. The principle is that revenues and expenditure go up in a way that never results in a profit, but if you broke each generation of development into a separate company it would be a series of profitable investments requiring increasingly larger investment for the next company. If serving ChatGPT stays profitable enough to cover the training of the model that they are currently serving then they are financially secure. It will only become a problem if they cannot recover the cost of training each model by serving it. We don't yet know if that will happen. There is insufficient data in this area, Without knowing the capital expenditure on hardware, the costs of running the hardware, and the breakdown between how much of that hardware is running inference and how much is training, we just don't have a reliable way to calculate potential profitability. It's been a long time since GPT4, and all releases since then have been improvements on that generation. Some of those improvements have significantly reduced the cost of inference. There is evidence that they are spending on the next two generations already. We don't yet know how capable the next generation model will be, in the absence of that data point, almost all of the speculation is relatively meaningless. >but I don't see any indicator that OpenAI will not go the route of enshittifiaction if it gets the opportunity There is a very significant indicator. We live in a world where it is commonplace to offer free services paid for by advertising. This is the model where the user is not the customer, it is the product. That is the most common path to enshitification, because pleasing your customer takes priority. OpenAI has not yet taken that path (and they have had the opportunity). Both the API and ChatGPT plus work on the old fashioned model of give us some money and we'll give you a service. That is a model that disincentivises screwing over your customers. It may not stay this way, but they certainly have had opportunities for enshitification that they have chosen not to embrace.