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>OpenAI plans to loose $5 billion this year Let that sink in for anyone that has incorporated Chatgpt in their work routines to the point their normal skills s

• switch007 2y ago
  $2k is way way cheaper than a junior developer which, if I had to guess their thinking, is who the Thought Leaders think it'll replace. Our Thought Leaders think like that at least. They also pretty much told us to use AI or get fired
  • ilrwbwrkhv 2y ago
    Which thought leader is telling you to use AI or get fired?
    • switch007 2y ago
      My CTO (C level is automatically a Thought Leader)
  • CamperBob2 2y ago
    It's premature to think you can replace a junior developer with current technology, but it seems fairly obvious that it'll be possible within 5-10 years at most. We're well past the proof-of-concept stage IMO, based on extensive (and growing) personal experience with ML-authored code. Anyone who argues that the traditional junior-developer role isn't about to change drastically is whistling past the graveyard. Your C-suite execs are paid to skate where that particular puck is going. If they didn't, people would complain about their unhealthy fixation on the next quarter's revenue. Of course, if the junior-developer role is on the chopping block, then more experienced developers will be next. Finally, the so-called "thought leaders" will find themselves outcompeted by AI. The ability to process very large amounts of data in real time, leveraging it to draw useful conclusions and make profitable predictions based on ridiculously-large historical models, is, again, already past the proof-of-concept stage.
    • actsasbuffoon 2y ago
      Unless I’ve missed some major development then I have to strenuously disagree. AI is primarily good at writing isolated scripts that are no more than a few pages long. 99% of the work I do happens in a large codebase, far bigger than anything that you can feed into an AI. Tickets come in that say something like, “Users should be able to select multiple receipts to associate with their reports so long as they have the management role.” That ticket will involve digging through a whole bunch of files to figure out what needs to be done. The resolution will ultimately involve changes to multiple models, the database schema, a few controllers, a bunch of React components, and even a few changes in a micro service that’s not inside this repo. Then the AI is going to fail over and over again because it’s not familiar with the APIs for our internal libraries and tools, etc. AI is useful, but I don’t feel like we’re any closer to replacing software developers now than we were a few years ago. All of the same showstoppers remain.
      • luckydata 2y ago
        Google's LLM can ingest humongous contexts. Check it out.
      • CamperBob2 2y ago
        All of the code you mention implements business logic, and you're right, it's probably not going to be practical to delegate maintenance of existing code to an ML model. What will happen, probably sooner than you think, is that that code will go away and be replaced by script(s) that describe the business logic in something close to declarative English. The AI model will then generate the code that implements the business logic, along with the necessary tests. So when maintenance is required, it will be done by adding phrases like "Users should be able to select multiple receipts" to the existing script, and re-running it to regenerate the code from scratch. Don't confuse the practical limitations of current models with conceptual ones. The latter exist, certainly, but they will either be overcome or worked around. People are just not as good at writing code as machines are, just as they are not as good at playing strategy games. The models will continue to improve, but we will not.
        • 2y ago
  • srockets 2y ago
    I found those tools to resemble an intern: they can do some tasks pretty well, when explained just right, but others you'd spend more time guiding than it would have taken you to do it yourself. And rarely can you or the model/intern can tell ahead of time which tasks are in each of those categories. The difference is, interns grow and become useful in months: the current rate of improvements in those tools isn't even close to that of most interns.
    • luckydata 2y ago
      I have a slightly different view. IMHO LLMs are excellent rubber ducks or pair programmers. The rate at which I can try ideas and get them back is much higher than what I would be doing by myself. It gets me unstuck in places where I might have spent the best part of a day in the past.
      • srockets 2y ago
        My experience differs: if at all, they get me unstuck by trying to shove bad ideas, which allows me to realize "oh, that's bad, let's not do that". But it's also extremely frustrating, because a stream of bad ideas from a human has some hope they'll learn, but here I know I'll get the same BS, only with an annoying and inhumane apology boilerplate.
        • Kiro 2y ago
          Not my experience at all. What kind of code are you using it for?
          • guappa 2y ago
            Not everyone does CRUD applications.
  • kergonath 2y ago
    > Our Thought Leaders think like that at least. They also pretty much told us to use AI or get fired Ours told us not to use LLMs because they are worried about leaking IP and confidential data.
    • switch007 2y ago
      I think Enterprise plans mostly solve this. And Copilot is quite aggressive with blocking public code (haven't looked in to what that really means and what we've configured, I just get the error often)
      • guappa 2y ago
        Ah yes, because microsoft never had a leak right? I can absolutely not go on the internet and download the source code for windows, because microsoft's security is impeccable.
  • guappa 2y ago
    A junior developer gets better every day (hopefully), an AI is a blank slate every time more or less.
• hggigg 2y ago
  I think this is the wrong way to think about it. It's more important to find a problem and see if this is a fit for the solution, not throw the technology at everything and see if it sticks. I have had no needs where it's an appropriate solution myself. In some areas it represents a net risk.
• chrsw 2y ago
  What if your competition is willing to give up autonomy to companies like Microsoft/Open AI a bet to race head of you and it comes off?
  • achierius 2y ago
    It's a devil's bargain, and not just in terms of the _individual_ payoffs that OpenAI employees/executives might receive. There's a reason why Google/Microsoft/Amazon/... ultimately failed to take the lead in GenAI, despite every conceivable advantage (researchers, infrastructure, compute, established vendor relationships, ...). The "autonomy" of a startup is what allows it to be nimble; the more Microsoft is able to tell OpenAI what to do, the more I expect them to act like DeepMind, a research group set apart from their parent company but still beholden to it.
• hmottestad 2y ago
  Cost tends to go down with time as compute becomes cheaper. And as long as there is competition in the AI space it's likely that other companies would step in and fill the void created by OpenAI going belly up.
  • infecto 2y ago
    I tend to think along the same lines. If they were the only player in town it would be different. I am also not convinced $5billion is that big of a deal for them, would be interesting to see their modeling but it would be a lot more suspect if they were raising money and increasing the price of the product. Also curious how much of that spend is R&D compared to running the system.
  • ToucanLoucan 2y ago
    > Cost tends to go down with time as compute becomes cheaper. This is generally true but seems to be, if anything, inverted for AI. These models cost billions to train in compute, and OpenAI thus far has needed to put out a brand new one roughly annually in order to stay relevant. This would be akin to Apple putting out a new iPhone that costed billions to engineer year over year, but was giving the things away for free on the corner and only asking for money for the versions with more storage and what have you. The vast majority of AI adjacent companies too are just repackaging OpenAI's LLMs, the exceptions being ones like Meta, which certainly has a more solid basis what with being tied to an incredibly profitable product in Facebook, but also... it's Meta and I'm sure as shit not using their AI for anything, because it's Meta. I did some back of napkin math in a comment a ways back and landed on that in order to break even merely on training costs, not including the rest of the expenditure of the company, they would need to charge all of their current subscribers $150 per month, up from... I think the most expensive right now is about $20? So nearly an 8 fold price increase, with no attrition, to again break even. And I'm guessing all these investors they've had are not interested in a 0 sum.
    • Mistletoe 2y ago
      The closest analog seems to be bitcoin mining, which continually increases difficulty. And if you've ever researched how many bitcoin miners go under...
• jdmoreira 2y ago
  Skills that will atrophy? People learnt those skills the hard way the first time around, do you really think they can't be sharpened again? This perspective makes zero sense. What makes sense is to extract as much value as possible as soon as possible and for as long as possible.
• sebzim4500 2y ago
  The marginal cost of inference per token is lower than what OpenAI charges you (IIRC about 2x cheaper), they make a loss because of the enormous costs of R&D and training new models.
  • diggan 2y ago
    Did OpenAI publish concrete numbers regarding this, or where are you getting this data from?
    • lukeschlather 2y ago
      https://news.ycombinator.com/item?id=41833287 https://news.ycombinator.com/item?id=41833287 This says 506 tokens/second for Llama 405B on a machine with 8x H200s which you can rent for $4/GPU so probably $40/hour for a server with enough GPUs. And so it can do ~1.8M tokens per hour. OpenAI charges $10/1M output tokens for GPT4o. (input tokens and cached tokens are cheaper, but this is just ballpark estimates.) So if it were 405B it might cost $20/1M output tokens. Now, OpenAI is a little vague, but they have implied that GPT4o is actually only 60B-80B parameters. So they're probably selling it with a reasonable profit margin assuming it can do $5/1M output tokens at approximately 100B parameters. And even if they were selling it at cost, I wouldn't be worried because a couple years from now Nvidia will release H300s that are at least 30% more efficient and that will cause a profit margin to materialize without raising prices. So if I have a use case that works with today's models, I will be able to rent the same thing a year or two from now for roughly the same price.
  • ignoramous 2y ago
    > The marginal cost of inference per token is lower than what OpenAI charges you Unlike most Gen AI shops, OpenAI also incurs a heavy cost for traning base models gunning for SoTA, which involves drawing power from a literal nuclear reactor inside data centers.
    • fransje26 2y ago
      > from a literal nuclear reactor inside data centers. No.
• b112 2y ago
  The cost of current compute for current versions pf chatgpt will have dropped through the floor in 2 years, due to processing improvements and on die improvements to silicon. Power requirements will drop too. As well, as people adopt, the output of training costs will be averaged over an ever increasing market of licensing sales. Looking at the cost today, and sales today in a massively, rapidly expanding market, is not how to assess costs tomorrow. I will say one thing, those that need gpt to code will be the first to go. Becoming a click-click, just passing on chatgpt output, will relegate those people to minimum wage. We already have some of this sort, those that cannot write a loop in their primary coding language without stackoverflow, or those that need an IDE to fill in correct function usage. Those who code in vi, while reading manpages need not worry.
  • ben_w 2y ago
    > We already have some of this sort, those that cannot write a loop in their primary coding language without stackoverflow, or those that need an IDE to fill in correct function usage. > Those who code in vi, while reading manpages need not worry I think that's the wrong dichotomy: LLMs are fine at turning man pages into working code. In huge codebases, LLMs do indeed lose track and make stuff up… but that's also where IDEs giving correct function usage is really useful for humans. The way I think we're going to change, is that "LGTM" will no longer be sufficient depth of code review: LLMs can attend to more than we can, but they can't attend as well as we can. And, of course, we will be getting a lot of LLM-generated code, and having to make sure that it really does what we want, without surprise side-effects.
  • nuancebydefault 2y ago
    > Those who code in vi, while reading manpages need not worry. That sounds silly at first read, but there are indeed people who are so stubborn to still use numbered zip files on a usb flash drive in stead of source control systems, or prefer to use their own scheduler over an RTOS. They will survive, they fill a niche, but I would not say they can do full stack development or be even easy to collaborate with.
  • whoisthemachine 2y ago
    You had me until vi.
• singularity2001 2y ago
  people kept whining about Amazon losing money and called me stupid for buying their stock...
  • empath75 2y ago
    Depending on when you bought it, it was a pretty risky play until AWS came out and got traction. Their retail business _still_ doesn't make money.
  • bmitc 2y ago
    Why does everyone always like to compare every company to Amazon? Those companies are never like Amazon, which is one of the most entrenched companies ever.
    • ben_w 2y ago
      While I agree the comparison is not going to provide useful insights, in fairness to them Amazon wasn't entrenched at the time they were making huge losses each year.
  • ben_w 2y ago
    As I recall, while Amazon was doing this, there was no comparable competition from other vendors that properly understood the internet as a marketplace? Closest was eBay? There is real competition now that plenty of big box stores' websites also list things you won't see in the stores themselves*, but then also Amazon is also making a profit now. I think the current situation with LLMs is a dollar auction, where everyone is incentivised to pay increasing costs to outbid the others, even though this has gone from "maximise reward" to "minimise losses": https://en.wikipedia.org/wiki/Dollar_auction https://en.wikipedia.org/wiki/Dollar_auction * One of my local supermarkets in Germany sells 4-room "garden sheds" that are substantially larger than the apartment I own in the UK: https://www.kaufland.de/product/396861369/ https://www.kaufland.de/product/396861369/
  • bigstrat2003 2y ago
    And for every Amazon, there are a hundred other companies that went out of business because they never could figure out how to turn a profit. You made a bet which paid off and that's cool, but that doesn't mean the people telling you it was a bad bet were wrong.
• bmitc 2y ago
  Fine with me. I've even considered turning off Copilot completely because I use it less and less.
  • simonswords82 2y ago
    Copilot really is garbage and I just don’t understand why. Is Microsoft not using OpenAIs latest models?
• InkCanon 2y ago
  I would just switch to Claude of Mistral like I already do. I really feel little difference between them
  • mprev 2y ago
    I like how your typo makes it sound like a medieval sage.
    • card_zero 2y ago
      Let me consult my tellingbone.
• whywhywhywhy 2y ago
  I used to be concerned with this back when GPT4 originally came out and was way more impressive than the current version and OpenAI was the only game in town. But Nowadays GPT has been quantized and cost-optimized to hell that it's no longer as useful as it was and with Claude or Gemini or whatever it's no longer noticeably better than any of them so it doesn't really matter what happens with their pricing.
  • edg5000 2y ago
    Are you saying they reduced the quality of the model in order to save compute? Would it make sense for them to offer a premium version of the model at at a very high price? At least offer it to those willing to pay? It would not make sense to reduce output quality only to save on compute at inference, why not offer a premium (and perhaps perhaps slower) tier? Unless the cost is at training time, maybe it would not be cost-effective for them to keep a model like that up to date. As you can tell I am a bit uninformed on the topic.
    • bt1a 2y ago
      Yeah, as someone who had access to gpt-4 early in 2023, the endpoint used to take over a minute to respond and the quality of the responses was mindblowing. Simply too expensive to serve at scale, not to mention the silicon constraints that are even more prohibitive when the organization needs to lock up a lot of their compute for training The Next Big Model. Thats a lot of compute that cant be on standby for serving inference
• marcosdumay 2y ago
  > being a luditite and abstaining from using AI is not the answer Hum... The judge is still out on that one, but the evidence is piling up into the "yes, not using it is what works best" here. Personally, my experience is strongly negative, and I've seen other people get very negative results from it too. Maybe it will improve so much that at some point people actually get positive value from it. My best guess is that we are not there yet.
  • bigstrat2003 2y ago
    Yeah, I agree. It's not "being a Luddite" to take a look and conclude that the tool doesn't actually deliver the value it claims to. When AI can actually reliably do the things its proponents say it can do, I'll use it. But as of today it can't, and I have no use for tools that only work some of the time.
  • Kiro 2y ago
    It's not either or. In my specific situation Cursor is such a productivity booster that I can't imagine going back. It's not a theoretical question.
    • epolanski 2y ago
      +1, people that are giving up on tools like Cursor are just less productive, that's not theoretical, that's a fact.
  • int_19h 2y ago
    Machine translation alone is a huge positive value. What GPT can do in this area is vastly better than anything before it.
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• righthand 2y ago
  Being a luddite has it’s advantages as you won’t succumb to the ills of society trying to push you there. To believe that it’s inevitable LLMs will be required to work is silly in my opinion. As these corps eat more and more good will of the content on the internet for only their gain, people will and have already started defecting from it. Many of my coworkers have shut off CoPilot, though still occasionally use ChatGPT. But since the power really only is adding randomization to established working document templates, the gain is only of a short amount of working time. There is also the active and passive efforts to poison the well. As LLMs are used to output more content and displace people, the LLMs will be trained on the limited regurgitation available to the public (passive). Then there’s the people intentionally creating bad content to be ingested. It really is a lose for big service llm companies as the local models become more and more good enough (active).
• zuminator 2y ago
  Where are you getting $2k/person/month? ChatGPT allegedly has on the order of 100 million users. Divide that by $5b and you get a $50 deficit per person per year. Meaning they could raise their prices by less than four and a half dollars per user to break even. Even if they were to only gouge the current ~11 million paying subscribers, that's around $40/person/month over current fees to break even. Not chump change, but nowhere close to $2k/person/month.
  • ants_everywhere 2y ago
    I think the question is more how much the market will bear in a world where MS owns the OpenAI IP and it's only available as an Azure service. That's a different question from what OpenAI needs to break even this year.
  • directevolve 2y ago
    [dead]
  • alpha_squared 2y ago
    What you're suggesting is the basic startup math for any typical SaaS business. The problem is OpenAI and the overall AI space is raising funding on the promise of being much more than a SaaS. If we ignore all the absurd promises ("it'll solve all of physics"), the promise to investors is distilled down to this being the dawn of a new era of computing and investors have responded by pouring in hundreds of billions of dollars into the space. At that level of investment, I sure hope the plan is to be more than a break-even SaaS.
  • layer8 2y ago
    > ChatGPT allegedly has on the order of 100 million users. That’s users, not subscribers. Apparently they have around 10 million ChatGPT Plus subscribers plus 1 million business-tier users: https://www.theinformation.com/articles/openai-coo-says-chatgpt-passed-11-million-paying-subscribers https://www.theinformation.com/articles/openai-coo-says-chat... To break even, that means that ChatGPT Plus would have to cost around $50 per month, if not more because less people will be willing to pay that.
• X6S1x6Okd1st 2y ago
  Chatgpt doesn't have much of a moat. Claude is comparable for coding tasks and llama isn't far behind. No biz collapse will remove llama from the world, so if you're worried about tools disappearing then just only use tools that can't disappear
  • mlnj 2y ago
    And Zuckerberg has vowed to pump billions more into developing and releasing more Llama. I believe "Altman declaring AGI is almost here" was peak OpenAI and now I will just have some popcorn ready.
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• Spivak 2y ago
  Take the "millennial subsidy" while the money font still floweth. If it gets cut off eventually so be it.
• AlwaysRock 2y ago
  Is anyone using it to the point where their skills start to atrophy? I use it fairly often but mostly for boilerplate code or simple tasks. The stuff that has specific syntax that I have to look up anyway. That feels like saying that using spell check or autocomplete will make one's spelling abilities atrophy.
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