4 ms·

They're not talking about your anecdotes, they're talking about the capex and returns. Which are overwhelmingly negative.

by __loam 2y ago

zachthewf 2y ago
I mean, inference costs have decreased like 1000x in a few years. OpenAI is the fastest growing startup by revenue, ever. How foolish do you have be to be worrying about ROI right now? The companies that are building out the datacenters produce billions per year in free cash flow. Maybe OP would prefer a dividend?
- ben_w 2y ago
  Given how close the tech is to running on consumer hardware — by which I mean normal consumers not top-end MacBooks — there's a real chance that the direct ROI is going to be exactly zero within 5 years. I say direct, because Chrome is free to users, yet clearly has a benefit to Google worth spending on both development and advertising the browser to users, and analogous profit sources may be coming to LLMs for similar reasons — you can use it locally so long as you don't mind every third paragraph being a political message sponsored by the Turquoise Party of Tumbrige Wells.
- billyhoffman 2y ago
  > OpenAI is the fastest growing startup by revenue, ever. No it's not. Facebook hit $2B in Revenue in late 2010 - early 2011, ~5 years after its founding. https://dazeinfo.com/2018/11/14/facebook-revenue-and-net-income-by-year-graphfarm/ https://dazeinfo.com/2018/11/14/facebook-revenue-and-net-inc...
  - kulahan 2y ago
    Finding one example of him being wrong still kinda supports his point, don't you think?
    - dghlsakjg 2y ago
      Especially when that example is Facebook!
      - saalweachter 2y ago
        MySpace had $1.5B in sales in 2009.
        dghlsakjg 2y ago
        Facebook sold 2b of ads this week.
    - shawabawa3 2y ago
      Coinbase was founded in 2013 and hit $1B in revenue in 2019 iirc
    - achierius 2y ago
      No, it makes me think there are more. ", ever." Suggests you actually know the space of things you're talking about.
- __loam 2y ago
  I would definitely be worried about ROI if my main product was something my big tech competition could copy easily because they did the research that led to my product.
elif 2y ago
What do you think the capex returns were for DARPA NET? These reflexive humanist anti-AI takes are going to age like peeled bananas.
- __loam 2y ago
  Likewise for the breathless praise. The early internet was a public project, it didn't have to worry about its own return because the point was to build a robust communications system that could survive a nuclear strike. Seeing as Openai is trying to change to a for profit corporation, it's hardly an apt comparison.
pembrook 2y ago
Yea, I mean, if it can't show a return in the very short term, is it even worth doing? How could something possibly develop into being profitable after years of not being so? All you have to do is point to bankrupt bookseller Amazon, whom that dumb Jeff Bezos ran into the ground with his money-losing strategy for years. Clearly it doesn't work!
- __loam 2y ago
  There's growth focus and there's doing some of the largest fundraising rounds in the history of silicon valley during a time when debt is the most expensive it's been in decades and still barely keeping the lights on because your service is so unprofitable.
  - pembrook 2y ago
    Interest rates are still well below their historical average right now. And yes, venture capital investing involves high risk, of which all participants are fully aware, and intentionally looking for. We're talking <2 years since ChatGPT went viral for the first time. Generally these stories take at least 10 years to play out. Uber was unprofitable for 15 years. Now they're profitable. Every VC-backed startup is unprofitable and barely keeping the lights on for many years. None have reached 100M active users in a matter of weeks like ChatGPT. They absolutely might fail. But the level of pessimism here is just plain funny. How much money are you willing to bet against them ever getting profitable?
    - __loam 2y ago
      I think there's a big difference between companies like Google and Amazon that were operated unprofitably for years but did have the option to pivot in to profitability for a lot of that time. I would also consider Uber more of an outlier than the rule in terms of blitzscaling. Maybe OpenAI will be kept alive on life support for a while because there is so much in the industry riding on AI being the next big thing, but their problems are myriad and include terrible unit economics and a complete lack of moat in an environment full of bigger organizations that can pour nigh unlimited money into trying to outcompete them. Maybe it makes me a pessimist to point out basic business fundamentals in the face of unquestioning optimism.

They're not talking about your anecdotes, they're talking about the capex and returns. Which are overwhelmingly negative.

by __loam 2y ago

They're not talking about your anecdotes, they're talking about the capex and returns. Which are overwhelmingly negative.

zachthewf 2y ago

I mean, inference costs have decreased like 1000x in a few years. OpenAI is the fastest growing startup by revenue, ever. How foolish do you have be to be worrying about ROI right now? The companies that are building out the datacenters produce billions per year in free cash flow. Maybe OP would prefer a dividend?

ben_w 2y ago
Given how close the tech is to running on consumer hardware — by which I mean normal consumers not top-end MacBooks — there's a real chance that the direct ROI is going to be exactly zero within 5 years. I say direct, because Chrome is free to users, yet clearly has a benefit to Google worth spending on both development and advertising the browser to users, and analogous profit sources may be coming to LLMs for similar reasons — you can use it locally so long as you don't mind every third paragraph being a political message sponsored by the Turquoise Party of Tumbrige Wells.
billyhoffman 2y ago
> OpenAI is the fastest growing startup by revenue, ever. No it's not. Facebook hit $2B in Revenue in late 2010 - early 2011, ~5 years after its founding. https://dazeinfo.com/2018/11/14/facebook-revenue-and-net-income-by-year-graphfarm/ https://dazeinfo.com/2018/11/14/facebook-revenue-and-net-inc...
- kulahan 2y ago
  Finding one example of him being wrong still kinda supports his point, don't you think?
  - dghlsakjg 2y ago
    Especially when that example is Facebook!
    - saalweachter 2y ago
      MySpace had $1.5B in sales in 2009.
      - dghlsakjg 2y ago
        Facebook sold 2b of ads this week.
  - shawabawa3 2y ago
    Coinbase was founded in 2013 and hit $1B in revenue in 2019 iirc
  - achierius 2y ago
    No, it makes me think there are more. ", ever." Suggests you actually know the space of things you're talking about.
__loam 2y ago
I would definitely be worried about ROI if my main product was something my big tech competition could copy easily because they did the research that led to my product.

elif 2y ago

What do you think the capex returns were for DARPA NET? These reflexive humanist anti-AI takes are going to age like peeled bananas.

__loam 2y ago
Likewise for the breathless praise. The early internet was a public project, it didn't have to worry about its own return because the point was to build a robust communications system that could survive a nuclear strike. Seeing as Openai is trying to change to a for profit corporation, it's hardly an apt comparison.

pembrook 2y ago

Yea, I mean, if it can't show a return in the very short term, is it even worth doing? How could something possibly develop into being profitable after years of not being so? All you have to do is point to bankrupt bookseller Amazon, whom that dumb Jeff Bezos ran into the ground with his money-losing strategy for years. Clearly it doesn't work!

__loam 2y ago
There's growth focus and there's doing some of the largest fundraising rounds in the history of silicon valley during a time when debt is the most expensive it's been in decades and still barely keeping the lights on because your service is so unprofitable.
- pembrook 2y ago
  Interest rates are still well below their historical average right now. And yes, venture capital investing involves high risk, of which all participants are fully aware, and intentionally looking for. We're talking <2 years since ChatGPT went viral for the first time. Generally these stories take at least 10 years to play out. Uber was unprofitable for 15 years. Now they're profitable. Every VC-backed startup is unprofitable and barely keeping the lights on for many years. None have reached 100M active users in a matter of weeks like ChatGPT. They absolutely might fail. But the level of pessimism here is just plain funny. How much money are you willing to bet against them ever getting profitable?
  - __loam 2y ago
    I think there's a big difference between companies like Google and Amazon that were operated unprofitably for years but did have the option to pivot in to profitability for a lot of that time. I would also consider Uber more of an outlier than the rule in terms of blitzscaling. Maybe OpenAI will be kept alive on life support for a while because there is so much in the industry riding on AI being the next big thing, but their problems are myriad and include terrible unit economics and a complete lack of moat in an environment full of bigger organizations that can pour nigh unlimited money into trying to outcompete them. Maybe it makes me a pessimist to point out basic business fundamentals in the face of unquestioning optimism.