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OpenAI’s board, paraphrased: ‘All we need is unimaginable sums of money’
- dheera 2y agoPlot twist: OpenAI uses their GPU farms to mine cryptocurrency so that they get those unimaginable sums of money
- jgalt212 2y agoThat would be funny. Microstrategy with one level of abstraction.
- gnabgib 2y agoDiscussion (274 points, 2 days ago, 315 comments) https://news.ycombinator.com/item?id=42521744 https://news.ycombinator.com/item?id=42521744
- greenthrow 2y agoThis is a link to an editorial by John Gruber, so not necessarily the same discussion.
- amelius 2y agoSo tired of people asking for giant piles of money that are high enough to corner a market.
- ren_engineer 2y agoand yet deepseek just created an amazing model with the fraction of their compute resources
- stri8ed 2y agoTrained at least in part on Chat-GPT data.
- Handprint4469 2y agoDoesn't matter. In fact, it makes it even funnier: all these investors spending billions of dollars on OpenAI just end up subsidizing the competing models.
- rubslopes 2y agoThat was trained on data scrapped from the web. I'd say it's fair.
- snats 2y agoIt's more of a distilled model, not a fair 1:1 comparison
- janice1999 2y agoWhere is all the money going? Nvidia hardware?
- rsrsrs86 2y agoAnd compute.
- jgalt212 2y agoYes, but the most expensive CPU doesn't cost $40K.
- smallmancontrov 2y agoSpatulas in Jensen's decorative jar.
- KennyBlanken 2y agoThat and power. The GB200 needs 1000W per GPU. Eight racks of GB200's? You're talking about 1 megawatt of power. Well over that if you include PSU losses, cooling, and all the networking, storage, memory...
- jazzyjackson 2y agoIP Lawyers and Nuclear Lobbyists, presumably
- tempodox 2y agoNot to mention all the spin doctors they need to conjure up a regulatory moat in absence of a technical one.
- esafak 2y agoIf we get nuclear fusion and better GPUs as a byproduct of enabling LLMs, great. We haven't had this kind of dynamic since the heft of Windows pushed Intel to deliver faster processors.
- ghshephard 2y agoIn all fairness regarding his comment about Netscape - anyone who invested in Netscape at the IPO (and certainly before the IPO) at $2.9B - made a ton of money on the Internet. On the last day of trading, after the AOL exit 4 years it was worth (cash, stock, etc...) around $10B. Thank Mike Homer for pushing that one through, and Jim Barksdale for being savvy enough to recognize it as the right play.
- asadotzler 2y agoAlso, they started from scratch, they didn't take NCSA's Mosaic public, they left the university, brought in some established players, created a new company, and re-wrote the entire browser from scratch. SamA wants to take everything the non-profit created and just make it for profit. If he want's to do that he can create a new company, lure away the talent, start from scratch, and run from there. This "it's just like Mosaic -> Netscape" line is total bullshit and either Gruber doesn't remember like I do or he's intentionally misleading for some other goal.
- MndlshnDscpl 2y agoAgreed. I think originally, it would have been more accurate to say IE was based on Mosaic. If I recall correctly, I think Microsoft bought out Spyglass Mosaic to base IE on, and that browser had been licensed from the NCSA. Netscape on the other hand had originally been Mosaic Communications(anyone remember home.mcom.com?) and changed the name when they did the clean rewrite. I think the name Mozilla came about because they were looking for a 'Mosaic Killer' or something along those lines. Memories are kind of fuzzy so I'm sure someone on here has a better recollection.
- asadotzler 2y agoYes. Microsoft licensed a version of Mosaic from Spyglass who got license from NCSA.The name change had nothing to do with the re-write. They never used Mosaic except in the name and were facing a suit from NCSA or the university (I can't remember) so they changed it. You are correct about Mozilla. I worked for Mozilla for 25 years and can attest to that.
- asadotzler 2y agoGruber's shilling some here. Andreesen et al. started over from scratch when they created Netscape. They didn't use any of the NCSA code. It was a ground up re-write. SamA wants to take everything the non-profit built and use it directly in HIS for profit enterprise. Fuck him.
- kragen 2y agoWho and what do you think Gruber is shilling for? I don't see Gruber saying anything that might tempt anyone to part from some of their money. He seems to be doing the diametrical opposite of shilling.
- asadotzler 2y agoThe "Silicon Valley can do no bad" crowd. He's making it sound like Altman's just following a well trod path here when they're clearly doing something novel and actually quite evil.
- kragen 2y agoHe calls investing in OpenAI "wishful thinking" and a "Ponzi scheme", and as I read it, he's also criticizing the thing you're criticizing, though somewhat less harshly. He just seems to be under the mistaken impression that Mosaic Communications Corporation was a licensee of Mosaic like Spry was, which, well, you can see how that misunderstanding could have arisen.
- mcphage 2y ago> He's making it sound like Altman's just following a well trod path Well trodden and failing path. You misread the article if you considered it any endorsement of OpenAI’s plan.
- RajT88 2y agoWell, who does Gruber usually shill for? The question is - why would that one company want this hot take out there?
- epolanski 2y agoI think their vision is as it should be ambitious, but I don't believe they can gain any real technical moat. Models are commodities, even in the case Open ai goes through another major breakthrough nothing can stop some of their employees to run to other companies or founding their own and replicating or bettering the OpenAI results. In fairness I realize that I don't use any of OpenAI's models. There are better alternatives for coding, translating or alternatives that are simply faster or cheaper (Gemini) or more open.
- brookst 2y agoTechnical moats are the worst ones. The absolute best you can hope for is patents, but those take years to issue and then you have to fight after tbe fact. Trade secrets are nice but hard to defend. The best moats are scale (Walmart), brand (“Google” means search), network effects (Facebook, TikTok). None of those are perfect but all are better than just having better tech.
- otherme123 2y agoFacebook and TikTok could collapse in under a year, that has happened before. Network effects seems very brittle: AIM or Fotolog doesn't exist, and they were huge. MySpace is a shadow of what it was. OTOH, WD40 has a technical moat since 1953, without a patent. There are a number of companies who rely on technical moat mixed with excellent technical image: Makita or Milwaukee Tool come to mind. You can have also a company based on technology moat that theoretically shouldn't exist (patents expired, commodity products), but it does (Loctite, 3M).
- numpy-thagoras 2y agoOpenAI's engineers: brilliant, A+, A* even. OpenAI's C-suite: Well, they earned the C, but it was a letter grade. What a profoundly unimaginative strategy. No matter the industry, a large-scale diversion of resources towards a moonshot goal will likely get you to that goal. They haven't made an argument as to why we should do that just for them, especially with all of the other alternatives. And no, advertising your previously secret testing models (e.g. o3) as if they were market competitors is not how to prove they should have our money.
- abc-1 2y ago> OpenAI's engineers: brilliant, A+, A* even. Then why do they look about average to Anthropic, Mistral, DeepSeek, and many others of that cohort despite having x100 the amount of resources?
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- numpy-thagoras 2y agoPraising one doesn't mean condemning another.
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- ryanwaggoner 2y ago”They haven’t made an argument as to why we should do that just for them…” What “we”? They’ve already raised billions, and I suspect they’re about to succeed at raising tens of billions more, despite the skepticism of random HN users.
- numpy-thagoras 2y agoTens of billions? Sama has been talking about how their ask can be for over a trillion dollars invested. What "we"? That trillion is going to come out of our pockets one way or another, either as costs passed down, as government handouts from our tax dollars, as redirected investments that dry up opportunities for SWEs elsewhere, etc.
- robertlagrant 2y agoThis doesn't seem to say much to back its comparisons. Wouldn't spending a giant amount of money create some sort of moat?
- wmf 2y agoNot if your competitors are spending the same amount (or spending vastly less to get similar results in the case of DeepSeek).
- mvdtnz 2y agoFrom what I'm reading of the industry, no not really. The laughably huge investments seem to buy OpenAI approximately a 6 month head start over open source models, which is not much.
- AnimalMuppet 2y agoDepends. If they manage to actually find a way to create an AGI, then a six month head start might be massive at that point. Until then... not so much.
- robertlagrant 2y agoWhy is this, though? Are they wasting the money? Or are their discoveries instantly disseminated to their competitors? Or are the open source models just currently sponsored by rich people?
- patrickhogan1 2y agoI agree that at its current rate of $20 per month and continuous cash burn, OpenAI’s model doesn’t seem sustainable. But the same could have been said about Google in its early days. Back then, Google spent heavily to index websites without a clear path to profitability—until it figured out how to monetize. Similarly, OpenAI will likely release more products to generate revenue. OpenAI has the potential to create the next groundbreaking innovation, like the iPhone. Who needs apps when the AI itself can handle everything?
- VHRanger 2y ago> Google spent heavily to index websites without a clear path to profitability Uh, they were advertising in 1999 already?
- patrickhogan1 2y agoPlease read the academic paper by Larry Page and Sergey Brin, available at this link: https://blogs.cornell.edu/info2040/2019/10/28/the-academic-paper-that-started-google/ https://blogs.cornell.edu/info2040/2019/10/28/the-academic-p... You might find their perspective on advertising surprising. Returning to my earlier point, please expand your argument about why OpenAI may fail. Let’s aim to elevate the discussion.
- int_19h 2y agoI would say that this paper rather supports the point: the people who made Google knew from the get go that ads were one way to make money off it (even if they didn't like the notion). OpenAI, in contrast, still doesn't have any notion as to how to make it all profitable.
- patrickhogan1 2y agoIf you’re going to downvote, please consider leaving a comment—I’d really value the feedback. I’d like to see more thoughtful discussion here. The debate often feels stuck between oversimplified takes like “It’s just a commodity” and “No, it’s a game changer!” Let’s assume for a moment that OpenAI operates as a commodity business but still figures out how to become profitable, even with small margins. After all, US Steel was a commodity and became hugely successful. Given these assumptions, why do you think OpenAI might not succeed? Let’s move the conversation forward.
- cs702 2y agoThis rings true to my ears: > There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble. Thus, effectively, OpenAI is to this decade’s generative-AI revolution what Netscape was to the 1990s’ internet revolution. The revolution is real, but it’s ultimately going to be a commodity technology layer, not the foundation of a defensible proprietary moat. In 1995 investors mistakenly thought investing in Netscape was a way to bet on the future of the open internet and the World Wide Web in particular. OpenAI has a short-ish window of opportunity to figure out how to build a moat. "Trying to spend more" is not a moat, because the largest US and Chinese tech companies can always outspend OpenAI. The clock is ticking.
- neals 2y agoI get the moat idea. But are there really any moats? What's a good moat these days anyway? Isn't being first and "really good" fine as well?
- kridsdale1 2y agoNetwork effects are a moat. A vertically integrated system that people depend on with non-portable integrations is a moat. Regulatory Capture is a moat.
- trhway 2y agoWhat is the moat of the Google Search? To me the LLM is the first and the only disruptor so far of the Search.
- andrewflnr 2y agoIt used to be their high search quality, difficult to replicate technology. Now they don't have one.
- asadotzler 2y agoTheir moat is lock-in across services now. People are "Google" users not just "web search" users.
- JojoFatsani 2y agoSame
- bloomingkales 2y agoUnimaginable sums of money can only come from oil rich countries. They are probably just mentally trying to accept that they are going to take the money from these nations. The word "open" is still under threat in this scenario too.
- rsync 2y agoYou mean like the United States? The world‘s largest oil producer?
- bloomingkales 2y agoLol, I meant the muslims.
- wmf 2y agoI see some people talking about OpenAI "stealing" IP from the nonprofit side, but remember that they went "capped profit" back in 2019. It's possible that GPT-3 and later were developed entirely by the capped-profit side anyway. I doubt there's much if any pre-2019 IP left.
- onlyrealcuzzo 2y agoThere is no profit yet...
- Jensson 2y agoBut they are expected to make profits in the future, that is what investments into for-profits are for.
- asadotzler 2y agoDid they license and pay for all of the non-profit work they utilized in GPT-3? OR are you claiming it was a clean-room re-write? I think you're pretty naive if you think the latter happened.
- wmf 2y agoI think they could have done just enough of both to plausibly neutralize Elon's lawsuit.
- bravura 2y agoPeople keep saying stuff like this, but I don't believe it: "There is no technical moat in this field, and so OpenAI is the epicenter of an investment bubble." AI progress is driven by strong valuable data. Detailed important conversation with a chatbot are much more valuable that quick search queries. As LLMs extend past web UIs, there is even more interaction data to capture and learn from. The company that captures the most human-AI interaction data will have a TREMENDOUS moat.
- ijustlovemath 2y agoWhat do you think they've been building these multimodal models with? If I had Google application logs from the past few decades I would absolutely be transforming it and loading into my training dataset. I would not be surprised if Google/Meta/Msft are not doing this already When the big companies say they're running out of data, I think they mean it literally. They have hoovered up everything external and internal and are now facing the overwhelming mediocrity that synthetic data provides.
- skydhash 2y agoDigital data are only a tiny part of the influx of information that people interact with. It's the same error platforms made with releasing movies straight to their services. Yes, people watch more movies at home, but going to cinemas is a whole experience that encompasses more than just watching a movie. Yes, books are great, but traveling and tutoring is much more impactful.
- ijustlovemath 2y agoSorry, what does that have to do with an OpenAI tech moat?
- skydhash 2y ago>>> The company that captures the most human-AI interaction data will have a TREMENDOUS moat. >> When the big companies say they're running out of data, I think they mean it literally. They have hoovered up everything external and internal and are now facing the overwhelming mediocrity that synthetic data provides. > Digital data are only a tiny part of the influx of information that people interact with.
- resonious 2y agoThe paraphrasing is very comical, but a bit different from what they actually said, which is more like "more than we had imagined".
- thefz 2y agoWell it's Gruber, not really known for being a decent blogger. He's the most biased person you can get acting like a prophet on the internet.
- YetAnotherNick 2y ago> There is no technical moat in this field This is getting so repetitive now that it is stated as a truism. Isn't it the same bet yahoo was betting on in 2000 that it would win because their product branding is better? And now, Yahoo's and Microsoft's search engine is worse than Google from 2 decades ago.
- scarmig 2y agoGoogle's search engine is worse than Google from 2 decades ago.
- malermeister 2y ago[dead]
- otterley 2y agoIs it Google's search engine, or is it that there was less pollution on the Internet two decades ago?
- jsheard 2y agoCorrection: all they need to succeed is unimaginable sums of money and the ironclad right to assimilate every work ever created by humanity without compensation. Who could refuse such a modest request? https://www.theguardian.com/technology/2024/jan/08/ai-tools-chatgpt-copyrighted-material-openai https://www.theguardian.com/technology/2024/jan/08/ai-tools-...
- brookst 2y agoSo why do they pay to license so much content? And you can’t really be suggesting that public domain should exclude AI training?
- jsheard 2y agoThat's a good question, why do they choose to pay for certain content while also continuing to insist that all publicly available content should be fair game? It's an incoherent stance, and the only plausible explanation I can come up with is that those "licensing deals" are out-of-court legal settlements in a trenchcoat.
- pas 2y agoIt's understandable that they don't have the luxury of consistency. They make deals to reduce risks. (It's usually not a great business decision to sue someone who is paying you a lot of money, even if in theory the court could order them to pay more. But how long? Also there are already lawsuits ongoing. Maybe they want to get those dropped?)
- xboxnolifes 2y agoTo sell the illusion of not using copyrighted works they make it publicly aware that they license some works.
- brookst 2y agoYou think the public in general is highly concerned with protecting copyrighted works? Like, they’re all saying “I would love to pay OpenAI but they are infringing on my beloved Reuters copyrights”?
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- ryao 2y agoI once had a colleague that told me in order to make a small fortune, all you need to do is begin with a large fortune.
- jmclnx 2y agoAI going down the Cold Fusion path ? Not much of a surprise to me
- myhf 2y agoUnimaginable Sums of Money Are All You Need The Unreasonable Effectiveness of Huge Sums of Money in the Natural Sciences Unimaginable Sums of Money Considered Harmful
- seydor 2y agoAll we need is unreasonably effective paper titles
- theideaofcoffee 2y agoHow I Learned to Stop Worrying and Love Unimaginable Sums of Money
- yobbo 2y agoUnimaginable Sums of Money: For Fun And Profit
- SignalsDoctor 2y agoThe Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Unimaginable Sums of Money
- eptcyka 2y agoWorst person one knows has a legitimately good opinion.
- andrewstuart 2y ago>> OpenAI currently offers, by far, the best product experience of any AI chatbot assistant. Claude is noticeably better
- tiffanyh 2y ago> defensible moat … investors mistakenly thought investing in Netscape was a good way to bet on the future Yet Chrome for Google did help create a moat. A moat that’s is so strong the DoJ is investigating if Chrome should be a forced divesture from Google/Aplhabet. Note: I do generally agree with the article, but this also shows why you shouldn’t use analogies to reason.
- scarface_74 2y agoGoogle was already dominant before Chrome. Why would anyone want to buy Chrome instead of just basing a browser on Chromium? How are they going to monetize it?
- LittleTimothy 2y agoI don't think you're analyzing this right. The web browser itself has no defensible moat. The reason that Chrome is winning is because Google has a massive money printer in the basement run by 3 guys and a hungry Alsatian (trained to bite anyone who messes with the money printer), and then 100,000 smart engineers desperately trying to find some application to throw that money at. The result is Chrome, Google invests in it because they don't want to be intermediation between them and eyeballs - it's a strategic play, not necessarily a direct money maker. So that's why they do it. But there is no moat, they have the number 1 browser because they spend enormous sums of money hiring top engineers to build the number 1 browser. And this has been true of the browser for a long time, Internet Explorer won because they forced people to use it and used a tonne of anti-competitive practices to screw the competition. Firefox still managed to disrupt that simply by building a better product. This is the clear evidence there is no moat - the castle has been stormed repeatedly.
- alexey-salmin 2y agoThe moat for Chrome is "it's free because it's subsidized by Google's search monopoly". Before that moat for Explorer was "it's free becaus it's subsidized by Microsoft's OS monopoly", that's what killed Netscape, they couldn't subsidize the Navigator. OpenAI can't do anything comparable to Google at this point because they have no other product. If anything they're more like Netscape.
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- benterix 2y agoFrankly, OpenAI efforts seem quite funny for me personally as for most tasks I do Claude is far superior and yet OpenAI behaves as if they were the only game in town. The so-called open source models are getting better and better and even if OpenAI suddenly discovered some new tech that would allow for another breakthrough, it will be immediately picked up by others.
- sumedh 2y ago> yet OpenAI behaves as if they were the only game in town. The data backs it up, Anthropic make most of their revenue from API while ChatGpt makes most of its revenue from the plus plan.
- TaurenHunter 2y ago'unimaginable sums of money’ considered harmful.
- Gys 2y agoA perfect fit for Softbank. I do not understand why a 'dream deal' between them has not happened yet?
- yodsanklai 2y agoHow do they define success after we gave them all the capital they're requesting?
- fragmede 2y agoAccording to 'The Information', AGI will be achieved only when OpenAI's AI systems generate profits exceeding $100 billion, so I'm guessing, for them, AGI = success.
- niemandhier 2y agoInvestors observed the pattern that the largest platform eats the market and bet on openAI moving along the same paths. I disagree, that phenomenon is tied to the social network like phenomena we saw with WhatsApp and Facebook and to the aggregator business model of Amazon and Google. Mathematically we can describe the process by which these monopolies form as nodes joining graphs: Each node selects graphs to connect to in such a way that the probability is proportional to the number of nodes in the graph. Sure Amazon and google feature two types of nodes, but the observation still fits: Selling on Amazon makes sense if there are many customers, buying on Amazon makes sense if there are many offers. OpenAIs business does not have this feature, it does not get intrinsically get more attractive by having more users.
- netdevphoenix 2y agoThis is why I don't think LLMs will lead anywhere other than the present: they are very expensive. If top LLM company in the world can't bring those costs down in a sensible amount of time, it tells you everything you need to know about the future of LLMs. Rest assured, once OpenAI goes down and it really sounds like they are way past the peak, valuations for other LLMs companies will follow. And once they can't raise funding, all of them aside from those backed by big conglomerates (see Google's Gemini and Facebook's Llama) will survive. The long term future of LLMs sure looks like the LLMs themselves will be commodities and the real value will lie in the use of those LLMs to deliver value
- ahel 2y agoWhy Meta decided to open source their Llama architecture and complete models? From a strategic business perspective, I'm trying to puzzle why they would give that up, a competitive advantage (even though it might not be as good as OpenAI product), rather than directly competing with OpenAI. What's the reasoning behind this decision?
- eden-u4 2y agometa is large enough (and diversified enough), when OpenAI valuation goes to pennies (because LLM won't solve any real problem, nor they'll remain relevant in the long term and open source alternative are more than enough for most chatbot usecases), they can acquire all the relevant technologies from OpenAI, Anthropic and such. The real question is why google didn't release their models.
- yodsanklai 2y ago> because LLM won't solve any real problem, LLMs in their current form are very useful tools for many people. Most programmers I know use them daily. I have even friends who aren't tech savvy who paid the subscription to ChatGPT and use it all the time.
- apbytes 2y agoI'd imagine that Meta is trying to avoid an AI / LLM monopoly from happening as the primary goal. They suffered when Apple was a gateway to their service for ios users and decided to shut their access to user data off. And AI is clearly going to be used widely to aid in content generation if not doing entirely. Also they tried jumping on the chatbot hype with M or something. That didn't pan out as well. By opening up AI, they would enable tools that allow users to pump out more content easily and spend more time in app. Getting the goodwill of dev community is a bonus. A brilliant move from Meta.
- dmazin 2y agoMeta's is doing classical (and brilliant) "commodify your complements". LLMs and AI is not where Meta adds value to the market. They add value via advertising. Therefore, AI is not Meta's product, and thus Meta should aim to make AI as cheap as possible. They did the same thing for infra. Meta doesn't sell cloud computing, so they want to make infra as cheap as possible.
- joseneca 2y agoDon't we all...
- betimsl 2y agoDon't we all?