4 ms·

The AI race is one of the most impressive examples of Capitalism making the market efficient. Or at least I've witnessed in my life. We went from Google having

The AI race is one of the most impressive examples of Capitalism making the market efficient. Or at least I've witnessed in my life. We went from Google having complete control. To Open AI releasing GPT2 which really inspired a lot of people to try it. Then GPT3+ convinced the world to try it. After that, Gemini, LLaMa, every type of fine-tune... The noteworthy thing is that LLaMA was good enough that ChatGPT had competition. Then within 1 year of that, we have a dozen companies with models that are good enough. The competition has been the best type of brutal.

jsheard 2y ago
Can it really be called efficient in the capitalist sense until they figure out how to actually turn this stuff into a viable business? Apparently OpenAI is even losing money on the new $200/month tier. https://finance.yahoo.com/news/sam-altman-says-losing-money-080700756.html https://finance.yahoo.com/news/sam-altman-says-losing-money-...
- bberenberg 2y ago
  I believe they’re profitable on all unit economics other than the $200/month tier. The users who opt into this are the absolute “highest” users so you end up with an adverse selection issue with this plan.
  - jsheard 2y ago
    That doesn't seem to gel with the fact that they lost $5 billion overall last year, mostly before the $200 tier was even available.
    - pottertheotter 2y ago
      They said profitable unit economics, not profitable as a company.
      - deleted 2y ago
        [deleted]
      - kridsdale1 2y ago
        So P/L incrementally, ignoring capex and salary?
- resource_waste 2y ago
  I have the local models, why am I supposed to care how a young company is wasting money?
  - jsheard 2y ago
    Every local model worth a damn is also the product of a company wasting money, so if you want better local models in the future then it's still your problem.
    - resource_waste 2y ago
      Lots of 'what ifs' but I still have these models on my computer.
redeux 2y ago
I'm not sure how a few multinational mega corporations "competing" with each other is an impressive example of capitalist market efficiency. After all, this is isn't GPTx vs Gemini vs Llama vs Claude - it's Microsoft vs Google vs Meta vs Amazon. None of which are fair actors in the global marketplace.
- brookst 2y ago
  Wait, which megacorp is Claude?
  - jsheard 2y ago
    Amazon by proxy, like how GPT is Microsoft by proxy: https://www.aboutamazon.com/news/aws/amazon-invests-additional-4-billion-anthropic-ai https://www.aboutamazon.com/news/aws/amazon-invests-addition...
- resource_waste 2y ago
  We have offline models and multiple online models of growing high quality. Its impressive. (and if you want to see the flip side, our regulatory captured Medical industry still uses faxes)
homebrewer 2y ago
Good enough for what? I've been playing around with local models that often get mentioned here (llama3.3, mistral, etc.) and they routinely provide incorrect code that does not even compile or implements algorithms that have nothing to do with the task at hand, generate invalid JSON like '{ "foo": bar - 42 }', write nonsensical statements like "CR1616 has double the capacity of CR2032", etc. I'm yet to find a useful application for them that they can actually solve at least somewhat reliably.
- thegeomaster 2y ago
  Yeah, I would like to know this. From my perspective, even frontier models by the big players (4o, 3.5 Sonnet) can be unreliable at times, and are at best just walking the line of usefulness for a lot of "exact" tasks (for me: programming, approximation and back-of-the-envelope calculations, expertise on subjects I'm unfamiliar with, a better Google, etc.). The only deal that would make sense for me is to get something more accurate, and these open models just go in the wrong direction. I've observed similar behavior to what you mention. I'd really like to know how people use them and for what tasks so that their performance is acceptable. In agentic settings, cost and latency are also a large factor since tokens are consumed invisibly, so I think a lot of these systems are waiting for a trifecta of better accuracy, better cost and better latency to make them viable. It's unclear that this is coming, at least it hasn't been the trend so far.
  - weird-eye-issue 2y ago
    o1 is 10x better than 4o and 3.5 Sonnet for non-trivial coding tasks. I don't even bother with the other models for coding-related tasks, it really is a big difference.
    - brookst 2y ago
      Yep. Calling 4o a “frontier model” when o1 is available seems questionable. I only use 4o when I need web search incorporated in results.
    - thegeomaster 2y ago
Mistletoe 2y ago
> The competition has been the best type of brutal. I’d counter with “The competition has been the worst type of brutal.” https://finance.yahoo.com/news/ai-destroyed-google-promise-carbon-214145116.html https://finance.yahoo.com/news/ai-destroyed-google-promise-c... Tech’s quest for the best chatbot so they get all the grift dollars has torched climate change progress.
- mwigdahl 2y ago
  "Torched climate change progress" is a wildly overblown take: https://www.sustainabilitybynumbers.com/p/ai-energy-demand https://www.sustainabilitybynumbers.com/p/ai-energy-demand
  - brookst 2y ago
    It’s well known that humans have a tendency to hallucinate!
- resource_waste 2y ago
  What about the patient that got their misdiagnosed illness finally solved? What is more important, the pains of Humans, or exhaustion of resources. You want to go tell patients that rocks in the ground and unconcious trees are more important than their pain? Or tell a student that their educational future is less important than tress?
koe123 2y ago
I think you could argue that competition indeed makes the market efficient, but that we shouldn't conflate that with capitalism itself. Capitalism, in my opinion, can at times prevent competition due to the required capital investment to compete. E.g. even OpenAI with their golden bullet couldn't get there without the capital investments from big tech? Might be wrong here of course.
- resource_waste 2y ago
  I specifically mentioned Capitalism because it required the investment. It was Capitalism, not market efficiency.
  - koe123 2y ago
    Fair enough!
ryandvm 2y ago
I will agree that the free market has really shined here as far as product development is concerned. I have a hard time believing any government effort short of a war-time incentive would have produced anywhere near the same results. That said, I think we're also going to see exactly where capitalism always fails - the negative externalities. If AI goes off the rails and ends up deliberately or incidentally wiping us off the globe, it's likely to be because of this relatively unregulated space race.

jsheard 2y ago

Can it really be called efficient in the capitalist sense until they figure out how to actually turn this stuff into a viable business? Apparently OpenAI is even losing money on the new $200/month tier. https://finance.yahoo.com/news/sam-altman-says-losing-money-080700756.html https://finance.yahoo.com/news/sam-altman-says-losing-money-...

bberenberg 2y ago
I believe they’re profitable on all unit economics other than the $200/month tier. The users who opt into this are the absolute “highest” users so you end up with an adverse selection issue with this plan.
- jsheard 2y ago
  That doesn't seem to gel with the fact that they lost $5 billion overall last year, mostly before the $200 tier was even available.
  - pottertheotter 2y ago
    They said profitable unit economics, not profitable as a company.
    - deleted 2y ago
      [deleted]
    - kridsdale1 2y ago
      So P/L incrementally, ignoring capex and salary?
resource_waste 2y ago
I have the local models, why am I supposed to care how a young company is wasting money?
- jsheard 2y ago
  Every local model worth a damn is also the product of a company wasting money, so if you want better local models in the future then it's still your problem.
  - resource_waste 2y ago
    Lots of 'what ifs' but I still have these models on my computer.

redeux 2y ago

I'm not sure how a few multinational mega corporations "competing" with each other is an impressive example of capitalist market efficiency. After all, this is isn't GPTx vs Gemini vs Llama vs Claude - it's Microsoft vs Google vs Meta vs Amazon. None of which are fair actors in the global marketplace.

brookst 2y ago
Wait, which megacorp is Claude?
- jsheard 2y ago
  Amazon by proxy, like how GPT is Microsoft by proxy: https://www.aboutamazon.com/news/aws/amazon-invests-additional-4-billion-anthropic-ai https://www.aboutamazon.com/news/aws/amazon-invests-addition...
resource_waste 2y ago
We have offline models and multiple online models of growing high quality. Its impressive. (and if you want to see the flip side, our regulatory captured Medical industry still uses faxes)

homebrewer 2y ago

Good enough for what? I've been playing around with local models that often get mentioned here (llama3.3, mistral, etc.) and they routinely provide incorrect code that does not even compile or implements algorithms that have nothing to do with the task at hand, generate invalid JSON like '{ "foo": bar - 42 }', write nonsensical statements like "CR1616 has double the capacity of CR2032", etc. I'm yet to find a useful application for them that they can actually solve at least somewhat reliably.

thegeomaster 2y ago
Yeah, I would like to know this. From my perspective, even frontier models by the big players (4o, 3.5 Sonnet) can be unreliable at times, and are at best just walking the line of usefulness for a lot of "exact" tasks (for me: programming, approximation and back-of-the-envelope calculations, expertise on subjects I'm unfamiliar with, a better Google, etc.). The only deal that would make sense for me is to get something more accurate, and these open models just go in the wrong direction. I've observed similar behavior to what you mention. I'd really like to know how people use them and for what tasks so that their performance is acceptable. In agentic settings, cost and latency are also a large factor since tokens are consumed invisibly, so I think a lot of these systems are waiting for a trifecta of better accuracy, better cost and better latency to make them viable. It's unclear that this is coming, at least it hasn't been the trend so far.
- weird-eye-issue 2y ago
  o1 is 10x better than 4o and 3.5 Sonnet for non-trivial coding tasks. I don't even bother with the other models for coding-related tasks, it really is a big difference.
  - brookst 2y ago
    Yep. Calling 4o a “frontier model” when o1 is available seems questionable. I only use 4o when I need web search incorporated in results.
  - thegeomaster 2y ago

Mistletoe 2y ago

> The competition has been the best type of brutal. I’d counter with “The competition has been the worst type of brutal.” https://finance.yahoo.com/news/ai-destroyed-google-promise-carbon-214145116.html https://finance.yahoo.com/news/ai-destroyed-google-promise-c... Tech’s quest for the best chatbot so they get all the grift dollars has torched climate change progress.

mwigdahl 2y ago
"Torched climate change progress" is a wildly overblown take: https://www.sustainabilitybynumbers.com/p/ai-energy-demand https://www.sustainabilitybynumbers.com/p/ai-energy-demand
- brookst 2y ago
  It’s well known that humans have a tendency to hallucinate!
resource_waste 2y ago
What about the patient that got their misdiagnosed illness finally solved? What is more important, the pains of Humans, or exhaustion of resources. You want to go tell patients that rocks in the ground and unconcious trees are more important than their pain? Or tell a student that their educational future is less important than tress?

koe123 2y ago

I think you could argue that competition indeed makes the market efficient, but that we shouldn't conflate that with capitalism itself. Capitalism, in my opinion, can at times prevent competition due to the required capital investment to compete. E.g. even OpenAI with their golden bullet couldn't get there without the capital investments from big tech? Might be wrong here of course.

resource_waste 2y ago
I specifically mentioned Capitalism because it required the investment. It was Capitalism, not market efficiency.
- koe123 2y ago
  Fair enough!

ryandvm 2y ago

I will agree that the free market has really shined here as far as product development is concerned. I have a hard time believing any government effort short of a war-time incentive would have produced anywhere near the same results. That said, I think we're also going to see exactly where capitalism always fails - the negative externalities. If AI goes off the rails and ends up deliberately or incidentally wiping us off the globe, it's likely to be because of this relatively unregulated space race.