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The railroads drama ended when JP Morgan (the person, not yet the entity) brought all the railroad bosses together, said "you all answer to me because I represe

The railroads drama ended when JP Morgan (the person, not yet the entity) brought all the railroad bosses together, said "you all answer to me because I represent your investors / shareholders", and forced a wave of consolidation and syndicates because competition was bad for business. Then all the farmers in the midwest went broke not because they couldn't get their goods to market, but because JP Morgan's consolidated syndicates ate all their margin hauling their goods to market. Consolidation and monopoly over your competition is always the end goal.

DrScientist 2y ago
> Consolidation and monopoly over your competition is always the end goal. Surely that's only possible when you have a large barrier to entry? What's going to be that barrier in this case - cos it turns out not to be neither training costs/hardware or secret expertise.
- yoyohello13 2y ago
  The large syndicate will create the barriers. Either via laws, or if that fails violence.
- tdb7893 2y ago
  So I'm not an expert in this but even with DeepSeek supposedly reducing training costs isn't the estimate still in the millions (and that's presumably not counting a lot of costs)? And that wouldn't be counting a bunch of other barriers for actually building the business since training a model is only one part, the barrier to entry still seems very high. Also barriers to entry aren't the only way to get a consolidated market anyway.
  - layer8 2y ago
    About your first point, IMO the usefulness of AI will remain relatively limited as long as we don’t have continuously learning AI. And once we have that, the disparity between training and inference may effectively disappear. Whether that means that such AI will become more accessible/affordable or less is a different question.
    - sitkack 2y ago
      We have that now, DeepSeek just proved it.
- floatrock 2y ago
  You figure that out and the VC's will be shovelling money into your face. I suspect the "it ain't training costs/hardware" bit is a bit exagerated since it ignores all the prior work that DeepSeek was built on top of. But, if all else fails, there's always the tried-and-true approaches: regulatory capture, industry entrenchment, use your VC bucks to be the last one who can wait out the costs the incumbents do face before they fold, etc.
  - jaredklewis 2y ago
    > I suspect the "it ain't training costs/hardware" bit is a bit exagerated since it ignores all the prior work that DeepSeek was built on top of. How does it ignore it? The success of Deepseek proves that training costs/hardware are definitely NOT a barrier to entry that protects OpenAI from competition. If anyone can train their model with ChatGPT for a fraction of the cost it took to train ChatGPT and get similar results, then how is that a barrier?
    - baq 2y ago
      Can anyone do that though? You need the tokens and the pipelines to feed them to the matmul mincers. Quoting only dollar equivalent of GPU time is disingenuous at best. That’s not to say they lie about everything, obviously the thing works amazingly well. The cost is understated by 10x or more, which is still not bad at all I guess? But not mind blowing.
      - maigret 2y ago
        Even if that's 10x, that's easy to counter. $50M can be invested by almost anyone. There are thousands of entities (incl. governments, even regional ones) who could easily bring such capital.
- antisthenes 2y ago
  > Surely that's only possible when you have a large barrier to entry? As you grow bigger, you create barriers to entry where none existed before, whether intentionally or unintentionally.
- _DeadFred_ 2y ago
  Government regulation. 'Can't have your data going to China' 'Can't allow companies that do censorship aligned with foreign nations' 'This company violated our laws and used an American company's tech for their training unfairly' And the government choosing winners. 'The government in announcing 500 billion going to these chosen winners, anyone else take the hint, give up, you won't get government contracts but will get pressure'. Good thing nobody is making these sorts of arguments today.
  - astrange 2y ago
    The government isn't giving 500 billion to anyone. They just let Trump announce a private deal he has no involvement.
    - _DeadFred_ 2y ago
      Correct, as I stated the government is just giving their 'blessing'.
  - DrScientist 2y ago
    Surely that will end in fragmentation along national lines if monopolies are defined by governments. Sure US economic power has a long reach right now because of the importance of the dollar etc - but the more it uses that to bully, the more countries are making sure they are independent.
mrdevlar 2y ago
Which is the exact goal of the current wave of Tech oligarchy also.
- deleted 2y ago
  [deleted]
jonstewart 2y ago
I just read _The Great River_ by Boyce Upholt, a history of the Mississippi river and human management thereof. It was funny how the railroads were used as a bogeyman to justify continued building of locks, dams, and other control structures on the Mississippi and its tributaries, long after shipping commodities down river had been supplanted by the railroads.
boringg 2y ago
This moment was also historically significant because it demonstrated how financial power (Morgan) could control industrial power (the railroads). A pattern that some say became increasingly important in American capitalism.
sitkack 2y ago
This is why we saw the market correction, because the AI hegemony has been cracked.

DrScientist 2y ago

> Consolidation and monopoly over your competition is always the end goal. Surely that's only possible when you have a large barrier to entry? What's going to be that barrier in this case - cos it turns out not to be neither training costs/hardware or secret expertise.

yoyohello13 2y ago
The large syndicate will create the barriers. Either via laws, or if that fails violence.
tdb7893 2y ago
So I'm not an expert in this but even with DeepSeek supposedly reducing training costs isn't the estimate still in the millions (and that's presumably not counting a lot of costs)? And that wouldn't be counting a bunch of other barriers for actually building the business since training a model is only one part, the barrier to entry still seems very high. Also barriers to entry aren't the only way to get a consolidated market anyway.
- layer8 2y ago
  About your first point, IMO the usefulness of AI will remain relatively limited as long as we don’t have continuously learning AI. And once we have that, the disparity between training and inference may effectively disappear. Whether that means that such AI will become more accessible/affordable or less is a different question.
  - sitkack 2y ago
    We have that now, DeepSeek just proved it.
floatrock 2y ago
You figure that out and the VC's will be shovelling money into your face. I suspect the "it ain't training costs/hardware" bit is a bit exagerated since it ignores all the prior work that DeepSeek was built on top of. But, if all else fails, there's always the tried-and-true approaches: regulatory capture, industry entrenchment, use your VC bucks to be the last one who can wait out the costs the incumbents do face before they fold, etc.
- jaredklewis 2y ago
  > I suspect the "it ain't training costs/hardware" bit is a bit exagerated since it ignores all the prior work that DeepSeek was built on top of. How does it ignore it? The success of Deepseek proves that training costs/hardware are definitely NOT a barrier to entry that protects OpenAI from competition. If anyone can train their model with ChatGPT for a fraction of the cost it took to train ChatGPT and get similar results, then how is that a barrier?
  - baq 2y ago
    Can anyone do that though? You need the tokens and the pipelines to feed them to the matmul mincers. Quoting only dollar equivalent of GPU time is disingenuous at best. That’s not to say they lie about everything, obviously the thing works amazingly well. The cost is understated by 10x or more, which is still not bad at all I guess? But not mind blowing.
    - maigret 2y ago
      Even if that's 10x, that's easy to counter. $50M can be invested by almost anyone. There are thousands of entities (incl. governments, even regional ones) who could easily bring such capital.
antisthenes 2y ago
> Surely that's only possible when you have a large barrier to entry? As you grow bigger, you create barriers to entry where none existed before, whether intentionally or unintentionally.
_DeadFred_ 2y ago
Government regulation. 'Can't have your data going to China' 'Can't allow companies that do censorship aligned with foreign nations' 'This company violated our laws and used an American company's tech for their training unfairly' And the government choosing winners. 'The government in announcing 500 billion going to these chosen winners, anyone else take the hint, give up, you won't get government contracts but will get pressure'. Good thing nobody is making these sorts of arguments today.
- astrange 2y ago
  The government isn't giving 500 billion to anyone. They just let Trump announce a private deal he has no involvement.
  - _DeadFred_ 2y ago
    Correct, as I stated the government is just giving their 'blessing'.
- DrScientist 2y ago
  Surely that will end in fragmentation along national lines if monopolies are defined by governments. Sure US economic power has a long reach right now because of the importance of the dollar etc - but the more it uses that to bully, the more countries are making sure they are independent.

mrdevlar 2y ago

Which is the exact goal of the current wave of Tech oligarchy also.

deleted 2y ago
[deleted]

jonstewart 2y ago

I just read _The Great River_ by Boyce Upholt, a history of the Mississippi river and human management thereof. It was funny how the railroads were used as a bogeyman to justify continued building of locks, dams, and other control structures on the Mississippi and its tributaries, long after shipping commodities down river had been supplanted by the railroads.

boringg 2y ago

This moment was also historically significant because it demonstrated how financial power (Morgan) could control industrial power (the railroads). A pattern that some say became increasingly important in American capitalism.

sitkack 2y ago

This is why we saw the market correction, because the AI hegemony has been cracked.