6 ms·

I still don't get where the money for new open source models is going to come from once setting investor dollars on fire is no longer a viable business model. D

I still don't get where the money for new open source models is going to come from once setting investor dollars on fire is no longer a viable business model. Does anyone seriously expect companies to keep buying and running thousands of ungodly expensive GPUs, plus whatever they spend on human workers to do labelling/tuning, and then giving away the spoils for free, forever?

finnjohnsen2 2y ago
ads again. somehow. its like a law of nature.
- api 2y ago
  If nationalist propaganda counts as ads, that might already be supporting Chinese models. Ask them about Tiananmen Square. Any kind of media with zero or near zero copying/distribution costs becomes a deflationary race to the bottom. Someone will eventually release something that's free, and at that point nothing can compete with free unless it's some kind of very specialized offering. Then you run into a the problem the OP described: how do you fund free? Answer: ads. Now the customer is the advertiser, not the user/consumer, which is why most media converges on trash.
  - Imustaskforhelp 2y ago
    These ads can also have ads blockers though. Perplexity released the deepseek r1 1331? ( I am not sure I forgot) It basically removes chinese censorships / yes you can ask it about the tiananmen square. I think the next iteration of these ai model ads would be sneaky which might be hard to remove Though it's funny you comment about chinese censorship yet american censorship is fine lol
    - eMPee584 2y ago
      XAI to the rescue!!1! ... (no, not the unintelligible one - the xplainable one)
    - Zambyte 2y ago
      There are lots of "alliterated" versions of models too, which is where people will essentially remove the models ability to reject responding to a prompt. The huihui r1 14b alliterated had some trouble telling me about tiananmen square, basically dodging the question by telling me about itself, but after some coaxing I was able to get the info out of it. I say this because I think that the Perplexity model is tuned on additional information, whereas the alliterated models only include information trained into the underlying model, which is interesting to see.
      - bigfudge 2y ago
        Abliterated? Alliterated LLMs might be fun though…
        Zambyte 2y ago
        Oops, yeah I don't know how that got autocorrected three times without my noticing. Abliterated.
ada1981 2y ago
Money from the Chinese defense budget? Everyone using these models undercuts US companies. Eventually China wins.
- Imustaskforhelp 2y ago
  And wez the end user get open source models. Also china doesn't have access to that many gpus because of the chips act. And i hate it , i hate it when america sounds more communist than china who open sources their stuff because free markets. I actually think that more countries need to invest into AI and not companies wanting profit. This could be the decision that can impact the next century.
  - greenavocado 2y ago
    If only you knew how many terawatt hours were burned on biasing models to prevent them from becoming racist
    - Imustaskforhelp 2y ago
      To be honest, maybe I am going off topic but I wish for the level of innovation in the ai industry in the energy industry. It feels as an outsider that very little progress is made on the energy issue. I genuinely think that ai can be accelerated so so much more if energy could be more cheap / green
      - wenyuanyu 2y ago
        The cycle from idea to product is a bit too long and too costly to materialize in energy sector. And that decides the speed of innovation.
  - bee_rider 2y ago
    China has allowed quite a bit of market liberalism, so it isn’t that surprising if their AI stuff is responding to the market. But, I don’t really see the connection on the flip side. Why should proprietary AI be associated with communism? If anything I guess a communist handling of AI would also be to share the model.
mitthrowaway2 2y ago
Maybe from NVIDIA? "Commoditize your product's complement". https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/ https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/
- akra 2y ago
  This is the reason IMO. Fundamentally China right now is better at manufacturing (e.g. robotics). AI is the complement to this - AI increases the demand for tech manufactured goods. Whereas America is in the opposite position w.r.t which side is their advantage (i.e. the software). AI for China is an enabler into a potentially bigger market which is robots/manufacturing/etc. Commoditizing the AI/intelligence part means that the main advantage isn't the bits - its the atoms. Physical dexterity, social skills and manufacturing skills will gain more of a comparative advantage vs intelligence work in the future as a result - AI makes the old economy new again in the long term. It also lowers the value of AI investments in that they no longer can command first mover/monopoly like pricing for what is a very large capex cost undermining US investment in what is their advantage. As long as it is strategic, it doesn't necessarily need to be economic on its own.
  - notarealllama 2y ago
    A well-rounded take in an age and medium of reactionary hot takes! While theres some synchronistic effects... I think the physical manufacturing and logistics base is harder to develop than deploying a new model, and will be the hard leading edge. (That's why the US seems to be hellbent on destroying international trade to try and build a domestic market.)
  - WiSaGaN 2y ago
    This may make sense if there is a centralized force to dictate how much these Chinese foundational model companies charge for their models. I know in the west people just blanketly believes that the state controls everything in China. However it can't be further from the truth. Most of the Chinese foundational model companies like moonshot, 01.ai, minimax, etc used to try to make money on those models. The VC money raised by those companies are in them to make money, not to voluntarily advance state competativeness. Deepseek is just an outlier backed by a billionaire. This billionaire has long been given money to various charities by hundered of millions per year before deepseek. Open-source SOTA models are not out-of-character move for him given his track record. The thing is, model is in effect a piece of software that has almost 0 marginal cost. You just need a few, maybe even one company to release SOTA models consistently to really crash the valuation of every model companies because every one can acquire that single piece of software without cost to leave other model companies by themselves. The foundational model scene is basically in an extremely unstable state readily to return to a stable state of the model cost goes to 0. You really don't need the state competition assumption to explain the current state of affairs.
theptip 2y ago
Yeah, this is the obvious objection to the doom. Someone has to pay to train the model that all the small ones distill from. Companies will have to detect and police distilling if they want to keep their moat. Maybe you have to have an enterprise agreement (and arms control waiver) to get GPT-6-large API access.
Imustaskforhelp 2y ago
I think it's market leadership which is just free word of mouth advertising which can then lead to consulting business or maybe they can cheek in some ads in llm directly oh boy you don't know. Also I have seen that once a open source llm is released to public, though you can access it on any website hosting it, most people would still prefer it to be the one which created the model. Deepseek released its revenue models and it's crazy good. And no they didn't have full racks of h100. Also one more thing. Open source has always had an issue of funding. Also they are not completely open source, they are just open weights, yes you can fine tune them but from my limited knowledge, there is some limitations of fine tuning so owning that training data proprietary also helps fund my previous idea of consulting other ai. Yes it's not a much profitable venture,imo it's just a decently profitable venture, but the current hype around ai is making it lucrative for companies. Also I think this might be a winner takes all market which increases competition but in a healthy way. What deepseek did with releasing the open source model and then going out of their way to release some other open source projects which themselves could've been worth a few millions (bycloud said it), helps innovate ai in general.
- TeMPOraL 2y ago
  Winner-takes-all markers are never healthy IMO - it's hardly a market when the winner took all. What I love about "open" models in general and Deepseek in particular, is how they undermine that market. Deepseek drops especially were fun to watch, they were like last minute plot twists, like dropping some antibiotic into a perti dish filled with bacteria. Sorry, try again with a better moat. "Open" models are in fact the very thing enabling having a functioning market in this space.
zamadatix 2y ago
Once setting investment dollars on fire is no longer viable it'll probably be because scaling died anyways so what's the rush to have a dozen new frontier models each year.
colechristensen 2y ago
I think the only people who will ever make money are the shovel makers, the models will always be free because you’ll just get open source models chasing the paid ones and never being all that far behind, especially when this S curve growth phase slows down.
natch 2y ago
Many sources, Chinese government could be one.
pants2 2y ago
There are lots of open-source projects that took many millions of dollars to create. Kubernetes, React, Postgres, Chromium, etc. etc. This has clearly been part of a viable business model for a long time. Why should LLM models be any different?
- wruza 2y ago
  So funny to see React among these projects. Tells a story about “frontend” on its own.
pizzly 2y ago
One possibility. Certain countries will always be able to produce open models cheaper than others. USA and Europe probably won't be able. However, due to national security and wanting to promote their models overseas instead of letting their competitors promote theirs, the governments of USA and Europe will subsidize models which will lead their competitors to (further?) subsidies. There is a promotional aspect as well, just like Hollywood governments will use their open source models to promote their ideology.
- energyrace 2y ago
  What's your take on why certain countries will have it cheaper and subsidies being at the forefront? An energy driven race to the bottom, is perhaps what you mean? I would suppose I have been seeing that China is ahead on their Renewables plan compared to the rest of the world, and they still have the lead on coal energy, so they'd likely be the winners on that front. But did you actually mean something else?
  - pzo 2y ago
    The problem with china is, they will have to figure out latency. Right now DeepSeek models hosted in china are having very high latency. It could because of DDoS and not strong enough infrastructure but probably also because of Great Firewall, runtime censoring prompt and servers physical location (big ping to US and EU countries).
    - rfoo 2y ago
      > Right now DeepSeek models hosted in china are having very high latency. If you are talking about DeepSeek's own hosted API service. It's because they deliberately decided to run the service in heavily overloaded conditions and have very aggressive batching policy to extract more out of their (limited) H800s. Yes, for some reason (the reason I heard is "our boss don't want to run such a business" which sounds absurd but /shrug) they refuse to scale up serving their own models.
      - 2y ago
lumost 2y ago
Product, and infra companies may continue to open these models by virtue that they need to continue improving their product. Omni chat app is a great product.
otabdeveloper4 2y ago
Big business and state actors don't want AI to be weaponized as economic terrorism. (Economic terrorism aka "we'll replace all your workers and infra with our subscription" is OpenAI's entire sales pitch.) So for them this is a case of insurance and hedging risks, not profit making.

finnjohnsen2 2y ago

ads again. somehow. its like a law of nature.

api 2y ago
If nationalist propaganda counts as ads, that might already be supporting Chinese models. Ask them about Tiananmen Square. Any kind of media with zero or near zero copying/distribution costs becomes a deflationary race to the bottom. Someone will eventually release something that's free, and at that point nothing can compete with free unless it's some kind of very specialized offering. Then you run into a the problem the OP described: how do you fund free? Answer: ads. Now the customer is the advertiser, not the user/consumer, which is why most media converges on trash.
- Imustaskforhelp 2y ago
  These ads can also have ads blockers though. Perplexity released the deepseek r1 1331? ( I am not sure I forgot) It basically removes chinese censorships / yes you can ask it about the tiananmen square. I think the next iteration of these ai model ads would be sneaky which might be hard to remove Though it's funny you comment about chinese censorship yet american censorship is fine lol
  - eMPee584 2y ago
    XAI to the rescue!!1! ... (no, not the unintelligible one - the xplainable one)
  - Zambyte 2y ago
    There are lots of "alliterated" versions of models too, which is where people will essentially remove the models ability to reject responding to a prompt. The huihui r1 14b alliterated had some trouble telling me about tiananmen square, basically dodging the question by telling me about itself, but after some coaxing I was able to get the info out of it. I say this because I think that the Perplexity model is tuned on additional information, whereas the alliterated models only include information trained into the underlying model, which is interesting to see.
    - bigfudge 2y ago
      Abliterated? Alliterated LLMs might be fun though…
      - Zambyte 2y ago
        Oops, yeah I don't know how that got autocorrected three times without my noticing. Abliterated.

ada1981 2y ago

Money from the Chinese defense budget? Everyone using these models undercuts US companies. Eventually China wins.

Imustaskforhelp 2y ago
And wez the end user get open source models. Also china doesn't have access to that many gpus because of the chips act. And i hate it , i hate it when america sounds more communist than china who open sources their stuff because free markets. I actually think that more countries need to invest into AI and not companies wanting profit. This could be the decision that can impact the next century.
- greenavocado 2y ago
  If only you knew how many terawatt hours were burned on biasing models to prevent them from becoming racist
  - Imustaskforhelp 2y ago
    To be honest, maybe I am going off topic but I wish for the level of innovation in the ai industry in the energy industry. It feels as an outsider that very little progress is made on the energy issue. I genuinely think that ai can be accelerated so so much more if energy could be more cheap / green
    - wenyuanyu 2y ago
      The cycle from idea to product is a bit too long and too costly to materialize in energy sector. And that decides the speed of innovation.
- bee_rider 2y ago
  China has allowed quite a bit of market liberalism, so it isn’t that surprising if their AI stuff is responding to the market. But, I don’t really see the connection on the flip side. Why should proprietary AI be associated with communism? If anything I guess a communist handling of AI would also be to share the model.

mitthrowaway2 2y ago

Maybe from NVIDIA? "Commoditize your product's complement". https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/ https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/

akra 2y ago
This is the reason IMO. Fundamentally China right now is better at manufacturing (e.g. robotics). AI is the complement to this - AI increases the demand for tech manufactured goods. Whereas America is in the opposite position w.r.t which side is their advantage (i.e. the software). AI for China is an enabler into a potentially bigger market which is robots/manufacturing/etc. Commoditizing the AI/intelligence part means that the main advantage isn't the bits - its the atoms. Physical dexterity, social skills and manufacturing skills will gain more of a comparative advantage vs intelligence work in the future as a result - AI makes the old economy new again in the long term. It also lowers the value of AI investments in that they no longer can command first mover/monopoly like pricing for what is a very large capex cost undermining US investment in what is their advantage. As long as it is strategic, it doesn't necessarily need to be economic on its own.
- notarealllama 2y ago
  A well-rounded take in an age and medium of reactionary hot takes! While theres some synchronistic effects... I think the physical manufacturing and logistics base is harder to develop than deploying a new model, and will be the hard leading edge. (That's why the US seems to be hellbent on destroying international trade to try and build a domestic market.)
- WiSaGaN 2y ago
  This may make sense if there is a centralized force to dictate how much these Chinese foundational model companies charge for their models. I know in the west people just blanketly believes that the state controls everything in China. However it can't be further from the truth. Most of the Chinese foundational model companies like moonshot, 01.ai, minimax, etc used to try to make money on those models. The VC money raised by those companies are in them to make money, not to voluntarily advance state competativeness. Deepseek is just an outlier backed by a billionaire. This billionaire has long been given money to various charities by hundered of millions per year before deepseek. Open-source SOTA models are not out-of-character move for him given his track record. The thing is, model is in effect a piece of software that has almost 0 marginal cost. You just need a few, maybe even one company to release SOTA models consistently to really crash the valuation of every model companies because every one can acquire that single piece of software without cost to leave other model companies by themselves. The foundational model scene is basically in an extremely unstable state readily to return to a stable state of the model cost goes to 0. You really don't need the state competition assumption to explain the current state of affairs.

theptip 2y ago

Yeah, this is the obvious objection to the doom. Someone has to pay to train the model that all the small ones distill from. Companies will have to detect and police distilling if they want to keep their moat. Maybe you have to have an enterprise agreement (and arms control waiver) to get GPT-6-large API access.

Imustaskforhelp 2y ago

I think it's market leadership which is just free word of mouth advertising which can then lead to consulting business or maybe they can cheek in some ads in llm directly oh boy you don't know. Also I have seen that once a open source llm is released to public, though you can access it on any website hosting it, most people would still prefer it to be the one which created the model. Deepseek released its revenue models and it's crazy good. And no they didn't have full racks of h100. Also one more thing. Open source has always had an issue of funding. Also they are not completely open source, they are just open weights, yes you can fine tune them but from my limited knowledge, there is some limitations of fine tuning so owning that training data proprietary also helps fund my previous idea of consulting other ai. Yes it's not a much profitable venture,imo it's just a decently profitable venture, but the current hype around ai is making it lucrative for companies. Also I think this might be a winner takes all market which increases competition but in a healthy way. What deepseek did with releasing the open source model and then going out of their way to release some other open source projects which themselves could've been worth a few millions (bycloud said it), helps innovate ai in general.

TeMPOraL 2y ago
Winner-takes-all markers are never healthy IMO - it's hardly a market when the winner took all. What I love about "open" models in general and Deepseek in particular, is how they undermine that market. Deepseek drops especially were fun to watch, they were like last minute plot twists, like dropping some antibiotic into a perti dish filled with bacteria. Sorry, try again with a better moat. "Open" models are in fact the very thing enabling having a functioning market in this space.

zamadatix 2y ago

Once setting investment dollars on fire is no longer viable it'll probably be because scaling died anyways so what's the rush to have a dozen new frontier models each year.

colechristensen 2y ago

I think the only people who will ever make money are the shovel makers, the models will always be free because you’ll just get open source models chasing the paid ones and never being all that far behind, especially when this S curve growth phase slows down.

natch 2y ago

Many sources, Chinese government could be one.

pants2 2y ago

There are lots of open-source projects that took many millions of dollars to create. Kubernetes, React, Postgres, Chromium, etc. etc. This has clearly been part of a viable business model for a long time. Why should LLM models be any different?

wruza 2y ago
So funny to see React among these projects. Tells a story about “frontend” on its own.

pizzly 2y ago

One possibility. Certain countries will always be able to produce open models cheaper than others. USA and Europe probably won't be able. However, due to national security and wanting to promote their models overseas instead of letting their competitors promote theirs, the governments of USA and Europe will subsidize models which will lead their competitors to (further?) subsidies. There is a promotional aspect as well, just like Hollywood governments will use their open source models to promote their ideology.

energyrace 2y ago
What's your take on why certain countries will have it cheaper and subsidies being at the forefront? An energy driven race to the bottom, is perhaps what you mean? I would suppose I have been seeing that China is ahead on their Renewables plan compared to the rest of the world, and they still have the lead on coal energy, so they'd likely be the winners on that front. But did you actually mean something else?
- pzo 2y ago
  The problem with china is, they will have to figure out latency. Right now DeepSeek models hosted in china are having very high latency. It could because of DDoS and not strong enough infrastructure but probably also because of Great Firewall, runtime censoring prompt and servers physical location (big ping to US and EU countries).
  - rfoo 2y ago
    > Right now DeepSeek models hosted in china are having very high latency. If you are talking about DeepSeek's own hosted API service. It's because they deliberately decided to run the service in heavily overloaded conditions and have very aggressive batching policy to extract more out of their (limited) H800s. Yes, for some reason (the reason I heard is "our boss don't want to run such a business" which sounds absurd but /shrug) they refuse to scale up serving their own models.
    - 2y ago

lumost 2y ago

Product, and infra companies may continue to open these models by virtue that they need to continue improving their product. Omni chat app is a great product.

otabdeveloper4 2y ago

Big business and state actors don't want AI to be weaponized as economic terrorism. (Economic terrorism aka "we'll replace all your workers and infra with our subscription" is OpenAI's entire sales pitch.) So for them this is a case of insurance and hedging risks, not profit making.