6 ms·

This journalist, Ed Zitron, is very skeptical of AI and his arguments border on polemic. But I find his perspective interesting - essentially, that very few pla

This journalist, Ed Zitron, is very skeptical of AI and his arguments border on polemic. But I find his perspective interesting - essentially, that very few players in the AI space are able to figure out a profitable business model: https://www.wheresyoured.at/core-incompetency/ https://www.wheresyoured.at/core-incompetency/

alephnerd 2y ago
What does Zitron define as "AI" companies though? (Actually curious). A lot of "AI" investments in public markets were basically a bundle of fabless players (Nvidia), data center adjacent players (Broadcom), and some applications, whereas private/VC investment was bifurcated between foundational model players (OpenAI, Anthropic), application or AIOps oriented players (ScaleAI, Harness, etc), and rebranded hardware vendors (Cerebras, CoreWeave, Groq, Lambda). If by AI he means foundational model companies, then I absolutely agree that there is a need to be bearish about their valuations, because they can constantly be outcompeted by domain specific or specialized models. Furthermore, a lot of the recent "AI" IPO hype are functionally fabless hardware companies like CoreWeave or Cerebras who were previously riding high because of the previous boom in semiconductor and chip investments. I've been fairly open about this opinion at my day job.
- zero_shift 2y ago
  I think he sees the weakness more in the model/product/IP holding companies than the infra/hardware/commodity compute side
  - alephnerd 2y ago
    Interesting. I personally think there is more risk on the commodity compute side because the projected multiples for a Cerebras or CoreWeave are imo unrealistic in such a margins driven market, and there was a DC funding boom that has started lagging over the past couple months, as there appears to be a bit of an overcapacity issue in compute - imo very similar to that in the mid-2000s with servers and networking players like Dell, EMC, Cisco, etc. That said, I have a similar opinion about foundational model companies as well.
MrBuddyCasino 2y ago
Ed Zitron is trying to be a wittier Kara Swisher, which means there is near zero signal in the anti-tech noise. Which is a shame because he has the talent to be something else.
- zero_shift 2y ago
  Would it not be the opposite? I always had the impression Swisher was quite boosterist, very enthusiastic about the industry. I don't know her work too well though
  - MrBuddyCasino 2y ago
    I‘ve only ever saw work of her that was the left-populist anti Big Tech fare that the whole legacy media had picked up in the 2010s, but it might not be representative.
beezlebroxxxxxx 2y ago
A big problem is to what extent do future business models disrupt the public perception that AI is "objective" or unbiased, a perception that is often itself the product of these companies' own marketing. When the very results of a prompt to an agent/LLM, such as ChatGPT, are suspected of profit/corporate interests over accuracy, why would anyone use it over the dozen other players in the field? This is precisely the thing that has soured google search results.
formerphotoj 2y ago
Also, from Sequoia: https://www.sequoiacap.com/article/ais-600b-question/ https://www.sequoiacap.com/article/ais-600b-question/ Sort of surprised this hasn't been taken down, actually.

alephnerd 2y ago

What does Zitron define as "AI" companies though? (Actually curious). A lot of "AI" investments in public markets were basically a bundle of fabless players (Nvidia), data center adjacent players (Broadcom), and some applications, whereas private/VC investment was bifurcated between foundational model players (OpenAI, Anthropic), application or AIOps oriented players (ScaleAI, Harness, etc), and rebranded hardware vendors (Cerebras, CoreWeave, Groq, Lambda). If by AI he means foundational model companies, then I absolutely agree that there is a need to be bearish about their valuations, because they can constantly be outcompeted by domain specific or specialized models. Furthermore, a lot of the recent "AI" IPO hype are functionally fabless hardware companies like CoreWeave or Cerebras who were previously riding high because of the previous boom in semiconductor and chip investments. I've been fairly open about this opinion at my day job.

zero_shift 2y ago
I think he sees the weakness more in the model/product/IP holding companies than the infra/hardware/commodity compute side
- alephnerd 2y ago
  Interesting. I personally think there is more risk on the commodity compute side because the projected multiples for a Cerebras or CoreWeave are imo unrealistic in such a margins driven market, and there was a DC funding boom that has started lagging over the past couple months, as there appears to be a bit of an overcapacity issue in compute - imo very similar to that in the mid-2000s with servers and networking players like Dell, EMC, Cisco, etc. That said, I have a similar opinion about foundational model companies as well.

MrBuddyCasino 2y ago

Ed Zitron is trying to be a wittier Kara Swisher, which means there is near zero signal in the anti-tech noise. Which is a shame because he has the talent to be something else.

zero_shift 2y ago
Would it not be the opposite? I always had the impression Swisher was quite boosterist, very enthusiastic about the industry. I don't know her work too well though
- MrBuddyCasino 2y ago
  I‘ve only ever saw work of her that was the left-populist anti Big Tech fare that the whole legacy media had picked up in the 2010s, but it might not be representative.

beezlebroxxxxxx 2y ago

A big problem is to what extent do future business models disrupt the public perception that AI is "objective" or unbiased, a perception that is often itself the product of these companies' own marketing. When the very results of a prompt to an agent/LLM, such as ChatGPT, are suspected of profit/corporate interests over accuracy, why would anyone use it over the dozen other players in the field? This is precisely the thing that has soured google search results.

formerphotoj 2y ago

Also, from Sequoia: https://www.sequoiacap.com/article/ais-600b-question/ https://www.sequoiacap.com/article/ais-600b-question/ Sort of surprised this hasn't been taken down, actually.