4 ms·

It’s not even approaching the asymptotic line of promises made at any achievable rate for the amount of cash being thrown at it. Where’s the business model? Su

by ohgr 2y ago

It’s not even approaching the asymptotic line of promises made at any achievable rate for the amount of cash being thrown at it. Where’s the business model? Suck investors dry at the start of a financial collapse? Yeah that’s going to end well…

maccard 2y ago
> where’s the business model? For who? Nvidia sell GPUs, OpenAI and co sell proprietary models and API access, and the startups resell GPT and Claude with custom prompts. Each one is hoping that the layer above has a breakthrough that makes their current spend viable. If they do, then you don’t want to be left behind, because _everything_ changes. It probably won’t, but it might. That’s the business model
- grey-area 2y ago
  That’s not a business model, it’s a pipe dream. This bubble will be burst by the Trump tariffs and the end of the zirp era. When inflation and a recession hit together hope and dream business models and valuations no longer work.
  - maccard 2y ago
    Which one? Nvidia are doing pretty ok selling GPU's, and OpenAI and Anthropic are doing ok selling their models. They're not _viable_ business models, but they could be.
    - grey-area 2y ago
      NVDA will crash when the AI bubble implodes, and none of those Generative AI companies are actually making money, nor will they. They have already hit limiting returns in LLM improvements after staggering investments and it is clear are nowhere near general intelligence.
      - maccard 2y ago
        All of this can be true, and has nothing to do with them having a business model. > NVDA will crash when the AI bubble implodes, > making money, nor will they > They have already hit limiting returns in LLM improvements after staggering investments > and it is clear are nowhere near general intelligence. These are all assumptions and opinions, and have nothing to do with whether or not they have a business model. You mightn't like their business model, but they do have one.
        grey-area 2y ago
        I consider it a business model if they have plans to make money at some point (no sign of that at openai which are not based on hopium) and are not engaged in fraud like bundling and selling to their own subsidiaries (nvda). These are of course just opinions, I’m not sure we can know facts about such companies except in retrospect.
        ohgr 2y ago
        Yep. Facts are usually found out during the SEC investigation but we know that isn't going to happen now...
    - dragandj 2y ago
      They are doing OK in the sense that they are spending a dollar to earn a dime I suppose.
  - otterley 2y ago
    The ZIRP era ended several years ago.
    - grey-area 2y ago
      Yes it did, but the irrational exuberance was ongoing till this trigger. Now we get to see if Bitcoin’s use value of 0 is really supporting 1.5 trillion market cap and if OpenAI is really worth $300 billion. I mean softbank just invested in openai, and they’ve never been wrong, right?
- ohgr 2y ago
  You missed the end of the supply chain. Paying users. Who magically disappear below market sustaining levels of sales when asked to pay.
  - maccard 2y ago
    I never said it was sustainable, and even if it was, OP asked for a business model. Customers don’t need a business model, they’re customers. The same is true for any non essential good or service.
    - dragandj 2y ago
      Than any silly idea can be a business model. Suppose I collect dust from my attic and hope to sell it as an add-on on my neighbor's lemonade stand, with a hefty profit for the neighbor, who is getting paid by me $10 to add a handful of dust in each glass and sell it to the customers for $1. The neighbor accepts. It's a business model, at least until I don't run of existing funds or the last customer leaves in disguist. At which point exactly that silly idea stops being an unsustainable business model and becomes a silly idea? I guess at least as early as I see that the funds are running up, and I need to borrow larger an larger lumps of money each time to keep spinning the wheel...
      - maccard 2y ago
        > Than any silly idea can be a business model. Indeed it can. The difference between a business model and a viable business model is one word - viable. If you asked me 18 years ago was "giving away a video game and selling cosmetics" a viable business model I would have laughed at you.If you asked me in 2019 I would probably give you money. If you asked me in 2025, I'd probably laugh at you again. > and I need to borrow larger an larger lumps of money each time to keep spinning the wheel... Or you figure out a way to to sell it to your neighbour for $0.50 and he can sell it on for $1. The play is clear at every level - Nvidia Sell GPUs, OpenAI sell models, and SAAS sell prompts + UI's. Whether or not any of them are viable remains to be seen. Personally, I wouldn't take the bet.
  - 2y ago
reportgunner 2y ago
Financial collapse ? Surely we can just roll out AI powered money printers and make them go BRRR /s

by ohgr 2y ago

maccard 2y ago

> where’s the business model? For who? Nvidia sell GPUs, OpenAI and co sell proprietary models and API access, and the startups resell GPT and Claude with custom prompts. Each one is hoping that the layer above has a breakthrough that makes their current spend viable. If they do, then you don’t want to be left behind, because _everything_ changes. It probably won’t, but it might. That’s the business model

grey-area 2y ago
That’s not a business model, it’s a pipe dream. This bubble will be burst by the Trump tariffs and the end of the zirp era. When inflation and a recession hit together hope and dream business models and valuations no longer work.
- maccard 2y ago
  Which one? Nvidia are doing pretty ok selling GPU's, and OpenAI and Anthropic are doing ok selling their models. They're not _viable_ business models, but they could be.
  - grey-area 2y ago
    NVDA will crash when the AI bubble implodes, and none of those Generative AI companies are actually making money, nor will they. They have already hit limiting returns in LLM improvements after staggering investments and it is clear are nowhere near general intelligence.
    - maccard 2y ago
      All of this can be true, and has nothing to do with them having a business model. > NVDA will crash when the AI bubble implodes, > making money, nor will they > They have already hit limiting returns in LLM improvements after staggering investments > and it is clear are nowhere near general intelligence. These are all assumptions and opinions, and have nothing to do with whether or not they have a business model. You mightn't like their business model, but they do have one.
      - grey-area 2y ago
        I consider it a business model if they have plans to make money at some point (no sign of that at openai which are not based on hopium) and are not engaged in fraud like bundling and selling to their own subsidiaries (nvda). These are of course just opinions, I’m not sure we can know facts about such companies except in retrospect.
        ohgr 2y ago
        Yep. Facts are usually found out during the SEC investigation but we know that isn't going to happen now...
  - dragandj 2y ago
    They are doing OK in the sense that they are spending a dollar to earn a dime I suppose.
- otterley 2y ago
  The ZIRP era ended several years ago.
  - grey-area 2y ago
    Yes it did, but the irrational exuberance was ongoing till this trigger. Now we get to see if Bitcoin’s use value of 0 is really supporting 1.5 trillion market cap and if OpenAI is really worth $300 billion. I mean softbank just invested in openai, and they’ve never been wrong, right?
ohgr 2y ago
You missed the end of the supply chain. Paying users. Who magically disappear below market sustaining levels of sales when asked to pay.
- maccard 2y ago
  I never said it was sustainable, and even if it was, OP asked for a business model. Customers don’t need a business model, they’re customers. The same is true for any non essential good or service.
  - dragandj 2y ago
    Than any silly idea can be a business model. Suppose I collect dust from my attic and hope to sell it as an add-on on my neighbor's lemonade stand, with a hefty profit for the neighbor, who is getting paid by me $10 to add a handful of dust in each glass and sell it to the customers for $1. The neighbor accepts. It's a business model, at least until I don't run of existing funds or the last customer leaves in disguist. At which point exactly that silly idea stops being an unsustainable business model and becomes a silly idea? I guess at least as early as I see that the funds are running up, and I need to borrow larger an larger lumps of money each time to keep spinning the wheel...
    - maccard 2y ago
      > Than any silly idea can be a business model. Indeed it can. The difference between a business model and a viable business model is one word - viable. If you asked me 18 years ago was "giving away a video game and selling cosmetics" a viable business model I would have laughed at you.If you asked me in 2019 I would probably give you money. If you asked me in 2025, I'd probably laugh at you again. > and I need to borrow larger an larger lumps of money each time to keep spinning the wheel... Or you figure out a way to to sell it to your neighbour for $0.50 and he can sell it on for $1. The play is clear at every level - Nvidia Sell GPUs, OpenAI sell models, and SAAS sell prompts + UI's. Whether or not any of them are viable remains to be seen. Personally, I wouldn't take the bet.
- 2y ago

reportgunner 2y ago

Financial collapse ? Surely we can just roll out AI powered money printers and make them go BRRR /s