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The bet is that the cost for delivering the same results will go down, through hardware or software advancements. This bet still seems reasonable based on how t

The bet is that the cost for delivering the same results will go down, through hardware or software advancements. This bet still seems reasonable based on how things have gone so far. Providers right now are willing to burn money acquiring a customer base, it's like really really expensive marketing.

bryanlarsen 1y ago
The bet is that costs will go down enough so that ad-supported AI will become profitable. This is not a positive outcome, a large part of the article is about the evils of ad-supported.
- some_random 1y ago
  Is that really the bet? Is it not enough for a $20 per month subscription to be sustainable with the free level being a trial for that subscription?
  - bryanlarsen 1y ago
    Sure, professionals will pay $20/month, but I highly doubt that many consumers ever will.
    - some_random 1y ago
      I think it depends entirely on what value can be provided, I'm not sure if that's been proven out yet. To be clear, I definitely think that we're most likely to see an ad supported slop generator as the model most people most commonly engage in but I don't think that right now it's what the industry thinks will be the case.
- jsnell 1y ago
  The costs are already far, far below that level. The only reason the consumer-facing businesses are not profitable is that nobody is yet showing ads, i.e. providing service to hundreds of millions of people with no monetization at all. LLM inference is cheap, but not free. But the moment they start showing ads, even basic ad formats will easily make them profitable. Let alone more sophisticated LLM-native ad formats, or the treasure trove of targeting data that a LLM chat profile can provide.
pier25 1y ago
Even if the cost goes down it will not change the fact they need to recoup like a trillion dollars before AI starts generating any profit. And there's really no timeline for costs going down. It seems the only way to get better models is by processing more data and adding more tokens which is only increasing the complexity of it all.

bryanlarsen 1y ago

The bet is that costs will go down enough so that ad-supported AI will become profitable. This is not a positive outcome, a large part of the article is about the evils of ad-supported.

some_random 1y ago
Is that really the bet? Is it not enough for a $20 per month subscription to be sustainable with the free level being a trial for that subscription?
- bryanlarsen 1y ago
  Sure, professionals will pay $20/month, but I highly doubt that many consumers ever will.
  - some_random 1y ago
    I think it depends entirely on what value can be provided, I'm not sure if that's been proven out yet. To be clear, I definitely think that we're most likely to see an ad supported slop generator as the model most people most commonly engage in but I don't think that right now it's what the industry thinks will be the case.
jsnell 1y ago
The costs are already far, far below that level. The only reason the consumer-facing businesses are not profitable is that nobody is yet showing ads, i.e. providing service to hundreds of millions of people with no monetization at all. LLM inference is cheap, but not free. But the moment they start showing ads, even basic ad formats will easily make them profitable. Let alone more sophisticated LLM-native ad formats, or the treasure trove of targeting data that a LLM chat profile can provide.

pier25 1y ago

Even if the cost goes down it will not change the fact they need to recoup like a trillion dollars before AI starts generating any profit. And there's really no timeline for costs going down. It seems the only way to get better models is by processing more data and adding more tokens which is only increasing the complexity of it all.