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I think the author's take is overly bleak. Yes, he supports his claim that AI businesses are currently money pits and unsustainable. But I don't think it's reas

I think the author's take is overly bleak. Yes, he supports his claim that AI businesses are currently money pits and unsustainable. But I don't think it's reasonable to claim that AI can't be profitable. This whole thing is moving so extremely fast. Models are getting better by the month. Cost is rapidly coming down. We broadly speaking still don't know how to apply AI. I think it's hubris to claim that, in the wake of this whole bubble noone will figure out how to use AI to provide value and noone will be profitable.

BoredPositron 1y ago
We are pretty much plateauing in base model performance since gpt4. It's mostly tooling and integration now. The target is also AGI so no matter your product you will get measured on your progress towards it. With new "sota" models popping up left and right you also have no good way of user retention because the user is mostly interested in the models performance not the funny meme generator you added. looking at you openai... "They called me bubble boy..." - some dude at Deutsche.
- GaggiX 1y ago
  >We are pretty much plateauing in base model performance since gpt4. Reasoning models didn't even exist at the time, LLMs were struggling a lot with math at the time, now it's completely different with SOTA models, there have been massive improvements since gpt4.
- impossiblefork 1y ago
  So, how do you feel about the recent IMO stuff? Don't they cause a consistency problem for your view that we've plateaued-- to me at least, I felt we were something like two years away from this kind of thing. Probably very expensive to run of course, probably ridiculously so, but they were able to solve really difficult maths problems.
  - narrator 1y ago
    The biological brain of the top human IMO guy runs on 20 watts. I wonder how much electricity Google used to match that performance.
    - emp17344 1y ago
      And they still couldn’t solve P6. All that power to perform worse than many human contestants.
    - blackoil 1y ago
      What is the training cost of such human? Reliability is another concern. There is no manufacturer whom you can pay 10 billion and get few 1000 of trained processor.
  - otabdeveloper4 1y ago
    > So, how do you feel about the recent IMO stuff? It's not real, they are cheating on benchmarks. (Just like the previous many times this was announced.)
- helicalmix 1y ago
  The transformer paper was published in 2017, and within 8 years (less so, if i'm being honest), we have bots that passed the Turing test. To people with shorter term memories, passing the turing test was a big deal. My point is that even if things are pleatuing, a lot of these advancements are done in step change fashion. All it takes is one or two good insights to make massive leaps, and just because things are plateauing now, it's a bad predictor for how things will be in the future.
cobertos 1y ago
"Cost is rapidly coming down" but capital expenditures are still high. They'll have to charge for this eventually, no?
- appreciatorBus 1y ago
  Not necessarily. The ppl and firms making the capital expenditures can go bankrupt for instance. The world will carry on without them, while the infrastructure they built with those expenditures continues to provide value, just to someone else, and now at a dramatically lower capital cost. We could compare it to the railroad boom, and the telecom boom - in both cases vast sums capital expenditures were made, and reasonable people might have concluded that eventually these expenses would have to be reimbursed through higher prices. However, in both cases, many firms simply went bankrupt and all that excess infrastructure went time to serve humanity for decades at lower cost.
  - hiAndrewQuinn 1y ago
    I am so, so glad you brought up what should be the obvious conclusion here. "B-but they spent all that money, how do they get it back!?" "That's the fun part, they don't." Creative destruction is a woefully underappreciated force in capitalism. Shareholders can lose everything. Debt can be restructured or sold for pennies on the dollar. Debt can go unsold and unpaid, and the creditors can lose everything. I think here it has to be mentioned that bankruptcy in the United States actually works very differently to bankruptcy in the European Union, where creditors have a lot more legal means at their disposal to haunt you if you try risky plays like taking on more debt to moonshot your way out of your current debt. In a funny way, a country's bankruptcy laws are their most important ones when it comes to wealth transfer.
    - appreciatorBus 1y ago
      It's also a common misconception in housing debates! "B-but the developer always has to make the money back so rents & prices can never go down!" "That's the fun part, they don't!" The builder/buyer/lender/landlord/etc can go bankrupt but as long as the building actually got built, it will carry on and benefit the rest of us, regardless of what happened to the ppl who paid for it to be built. Also fun when landlords claim to be "housing providers" "No actually, the housing will still be there, even if you sell, even if you lose your shirt and get foreclosed on"
nicce 1y ago
It is not about profitability alone, but whether benefits are net positive for society over the long term. Profitability is easy with current standards. Get the users. Make them dependent. Increase the price. Make AI mandatory. List goes on.
- jsnell 1y ago
  From a quick skim, at least 90% of the article is about profitability. The remaining 10% is mostly bragging.
- troupo 1y ago
  > Profitability is easy with current standards. Get the users. Make them dependent. Increase the price. Make AI mandatory. List goes on. "Easy". "Just" get more users and "just" increase prices to somehow cover hundreds of billions of invested dollars and hundreds of millions of running costs. It's that easy. I'm surprised none of the companies mentioned in the article thought of that.
  - nicce 1y ago
    > I'm surprised none of the companies mentioned in the article thought of that. I was just stating the obvious. That is what they are doing.
    - troupo 1y ago
      Currently they are throwing money onto the fire. Almost all of them are not just unprofitable. They are abysmally unprofitable. The only reason they are raising prices is to try and recoup some of the ongoing operational costs. In the end it will only be Google left standing because Google has unlimited money, and they can price dump indefinitely long, and offer most things for free.
hopelite 1y ago
What is noone? You sure put a lot of confidence in it
ddddang 1y ago
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BoredPositron 1y ago

We are pretty much plateauing in base model performance since gpt4. It's mostly tooling and integration now. The target is also AGI so no matter your product you will get measured on your progress towards it. With new "sota" models popping up left and right you also have no good way of user retention because the user is mostly interested in the models performance not the funny meme generator you added. looking at you openai... "They called me bubble boy..." - some dude at Deutsche.

GaggiX 1y ago
>We are pretty much plateauing in base model performance since gpt4. Reasoning models didn't even exist at the time, LLMs were struggling a lot with math at the time, now it's completely different with SOTA models, there have been massive improvements since gpt4.
impossiblefork 1y ago
So, how do you feel about the recent IMO stuff? Don't they cause a consistency problem for your view that we've plateaued-- to me at least, I felt we were something like two years away from this kind of thing. Probably very expensive to run of course, probably ridiculously so, but they were able to solve really difficult maths problems.
- narrator 1y ago
  The biological brain of the top human IMO guy runs on 20 watts. I wonder how much electricity Google used to match that performance.
  - emp17344 1y ago
    And they still couldn’t solve P6. All that power to perform worse than many human contestants.
  - blackoil 1y ago
    What is the training cost of such human? Reliability is another concern. There is no manufacturer whom you can pay 10 billion and get few 1000 of trained processor.
- otabdeveloper4 1y ago
  > So, how do you feel about the recent IMO stuff? It's not real, they are cheating on benchmarks. (Just like the previous many times this was announced.)
helicalmix 1y ago
The transformer paper was published in 2017, and within 8 years (less so, if i'm being honest), we have bots that passed the Turing test. To people with shorter term memories, passing the turing test was a big deal. My point is that even if things are pleatuing, a lot of these advancements are done in step change fashion. All it takes is one or two good insights to make massive leaps, and just because things are plateauing now, it's a bad predictor for how things will be in the future.

cobertos 1y ago

"Cost is rapidly coming down" but capital expenditures are still high. They'll have to charge for this eventually, no?

appreciatorBus 1y ago
Not necessarily. The ppl and firms making the capital expenditures can go bankrupt for instance. The world will carry on without them, while the infrastructure they built with those expenditures continues to provide value, just to someone else, and now at a dramatically lower capital cost. We could compare it to the railroad boom, and the telecom boom - in both cases vast sums capital expenditures were made, and reasonable people might have concluded that eventually these expenses would have to be reimbursed through higher prices. However, in both cases, many firms simply went bankrupt and all that excess infrastructure went time to serve humanity for decades at lower cost.
- hiAndrewQuinn 1y ago
  I am so, so glad you brought up what should be the obvious conclusion here. "B-but they spent all that money, how do they get it back!?" "That's the fun part, they don't." Creative destruction is a woefully underappreciated force in capitalism. Shareholders can lose everything. Debt can be restructured or sold for pennies on the dollar. Debt can go unsold and unpaid, and the creditors can lose everything. I think here it has to be mentioned that bankruptcy in the United States actually works very differently to bankruptcy in the European Union, where creditors have a lot more legal means at their disposal to haunt you if you try risky plays like taking on more debt to moonshot your way out of your current debt. In a funny way, a country's bankruptcy laws are their most important ones when it comes to wealth transfer.
  - appreciatorBus 1y ago
    It's also a common misconception in housing debates! "B-but the developer always has to make the money back so rents & prices can never go down!" "That's the fun part, they don't!" The builder/buyer/lender/landlord/etc can go bankrupt but as long as the building actually got built, it will carry on and benefit the rest of us, regardless of what happened to the ppl who paid for it to be built. Also fun when landlords claim to be "housing providers" "No actually, the housing will still be there, even if you sell, even if you lose your shirt and get foreclosed on"

nicce 1y ago

It is not about profitability alone, but whether benefits are net positive for society over the long term. Profitability is easy with current standards. Get the users. Make them dependent. Increase the price. Make AI mandatory. List goes on.

jsnell 1y ago
From a quick skim, at least 90% of the article is about profitability. The remaining 10% is mostly bragging.
troupo 1y ago
> Profitability is easy with current standards. Get the users. Make them dependent. Increase the price. Make AI mandatory. List goes on. "Easy". "Just" get more users and "just" increase prices to somehow cover hundreds of billions of invested dollars and hundreds of millions of running costs. It's that easy. I'm surprised none of the companies mentioned in the article thought of that.
- nicce 1y ago
  > I'm surprised none of the companies mentioned in the article thought of that. I was just stating the obvious. That is what they are doing.
  - troupo 1y ago
    Currently they are throwing money onto the fire. Almost all of them are not just unprofitable. They are abysmally unprofitable. The only reason they are raising prices is to try and recoup some of the ongoing operational costs. In the end it will only be Google left standing because Google has unlimited money, and they can price dump indefinitely long, and offer most things for free.

hopelite 1y ago

What is noone? You sure put a lot of confidence in it

ddddang 1y ago

[dead]