3 ms·

My conjecture is that their memory implementation is not aimed at building a user profile. I don't know if they would or would not serve ads in the future, but

My conjecture is that their memory implementation is not aimed at building a user profile. I don't know if they would or would not serve ads in the future, but it's hard to see how the current implementation helps them in that regard.

cj 1y ago
> I don't know if they would or would not serve ads in the future There are 2 possible futures: 1) You are served ads based on your interactions 2) You pay a subscription fee equal to the amount they would have otherwise earned on ads I highly doubt #2 will happen. (See: Facebook, Google, twitter, et al) Let’s not fool ourselves. We will be monetized. And model quality will be degraded to maximize profits when competition in the LLM space dies down. It’s not a pretty future. I wouldn’t be surprised if right now is the peak of model quality, etc. Peak competition, everyone is trying to be the best. That won’t continue forever. Eventually everyone will pivot their priority towards monetization rather than model quality/training. Hopefully I’m wrong.
- taneq 1y ago
  3) You pay a subscription fee, and are force-fed ads anyway.
- fluidcruft 1y ago
  But aren't we only worth something like $300/year each to Meta in terms of ads? I remember someone arguing something like that when the TikTok ban was being passed into law... essentially the argument was that TikTok was "dumping" engagement at far below market value (at something like $60/year) to damage American companies. That was something the argument I remember anyway.
  - cj 1y ago
    If that’s the case, we have an even bigger problem on our hands. How will these companies ever be profitable? If we’re already paying $20/mo and they’re operating at a loss, what’s the next move (assuming we’re only worth an extra $300/yr with ads?) The math doesn’t add up, unless we stop training new models and degrade the ones currently in production, or have some compute breakthrough that makes hardware + operating costs an order of magnitudes cheaper.
    - rrrrrrrrrrrryan 1y ago
      OpenAI has already started degrading their $20/month tier by automatically routing most of the requests to the lightest free-tier models. We're very clearly heading toward a future where there will be a heavily ad-supported free tier, a cheaper (~$20/month) consumer tier with no ads or very few ads, and a business tier ($200-$1000/month) that can actually access state of the art models. Like Spotify, the free tier will operate at a loss and act as a marketing funnel to the consumer tier, the consumer tier will operate at a narrow profit, and the business tier for the best models will have wide profit margins.
      - lodovic 1y ago
        I find that hard to believe. As long as we have open weight models, people will have an alternative to these subscriptions. For $200 a month it is cheaper to buy a GPU with lots of memory or rent a private H200. No ads and no spying. At this point the subscriptions are mainly about the agent functionality and not so much the knowledge in the models themselves.
        lupusreal 1y ago
        I think what you're missing here is most OpenAI users aren't technical in the slightest. They have massive and growing adoption from the general public. The general public buy services, not roll their own for free, and they even prefer to buy service from the brand they know over getting cheaper service from somebody else.
        BigGreenJorts 1y ago
        The conclusion I got from their comment was that the highest margin tier (the business customers) would be incentivized to build their own service instead of paying the subscription. Of course, I am doubtful that for the vast majority of businesses this viable/at all more cost effective when a service AWS is highly popular and extremely profitable.
        HotHotLava 1y ago
  - majormajor 1y ago
    Here is some old analysis I remember seeing at the time of Hulu ads vs no-ads plans: https://ampereanalysis.com/insight/hulus-price-drop-is-a-wise-money-move https://ampereanalysis.com/insight/hulus-price-drop-is-a-wis... They dropped the price $2/mo on their with-ads plan to make a bigger gap between the no-ads plan and the ads plan, and the analyst here looks at their reported ad revenue and user numbers to estimate $12/mo per user from ads. Whether Meta across all their properties does more than $144/yr in ads is an open question; long-form video ads are sold at a premium but Facebook/IG users see a LOT of ads across a lot of Meta platforms. The biggest advantage in ad-$-per-user Hulu has is that it's US-only. ChatGPT would also likely be considered premium ad inventory, though they'd have a delicate dance there around keeping that inventory high-value, and selling enough ads to make it worthwhile, without pissing users off too much. Here they estimate a much lower number for ad revenue per Meta user, like $45 bucks a year - https://www.statista.com/statistics/234056/facebooks-average-advertising-revenue-per-user/ https://www.statista.com/statistics/234056/facebooks-average... - but that's probably driven disproportionately by wealth users in the US and similar countries compared to the long tail of global users. One problem for LLM companies compared to media companies is that the marginal cost of offering the product to additional users is quite a bit higher. So business models, ads-or-subscription, will be interesting to watch from a global POV there. One wonders what the monetization plan for the "writing code with an LLM using OSS libraries and not interested in paying for enterprise licenses and such" crowd will be. What sort of ads can you pull off in those conversations?
- hbarka 1y ago
  Imagine a model where a user can earn “token allowances” through some kind of personal contribution or value add.
- __MatrixMan__ 1y ago
  3) AIs will steer you towards a problem for which one product is the obvious solution without directly mentioning that product, so you'll think you're getting (2) while actually getting (1).

cj 1y ago

> I don't know if they would or would not serve ads in the future There are 2 possible futures: 1) You are served ads based on your interactions 2) You pay a subscription fee equal to the amount they would have otherwise earned on ads I highly doubt #2 will happen. (See: Facebook, Google, twitter, et al) Let’s not fool ourselves. We will be monetized. And model quality will be degraded to maximize profits when competition in the LLM space dies down. It’s not a pretty future. I wouldn’t be surprised if right now is the peak of model quality, etc. Peak competition, everyone is trying to be the best. That won’t continue forever. Eventually everyone will pivot their priority towards monetization rather than model quality/training. Hopefully I’m wrong.

taneq 1y ago
3) You pay a subscription fee, and are force-fed ads anyway.
fluidcruft 1y ago
But aren't we only worth something like $300/year each to Meta in terms of ads? I remember someone arguing something like that when the TikTok ban was being passed into law... essentially the argument was that TikTok was "dumping" engagement at far below market value (at something like $60/year) to damage American companies. That was something the argument I remember anyway.
- cj 1y ago
  If that’s the case, we have an even bigger problem on our hands. How will these companies ever be profitable? If we’re already paying $20/mo and they’re operating at a loss, what’s the next move (assuming we’re only worth an extra $300/yr with ads?) The math doesn’t add up, unless we stop training new models and degrade the ones currently in production, or have some compute breakthrough that makes hardware + operating costs an order of magnitudes cheaper.
  - rrrrrrrrrrrryan 1y ago
    OpenAI has already started degrading their $20/month tier by automatically routing most of the requests to the lightest free-tier models. We're very clearly heading toward a future where there will be a heavily ad-supported free tier, a cheaper (~$20/month) consumer tier with no ads or very few ads, and a business tier ($200-$1000/month) that can actually access state of the art models. Like Spotify, the free tier will operate at a loss and act as a marketing funnel to the consumer tier, the consumer tier will operate at a narrow profit, and the business tier for the best models will have wide profit margins.
    - lodovic 1y ago
      I find that hard to believe. As long as we have open weight models, people will have an alternative to these subscriptions. For $200 a month it is cheaper to buy a GPU with lots of memory or rent a private H200. No ads and no spying. At this point the subscriptions are mainly about the agent functionality and not so much the knowledge in the models themselves.
      - lupusreal 1y ago
        I think what you're missing here is most OpenAI users aren't technical in the slightest. They have massive and growing adoption from the general public. The general public buy services, not roll their own for free, and they even prefer to buy service from the brand they know over getting cheaper service from somebody else.
        BigGreenJorts 1y ago
        The conclusion I got from their comment was that the highest margin tier (the business customers) would be incentivized to build their own service instead of paying the subscription. Of course, I am doubtful that for the vast majority of businesses this viable/at all more cost effective when a service AWS is highly popular and extremely profitable.
      - HotHotLava 1y ago
- majormajor 1y ago
  Here is some old analysis I remember seeing at the time of Hulu ads vs no-ads plans: https://ampereanalysis.com/insight/hulus-price-drop-is-a-wise-money-move https://ampereanalysis.com/insight/hulus-price-drop-is-a-wis... They dropped the price $2/mo on their with-ads plan to make a bigger gap between the no-ads plan and the ads plan, and the analyst here looks at their reported ad revenue and user numbers to estimate $12/mo per user from ads. Whether Meta across all their properties does more than $144/yr in ads is an open question; long-form video ads are sold at a premium but Facebook/IG users see a LOT of ads across a lot of Meta platforms. The biggest advantage in ad-$-per-user Hulu has is that it's US-only. ChatGPT would also likely be considered premium ad inventory, though they'd have a delicate dance there around keeping that inventory high-value, and selling enough ads to make it worthwhile, without pissing users off too much. Here they estimate a much lower number for ad revenue per Meta user, like $45 bucks a year - https://www.statista.com/statistics/234056/facebooks-average-advertising-revenue-per-user/ https://www.statista.com/statistics/234056/facebooks-average... - but that's probably driven disproportionately by wealth users in the US and similar countries compared to the long tail of global users. One problem for LLM companies compared to media companies is that the marginal cost of offering the product to additional users is quite a bit higher. So business models, ads-or-subscription, will be interesting to watch from a global POV there. One wonders what the monetization plan for the "writing code with an LLM using OSS libraries and not interested in paying for enterprise licenses and such" crowd will be. What sort of ads can you pull off in those conversations?
hbarka 1y ago
Imagine a model where a user can earn “token allowances” through some kind of personal contribution or value add.
__MatrixMan__ 1y ago
3) AIs will steer you towards a problem for which one product is the obvious solution without directly mentioning that product, so you'll think you're getting (2) while actually getting (1).