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Spending on AI Is at Epic Levels. Will It Ever Pay Off?
- techblueberry 1y agoNo
- scrubs 1y ago(Violins playing) and now what?
- alexnewman 1y agoAgreed
- kingo55 1y agoI look forward to the cheap compute flooding the market when the music stops.
- lomase 1y agoPeople still waiting for GPUs to be cheap after the blockchain bubble.
- chasd00 1y agoTouche. I was just about to comment on snapping up the cheap gpus
- SoftTalker 1y agoWe created the LLM bubble to prop up those investments.
- 0000000000100 1y agoNot egregious API spending, but ChatGPT Pro was been one of the best investments our company has paid for. It is fantastic at reasonable scale ports / refactors, even with complicated subject matter like insurance. We have a project at work where Pro has saved us hours of time just trying to understand the over complicated that is currently in place. For context, it’s a salvage project with a wonderful mix of Razor pages and a partial migration to Vue 2 / Vuetify. It’s best with logic, but it doesn’t do great with understanding the particulars of UI.
- neuronic 1y agoHow are you getting these results? Even with grounding in sources, careful context engineering and whatever technique comes to your mind we are just getting sloppy junk out of all models we have tried. The sketchy part is that LLMs are super good at faking confidence and expertise all while randomly injected subtle but critical hallucinations. This ruins basically all significant output. Double-checking and babysitting the results is a huge time and energy sink. Human post-processing negates nearly all benefits. Its not like there is zero benefit to it, but I am genuinely curious how you get consistently correct output for a "complicated subject matter like insurance".
- cjbarber 1y agoWhat are you trying to use LLMs for and what model are you using?
- 0000000000100 1y agoDepends a lot. Use it for one off scripts, particularly for anything Microsoft 365 related (expanding Sharepoint drives, analyzing AWS usage, general IT stuff). Where there is a lot of heavy context based business logic it will fail since there’s too much context for it to be successful. I work in custom software where the gap in non-LLM users and those who at least roughly know how to use it is huge. It largely depends on the prompt though. Our ChatGPT account is shared so I get to take a gander at the other usages and it’s pretty easy see: “okay this person is asking the wrong thing”. The prompt and the context has a major impact on the quality of the response. In my particular line of work, it’s much more useful than not. But I’ve been focusing on helping build the right prompts with the right context, which makes many tasks actually feasible where before it would be way out of scope for our clients budgets.
- torben-friis 1y agoCould you give an example of a prompt?
- 1y ago
- mwkaufma 1y agoIt's almost tiresome to keep citing Betteridge's law of headlines, but editors at legacy publications keep it relevant. If there was any compelling evidence, they wouldn't have to phrase it as a hypothetical.
- deleted 1y ago[deleted]
- profsummergig 1y ago(1999) - "Spending on Amazon warehouses Is at Epic Levels. Will It Ever Pay Off?"
- simonw 1y agoAmazon weren't spending a single digit percentage of GDP on GPUs with a shelf life measured in just a few years though.
- SaberTail 1y agoI'd suggest a better analogy would be telecommunications fiber[1]. [1] https://internethistory.org/wp-content/uploads/2020/01/OSA_Boom.Bubble.Bust_Fiber.Optic_.Mania_.pdf https://internethistory.org/wp-content/uploads/2020/01/OSA_B...
- lomase 1y agoIs not similar at all. Even the smallest and poorest countries in the world invested in their fiber networks. Only China and the US have money to create models.
- ACCount37 1y agoIn that, it's closest to the semiconductor situation. Few companies and very few countries have the bleeding edge frontier capabilities. A few more have "good enough to be useful in some niches" capabilities. The rest of the world has to get and use what they make - or do without, which isn't a real option.
- option 1y agoYes
- lioeters 1y agoAnd..?
- rubyfan 1y agoIs it possible all this capital would be better deployed creating value through jobs that leverage human creativity?
- colkassad 1y agoMeat-based LLMs trained for billions of years are underrated! Too bad they need healthcare (and sleep).
- surgical_fire 1y agoNo. The wet dream of the elites is to get rid of the pesky underclass that provides labor. They have a visceral hatred of workers. The sooner people accept that as reality, the better.
- tim333 1y agoIndeed. I'm optimistic on AI but think it would be better if they spend less on data centers and more on research. If they AI companies just charged enough to users to cover their costs then the demand would drop 10x and we wouldn't need most of the data centers.
- hettygreen 1y agoPay off for who? After learning about "The Gospel" [0], does anyone else wonder if spending on AI is actually just an arms race? [0] https://en.wikipedia.org/wiki/AI-assisted_targeting_in_the_Gaza_Strip https://en.wikipedia.org/wiki/AI-assisted_targeting_in_the_G...
- naveen99 1y agoIt’s not like anyone is going in debt to pay for gpu’s though. So it’s probably ok. Now if banks start selling 30 year mortgages for gpu’s, I might get a little worried.
- noosphr 1y agoPeople act like big tech didn't have a mountain of cash they didn't know what to do with. Each of the big players has around 100 billion that just sitting there doing nothing.
- prewett 1y agoWell, Apple spends some of that pre-paying TSMC for their next node in exchange for exclusivity...
- deleted 1y ago[deleted]
- fprog 1y agoOracle is going to use debt to finance the buildout of AI cloud infrastructure to meet their obligations to customers. They’re the first hyperscaler to do so. Made the news two weeks ago.
- naveen99 1y agoYikes. Oracle just issued 40 year mortgages , I mean bonds. Ok, you can be a little worried now. There balance sheet looks a lot like Coreweave or mstr. I guess the market will allow it for some more time. Nvidia gpu treasury companies can sell a dollar worth of future gpu for $2 for some time I guess. Of course I won’t be buying oracle or mstr… but bitcoin and gpu’s are still fine.
- jemmyw 1y agoI don't know if that was epic sarcasm, but companies are doing exactly that. CoreWeave has taken on something like $30b of debt against the value of their GPUs. https://www.forbes.com/sites/rashishrivastava/2025/09/22/coreweaves-29-billion-bet-that-its-debt-fueled-ai-boom-wont-go-bust/ https://www.forbes.com/sites/rashishrivastava/2025/09/22/cor... They aren't the only company doing this.
- scuff3d 1y agoWhile it has its uses I have yet to see a single use case, or combination of use cases, that warrants the insane spending. Not to mention the environmental damage and wide spread theft and copyright infringement required to make it work.
- duped 1y agoThe people funding this seem to believe that firstly text inference and gradient descent can synthesize a program that can operate on information tasks as good or better than humans, secondly that the only way of generating the configuration data for those programs to work is by powering vast farms of processors doing matrix arithmetic but requiring the worlds most complex supply chain tethered to a handful of geopolitically volatile places, thirdly that those farms have power demands comparable to our biggest metropolises, and finally if they succeed, they'll have unlocked economic power amplification that hasn't been seen since James Watt figured out how to move water out of coal mines a bit quicker. Oh and the really fucky part is half of them just want to get a bit richer, but the other half seem to be in a cult that thinks AI's gross disruption of human economies and our environment is actually the most logically ethical thing to do.
- yeasku 1y agoI tougth what you wrote was crazy wasteful, then I remember the world runs on js.
- pizlonator 1y agoSomeone should create a tracker that measures the number of bearish AI takes that make the front page of HN each day.
- g42gregory 1y agoAre we still getting AGI in 2026, per OpenAI? Based on AGI 2026, they convinced US Government to block high-end GPU sales to China. They said, we only needed 1-2 more years to hold them off. Then AGI and OpenAI/US rules the world. Is this still the plan? /s If AGI does not materialize in 2026, I think there might be trouble, as China develops alternative GPUs and NVIDIA loses that market.
- lomase 1y agoAltman says in a few years Chat GPT 8 will solve quantum physics
- RajT88 1y agoI mean, I'll take it if it comes true. insert Rick & Morty "Show me what you got" gif here
- prewett 1y ago"Solve quantum physics" meaning generating closed-form solutions to the Schrodinger equation for atoms of any composition? Of arbitrary molecules? Good luck with that... Even for the hydrogen atom, the textbook said "so it happens that <some polynomial function I'd never heard of before> just so happens to solve this equation", instead of the derivations one would normally expect. I doubt we have even invented the math to solve the equations much above the hydrogen atom, assuming that a closed-form solution is even theoretically possible. I think Altman has been getting mentored by Musk. I think we'll get full self-driving Teslas before quantum mechanics is "solved", though, and I am not expecting that in the foreseeable future.
- ChrisArchitect 1y agoRelated: Cost of AGI Delusion https://news.ycombinator.com/item?id=45395661 https://news.ycombinator.com/item?id=45395661 AI Investment Is Starting to Look Like a Slush Fund https://news.ycombinator.com/item?id=45393649 https://news.ycombinator.com/item?id=45393649
- kernelRiot 1y ago[dead]
- windex 1y agoA lot of us use it in a very structured manner for code and other areas. It absolutely is value for money. I don't really get what people keep complaining about. I think the complaints mostly come from people trying to embed LLMs and expecting a human like output. Decision support, coding, and for structured outputs I love it. I know its not human, and i write instructions that are specific to the way it reasons.
- surgical_fire 1y agoThis is sort of useful, and it is how I have been using LLMs. I don't think the companies betting on AI are burning mountains of cash because they think it will be a moderately useful tool for decision support, coding and such. They are betting this will be "The Future™" in their search of perpetual growth.
- maxglute 1y agoAfter seeing kids abuse llms for companionship I think many new gen will grow up shelling for sub if companies decide to wholey gatelock behind paywall. Where this world is heading, its cheaper than therapy. It's going to be indispensible while old men yell at clouds, think cell phone plan not spotify or netflix once companies start squeezing.