5 ms·

Seems obvious. AI is useful. But it's not trillion-dollars useful, and it probably won't be.

by Pxtl 1y ago

whimsicalism 1y ago
Why is that obvious? Even with effectively complete stagnation and just existing technology + limited RLVR, I can see how this could be trillion-dollars level useful.
- Delphiza 1y ago
  It is the financial risk that is obvious. The big players are struggling to show meaningful revenue from the investment. Because the investment is so high, the revenue numbers need to be equally high, and growing fast. The 'correction' is when (ok, if) the markets realise that the returns aren't there. The worldwide risk is that AI-led growth has been a large chunk of the US stock market growth. If it 'corrects' US growth disappears overnight and takes everyone down with it. It is not an issue about the usefulness of AI, but the returns on investment and the market shocks caused by such large sums of money sloshing around one market.
  - whimsicalism 1y ago
    I think we have only scratched the surface of what we can do with the existing technology. A much more present risk from stagnation IMO is that if we stagnate, it is almost certain that the value of the tech will not be able to be enclosed /captured by its creators.
    - Pxtl 1y ago
      Imho it will take off in animation/illustration as soon as Adobe (or some competitor) figures out how to make good tooling for artists. Not for idiot wantrepeneurs who want to dump fully-generated-slop onto Amazon, but so that a person can draw rough pencil sketches and storyboards and reference character sheets and get back proper illustrations. Basically, don't replace the penciler but replace the inker and the colourist (and, in animation, the in-betweener). That's more of a UI problem than a limitation in Diffusion tech. That's a customer who'll pay, it might be worth a lot. But a $trillion per year?
      - justlikereddit 1y ago
        There's a free addon for free Krita that did pretty much that when I tried it, last year. The glaring issue with it back then was that unlike an LLM that can be understanding of what you try to explain and bit more consistent the diffusion models ability to read and understand your prompt wasn't really there yet, you're more shotgunning keywords and hope the seed lottery gives you something nice. But recent image generation models are significantly better in stable output. Something like qwen image will care a lot more about your prompt and not entirely redraw the scene into something else just because you change the seed. Meaning that the UI experiments already exist but the models are still a bit away from maturity. On the other hand, when looking at how models are actually evolving I'm not entirely convinced we'll need particularly many classically trained artists in roles where they draw static images with some AI acceleration. I expect people to talk to an LLM interface that can take the dumbest of instructions and carefully adjust a picture, sound, music or an entire two hour movie. Where the artist would benefit more by knowing the terminology and the granular abilities of the system than by being able to hold a pencil. The entertainment and media industry is worth trillions on an annual basis, if AI can eat a fraction of that in addition to some other work-roles it will easily be worth the current valuations.
  - dzhiurgis 1y ago
    > big players are struggling to show meaningful revenue from the investment ChatGPT's $10b per year is not insignificant tho.
    - bigfatkitten 1y ago
      It is when compared with their capex, and where is that revenue coming from? It’s predominantly coming from other AI hopefuls incinerating capital.
      - dzhiurgis 1y ago
        > where is that revenue coming from? 800M active users aka 10% of worlds population.
        bigfatkitten 1y ago
        Of which a small minority are paying subscribers.
        dzhiurgis 1y ago
        Math says about 10%
- an0malous 1y ago
  The existing technology can’t even replace customer support systems, which seems like the lowest bar for a role that’s perfectly well suited to LLMs. How are you justifying the trillion dollar value?
  - whimsicalism 1y ago
    I think with a bit of engineering, the existing tech can replace customer support systems - especially as the boomers are going away. But I realize this is an uphill battle on HN
    - lm28469 1y ago
      > I think with a bit of engineering, the existing tech can replace customer support system That's the lowest of the low and even you accept it doesn't work (yet), how can LLMs be worth 50% of the last years of gdp growth if it's that bad. Do you think customer support represents 50% of newly created value ? I bet it isn't event .5%
    - Pxtl 1y ago
      But the point is the tech obviously isn't there yet. LLMs are still too prone to giving falsehoods and in that case a raw text-search of the support DB would be more useful anyways. Maybe if companies would wire up their "oh a customer is complaining try and talk them out of canceling their account offer them a mild discount in exchange for locking in for a year contract" API to the LLM? Okay, but that's not a trillion-dollar service.
  - xboxnolifes 1y ago
    I disagree that customer support is the lowest bar for LLMs. Companies have been trying to reduce customer support spend for decades, and yet it still exists. Why? Because the types of questions and types of callers that fall on-to the remaining customer support requests are not easy to automate. Either the question itself is a complex edge-case that requires human intervention, or the person calling wants to talk to a human and good documentation was not going to change their action.
- Pxtl 1y ago
  I can't think of any tech with this kind of crazy yearly investment in infrastructure with no success stories. Maybe it's because I find writing easy, but I find the text generation broadly useless except for scamming. The search capabilities are interesting but the falsehoods that come from LLM questions undermine it. The programming and visual art capabilities are most impressive to me... but where's the companies making killings on those? Where's the animation studio cranking out Pixar-quality movies as weekly episodes?
  - kranke155 1y ago
    The animation stuff is about to happen but not there yet. I work in the industry and I know that ad agencies are already moving onto AI gen for social ads. For VFX and films the tech is not there yet, since OpenAI believes they can build the next TikTok on AI (a proposition being tested now) and Google is just being Google - building amazing tools but with little understanding (so far) of how to deploy them on the market. Still Google is likely ahead in building tools that are being used (Nano Banana and Veo 3) while the Chinese open source labs are delivering impressive stuff that you run locally or increasingly on a rented H100 on the cloud.
  - jf22 1y ago
    You can easily google "generative AI success stories" and read about them. There are always a few comments that make it seem like LLMs have done nothing valuable despite massive levels of adoption.
    - Pxtl 1y ago
      I realize this is a cheap shot but > You can easily google "generative AI success stories" and read about them. notice you suggested asking Google and not chatgpt.
      - jf22 1y ago
        I don't understand why you think this is important to mention. Search engines are better at certain tasks than others. If I said should FLY to Spain is it a cheap shot against sailing because I didn't mention it?
- lm28469 1y ago
  Where is all the productivity ? Everyone says they became a 100x employee thanks to LLMs yet not one company has seen any out of the ordinary growth or profit besides AI hyped companies. What if the amount of slop generated counteracts the amount of productivity gained ? For every line of code it writes it also writes some BS paragraph in a business plan, a report, &c.
  - jf22 1y ago
    How are you evaluating the phrase "yet not one company?"
  - bigfatkitten 1y ago
    I’m a heavy LLM user, and that has probably made me a 1.05x employee on a good day.
- insane_dreamer 1y ago
  Because it primarily replaces existing value rather creating new value worth $1T.
  - dzhiurgis 1y ago
    What creates more value - 1 developer or 1 developer working at 10x pace?
    - insane_dreamer 1y ago
      First of all, 1 dev _producing_ at 10x pace is a myth. But second of all, companies do not need to 10x their software production output. Rather the goal, if the 10x productivity is achieved, is to _reduce_ human labor while retaining desired levels of output. If ultimately you're replacing humans with AI agents, you're exchanging one value for another.
      - dzhiurgis 1y ago
        I’m sorry, what? Companies do not need features? Next thing you’ll tell me they need to improve code quality?
- rchaud 1y ago
  Complete stagnation would mean that hundreds of billions earmarked for datacenter and chip production in the next few years would have to be cancelled. The promise of this future demand is what is driving the inflation of the stock market, with investors happy to ignore the deep losses accruing to every AI software player...for now. Pulling the plug on the capacity-building deals is effectively an admission that demand was overestimated, and the market will tank accordingly. It says it all about current market mania that Nvidia (who sells most of the future chip capacity) is valued at $4 trillion, more than every publicly traded pharmaceutical company (who have decades of predictable future cash flows) combined.
  - Ekaros 1y ago
    At least Nvidia is making money now. Just look at Tesla, also over a trillion doing exactly what and promising exactly what again? Wait for time of them not delivering coinciding at same time as AI and it is even deeper hole...
    - deaux 1y ago
      Considering the market cap of Tesla in light of what the company produces is the same mistake as anthropomorphizing Larry Ellison. It's like how the price of Dogecoin isn't related to how in vogue doge memes are.
- array_key_first 1y ago
  The monetization behind AI is on shakey grounds. Nobody is actually making any money off of it, and when they propose how to make money, we all get very scared. It's either world-ending hard to believe conjecture, like the death of scarcity, or it's... ads. Ads. You know, the thing we're already doing? So, it's not looking great. Maybe we will find monetization strategies, but they're certainly not present now, even by the largest players with the most to lose.
Esophagus4 1y ago
> But it's not trillion-dollars useful, and it probably won't be. The market disagrees. But if you are sure of this, please show your positions. Then we can see how deeply you believe it. My guess is you’re short the most AI-exposed companies if you think they’re overvalued? Hedged maybe? You’ve found a clever way to invest in bankruptcy law firms that handle tech liquidations?
- ghaff 1y ago
  One can be skeptical about the overall value of various technologies while also being conservative about specific bets in specific timeframes against them.
  - Esophagus4 1y ago
    I think you’re making my point without realizing it. If you are skeptical but also not willing to place a bet, you shouldn’t say “AI is overvalued” because you don’t actually believe it. You should say, “I think it might be overvalued, but I’m not really sure? And I don’t have enough experience in markets or confidence to make a bet on it, so I will go with everyone else’s sentiment and make the ‘safe’ bet of being long the market. But like… something feels weird to me about how much money is being poured into this? But I can’t say for sure whether it is overvalued or not.” Those are two wildly different things.
    - ghaff 1y ago
      Not at all. I may think $TECH is overvalued but some companies may well make it out the other side, some aspects of the $TECH may play out (or not), and the bubble may pop in 1 year or 5. So the sensible process may be to invest in broader indexes and let things play out at the more micro level (that may not be possible to invest in anyway). I certainly had unease about the dot-com market and should have shifted more investments to the conservative side. But I made the "‘safe’ bet of being long the market" even after things started going south. FWIW, I do think AI is overvalued for the relatively near term. But I'm not sure what to do about that other than being fairly conservatively invested which makes sense for me at this point anyway.

Seems obvious. AI is useful. But it's not trillion-dollars useful, and it probably won't be.

by Pxtl 1y ago

Seems obvious. AI is useful. But it's not trillion-dollars useful, and it probably won't be.

Why is that obvious? Even with effectively complete stagnation and just existing technology + limited RLVR, I can see how this could be trillion-dollars level useful.

Delphiza 1y ago
It is the financial risk that is obvious. The big players are struggling to show meaningful revenue from the investment. Because the investment is so high, the revenue numbers need to be equally high, and growing fast. The 'correction' is when (ok, if) the markets realise that the returns aren't there. The worldwide risk is that AI-led growth has been a large chunk of the US stock market growth. If it 'corrects' US growth disappears overnight and takes everyone down with it. It is not an issue about the usefulness of AI, but the returns on investment and the market shocks caused by such large sums of money sloshing around one market.
- whimsicalism 1y ago
  I think we have only scratched the surface of what we can do with the existing technology. A much more present risk from stagnation IMO is that if we stagnate, it is almost certain that the value of the tech will not be able to be enclosed /captured by its creators.
  - Pxtl 1y ago
    Imho it will take off in animation/illustration as soon as Adobe (or some competitor) figures out how to make good tooling for artists. Not for idiot wantrepeneurs who want to dump fully-generated-slop onto Amazon, but so that a person can draw rough pencil sketches and storyboards and reference character sheets and get back proper illustrations. Basically, don't replace the penciler but replace the inker and the colourist (and, in animation, the in-betweener). That's more of a UI problem than a limitation in Diffusion tech. That's a customer who'll pay, it might be worth a lot. But a $trillion per year?
    - justlikereddit 1y ago
      There's a free addon for free Krita that did pretty much that when I tried it, last year. The glaring issue with it back then was that unlike an LLM that can be understanding of what you try to explain and bit more consistent the diffusion models ability to read and understand your prompt wasn't really there yet, you're more shotgunning keywords and hope the seed lottery gives you something nice. But recent image generation models are significantly better in stable output. Something like qwen image will care a lot more about your prompt and not entirely redraw the scene into something else just because you change the seed. Meaning that the UI experiments already exist but the models are still a bit away from maturity. On the other hand, when looking at how models are actually evolving I'm not entirely convinced we'll need particularly many classically trained artists in roles where they draw static images with some AI acceleration. I expect people to talk to an LLM interface that can take the dumbest of instructions and carefully adjust a picture, sound, music or an entire two hour movie. Where the artist would benefit more by knowing the terminology and the granular abilities of the system than by being able to hold a pencil. The entertainment and media industry is worth trillions on an annual basis, if AI can eat a fraction of that in addition to some other work-roles it will easily be worth the current valuations.
- dzhiurgis 1y ago
  > big players are struggling to show meaningful revenue from the investment ChatGPT's $10b per year is not insignificant tho.
  - bigfatkitten 1y ago
    It is when compared with their capex, and where is that revenue coming from? It’s predominantly coming from other AI hopefuls incinerating capital.
    - dzhiurgis 1y ago
      > where is that revenue coming from? 800M active users aka 10% of worlds population.
      - bigfatkitten 1y ago
        Of which a small minority are paying subscribers.
        dzhiurgis 1y ago
        Math says about 10%
an0malous 1y ago
The existing technology can’t even replace customer support systems, which seems like the lowest bar for a role that’s perfectly well suited to LLMs. How are you justifying the trillion dollar value?
- whimsicalism 1y ago
  I think with a bit of engineering, the existing tech can replace customer support systems - especially as the boomers are going away. But I realize this is an uphill battle on HN
  - lm28469 1y ago
    > I think with a bit of engineering, the existing tech can replace customer support system That's the lowest of the low and even you accept it doesn't work (yet), how can LLMs be worth 50% of the last years of gdp growth if it's that bad. Do you think customer support represents 50% of newly created value ? I bet it isn't event .5%
  - Pxtl 1y ago
    But the point is the tech obviously isn't there yet. LLMs are still too prone to giving falsehoods and in that case a raw text-search of the support DB would be more useful anyways. Maybe if companies would wire up their "oh a customer is complaining try and talk them out of canceling their account offer them a mild discount in exchange for locking in for a year contract" API to the LLM? Okay, but that's not a trillion-dollar service.
- xboxnolifes 1y ago
  I disagree that customer support is the lowest bar for LLMs. Companies have been trying to reduce customer support spend for decades, and yet it still exists. Why? Because the types of questions and types of callers that fall on-to the remaining customer support requests are not easy to automate. Either the question itself is a complex edge-case that requires human intervention, or the person calling wants to talk to a human and good documentation was not going to change their action.
Pxtl 1y ago
I can't think of any tech with this kind of crazy yearly investment in infrastructure with no success stories. Maybe it's because I find writing easy, but I find the text generation broadly useless except for scamming. The search capabilities are interesting but the falsehoods that come from LLM questions undermine it. The programming and visual art capabilities are most impressive to me... but where's the companies making killings on those? Where's the animation studio cranking out Pixar-quality movies as weekly episodes?
- kranke155 1y ago
  The animation stuff is about to happen but not there yet. I work in the industry and I know that ad agencies are already moving onto AI gen for social ads. For VFX and films the tech is not there yet, since OpenAI believes they can build the next TikTok on AI (a proposition being tested now) and Google is just being Google - building amazing tools but with little understanding (so far) of how to deploy them on the market. Still Google is likely ahead in building tools that are being used (Nano Banana and Veo 3) while the Chinese open source labs are delivering impressive stuff that you run locally or increasingly on a rented H100 on the cloud.
- jf22 1y ago
  You can easily google "generative AI success stories" and read about them. There are always a few comments that make it seem like LLMs have done nothing valuable despite massive levels of adoption.
  - Pxtl 1y ago
    I realize this is a cheap shot but > You can easily google "generative AI success stories" and read about them. notice you suggested asking Google and not chatgpt.
    - jf22 1y ago
      I don't understand why you think this is important to mention. Search engines are better at certain tasks than others. If I said should FLY to Spain is it a cheap shot against sailing because I didn't mention it?
lm28469 1y ago
Where is all the productivity ? Everyone says they became a 100x employee thanks to LLMs yet not one company has seen any out of the ordinary growth or profit besides AI hyped companies. What if the amount of slop generated counteracts the amount of productivity gained ? For every line of code it writes it also writes some BS paragraph in a business plan, a report, &c.
- jf22 1y ago
  How are you evaluating the phrase "yet not one company?"
- bigfatkitten 1y ago
  I’m a heavy LLM user, and that has probably made me a 1.05x employee on a good day.
insane_dreamer 1y ago
Because it primarily replaces existing value rather creating new value worth $1T.
- dzhiurgis 1y ago
  What creates more value - 1 developer or 1 developer working at 10x pace?
  - insane_dreamer 1y ago
    First of all, 1 dev _producing_ at 10x pace is a myth. But second of all, companies do not need to 10x their software production output. Rather the goal, if the 10x productivity is achieved, is to _reduce_ human labor while retaining desired levels of output. If ultimately you're replacing humans with AI agents, you're exchanging one value for another.
    - dzhiurgis 1y ago
      I’m sorry, what? Companies do not need features? Next thing you’ll tell me they need to improve code quality?
rchaud 1y ago
Complete stagnation would mean that hundreds of billions earmarked for datacenter and chip production in the next few years would have to be cancelled. The promise of this future demand is what is driving the inflation of the stock market, with investors happy to ignore the deep losses accruing to every AI software player...for now. Pulling the plug on the capacity-building deals is effectively an admission that demand was overestimated, and the market will tank accordingly. It says it all about current market mania that Nvidia (who sells most of the future chip capacity) is valued at $4 trillion, more than every publicly traded pharmaceutical company (who have decades of predictable future cash flows) combined.
- Ekaros 1y ago
  At least Nvidia is making money now. Just look at Tesla, also over a trillion doing exactly what and promising exactly what again? Wait for time of them not delivering coinciding at same time as AI and it is even deeper hole...
  - deaux 1y ago
    Considering the market cap of Tesla in light of what the company produces is the same mistake as anthropomorphizing Larry Ellison. It's like how the price of Dogecoin isn't related to how in vogue doge memes are.
array_key_first 1y ago
The monetization behind AI is on shakey grounds. Nobody is actually making any money off of it, and when they propose how to make money, we all get very scared. It's either world-ending hard to believe conjecture, like the death of scarcity, or it's... ads. Ads. You know, the thing we're already doing? So, it's not looking great. Maybe we will find monetization strategies, but they're certainly not present now, even by the largest players with the most to lose.

Esophagus4 1y ago

> But it's not trillion-dollars useful, and it probably won't be. The market disagrees. But if you are sure of this, please show your positions. Then we can see how deeply you believe it. My guess is you’re short the most AI-exposed companies if you think they’re overvalued? Hedged maybe? You’ve found a clever way to invest in bankruptcy law firms that handle tech liquidations?

ghaff 1y ago
One can be skeptical about the overall value of various technologies while also being conservative about specific bets in specific timeframes against them.
- Esophagus4 1y ago
  I think you’re making my point without realizing it. If you are skeptical but also not willing to place a bet, you shouldn’t say “AI is overvalued” because you don’t actually believe it. You should say, “I think it might be overvalued, but I’m not really sure? And I don’t have enough experience in markets or confidence to make a bet on it, so I will go with everyone else’s sentiment and make the ‘safe’ bet of being long the market. But like… something feels weird to me about how much money is being poured into this? But I can’t say for sure whether it is overvalued or not.” Those are two wildly different things.
  - ghaff 1y ago
    Not at all. I may think $TECH is overvalued but some companies may well make it out the other side, some aspects of the $TECH may play out (or not), and the bubble may pop in 1 year or 5. So the sensible process may be to invest in broader indexes and let things play out at the more micro level (that may not be possible to invest in anyway). I certainly had unease about the dot-com market and should have shifted more investments to the conservative side. But I made the "‘safe’ bet of being long the market" even after things started going south. FWIW, I do think AI is overvalued for the relatively near term. But I'm not sure what to do about that other than being fairly conservatively invested which makes sense for me at this point anyway.