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Wouldn't be a gary marcus post without congratulating himself for tweeting something that all but confirms a disaster that hasn't happened yet. Anyways, OpenAI

Wouldn't be a gary marcus post without congratulating himself for tweeting something that all but confirms a disaster that hasn't happened yet. Anyways, OpenAI is not in profit-seeking mode, and there's no economic incentives to do so right now.

woeirua 11mo ago
Is that why they just changed to become a for-profit company?
stanleykm 11mo ago
Not being in profit seeking mode is one thing. Being so far away from profit seeking mode that you need a government bailout is an entirely different thing.
- aeonfox 11mo ago
  According to this[0] podcast some captains of industry in SV consider that bubbles are good, actually. At least, that is the thesis of this[1] book published by Stripe Press. Not because they'll deliver returns for their investors, but because they drive innovation in the long run. But obviously, if they are perceived to have terrible ROI, they aren't getting over the line, which leads to a dilemma – how do we reach that moonshot without fooling a bunch of people and destroying the economy along the way? All that said, anyone who spends a lot of time with AI knows the current direction of generative AI isn't really that moonshot. But the scale of compute that is being unlocked right now, along with technologies like photonics, might be what's key to AGI. [0] https://shows.acast.com/the-david-mcwilliams-podcast/episodes/the-ai-bubble-boom-bust-baked-in-nimbin https://shows.acast.com/the-david-mcwilliams-podcast/episode... [1] https://www.stripe.press/boom https://www.stripe.press/boom
  - y0eswddl 11mo ago
    they have 2-5 years... then we're gonna need to replace all those GPUs
johnnienaked 11mo ago
There's no ability for them to do so. They have a pathetic conversion rate and lose 3x as much money as they make.
bix6 11mo ago
No economic incentives to seek profit? Yeah there certainly aren’t when you can sucker everyone else into paying for your money losing company and cash out in the secondary market.
- HWR_14 11mo ago
  Almost every Silicon Valley startup goes through a period where they seek growth, not profit and spend their investors money to maintain it.
  - deleted 11mo ago
    [deleted]
  - gipp 11mo ago
    Yes, at about 1% of this scale. OpenAI's obligations are not something they can just run to daddy VC to pay for; he can't afford it either
  - Forgeties79 11mo ago
    But what percentage of those startups are making such grand promises while taking in such unfathomable amounts of capital? The sheer scale of the investment per AI company, the massive tax incentives being given out by states and debt being taken on by energy companies promising massive increase in loads…I mean this is all without precedent. AI speculation is rapidly driving infrastructural changes at the state level across the country. We know they can’t all be winners. But the price and ripple per failure (at least it seems to me) will be staggering. Am I off base here?
  - malfist 11mo ago
    Sure, most of then lose millions of dollars, but uh, not trillions
- babelfish 11mo ago
  800M WAU is a "losing company"?
  - 11mo ago
sethops1 11mo ago
Huh? They have committed to about a trillion dollars in infrastructure build out they will need to pay for. How about instead of begging tax payers to back loans to pay for this, they actually produce some profit and pay for it themselves?
- Forgeties79 11mo ago
  I feel like this question needs to be even louder because in the past they would just mumble something about “job creation,” but that’s undermined by the fact that they also tout AI as “job replacement” to investors and clients alike.
d0odk 11mo ago
If you show revenue, people will ask "How much?" And it will never be enough, but if you have no revenue, you can say you're pre-revenue. You're a potential pure play. It's not about how much you earn, it's about what you're worth. And who's worth the most? Companies that lose money.
- Gud 11mo ago
  Actually, companies that make a shitload of money are worth the most.
- array_key_first 11mo ago
  > And who's worth the most? Companies that lose money. This is a fairly new phenomenon and we don't actually know if it works. It's entirely possible this exact mentality blows up the economy.
  - luckman212 11mo ago
    Yes, we know it works. Just ask the knowledgeable crowd over on r/wallstreetbets. They have the answer: just turn your phone upside down! Voila, line is going up again!
wavemode 11mo ago
> Anyways, OpenAI is not in profit-seeking mode, and there's no economic incentives to do so right now. You disparaged the article, but then immediately agreed with its main point. The fact that there is no economic incentive for OpenAI to run sustainably is a problem. It means they will happily continue to spend trillions of investor, lender, and (soon) government money, most of which is being burned as waste heat radiating from GPUs, in pursuit of an AGI pipedream.
- phillipcarter 11mo ago
  I didn’t agree with the article at all.
deleted 11mo ago
[deleted]

woeirua 11mo ago

Is that why they just changed to become a for-profit company?

stanleykm 11mo ago

Not being in profit seeking mode is one thing. Being so far away from profit seeking mode that you need a government bailout is an entirely different thing.

aeonfox 11mo ago
According to this[0] podcast some captains of industry in SV consider that bubbles are good, actually. At least, that is the thesis of this[1] book published by Stripe Press. Not because they'll deliver returns for their investors, but because they drive innovation in the long run. But obviously, if they are perceived to have terrible ROI, they aren't getting over the line, which leads to a dilemma – how do we reach that moonshot without fooling a bunch of people and destroying the economy along the way? All that said, anyone who spends a lot of time with AI knows the current direction of generative AI isn't really that moonshot. But the scale of compute that is being unlocked right now, along with technologies like photonics, might be what's key to AGI. [0] https://shows.acast.com/the-david-mcwilliams-podcast/episodes/the-ai-bubble-boom-bust-baked-in-nimbin https://shows.acast.com/the-david-mcwilliams-podcast/episode... [1] https://www.stripe.press/boom https://www.stripe.press/boom
- y0eswddl 11mo ago
  they have 2-5 years... then we're gonna need to replace all those GPUs

johnnienaked 11mo ago

There's no ability for them to do so. They have a pathetic conversion rate and lose 3x as much money as they make.

bix6 11mo ago

No economic incentives to seek profit? Yeah there certainly aren’t when you can sucker everyone else into paying for your money losing company and cash out in the secondary market.

HWR_14 11mo ago
Almost every Silicon Valley startup goes through a period where they seek growth, not profit and spend their investors money to maintain it.
- deleted 11mo ago
  [deleted]
- gipp 11mo ago
  Yes, at about 1% of this scale. OpenAI's obligations are not something they can just run to daddy VC to pay for; he can't afford it either
- Forgeties79 11mo ago
  But what percentage of those startups are making such grand promises while taking in such unfathomable amounts of capital? The sheer scale of the investment per AI company, the massive tax incentives being given out by states and debt being taken on by energy companies promising massive increase in loads…I mean this is all without precedent. AI speculation is rapidly driving infrastructural changes at the state level across the country. We know they can’t all be winners. But the price and ripple per failure (at least it seems to me) will be staggering. Am I off base here?
- malfist 11mo ago
  Sure, most of then lose millions of dollars, but uh, not trillions
babelfish 11mo ago
800M WAU is a "losing company"?
- 11mo ago

sethops1 11mo ago

Huh? They have committed to about a trillion dollars in infrastructure build out they will need to pay for. How about instead of begging tax payers to back loans to pay for this, they actually produce some profit and pay for it themselves?

Forgeties79 11mo ago
I feel like this question needs to be even louder because in the past they would just mumble something about “job creation,” but that’s undermined by the fact that they also tout AI as “job replacement” to investors and clients alike.

d0odk 11mo ago

If you show revenue, people will ask "How much?" And it will never be enough, but if you have no revenue, you can say you're pre-revenue. You're a potential pure play. It's not about how much you earn, it's about what you're worth. And who's worth the most? Companies that lose money.

Gud 11mo ago
Actually, companies that make a shitload of money are worth the most.
array_key_first 11mo ago
> And who's worth the most? Companies that lose money. This is a fairly new phenomenon and we don't actually know if it works. It's entirely possible this exact mentality blows up the economy.
- luckman212 11mo ago
  Yes, we know it works. Just ask the knowledgeable crowd over on r/wallstreetbets. They have the answer: just turn your phone upside down! Voila, line is going up again!

wavemode 11mo ago

> Anyways, OpenAI is not in profit-seeking mode, and there's no economic incentives to do so right now. You disparaged the article, but then immediately agreed with its main point. The fact that there is no economic incentive for OpenAI to run sustainably is a problem. It means they will happily continue to spend trillions of investor, lender, and (soon) government money, most of which is being burned as waste heat radiating from GPUs, in pursuit of an AGI pipedream.

phillipcarter 11mo ago
I didn’t agree with the article at all.

deleted 11mo ago

[deleted]