4 ms·
I'm not sure if this is comparable to the yellow pages vs the internet. Google became profitable in 2001 whereas OpenAI et al are still operating at a huge los
by pier25 10mo ago
I'm not sure if this is comparable to the yellow pages vs the internet.
Google became profitable in 2001 whereas OpenAI et al are still operating at a huge loss. Even with ads it's not clear whether LLMs can be profitable unless they increase prices significantly.
- usef- 10mo agoGoogle was not profitable until they rolled out ads, either. The scope of use of AI assistants in people's lives are significantly higher than google search, imo. People use it in far more scenarios already than just information retrieval. That's why some are betting there's a chance it's more valuable than present-day google search.
- pier25 10mo agoIIRC Google had no monetization at all until ads. Even then the cost of providing search with ads is orders of magnitude lower compared to running LLMs.
- usef- 10mo agoThey made money by licensing their search technology to other sites, as well as selling physical search appliances for businesses. They were considered by some to be struggling to find a way to monetise well. Computational cost is indeed higher than search (though remember, search has been heavily optimised for many years!), but search and web companies were one of the lowest cost, highest-margin businesses in human existence. Many higher-cost businesses have been supported by ads.
- pier25 10mo agoIt's not only the computational cost though. Hardware requirements are much higher and GPUs need to be replaced every 2-3 years. Plus model training expenses which are considerable. I imagine it's easily 100x more expensive and the margins (if there's ever any profit) will be very low.
- johnnyanmac 10mo ago>Many higher-cost businesses have been supported by ads. Not at the scale of a trillion dollars, though. You can't make that kind of money back with eyeballs. You either need government subsidies or insane vertical integration. And if your program threatens to neuter the GDP of a country, I don't know how long subsidies will last. At least not in a democracy. People are so mad about immigrants taking jobs, and this would be 10 times worse (and bipartisan, eventually). Even then: we're quickly hitting a resource wall as well. Are we really going to go to war just so we can have some dude generate AI sheep memes? Something's got to give.
- LanceJones 10mo agoOpenAI could be profitable (easily) if it stopped training new models. Whether they will make that choice or not, who knows.
- aatd86 10mo agoThat would be short-termist though. So, quite unlikely. In my usage (code) they are still better than everything else I have tried. Point being that I am looking predominantly for the one llm that gives me the best code output. If they risk losing that advantage for immediate profit, guess I will cancel like I did for claude... (I still got a gemini subscription, for some reason it has a good UI, fast for common non technical requests). Seems to have been my pattern of behavior with all these tools.
- johnnyanmac 10mo ago>If they risk losing that advantage for immediate profit, guess I will cancel We call that "when the bubble pops". Can't wait.
- pier25 10mo agoGoogle and Anthropic probably won't stop training though.