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> But we can still do an illustrative calculation: let’s conservatively assume that OpenAI started R&D on GPT-5 after o3’s release last April. Then there’d stil

by pu_pe 9mo ago

> But we can still do an illustrative calculation: let’s conservatively assume that OpenAI started R&D on GPT-5 after o3’s release last April. Then there’d still be four months between then and GPT-5’s release in August,20 during which OpenAI spent around $5 billion on R&D. But that’s still higher than the $3 billion of gross profits. In other words, OpenAI spent more on R&D in the four months preceding GPT-5, than it made in gross profits during GPT-5’s four-month tenure. These numbers actually look really good. OpenAI's revenue has been increasing 10x year-on-year since 2023, which means spending even 3x the amount of resources to produce another model next year would likely generate a healthy profit. The newer models are more efficient so inference costs tend to decrease as well. As long as models can keep improving, and crucially if that depends on the amount of compute you put in them, OpenAI and other closed-source AI companies will succeed. If those two key assumptions stop being true, I can definitely see the whole castle of cards crumbling as open source competition will eat their lunch.

conartist6 9mo ago
But on the other hand every single model is competing in the sense that there's only one world to fill up with slop. Maybe in a few years LinkedIn will have 10 times more AI slop, but that won't make either LinkedIn or the AI companies 10x more valuable. I guess my point is that the models, IRL, salt the earth. Since model use became common people have started using them to cheat on their work as students, cheat on job interviews, cheat their duties to scientific integrity, and generally stop building and sharing communal knowledge. Why wouldn't you cheat and steal instead of improving yourself when you're told that in the future your skill and intelligence will be utterly and completely negligible compared to that of The Machine. This is already costing society trillions of dollars in practical damages. OpenAI is one of the world's biggest polluters, but in the past there has never been a need for legal protections against indsutrial-scale polluting of the well of human knowledge so we're still catching up. Nevertheless the fact that the unit economics look even this good is because they're dumping the real costs onto society itself.

by pu_pe 9mo ago

conartist6 9mo ago

But on the other hand every single model is competing in the sense that there's only one world to fill up with slop. Maybe in a few years LinkedIn will have 10 times more AI slop, but that won't make either LinkedIn or the AI companies 10x more valuable. I guess my point is that the models, IRL, salt the earth. Since model use became common people have started using them to cheat on their work as students, cheat on job interviews, cheat their duties to scientific integrity, and generally stop building and sharing communal knowledge. Why wouldn't you cheat and steal instead of improving yourself when you're told that in the future your skill and intelligence will be utterly and completely negligible compared to that of The Machine. This is already costing society trillions of dollars in practical damages. OpenAI is one of the world's biggest polluters, but in the past there has never been a need for legal protections against indsutrial-scale polluting of the well of human knowledge so we're still catching up. Nevertheless the fact that the unit economics look even this good is because they're dumping the real costs onto society itself.