4 ms·

And this is exactly what the LLM provider industry is fighting tooth-and-nail. It’s not only because it doesn’t directly contribute to their bottom line, it als

And this is exactly what the LLM provider industry is fighting tooth-and-nail. It’s not only because it doesn’t directly contribute to their bottom line, it also directly opposes the idea that LLMs are going to replace entire workers rather than enhance the abilities of individual workers. What we’re headed towards would have been a killer product and probably still shifted a bunch of capital to the bazillionaires had these companies set more realistic goals rather than banking that they’d be the ones that won the war that “changed everythingTM”.

achenet 5mo ago
mainframe industry vs personal computers. If their product is "access to a big model running on a really big computer" (if we can count 'multiple data-centers' as a single enormous distributed computer), then the product "small, accessible device that everyone has" risks killing their cash cow. Ironically enough, the first company to really focus on "an LLM in every phone" will have a good shot at actually being the ones that "changed everythingTM", in the way Microsoft changed the world from IBM mainframes to PCs, or Apple made smartphones a thing.
- DrewADesign 5mo ago
  As an aside, the mainframe industry was profitable for decades before PCs took over. It’s not like they spent a zillion dollars ramping up at the same time.
  - albuic 5mo ago
    The mainframe industry IS profitable.
voncheese 5mo ago
As long as Apple and Google put reasonable AI capabilities on device, then software engineers will use those capabilities when it makes sense (the article gives lots of good examples of capabilities that make sense to run locally). As the author notes, it's cheaper and more reliable to run these things locally. That also doesn't preclude LLM services from being massively successful, they'll just have to justify the pricing and complexity that comes with their adoption, just like any other product.
- order-matters 5mo ago
  > they'll just have to justify the pricing like by selling it at a loss to build dependencies and then jacking the price up year after year by whatever amount is just below the cost of removing the dependency
- goatlover 5mo ago
  In an ideal world they will. In reality most will use online AI, because it's path of least resistance and more familiar.
- DrewADesign 5mo ago
  > That also doesn't preclude LLM services from being massively successful, they'll just have to justify the pricing and complexity that comes with their adoption, just like any other product. What is completely different from every other product is how much they’re spending, and how much they’re obligating themselves to spend going forward. I think there’s a very good chance that the existing providers could be miles underwater coming out of this. Even if the business is not the everything to everybody that they’re banking on it being, they still owe all of that money back to the people they borrowed it from, and they will be a lot less likely to float them cash to get them back to a normal operating mode if they burned the last ocean of cash promising the universe and winding up with “oh yeah, that’s pretty useful sometimes.”
  - voncheese 5mo ago
    Yeah that's a good callout for sure, the spending here is nuts so agree that it's not "just another business that has to price itself right to be competitive". I guess if the time horizons is long, like 20 years, then maybe the spending, as it begins to amortize, gets more in line? I was thinking that a comparison could be to cloud providers, each of which had to spend a lot of money to build out datacenter before making money. Difference there is AWS proved the product first, so when Microsoft and Google came along, they knew it would work and be profitable. With AI, nobody has proven it will work and be profitable, they're all competing for that at the same time which is a potentially dangerous mix for the reasons you cited.
ToucanLoucan 5mo ago
> ...it also directly opposes the idea that LLMs are going to replace entire workers rather than enhance the abilities of individual workers. Which also, as I feel the need to remind everyone every time it comes up, has not yet once been actually shown to be a workable strategy. For any worker in any industry. And to be clear, I'm talking about a worker, sitting in a chair, replaced with an agent, sitting in... a server, I guess, where nothing else about the org has to be changed. That's what's being advertised and sold, and it has never to my knowledge actually happened.

achenet 5mo ago

mainframe industry vs personal computers. If their product is "access to a big model running on a really big computer" (if we can count 'multiple data-centers' as a single enormous distributed computer), then the product "small, accessible device that everyone has" risks killing their cash cow. Ironically enough, the first company to really focus on "an LLM in every phone" will have a good shot at actually being the ones that "changed everythingTM", in the way Microsoft changed the world from IBM mainframes to PCs, or Apple made smartphones a thing.

DrewADesign 5mo ago
As an aside, the mainframe industry was profitable for decades before PCs took over. It’s not like they spent a zillion dollars ramping up at the same time.
- albuic 5mo ago
  The mainframe industry IS profitable.

voncheese 5mo ago

As long as Apple and Google put reasonable AI capabilities on device, then software engineers will use those capabilities when it makes sense (the article gives lots of good examples of capabilities that make sense to run locally). As the author notes, it's cheaper and more reliable to run these things locally. That also doesn't preclude LLM services from being massively successful, they'll just have to justify the pricing and complexity that comes with their adoption, just like any other product.

order-matters 5mo ago
> they'll just have to justify the pricing like by selling it at a loss to build dependencies and then jacking the price up year after year by whatever amount is just below the cost of removing the dependency
goatlover 5mo ago
In an ideal world they will. In reality most will use online AI, because it's path of least resistance and more familiar.
DrewADesign 5mo ago
> That also doesn't preclude LLM services from being massively successful, they'll just have to justify the pricing and complexity that comes with their adoption, just like any other product. What is completely different from every other product is how much they’re spending, and how much they’re obligating themselves to spend going forward. I think there’s a very good chance that the existing providers could be miles underwater coming out of this. Even if the business is not the everything to everybody that they’re banking on it being, they still owe all of that money back to the people they borrowed it from, and they will be a lot less likely to float them cash to get them back to a normal operating mode if they burned the last ocean of cash promising the universe and winding up with “oh yeah, that’s pretty useful sometimes.”
- voncheese 5mo ago
  Yeah that's a good callout for sure, the spending here is nuts so agree that it's not "just another business that has to price itself right to be competitive". I guess if the time horizons is long, like 20 years, then maybe the spending, as it begins to amortize, gets more in line? I was thinking that a comparison could be to cloud providers, each of which had to spend a lot of money to build out datacenter before making money. Difference there is AWS proved the product first, so when Microsoft and Google came along, they knew it would work and be profitable. With AI, nobody has proven it will work and be profitable, they're all competing for that at the same time which is a potentially dangerous mix for the reasons you cited.

ToucanLoucan 5mo ago

> ...it also directly opposes the idea that LLMs are going to replace entire workers rather than enhance the abilities of individual workers. Which also, as I feel the need to remind everyone every time it comes up, has not yet once been actually shown to be a workable strategy. For any worker in any industry. And to be clear, I'm talking about a worker, sitting in a chair, replaced with an agent, sitting in... a server, I guess, where nothing else about the org has to be changed. That's what's being advertised and sold, and it has never to my knowledge actually happened.