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Ai revenue or datacenter/compute revenue? There's a lot of circular financing right now and there's a pretty obvious bubble for sure but I haven't been able to
by vikramkr 2mo ago
Ai revenue or datacenter/compute revenue? There's a lot of circular financing right now and there's a pretty obvious bubble for sure but I haven't been able to figure out what exactly this guy's argument is after seeing it a few times recently. Like yeah most ai datacenter spend is those two companies - that's pretty standard monopoly (or monopsony for the cloud providers) dynamics. If you're saying some major percentage of all ai related spending is openai and anthropic spending money on compute - well that's not exactly right because Google etc are also spending money on building datacenters (that's not ai spend in this definition? WTF is ai revenue exactly?) - and that's just pretty much indicating it's a frothy market with two unprofitable companies at the center with huge cogs? We knew that already.
Feels like they want to make a clean headline grabbing argument about how "70% of all the spending is actually just these two companies" and are ending up with a really muddled headline that's just like yeah that's how monopoloies and duopolies work. When there's a lot more insidious circular complicated shenanigans going on that gets collapsed by this framing.
- johnbarron 2mo ago>> When there's a lot more insidious circular complicated shenanigans going on that gets collapsed by this framing. All that is discussed in the video, plus those distinctions. And most important, that AI revenue would not exist...if OpenAI and Anthropic would not be funded, by the same Amazon, Google and Microsoft they are buying it from! We now have several voices saying the same: "Aswath Damodaran: Big Tech Has No Idea How AI Pays Off" - https://news.ycombinator.com/item?id=49229981 https://news.ycombinator.com/item?id=49229981 "Why Wall Street Is Ignoring Big Tech's Debt" - https://news.ycombinator.com/item?id=49230630 https://news.ycombinator.com/item?id=49230630
- lokar 2mo agoThe general concern (from him and others) is that the cloud providers are making extremely large capex commitments (borrowing, going cashflow negative) to satisfy demand from a small number of customers who may not be able to pay them.
- re-thc 2mo ago> to satisfy demand from a small number of customers who may not be able to pay them Because a lot of isn't real demand, e.g. given away for free or very very cheap.
- doctorpangloss 2mo agoOne interpretation is that so called profitability is one 15 minute phone call between OpenAI and Anthropic to increase prices. If you think that antitrust is the reason that this won't happen, you've stated a speculation. Not a certainty.
- bvghnnxeyjbx 2mo agothere isn't enough demand to raise prices. OpenAI announced price CUTS recently and they are hilariously unprofitable already. Why would they be cutting prices if they have the ability to raise them? outside of this website and the ownership class everyone hates AI
- Ekaros 2mo agoAnd I am not even sure ownership class have any real understanding or opinion on AI. Just that it has been sold to them as something that will save wages and make money... If it does not or the narrative turns they will abandon it like any other idea they have been sold.
- dgellow 2mo agoThey are pressured by open models to reduce prices, not increase
- doctorpangloss 2mo agoWhy do people continue to use them despite the existence of so many open weights models? This is "priced in." Short of stealing the checkpoints straight from the servers, it's unlikely to change.
- WhrRTheBaboons 2mo ago>Why do people continue to use them despite the existence of so many open weights models? Because of the low prices lol.
- 2mo ago