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So how exactly is Anthropic and OpenAI ever going to pay back the trillions that they plan on spending?
by m_ke 1mo ago
So how exactly is Anthropic and OpenAI ever going to pay back the trillions that they plan on spending?
- vrganj 1mo agoWhy do you think tech oligarchs have been cozying up to the Trump admin? They're angling for a government bailout, paid for by your tax money!
- ptdcc 1mo agoThy cozy up to whoever is in government. They cozy'd up with Biden too.
- vrganj 1mo agoThat's true. But it's been a while since an admin was as brazenly corrupt and the cozying up was so promising.
- Forgeties79 1mo agoI think most of us can see that the level of corruption we are seeing with the administration is quite historical. You can’t simply say “both administrations engaged in corruption” and consider the matter closed. Scale matters.
- Haven880 1mo agoSocialize the lost.They dont have to. You pay.
- gruez 1mo agoYou could ask the same about how z.ai, moonshot ai, minimax, and alibaba are going to continue training and releasing models for free.
- epolanski 1mo agoAt a fraction of the cost.
- gruez 1mo agoShoveling 70% less money into a money pit is still shoveling money into a money pit. Not to mention that at least openai/anthropic has better prospects of making back the money because their models are proprietary, and won't be cannibalized by other companies serving the exact same models.
- epolanski 1mo agoNeither of the two is designed or cares to ever be profitable or make any money back. Those are Musk-like businesses, on steroids. Not even Tesla has been profitable compared to the capital raised and the debt issued.
- m_ke 1mo agojust like there were mistrals, coheres, llamas, etc, there will be new deepseeks and moonshots if those ever flame out (worst case, given out at cost by google, meta, alibaba or etc) OpenAI and Anthropic are already in a ~200bil hole from previous model iterations and are committing to trillions of additional spending OpenAI spent more TBPN than kimi spent on training K3
- WarmWash 1mo agoThey are owned by the state, so the economics are a bit different.
- gruez 1mo ago>They are owned by the state They are by all accounts, not. Z.ai for instance is a public company according to wikipedia. Moonshot AI is private but all their investors are private companies. Alibaba, as we all know, is a massive publicly traded tech conglomerate. Moreover even if we take the more charitable view that they're controlled by the CCP, and therefore will continue releasing models for free, that seems as questionable as the prospect that private investors will continue shoveling money into anthropic/openai.
- WarmWash 1mo agoChina has "classroom game capitalism", where companies can play the game, but the teacher still has uncontested, absolute, unilateral control in everything and anything. All the parameters of the game are managed by the teacher, and the teacher is the one who creates the foundations for the direction they want the game to move in. Don't forget, Jack Ma of "publicly owned" Alibaba, had to go into classroom time out after seemingly forgetting that its classroom capitalism and not real world capitalism.
- _aavaa_ 1mo agoLet’s not pretend that what is currently in the US is real world capitalism, whatever that means.
- skeledrew 1mo agoChina plays the capitalism game so it can participate in the global market. The US depends on it as a means to control resource distribution.
- WarmWash 1mo agoIn the US there is no teacher, and any student can sue the governmental body and win, because they own their stake, not the governmental body.
- npn 1mo ago1. they still have revenue though. it might not enough to cover all the r&d but it is surely enough to cover the hardware cost. 2. people tend to ignore this, but the salary budget of a US frontier lab and chinese frontier lab is nowhere comparable, the first can easily outdone the later by 100x. 3. us labs, like other US style startups, always throw ton of money to capture the market. I don't see the chinese company doing the same scheme at all. so, surely chinese AI providers also lost money making new models, but they are not spending nearly as much as US ones.
- applicative 1mo agoLiterally nothing is known about how these companies are financed. The usual story is that Moonshot was chosen when 'Mythos' occasioned a huge state crisis. China is the ascended masters of insane amounts of capital poured into whatever the state takes into its head next.
- gruez 1mo ago>1. they still have revenue though. it might not enough to cover all the r&d but it is surely enough to cover the hardware cost. >2. people tend to ignore this, but the salary budget of a US frontier lab and chinese frontier lab is nowhere comparable, the first can easily outdone the later by 100x. Both arguments make it seem like there's a double standard for american vs chinese AI companies, where american labs are held up to strict standards for profitability, but chinese labs get a pass because [insert handwaving about how some aspect of chinese labs is different]. Let's do apples to apples comparisons here, what are both sides' run rates and revenue growth prospects? >3. us labs, like other US style startups, always throw ton of money to capture the market. I don't see the chinese company doing the same scheme at all. Right, instead they're releasing their models for free so competitors can undercut them on inference. American labs' prospect of "there are open models 90% as good but cost less" might seem bad, but chinese labs' prospect of "there are companies offering the exact same models but aren't on the hook for r&d spend" seems even worse.
- skeledrew 1mo ago> there's a double standard for american vs chinese AI companies Not really, in a way. Things just cost far more in the US than in China; has pretty much always been the case, far back as I can recall. The Chinese state heavily invests in anything it wants to succeed at, and it has the resources to throw. Cost of living is generally wildly lower in China, along with salaries (although it's also pretty location- and role-dependent). Overall I'd say labs are far cheaper to run in China than in the US, in more than just from the finances angle.
- maxglute 1mo agoBy charging $$$ like they do now and having a non terminal business model. PRC AI have lower opex and capex, i.e. export controls means they couldn't be trillions in the hole on inflated hardware in the first place. They only need to extract a few 10s of billions from domestic market have a healthy runway. If investors/gov wants to throw in a few billion to treat as utility, whatever, it's still rounding error.
- maxglute 1mo agoBy charging $$$ like they do now and having a non terminal business model. PRC AI have lower opex and capex, i.e. export controls means they couldn't be trillions in the hole on inflated hardware in the first place. They only need to extract a few 10s of billions from domestic market have a healthy runway. If investors/gov wants to throw in a few billion to treat as utility, whatever, it's still rounding error.
- jauntywundrkind 1mo agoDirt cheap Chinese solar is a competitive advantage just sitting there waiting, but instead the US is trying to revive coal, restart a grossly ineffective small scale nuclear system with immensely bad fuel utilization, and spending billions to cancel renewable projects that were already approved. I'm so tired of these insurrectionist dog traitors to this country I love.
- gruez 1mo ago>Dirt cheap Chinese solar is a competitive advantage just sitting there waiting, but instead the US is trying to revive coal, This seems like a double standard given that china is still building coal.
- Marha01 1mo ago> So how exactly is Anthropic and OpenAI ever going to pay back the trillions that they plan on spending? It's really simple: if they truly get to human-level AI (or even superhuman AI), then money and debts no longer matter, since our current economic system will be obsolete. They are betting everything on this outcome. I don't know if they will manage to do it before their debts have to be repaid, but considering the rate of acceleration in the past few months, there is a non-trivial chance that they will, IMHO. We will see.
- my002 1mo agoThat's assuming that human-level AI is a possibility with current approaches.
- traverseda 1mo agoNo, it's assuming there's a non-trivial chance that they will.
- thatwasunusual 1mo agoI'd assume we want at least human-level intelligence, but better than human-level _decision making_. ;)
- skeledrew 1mo agoNo need even for "human-level" per se. It just has to be useful enough that it upends the current economic order, which it's already well on the way into doing.
- LeBit 1mo agoThat’s like building F1 cars and thinking you will soon have a rocket to land on the moon. LLM has nothing to do with AGI.
- Marha01 1mo agoI would perhaps agree with you just a year ago. But now I am not so sure. It is clear that scaling up Transformers still leads to significant improvements, and they are now solving math conjectures and finding real vulnerabilites in software. We don't really know where the capability ceiling of the current approach is, and anyone telling you that we know it is lying to you.
- yogthos 1mo agoI expect they're going to fight each other to become the vendor of record for the government, and whoever wins will get bailed out. This is one area where they don't have to worry about competition from Chinese models.
- applicative 1mo agoIts more Google Amazon Meta Microsoft who are spending trillions. They will be fine. So will Anthropic and OpenAI. Nvidia will presumably survive. The losses are all the real estate interests and contractors and contributory hardware companies etc.