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"I was given £1M to run my project over 5 years; Anthropic took only 11 days but I do wonder if they spent more money…" Gives you an idea of the scale...
by BeetleB 1mo ago
"I was given £1M to run my project over 5 years; Anthropic took only 11 days but I do wonder if they spent more money…"
Gives you an idea of the scale...
- sebzim4500 1mo agoIt sounds plausible they spent more, given the output tokens (6 billion of them) would cost $300k at API prices and presumably there will have been many more input tokens than output tokens.
- _aavaa_ 1mo agoUnlikely, api pricing includes a healthy profit margin (as near as we can tell from the outside) which they wouldn’t charge themselves.
- alch- 1mo agoI don't think Anthropic is turning a profit ;)
- dist-epoch 1mo agoNeither did Amazon for it's first 25 years ;)
- caughtinthought 1mo agoI think you're missing the point of the comment you responded to, lol.
- CaptWorld 1mo agoRegardless the profit margin as a talking point seems to be bad as AI as a tech might never be reversed whether anthropic failed or succeeded. Indeed it's imperative we subsidize AI companies and tech to make them explore more solutions to scientific problems which has a downstream effect on human flourishing.
- oblio 1mo agoOr we could invest in a ton of other non AI related research we're underinvesting in.
- CaptWorld 1mo agoLike? I feel breakthroughs that can be found via AI might help us more in the long term where even previously non AI fields can be helped by AI. So you have specific non AI research in mind that we're underinvesting in? Because the USA is already spending crazy anyway for healthcare and I don't feel like funding is the issue but better incentives, reforms etc
- fyredge 1mo agoLike funding education. Let's build up human intelligence instead, they seem to have made great breakthroughs in every single field! The US doesn't pay too much to healthcare, they pay too much to health insurance. Too much for too little value
- CaptWorld 1mo agoBut US also spends too much on education as well. The issue doesn't seem to be funding but the educational reform like in mississippi, where they increased student performance without increasing their budget too much. That's why you see bad k12 educational outcomes compared to the budget spent in blue states. It's all about efficiency. Give AIa chance in few years as I feel it can make great strides.. it's hard to imagine that chatgpt released in 2022 and look at the progress in just few years as it just changed software engineering field entirely.. i expect similar kinda progress where of course humans will still be making breakthroughs but it'll be accelerated with the help of AI. Spending on health insurance is spending on health care.. Americans want free healthcare but no tax bump so health insurance is a compromise.. when even just ACA was passed and premiums increased, democrats got destroyed at midterms so Americans might be living in la la land.
- 1mo ago
- btilly 1mo agoAmazon didn't make a profit because they were reinvesting money into starting new lines of business. Basically there was a choice between taking the money, and growing. They chose growth.
- chpatrick 1mo agoAs opposed to...?
- drchickensalad 1mo agoSpending all your money on extremely quickly depreciating graphics hardware and model training
- btilly 1mo agoAs opposed to building a bigger bank account, or paying dividends.
- _aavaa_ 1mo agoWhether on net they turn a profit as company overall is neither here nor there.. My point is that they are selling API tokens at a profit (or if being pedantic, then at a price higher than the cost to serve them ignoring research costs). And that that price is got a healthy margin which they don't charge themselves.
- irthomasthomas 1mo agoBecause of the ongoing training costs. They are certainly making a healthy profit margin on inference.
- Philip-J-Fry 1mo agoNever really a sound argument. It's like having new solar panels installed every week. Sure you're "profitable" on the $0.20/kWh you're selling your "free" energy at when you ignore the cost of the solar panels you're buying every week.
- ludwik 1mo agoIt is a sound argument in the context of trying to estimate what it costs them to generate this specific output. They have training cost eather way.
- kinj28 1mo agoI would like to imagine accounting inference revenue on trained model and the depreciation cost for training that specific model must already been capitalized + compute to serve would be a net positive margin business. Ongoing training must rather be for future models. But again once future models arrive they would render older models useless, so the asset must be depreciating really fast. Would love someone to throw light on revenue and cost recognition at the unit level for this.
- mbesto 1mo ago> healthy profit margin (as near as we can tell from the outside) Ugh we still don't know if this is true and it's nearly impossible to calculate without a full understanding of the real CAPEX cycle. Stop spreading these rumors until we know for sure.
- bryanlarsen 1mo agoSemiAnalysis estimates their profit margin to be 70%. To be losing money on inference implies that their costs are almost 4X higher than SemiAnalysis has calculated. That's not credible.
- p-e-w 1mo agoI don’t see how they could credibly estimate inference costs without knowing the model size.
- FuckButtons 1mo agoBut we do have a reasonable estimate of model size.
- nbardy 1mo agoYou can estimate the model size by looking at tokens per second and comparing to open source models
- 2muchcoffeeman 1mo agoThe token price seems like a poor measure. Building the LLM that could do this work in 11 days cost multi billions. The economics probably only make sense if LLMs prove to be a benefit to almost everyone in a way we can all accept. Otherwise this cost a lot more than we’d otherwise pay. It was incredibly fast though. But we all know: cost, speed, quality. Pick two.
- eproxus 1mo agoThis the correct way to look at it. Just as the person spending 5 years working on this will have learnt many things which will be useful after this problem is solved, you have to factor in the training cost (sure it's only done "once", but that is the same for the person too once they jump on the next problem). The model wouldn't not be able to solve this without all the training leading up to the actual execution, so counting only the tokens of the execution doesn't give the full picture.
- aurareturn 1mo agoHuman mathematicians also have to eat right, trained, etc.
- 2muchcoffeeman 1mo agoChatGPT has raised over 120 billion USD in funding. For argument let’s just say we paid all the mathematicians 200k in salary from graduation till retirement. Say 40 years. That’s about 8 million. Let’s round that up to USD 10 million. We can see the future and pay to raise all the baby mathematicians. For 100 billion that’s 10000 mathematician lifetimes. For 1 AI company _so far_. There’s no value for money in AI yet.
- aurareturn 1mo agoWell, it's taken 4 billion years for life to evolve into humans to be able to do math. That's a lot of resources, right? Likewise, LLMs also needed the same amount of evolution. My point is that it's silly to make these comparisons on resources. A single SOTA trained LLM isn't just doing advanced math research. It's used by hundreds of millions or even billions daily for various tasks. It's just a tool humans invented.
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- musictubes 1mo agoAnd which they could not charge anyone for. Unless these were extra resources that would otherwise go unused it cost them the amount they could have charged for them. Normally I would expect most businesses to make reasonable tradeoffs when it comes to how to allocate resources. I’m not convinced that any of the AI providers should be given that benefit of the doubt.
- _aavaa_ 1mo agoI don't see them turning people back from buying tokens through the API. Until then, I don't see why we should follow this argument.
- UltraSane 1mo agoI burned $70 on fable 5.1 Max in about 2 hours. I suggest never using fable 5.1 on higher than High reasoning unless someone else is paying for it.
- paulpauper 1mo agoYeah, "major conjecture proved" with unlimited token budget bankrolled by trillion dollar firm.
- iterateoften 1mo agoHow many previous attempts with other models failed or on other problems. Perhaps this is $300k out of $100M or $1B of total budget just breadth first searching theorems in math and all the failed attempts conveniently don't get mentioned.