OpenAI was already projected to burn money at a ludicrous rate and now the news is they are going to burn it even faster. I just don’t see how this ends well for anyone. Regardless of what you think of AI it is apparently entirely too expensive to run. Maybe costs will come down dramatically, but is that at the cost of stagnation in the models? And if that is the case is AI a failure to investors?
At some point in the next few years investors are going to want their returns. The only way I see that happening is though an IPO and then… I don’t know if they have a sustainable business model or one in sight.
I disagree that they would be bailed out. The contagion and impact on the larger economy would be somewhat limited. They would more than likely just be sold to the highest bidder. The US would certainly dictate that the buyer is a US company, but I don’t see a bail out.
GM was bailed out because of the potential loss of US manufacturing jobs and the fact that auto factories can be converted to build other things in times of war. There was also no readily available buyer for GM as Ford was also hurting and there wasn't anyone else in a position to buy such a large company who was interested, though perhaps someone would have emerged over time.
OpenAI is a young company and if it collapses it is an indictment that AI is perhaps not really all that valuable. Further the technology and brand can be sold to a US company with plenty of expertise in AI themselves. The loss of jobs, relative to the larger economy, is minuscule. Google, Microsoft, Amazon, Apple, would all be happy to buy at a discount.
It certainly won’t help. And I’m not just saying the headline “US bails out OpenAI for $850B” will cost them support. The programs they cut to fund said purchase will cost them support. And that’s assuming they can even pull this off by November, because if the democrats take back the house and senate it’s game over. They won’t have time to fund the purchase with corporate tax breaks. At any time dems may be able to force a shutdown just like they did over DHS funding.
> The programs they cut to fund said purchase will cost them support.
They want to cut those programs anyway, it's a win/win.
The Iran war is probably going to cost $1T or more (it's ranging from $1B/day to $2B/day already), so it's going to be more costly than this hypothetical OpenAI bailout. The Republican base doesn't care.
Naming your company off a product that doesn't really exist yet and then ultimately fails is a pretty crazy and stupid thing to do. A bit cart before horse.
Oh, I know, but they could have named themselves anything. They believed in the metaverse, They thought it was the next big thing. The same way Zuckerburg thought voice assistants, and AI will be a thing.
This strikes me as a pullback by Microsoft. Coupled with some of the other news coming out of Microsoft it appears they are hoping to have "good enough" AI in their products. I think Microsoft knows they can win a lot of business customers by bundling with Office 365.
I think everyone is incentivized to keep the music playing and the party going with AI. Because the alternative is a massive correction like we have rarely seen.
What if AI is never good or cheap enough to reach significant profitability?
In a rationale business yes, but when everything is basically some form of growth signal to investors to extract even more money from them before the music stops it doesn’t matter.
I see what the author is saying and I agree to some extent, but I think the F35 is mostly irrelevant in terms of the argument being made. I think it is needed and does it's job as a deterrent. The F35 means that that no one can really control the skies against the US. Iran was considered to have fairly robust air defenses and that was all but destroyed within days. So the F35, as the author states, is performing well along with the rest of the United States Airforce.
The issue the US has is that they really do not want to lose US soldiers in this war and because of that they are unwilling to fully occupy or destroy Iran. And the reason they don't want to do that beyond all the normal reasons is that this is a phenomenally unpopular war and every lost life is considered unacceptable by the American people. Similarly, causalities of innocent Iranians is not going to play well domestically or internationally, since one of the ever shifting reasons for war that was given was that the Iranian government was killing it's people. Helping the current Iranian regime kill innocent civilians seems counter productive to that point.
The US nor any country will ever be good at fighting a war where there is no clear objective and they are not fully committed. Winning for Iran is not losing and the US isn't playing to win, so Iran wins by default. This entire campaign is a textbook example of how not to go to war. No military equipment or capability is going to change that.
I think that tech people presume too much overlap between their own domain knowledge and war. The analysis isn't particularly bad, it's just wildly overconfident. Replacing F-35s with drones is like replacing cell towers with bluetooth mesh networks. You can hate the F-35 and love drone swarms, but they aren't in the same niche.
Cheap (~1k USD) drones are easy to intercept, vulnerable to EM/GPS jamming, require nearby operators, break easily, and can't carry enough payload to make a difference. Try to fix any one or two of these and the price will go up. As the price goes, reliability becomes more important. Try to fix them all and you're going to reinvent the missile.
One comment in this thread argued that drone factors can be protected from F-35s by burring them underground, misunderstand that such logistical hurdles are what causes military hardware to be more expensive than civilian equivalents in the first place.
F-35 isn't a deterrent. Nukes are the deterrent. Iran and Venezuela lacked nukes. North Korea doesn't lack nukes.
The F-35 is just peacocking but ultimately useless. If these war games were realistic the game ends on the first move which is asking the question "Do they have nukes." If the answer is yes, then the game doesn't even start.
Nuclear weapons are a deterrent against somebody invading the US (or another NATO country) but that doesn't make conventional forces not a deterrent against other kinds of aggression. Many attacks have been made against the US and not resulted in nuclear retaliation, like 9-11.
India and Pakistan have nukes and have fought each other recently so your assertion that "has_nukes() == no_game_start()" is *false*. Nukes, however probably will deter India from doing the full-Putin into Pakistan.
I think for many, if LLMs and AI only improves marginally in the next 5-10 years it is effectively a dead end. The capital expenditure necessitates AI does something exponentially more valuable than what it does now.
I think we are saying the same thing.i just think the pull back on AI will be dramatic unless something amazing happens very soon.
I just don’t see it. Both professionally and personally I’m producing so much more now. Back burner projects that weren’t worth months of my time are easily worth a few hours and $20 or whatever.
You’re probably already experienced at your job and using AI to enhance that, or at least using that experience to keep the AI results clean. That’s something you or a company would want to pay for but it has to be a lot more than today’s prices to make it profitable. Companies want to get more out of you, or get a better price/performance ratio (an AI that delivers cheaper than the equivalent human).
But current gen AIs are like eternal juniors, never quite ready to operate independently, never learning to become the expert that you are, they are practically frozen in time to the capabilities gained during training. Yet these LLMs replaced the first few rungs of the ladder so human juniors have a canyon to jump if they want the same progression you had. I’m seeing inexperienced people just using AI like a magic 8 ball. “The AI said whatever”. [0] LLMs are smart and cheap enough to undercut human juniors, especially in the hands of a senior. But they’re too dumb to ever become a senior. Where’s the big money in that? What company wants to pay for the “eternal juniors” workforce and whatever they save on payroll goes to procuring external seniors which they’re no longer producing internally?
So I’m not too sure a generation of people who have to compete against the LLMs from day 1 will really be producing “so much more” of value later on. Maybe a select few will. Without a big jump in model quality we might see “always junior” LLMs without seniors to enhance. This is not sustainable.
And you enhancing your carpentry skills for your free time isn’t what pays for the datacenters and some CEO’s fat paycheck.
[0] I hire trainees/interns every year, and pore through hundreds of CVs and interviews for this. The quality of a significant portion of them has gone way down in the past years, coinciding with LLMs gaining popularity.
This is thoroughly debunked at this point. The frontier labs are profitable on the tokens they serve. They are negative when you bake in the training costs for the next generation.
So what. Fluctuations over a year or two are meaningless. Do you really believe that the constant-dollar price of an LLM token will be higher in 20 years?
I can see a world where energy costs rise at a rate faster than overall inflation, or are a leading indicator. In that scenario then yes I could see LLM token costs going up.
Lol are people like you going to be enough to support the large revenues? Nope.
A firm that see's rising operating expenses but no not enough increase in revenue will start to cut back on spending on LLMs and become very frugal (e.g. rationing).
I think it is clear the whole AI market is absurd and filled with snake oil. My question is how long can the absurdity last? Perhaps forever. The stock market seems increasingly detached from reality and no one really seems to care.
There are ebbs and flows of absurdity, with the peaks being bubbly moments. I will never forget the fact that Dentacoin existed in 2017, and garnered attention for being a crypto token that you could use to pay your dentist. It's a multi billion dollar market! And the marketcap reached a $2 billion mark.
I said it at the time and I reiterate it now. Pat had the right strategy and was the right person for the job. His decision are justified. He could have played the politics better with the board and externally and that is why I think he got fired, but he laid the ground work for where they are now.
At some point in the next few years investors are going to want their returns. The only way I see that happening is though an IPO and then… I don’t know if they have a sustainable business model or one in sight.
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