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GenAI FOMO has spurred businesses to light nearly $40B on fire

theregister.com

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Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#111

Post by nazgul17 »

Nevermark wrote: post #80

Well run large companies often waste a lot, in order to (1) hedge risks of being left behind, (2) ensure they have options in the future in possible growth or new efficiency areas, and (3) to start on long learning curves for skills and capabilities that appear likely to be a baseline necessity in the long run. Bonfires of money. Predictably. Because all three of those concerns require highly speculative action to pr…

You put my thoughts into words better than I could.

This reminds me of the exploration-exploration trade-off in reinforcement learning: you want to maximise your long term profits but, since your knowledge is incomplete, you must acquire new knowledge, which companies do by trying stuff. Prematurely dismissing GenAI could mean missing out on new efficiencies, which take time to be identified.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#112

Post by cc62cf4a4f20 »

Aren't executives just responding rationally to the current environment? Right or wrong, the broadly speaking, the current thinking is that GenAI will be super impactful. Which means there is a lot of risk to be seen as underinvesting in GenAI, even when the ROI isn't there. Until the hype dies down and there is a broad, practical understanding of the value of GenAI, I don't see how it could work anyother way.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#113

Post by kstrauser »

inkyoto wrote: post #110
kstrauser wrote: post #105

Earlier quoted context omitted.

True but irrelevant. You can't remove a commit in a way that someone else with a copy of the repo can't detect, in exactly the same way and for the same reason that you can't remove a blockchain entry without making instantly obviously to later items.

Very much relevant. The definition of the ledger database includes immutability of datasets as a hard constraint[0][1]. The mere fact that the git commit history can be altered automatically disqualifies git from being an acceptable alternative to the ledger database in highly regulated environments. If strict compliance is not a hard requirement (open source project are the prime example), git can be used to prove p…

It is immutable in exactly the same way. The git commit history cannot by altered, except in the same sense that you could manually edit the backing store of a blockchain to alter the data, and with the same consequence that the alteration would be instantly noticeable in either case.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#114

Post by palmotea »

fancyfredbot wrote: post #18

Article doesn't understand that cutting "between five and 20 percent of support and admin processing" is really valuable, instead it seems to want to dismiss that as a dull failure. Business process outsourcing companies are valued at $300bn according to the BPO Wikipedia page. So 5%-20% of that is 15-60bn. So even if we're valuing all the other GenAI impact at zero the impact on admin and support alone could plausib…

> Article doesn't understand that cutting "between five and 20 percent of support and admin processing" is really valuable, instead it seems to want to dismiss that as a dull failure.

To whom? From the customer perspective, it sounds like a shittier level of service is coming, which is a kind of failure.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#115

Post by simianwords »

palmotea wrote: post #114
fancyfredbot wrote: post #18

Article doesn't understand that cutting "between five and 20 percent of support and admin processing" is really valuable, instead it seems to want to dismiss that as a dull failure. Business process outsourcing companies are valued at $300bn according to the BPO Wikipedia page. So 5%-20% of that is 15-60bn. So even if we're valuing all the other GenAI impact at zero the impact on admin and support alone could plausib…

> Article doesn't understand that cutting "between five and 20 percent of support and admin processing" is really valuable, instead it seems to want to dismiss that as a dull failure. To whom? From the customer perspective, it sounds like a shittier level of service is coming, which is a kind of failure.

Massive cost savings vs slightly more shitty customer service means it was probably worth the trade off. Nothing usually comes without tradeoffs.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#116

Post by OtherShrezzing »

impossiblefork wrote: post #34
OtherShrezzing wrote: post #27

Earlier quoted context omitted.

The VCs are the small players in this bubble now. Big traditional finance is helping Microsoft, Google, Meta, and Amazon build out their datacenters, and the infrastructure to power them. VCs have a lot of money compared to your startup, but they can’t finance a trillion dollars in construction projects. They’re all so highly levered up that they can’t afford for the bubble to pop. If this goes on for another couple…

I don't think Microsoft has a lot of corporate debt relative to its profits etc., and Google has even less. I'm sure there will be losers, but I'm not quite sure who.

Their recent filings show that they’re planning $100bn/yr in AI expenditures as early as 2027. They’re raising debt, rather than spending from revenues, because they get a better multiplier there.

They’re also acting as a guarantor to lots of infrastructure project - meaning the debt is their responsibility, but not on their books.

If the creditworthiness of any of the hyperscalers slip, even a tiny amount, the tech and banking sectors are in some hot water.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#117

Post by Gazoche »

Nevermark wrote: post #80

Well run large companies often waste a lot, in order to (1) hedge risks of being left behind, (2) ensure they have options in the future in possible growth or new efficiency areas, and (3) to start on long learning curves for skills and capabilities that appear likely to be a baseline necessity in the long run. Bonfires of money. Predictably. Because all three of those concerns require highly speculative action to pr…

Or (4), because a sales team convinced them there was some magic wand they could buy that would triple their productivity.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#118

Post by fancyfredbot »

kurthr wrote: post #66
fancyfredbot wrote: post #18

Article doesn't understand that cutting "between five and 20 percent of support and admin processing" is really valuable, instead it seems to want to dismiss that as a dull failure. Business process outsourcing companies are valued at $300bn according to the BPO Wikipedia page. So 5%-20% of that is 15-60bn. So even if we're valuing all the other GenAI impact at zero the impact on admin and support alone could plausib…

What is missing even in this article is the install and expected failure rate of the dominant GB300 servers. Numbers I heard were, "~15% annual failure and it's not worth trying to swap/repair". That means in 5 years these entire installs are down more than half. Of course they can install the NEW GX500turbo servers which are 4x the compute, but 2x more power hungry. How much will that cost? What is the hyperscaler w…

The article is right to focus on the end customer and not on the hyperscalars.

The hyperscalars are not the ones having trouble generating income. They have plenty of paying customers. They certainly understand capital depreciation and the need to refresh hardware. Premature hardware failure will be charged back to Nvidia who are not exactly struggling for cash either.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#119

Post by jstummbillig »

compiler-guy wrote: post #52
jstummbillig wrote: post #24

What arrogant and cynical way of looking at business operations. You don't know how anything interesting turns out in the future. You make educated guesses and those cost money. When you run a business, everything costs money. But that is not "lighting money on fire", that is how all learning happens. If anyone thinks they have figured it all out, stop blabbering around. Short the market.

"The market can remain irrational longer than you can remain insolvent." --John Maynard Keynes Lots of people lost their shirts shorting the housing market prior to the 2008 crash. (_The Big Short_ highlights those who were successful, but plenty of people weren't.) But it was undoubtedly a bubble and there was a world-wide recession when it popped.

If someone claims to be certain of the future with much more clarity than the rest of us, yet is unable to find ANY way to turn that advantage into leverage, I certainly would not trust the person on that issue.

Re: GenAI FOMO has spurred businesses to light nearly $40B on fire

#120

Post by Blockingto »

inkyoto wrote: post #76
kayodelycaon wrote: post #16

Well, at least AI is going to be better than the blockchain hype. No one knew what “blockchain” was, how it worked, or what could be used for. I had a very hard time explaining once you put something in the chain, you can’t easily pull it back out. If you wanted to verify documents, all you have to do is put a hash in a database table. Which we already had. It has exactly one purpose: prevent any single entity from c…

> No one knew what “blockchain” was, how it worked, or what could be used for. Not the blockchain itself, but the concept of an immutable, append only, tamper-proof ledger underpinning it is a very useful one in many contexts where the question of authenticity of datasets arises – the blockchain has given us a ledger database. The ledger database is more than just a hash as it also provides a cryptographic proof that…

Blockchain did not give us that.

It only moved the goal post.

As long as you can't guarauntee that the data you put onto a blockchain is trustworth in the first place, whatever you put on a blockchain is not 'tamper-proof'.

Therefore the ONLY thing you can handle on a blockchain 'tamper-proof' is stuff only existing on the blockchain itself. Which means basically nothing.

And there is a second goal post which was moved: the ignorance about a blockchain being 'tamper-proof'. 51% attack are real, you don't know if a country just owns and controls a lot of nodes and the latest rumor: NSA was involved in blockchain creation. You don't know if something is hidden in the system which gives one entity an edge over others.

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