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How the AI Bubble Will Pop

derekthompson.org

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Re: How the AI Bubble Will Pop

#281

Post by crazygringo »

Gerardo1 wrote: post #257
crazygringo wrote: post #82

Earlier quoted context omitted.

No. The aggregate is useless. What matters is the 5% that have positive return. In the first few years of any new technology, most people investing it lose money because the transition and experimentation costs are higher than the initial returns. But as time goes on, best practices emerge, investments get paid off, and steady profits emerge.

On the provider end, yes. Not on the consumer end. These are business customers buying a consumer-facing product.

No, on the consumer end. The whole point is that the 5% profitable is going to turn to 10%, 25%, 50%, 75% as companies work out how to use AI profitably.

It always takes time to figure out how to profitably utilize any technological improvement and pay off the upfront costs. This is no exception.

Re: How the AI Bubble Will Pop

#282

Post by dist-epoch »

therealmarv wrote: post #46

It reminds me what I said to somebody recently: All my friends and family are using the free version of ChatGPT or something similar. They will never pay (although they have enough money to do so). Even in my very narrow subjective circles it does not add up. Who pays for AI and how? And when in the future?

> They will never pay

Of course they will, once they start falling behind not having access to it.

People said the same things about computers (they are just for nerds, I have no use for spreadsheets) and smartphones (I don't need apps/big screen, I just want to make/receive calls).

Re: How the AI Bubble Will Pop

#283

Post by Gerardo1 »

steveklabnik wrote: post #250
skybrian wrote: post #194

Earlier quoted context omitted.

How do we know this?

Many of the companies (including OpenAI) have even claimed the opposite. Inference is profitable; it's R&D and training that's not.

It's not reasonable to claim inference is profitable when they've also never released those numbers. Also the price they charge for inference is not indicative of the price they're paying to provide inference. Also, at least in openAI's case, they are getting a fantastic deal on compute from Microsoft, so even if the price they charge is reflective of the price they pay, it's still not reflective of a market rate.

Re: How the AI Bubble Will Pop

#284

Post by iberator »

fragmede wrote: post #237
hshdhdhj4444 wrote: post #60

Earlier quoted context omitted.

> This friend told me she can't work without ChatGPT anymore. Is she more productive though? People who smoke cigarettes will be unable to work without their regular smoke breaks. Doesn’t mean smoking cigarettes is good for working. Personally I am an AI booster and I think even LLMs can take us much farther. But people on both sides need to stop accepting claims uncritically.

> Doesn’t mean smoking cigarettes is good for working. Fun fact; smoking likely is! There have been numerous studies into nicotine as a nootropic, eg https://pubmed.ncbi.nlm.nih.gov/1579636/#:~:text=Abstract,sh... which have found that nicotine improves attention and memory. Shame about the lung cancer though.

Nicotine does not cause cancer. Smoke do

Re: How the AI Bubble Will Pop

#285

Post by dist-epoch »

lm28469 wrote: post #134
delichon wrote: post #70

Earlier quoted context omitted.

Someone is paying. OpenAI revenue was $4.3 billion in the first half of this year.

You forgot that part: > The artificial intelligence firm reported a net loss of US$13.5 billion during the same period If you sell gold at $10 a gram you'll also make billions in revenues.

That loss includes the costs to train the future models.

Like Dario/Anthropic said, every model is highly profitable on it's own, but the company keeps losing money because they always train the next model (which will be highly profitable on it's own).

Re: How the AI Bubble Will Pop

#286

Post by eucyclos »

jennyholzer wrote: post #77
cornholio wrote: post #64

Earlier quoted context omitted.

It's silly to say that the only objective that will vindicate AI investments is AGI. Current batch of deep learning models are fundamentally a technology for labor automation. This is immensely useful in itself, without the need to do AGI. The Sora2 capabilities are absolutely wild (see a great example here of what non-professional users are already able to create with it: https://www.youtube.com/watch?v=HXp8_w3XzgU…

You seem to be making an implicit claim that LLMs can create an effective cancer drug "10% of the time". Smells like complete and total bullshit to me. Edit: @eucyclos: I don't assume that Chat GPT and LLM tools have saved cancer researchers any time at all. On the contrary, I assume that these tools have only made these critical researchers less productive, and made their internal communications more verbose and les…

How many hours writing emails does it have to save human cancer researchers for it to be effectively true?

Re: How the AI Bubble Will Pop

#287

Post by calmoo »

jennyholzer wrote: post #85
calmoo wrote: post #69

Earlier quoted context omitted.

FWIW Derek Thompson (the author of this blogpost) isn't exactly a 'business guy'

If I'm not mistaken he's working with Ezra Klein to push the Democrats to embrace racism instead of popular economic measures. Edit: I expect that these guys will try to make a J.D. Vance style Republican pivot in the next 4-8 years. Second Edit: Ezra Klein's recent interview with Ta-Nehisi Coates is very specifically why I expect he will pivot to being a Republican in the near future. Listen closely. Ezra Klein will…

I don't really want to discuss politics off the bat of my purely 'for your information' comment, but I think you're grossly misrepresenting Ezra Klein's worldview and not listening to the nuances of his opinion, and instead having an intense emotional reaction to his words. Take a step back and try to think a bit more rationally here.

Also your prediction of them making a JD vance republican pivot is extremely misguided. I would happily bet my life savings against that prediction.

Re: How the AI Bubble Will Pop

#288

Post by hx8 »

jacknews wrote: post #109
rimeice wrote: post #2

> Some people think artificial intelligence will be the most important technology of the 21st century. I don’t, I think a workable fusion reactor will be the most important technology of the 21st century.

How so? The maximum possible benefit of fusion (aside from the science gained in the attempt) is cheap energy. We'll get very cheap energy just by massively rolling out existing solar panels (maybe some at sea), and other renewables, HVDC and batteries/storage. Fusion is almost certain to be uneconomical in comparison if it's even feasible technically. AI, is already dramtically impacting some fields, including scien…

Fusion at 100% grid scale might be better for the environment than solar at 100% grid scale.

It might be nice if at the end of the 21st century that is something we care.

Re: How the AI Bubble Will Pop

#289

Post by danaris »

throwaway-0001 wrote: post #201
Diti wrote: post #190

Earlier quoted context omitted.

LLMs cannot think on their own, they’re glorified autocomplete automatons writing things based on past training. If the “AI figured out something on your mind”, it is extremely likely the “thing on your mind” was present in the training corpus, and survivorship bias made you notice.

Tbh if Claude is smarter than average person, and it is, then 50% of the population is not even a glorified auto complete. Imagine that, all not very bright.

That "if" is doing literally all the work in that post.

Claude is not, in fact, smarter than the average person. It's not smarter than any person. It does not think. It produces statistically likely text.

Re: How the AI Bubble Will Pop

#290

Post by dist-epoch »

the_snooze wrote: post #277
dist-epoch wrote: post #266

Earlier quoted context omitted.

Electricity is not free. If you do the math, online LLMs are much cheaper. And this is before considering capabilities/speed.

They're cheaper right now because they're operating at a loss. At some point, the bill will come due. Netflix used to be $8/month for as many streams and password-shares as you wanted for a catalog that met your media consumption needs. It was a great deal back then. But then the bill came due. Online LLM companies are positioning themselves to do the same bait-and-switch techbro BS we've seen over the last 15+ years…

Fundamentally it will always be cheaper to run LLMs in the cloud, because of batching.

Unless somehow magically you'll have the need to run 1000 different prompts at the exact same time to also benefit from it locally.

This is even without considering cloud GPUs which are much more efficient than local ones, especially from old hardware.

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