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How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

nytimes.com

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Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#211

Post by gitremote »

parineum wrote: post #132
gitremote wrote: post #74

Earlier quoted context omitted.

> Reality lies in the middle The argument to moderation/middle ground fallacy is a fallacy. https://en.wikipedia.org/wiki/Argument_to_moderation

Not really. The idea that reality lies _in_ the middle is fairly coherent. It's not, on it's face, absolutely true but there are and infinite number of options between two outcomes so the odds are overwhelmingly in the favor that the truth lies somewhere in between. Is either side totally right about every single point of contention between them? Probably not, so the answer is likely in the middle. The fallacy is a l…

Flat-earthers: The earth is flat.

Round-earthers: The earth is round.

"Reality lies in the middle" argument: The earth is oblong, not a perfect sphere, so both sides were right.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#212

Post by embedding-shape »

jimbokun wrote: post #124
embedding-shape wrote: post #34

Earlier quoted context omitted.

Why is ML knowledge "in the engineers" while chip manufacturing apparently sits in the company/hardware/something else than the engineers/humans?

Chip designs have strong IP protections. AI models do not. Sure you can't just copy the exact floating point values without permission. But with enough capital you can train a model just as good, as the training and inference techniques are well known.

> But with enough capital you can train a model just as good, as the training and inference techniques are well known

You're not alone in believing just money can train a good model, and I've already answered elsewhere why things aren't so easy as you believe, but besides this, where are y'all getting that from? Is there some popular social media influencer that keeps parroting this or where it comes from? Clearly you're not involved in those processes/workflows yourself, then you wouldn't claim it's just a money problem, so where are you all getting this from?

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#213

Post by adastra22 »

Workaccount2 wrote: post #173
anonymousiam wrote: post #153

Earlier quoted context omitted.

The one what? What is the secret sauce that will distinguish one LLM from another? Is it patentable? What's going to prevent all of the free LLMs from winning the prize? An AI crash seems inevitable.

The goal isn't to be the best LLM, the goal is to be the first self-improving LLM. On paper, whoever gets there first, along with the needed compute to hand over to the AI, wins the race.

Maybe in paper, but only on paper. There are so many half baked assumptions in that self-improvement logic.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#214

Post by schmidtleonard »

0xbadcafebee wrote: post #165
zemvpferreira wrote: post #44

Earlier quoted context omitted.

There’s one key difference in my opinion: pre-.com deals were buying revenue with equity and nothing else. It was growth for growth’s sake. All that scale delivered mostly nothing. OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go anot…

Eventually when ChatGPT replaces Google Search, they will run ads, and so have that whole revenue stream. Still isn't enough money to buy the trillions worth of infrastructure they want, but it might be enough to keep the lights on.

That's an insightful point! Making insightful points like that one is taxing on the brain, you should consider an electolyte drink like Brawndo™ (it's got what plants crave) to keep yourself sharp!

Ugh I hate it so much, but you're right, it's coming.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#215

Post by accrual »

otherjason wrote: post #162
DenisM wrote: post #152

Earlier quoted context omitted.

OpenAI invests heavily into integration with other products. If model development stalls they just need to be not worse than other stalled models while taking advantage of brand recognition and momentum to stay ahead in other areas. In that sense it makes sense to keep spending billions even f model development is nearing diminishing return - it forces competition to do the same and in that game victory belongs to th…

But, if model development stalls, and everyone else is stalled as well, then what happens to turn the current wildly-unprofitable industry into something that "it makes sense to keep spending billions" on?

I suspect if model development stalls we may start to see more incremental releases to models, perhaps with specific fixes or improvements, updates to a certain cutoff date, etc. So less fanfare, but still some progress. Worth spending billions on? Probably not, but the next best avenue would be to continue developing deeper and deeper LLM integrations to stay relevant and in the news.

The new OpenAI browser integration would be an example. Mostly the same model, but with a whole new channel of potential customers and lock in.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#217

Post by teiferer »

bunderbunder wrote: post #182
guywithahat wrote: post #140

Earlier quoted context omitted.

It's incredible how Tesla used to lose a few hundred million a year and analysis shows would freak out claiming they'd never be profitable. Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft still backs them. I do think this is going to be a deeply profitable industry, but this feels a little like the WeWork CEO flying couches to offices…

It reminds me a lot of the late 1990s. We had an impressive new technology (the Web), and everyone could see it was going to change the world, which fueled a huge gold rush that turned into a speculative bubble. And yes, ultimately the Web did change the world and a lot of people made a lot of money off of it. But that largely happened later, after the bubble burst, and in ways that people didn't quite anticipate. Ma…

> we've got one side saying we're in a speculative bubble, and the other side saying no this technology is the real deal.

Um I think nobody is really denying that we are in a bubble. It's normal for new tech and the hype around it. Eventually the bad apples are weeded out and some things survive, others die out.

The first disagreement is how big the bubble is, i.e. how much air is in it that could vanish. And that's because of the second disagreement, which is about how useful this tech is and how much potential it has. It's clear that it has some undeniable usefulness. But some people think we'll soon have AGI replacing everybody and the opposite is that's all useless crap beyond a few niche applications. Most people fall somewhere in between, with a somewhat bimodal split between optimists and skeptics. But nobody really contends that it's a bubble.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#218

Post by treis »

delis-thumbs-7e wrote: post #113
api wrote: post #95

Earlier quoted context omitted.

The assumption is that they have a large moat. If they don't then they're spending a ton of money to level up models and tech now, but others will eventually catch up and their margins will vanish. This will be true if (as I believe) AI will plateau as we run out of training data. As this happens, CPU process improvements and increased competition in the AI chip / GPU space will make it progressively cheaper to train…

Apple new M5 can run models over 10B parametres and if they give their new Studio next year enough juice, it can run maybe 30B local model. How long is it that you can run a full GPT-5 on your laptop or homeserver with few grands worth of hardware? What is going to happen to all these GPU farms, since as I understood they are fairly useless for anything else?

Very few people own top of the line Macs and most interactions are on phones these days. We are many generations of phones away from running GPT-5 on a phone without murdering your battery.

Even if that weren't true having your software be cheaper to run is not a bad thing. It makes the software more valuable in the long run.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#219

Post by bobxmax »

bunderbunder wrote: post #182
guywithahat wrote: post #140

Earlier quoted context omitted.

It's incredible how Tesla used to lose a few hundred million a year and analysis shows would freak out claiming they'd never be profitable. Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft still backs them. I do think this is going to be a deeply profitable industry, but this feels a little like the WeWork CEO flying couches to offices…

It reminds me a lot of the late 1990s. We had an impressive new technology (the Web), and everyone could see it was going to change the world, which fueled a huge gold rush that turned into a speculative bubble. And yes, ultimately the Web did change the world and a lot of people made a lot of money off of it. But that largely happened later, after the bubble burst, and in ways that people didn't quite anticipate. Ma…

[dead]

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#220

Post by jwpapi »

When I was 16 I started working at a startup buying and reselling used electronics.

There were like 5 competitors all trying to become the winner takes it all. Afaik after 10 years some closed, restructured but most of them burnt a lot of money. One lets call him indie dev made a lot of money building a simple comparison platform and getting 10-20% on all deals.

This is n=1, but I think it still made me really averse to raising money.

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