171–180 of 308 posts
Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…
Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…
I am not sure how grounded this is in reality. Fortune 500s that were not already testing the waters with companies like Anthropic are rushing to figure out governance and how to use these tools across their orgs. Has there been a ton of hype? Absolutely but the value proposition is getting more and more tangible. Did some of the AI companies over commit in spending? I am sure and they will probably hurt in the long…
Most of this is still structured around "find use cases for AI" rather than one (or more) clear use cases being the reason for adopting AI.
There's no "Lotus 1-2-3" of AI. Even the software development applications are still somewhat controversial and highly pushed based on "Sam Altman promised me 10x developers".
If you think you need to spend $100B, does using a third-party cloud provider still make sense? It doesn’t matter what sweet deal Amazon is pitching—in that scenario, you’d want to own your stack. Especially in a hyper-competitive field like this, where margins are going to matter a lot soon. It feels like these hyperscalers are just raising as much as they can giving extremely rosy projections becauses these sooner…
The problem is that at that scale, the alternative is building your own data centers. You'd probably want at least 2 in the US, 2 in Europe, 2 in Asia, maybe 1 in Africa and 1 in LATAM. So 8-10, and you need at least half of them ready "on time." What does "on time" mean? You'll need to negotiate with local authorities, some friendly, some not. Data centers aren't exactly popular neighbors these days. Then negotiate…
Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…
It's only a matter of time until they crash the market. Nobody is making any money, even if the White House is dumping billions in their tools.
Earlier quoted context omitted.
The only AI use case that cares about latency is interactive voice agents, where you ideally want <200ms response time, and 100ms of network latency kills that. For coding and batch job agents anything under 1s isn't going to matter to the user.
tbh, that's a good point about the voice agents that I hadn't considered. I guess there are some latency-sensitive inference workloads. Thanks for pointing that out.
Earlier quoted context omitted.
From the limited perspective of software development, today’s models are well-worth their per-token cost. This reads to me like Anthropic anticipating demand and making a commitment to acquire supply. Not unlike airlines committing to future jet fuel purchases, or Apple committing to future DRAM volume.
But that per-token cost is a total joke. All these companies are fighting to build market share in some future dominated by one or two AI ecosystems. It is musical chairs until someone creates the one ring to rule them all. So they are charging token amounts just to claim revenue as they burn through investor dollars. In short: per-token charges currently cover maybe 1% of the total costs in this field. To pay ongoin…
There are plenty of seemingly informed people saying the exact opposite, so that's a lot of confidence you're talking with. I have a hard time believing it when we know what open weights models cost to run. And sure, there's training costs, but again many say inference costs are already above training costs.
Earlier quoted context omitted.
> From the limited perspective of software development, today’s models are well-worth their per-token cost. At the current price or real price? Anthropic said a $200 subscription can cost them $5000 so the real price could be anywhere from 10-30x the current price.
No, that is probably one of the worst cases they probably saw. Most likely the subscription inference cost is much lower than you expect. If you look at costs for similar open models they are much lower than what you get by buying from anthropic, so that is the real cost basis I expect. It's likely Amazon is making a fucking killing though.
> Most likely the subscription inference cost is much lower than you expect.
This is probably not true because they'd be screaming it off every rooftop were that the case.
Same deal with the API inference. Even the "profitable on inference" claim is sourced back to hearsay of informal statements made by OpenAI/Anthropic staff. No formal announcements, nothing remotely of the "You can trust what I'm saying, because if I'm lying the SEC will have my head" sort.
Yet making such statements would be invaluable. If Anthropic can demonstrate profitability before OpenAI, they could poach most of the funding. There's no reason to keep it a company secret.
And API inference is only part of the total costs, not even bringing in training and ongoing fine-tuning. If they're not even profitable on inference, how could they hope to be profitable overall.
Perversely, it appears that the market will remain rational longer than they can remain solvent :-)
Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time. Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end. We are only just now getting a taste of the “true cost” of these tokens. Then there…
Doubtful. Look at how long Uber and Tesla have lasted despite making huge losses. Hell even Magic Leap somehow still exists (I guess because they don't have running costs beyond salaries). I think this can keep going for at least another 5 years.