221–230 of 426 posts
TL;DR to save you time: 1. GenAI companies are making a loss in order to gain adoption and later lock-in 2. ??? 3. They're going to cash-in soon and start milking you now that business critical systems rely on GenAI The "???" denotes a complete failure to offer compelling arguments that link 1 and 3.
https://github.blog/news-insights/company-news/github-copilo...
Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.
It would cost me $300 in normal deepseek v4 pricing (non discounted) PER DAY, but I get it all for $500 worth of subscriptions.
Those same companies are getting sweetheart deals with the frontier AI labs in the hope that infrastructure costs go down enough in the future to invert profitability, but it's still a risky position for them to be in. (Having their own infrastructure gives the bigcos huge leverage, even if it's only 80% as good as frontier.)
Earlier quoted context omitted.
You can now buy 128 GB unified memory computers from AMD as commodity. They’re still pricey, the world is still scaling up memory production, and a lot of code isn’t yet built for AMD, but we went from the Wright’s brothers first airplane to jet engines in 27 years. I’m not sure “it’s only a few years away” but we are sure moving there fast.
I believe the same thing but keep repeating the question: Then what are all the datacenters for?
Cynically: it’s become an executive-level gpu measuring contest. If you’re not making huge commitments on data centers, you can’t be a serious player.
Realistically: It’s a mix of the two. The recent Claude caps for agentic usage suggest that demand exceeded their immediate compute supply. That they can alleviate it with additional capacity from the existing and small-ish xAI facility suggests that either demand may not be rising quite as fast as anticipated, that they’re okay in the short term until more capacity comes online, or a mix of both.
Open questions:
1. At what price point does demand fall, and are the frontier providers overall profitable before that price point?
2. At what price/performance point do on-prem local models make more sense than cloud models?
Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.
> within a few years we will be running local models as good as today’s frontier models with almost no cost burden Based on what? The RAM requirements alone are extraordinary. No, running large models on shared, dedicated hosted hardware at full utilization is going to be vastly more cost-efficient for the foreseeable future.
I must say that the largest dedicated hosted hardware providers now, like Amazon or Google, to a large extent do not produce the software they are offering as a hosted solution (like Linux, Postgres, Redis, Python, Node, etc). Similarly I'm not sure if the producers of the frontier models are going to keep their lead as the service providers for the most widely used models. They would need to have quite a bit of an edge above open-weights models.
Also, models are given very sensitive data to process. For large organizations, the shared dedicated hardware may look like a few (dozens of) racks in a datacenter, rented by a particular company and not shared with any other tenants.
Earlier quoted context omitted.
I believe the same thing but keep repeating the question: Then what are all the datacenters for?
I print documents and photos at home regularly but I still contract out to dedicated print shops. The print shop can’t replicate the practicality of local printing and I can’t replicate their scale of investment. Both coexist perfectly.
Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.
Every AI subscription is a ticking time bomb for the frontier provider; within a few years we will be running local models as good as today’s frontier models with almost no cost burden. The floor will fall out of the enterprise market for all the frontier companies.
People who are this certain of their predictions should be forced to put real money on them on Kalshi or Polymarket instead of drive-by blowharding on HN.