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AI is too expensive

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Re: AI is too expensive

#111

Post by DonsDiscountGas »

bensyverson wrote: post #13

If you're older than 30, you've seen this play out before… This is just how the VC game works. Cross-town Uber rides don't stay $5 forever. The bright side is: this is a golden era of subsidized tokens. It will not always be like this, so now is the time to churn out your passion projects.

Seeing as the physics and economics of SaaS LLMs are a lot different from branded taxis, and that LLM token prices are down 100x over the past 4 years, there is good reason to believe that analogy isn't exactly perfect. Price hikes in the near term wouldn't shock me (in fact they've kinda already happened) but in the long term I'm optimistic

Re: AI is too expensive

#112

Post by throawayonthe »

han1 wrote: post #15
citrin_ru wrote: post #7

Earlier quoted context omitted.

Why we should assume that whoever offers these Chinese models makes sufficient profits and will not rise the prices eventually too?

Chinese models are state-funded and not concerned with taking profits.

that's not how that works

regardless, the parent comment is talking about third parties hosting, for a fee, the openly available models, usually outside china

Re: AI is too expensive

#113

Post by elorant »

changoplatanero wrote: post #16

Imagine you were looking at Google, a sustainable and profitable business, and you thought you saw a once in a lifetime opportunity to compete with them and take their position as a leading tech company. How much money would you need to spend to make a credible attempt? Google has had decades to accumulate intellectual and physical capital. Catching up quickly means spending >500 billion. If you can actually dethrone…

Problem is that Google practically invented LLMs. So it’s not like they’d sit around while you try to eat their lunch.

Re: AI is too expensive

#114

Post by catdog »

bensyverson wrote: post #13

If you're older than 30, you've seen this play out before… This is just how the VC game works. Cross-town Uber rides don't stay $5 forever. The bright side is: this is a golden era of subsidized tokens. It will not always be like this, so now is the time to churn out your passion projects.

> This is just how the VC game works. Cross-town Uber rides don't stay $5 forever.

Basically yes but there is a small difference I think. Things like Uber took an existing and proven business model. slapped an App on top and priced the competition out of the market. The winner takes it all.

With "AI" it's not yet clear if there will be any winner at all because it's not yet proven if the business model is viable at the "real" price. Think air taxis across town, 5$ a ride, will work at scale for sure, probably won't work for 500$.

Re: AI is too expensive

#115

Post by DonsDiscountGas »

semiquaver wrote: post #94

This guy is the master of goalposts. He never cops to the fact that he is constantly being proven wrong and changing his tune every few months to a new theme which he will abandon as soon as it’s not supported. I’d like to think that if I was as catastrophically, publicly, consistently incorrect on the main thing I do, I’d have a little more humility than this charlatan.

I like how he mentions that "AI revenue would need to EXPLODE", seemingly oblivious to the fact that it has been exploding for months

Re: AI is too expensive

#116

Post by dgudkov »

I don't see any problem with refunding the massive AI expenses. All the AI costs will be pushed down on consumers whether they need AI or not. Nobody will ask them. Everybody is so deeply hooked on SaaS and cloud and LLM providers that they have lost any bargaining power and will pay whatever prices the hyperscalers and SaaS platforms will tell them to pay. The prices have already been raising because "now it includes AI".

To pay back $3 trillion, 1 billion consumers will have to pay just $3000 each, or $83/mo monthly over 3 years, on average. Of course they will pay that and even more.

Re: AI is too expensive

#117

Post by ethagnawl »

etempleton wrote: post #103
ethagnawl wrote: post #49

Earlier quoted context omitted.

> billions down the drain that could have gone into building more efficient LLMs instead. Or any one of thousands of other ventures which could be more beneficial to humanity, the environment, etc.

Or at least profit margins.

True!

Re: AI is too expensive

#118

Post by operatingthetan »

raincole wrote: post #104
operatingthetan wrote: post #85

Earlier quoted context omitted.

Why did you criticize his past arguments instead of the claims in this article? The one relevant claim you address is basically a shrug on your part. This seems to be purely a character attack of Zitron. I agree that he is very one-sided, but I doubt his hit-rate is much worse than other pundits in the industry.

I think it's very reasonable to look at the track record when posting anti-AI articles looks like the author's part-time (if not full-time) job: https://www.wheresyoured.at/author/edward/

It is reasonable to do so but only if they also actually address the current claims.

Re: AI is too expensive

#119

Post by KronisLV »

I mean if I was one of the enterprises or someone that wants VC funding, I'd be pretty upset at the state of things. But if it's a bunch of huge orgs and investors sinking their money into a bet that may or may not work out, I for one appreciate that Anthropic (and OpenAI and others too) let me have a bunch of subsidized subscription tokens probably below their real value.

Unless the bubble bursts instead of a slow cooldown after the peak of the hype cycle and something close to 2008 happens and the losses would somehow get offloaded upon the regular folks, then it'd suck. Seeing as programming seems to be one of the most widespread use cases https://news.ycombinator.com/item?id=48179021 then what those large orgs should be doing is talk up developers and try to get more goodwill and maybe increase the dev salaries of those who can wield those tools (though realistically they don't care and devaluation of software development work will happen, coupling it to AI anyways regardless of how people feel about it).

Except for them driving up the RAM prices. And also more or less meaning that Intel Arc B770 won't happen. Fuck them for that. Oh and also the people struggling with increased electricity prices and pollution, and water availability. In a functioning country I think there can be enough regulation and enforcement to either fine the crap out of them or put people in jail (e.g. for messing with the environment by using illegal generators and trying to exploit loopholes), though I don't think there's ANY regulatory answer to companies going: "Yeah, we don't care about consumer segment, we're just making hardware for AI and enterprise now."

Tone of the article very much reads like a rant at some points. Guess the status quo will push people to that, with AI hate also being a massive social trend. I wonder what the economics behind DeepSeek and others over there are like, especially in the case if they distill Western models somewhat.

Re: AI is too expensive

#120

Post by argee »

czhu12 wrote: post #36

I really respected Ed Zitron, but I feel like he's very much lost the plot on AI. Scroll back not too far and he was publishing criticisms that no one wants to spend actual money AI. Anthropic has shattered all notions of that since then. Then there was the idea that even if people want it, we have way too much GPU capacity to ever be saturated. Now almost all providers are hitting limits. Now, its the next iteration…

I agree that it’s not going to be profitable, when it comes to monopolistic profit. AI is increasingly commoditized and providers can’t set prices too far out of band with their competition, which includes local models, Chinese distillations, and established giants which can operate at a loss indefinitely. I haven’t seen any moat appear thus far, and we’re rapidly approaching the point where we will learn the bitter lesson again. As another comment said, we should draw a distinction between "AI is valuable" and "AI justifies its current investment levels."
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