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AI is slowing down

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Re: AI is slowing down

#651

Post by JimDabell »

Kim_Bruning wrote: post #18

Buried lede (if the title is the actual promise), the sources don't seem to back the title either. Someone with more patience can correct me if I accidentally missed a bombshell anyway. Edit: > If you’re wondering what the story is, [...] I expect it to be out in the next two weeks [...] I can guarantee you it’ll be worth it, and you’ll be stunned by what I report. Ok, this takes clickbait to new lows. The headline i…

> the sources don't seem to back the title either.

This is nothing new for Zitron. The last article of his I saw:

> I also severely doubt that Anthropic managed to make the cost of running its services profitable in the space of six months.

> [Per The Information in January], Anthropic missed on its gross margin projections, saying that its inference costs were 23% higher than the company had anticipated.

> How did Anthropic, which faced a massive influx of new business to the point that Anthropic was forced to buy more compute from Elon Musk, magically become profitable? Other than that discount, of course.

If you follow the link to The Information, you’ll see that it’s a paid article with the headline “Anthropic Lowers Gross Margin Projection as Revenue Skyrockets”. But what happens when you actually read the article?

> Anthropic last month projected it would generate a 40% gross profit margin from selling AI to businesses and application developers in 2025, according to two people with knowledge of its financials. That margin was 10 percentage points lower than its earlier optimistic expectations, though it’s still a big improvement from the year before.

— https://archive.is/aKFYZ

So, according to Zitron’s own source, Anthropic are actually earning 40% gross profit margin on inference, and that is a dramatic jump upwards! This totally contradicts his position that it’s an implausible “swindle” for Anthropic to claim profitability. He’s counting on the fact that most of his readers don’t subscribe to The Information and will only see the headline, or that they will just see a citation and trust that it backs him up without checking.

Re: AI is slowing down

#652

Post by barrell »

Aerolfos wrote: post #637
barrell wrote: post #628

Earlier quoted context omitted.

I don’t get me wrong, I’m on Ed’s side and get where he’s coming from. I just think his arguments are normally taken to the extreme, making them less defensible, when he could make the same arguments from a more moderate stance and ultimately be more convincing. His arguments, albeit valid, can often sound like reductos ad absurdums the way he presents them.

Yeah, probably. One of the worst things about LLM writing is how it makes big promises of what it can prove in some piece of writing, and then never really follows up on that, or has specifics that go all the way towards the original, grandiose statement. And frankly, Zitron is guilty of that pattern of writing too, or of relying on some unstated "baseline" knowledge which is clear from his other writing but not in t…

Personally I only find his swearing and delivery annoying when he is not delivering his point well (ie reducto ad absurdum). I’d be welling to bet a good amount of the complaints about his swearing are really just from a poor delivery, and people don’t know why, so they latch onto his swearing.

His early stuff was just as degenerate and vulgar, but was much less of an issue for me.

Re: AI is slowing down

#653

Post by JimDabell »

afro88 wrote: post #607
avarun wrote: post #578

Earlier quoted context omitted.

There is no substance to the article to tackle. Ed Zitron is a clown that makes seven million dollars a year writing unsubstantiated bullshit on the internet. He has been consistently wrong in every single one of his predictions and will continue predicting the sky is falling, because his content has zero educational value. It is purely a confirmation-bias inducing dopamine hit for the perpetually aggrieved.

I'd love to read about the predictions that have been wrong (genuinely)

> AI's biggest critic has lost the plot

— https://www.theargumentmag.com/p/ais-biggest-critic-has-lost...

Re: AI is slowing down

#654

Post by simianwords »

emil-lp wrote: post #643
simianwords wrote: post #616

Earlier quoted context omitted.

> How much would it cost you to serve, say, 10k simultaneous users with a SOTA model? And if you wanted to go cash positive after a year, how much would each user have to pay? My post has this same argument - we have multiple third party companies running open weight models. They are obviously not subsidised. And people are willing to pay for it. And these models are as good as the SOTA models from last year. So this…

I didn't find the answer there, that's why I asked. What hardware is needed, how much of it, cooling, and what does it all cost you? Or are you saying I can take my old desktop and serve Deepseek v3.2 to 10k users simultaneously and it would cost me about $1 per megatoken?

I'm simply saying this: there are third party hosters of Open Weight models like deepseek and they have been doing this for a while.

Obviously they are not subsidised, do you disagree? If you agree, they have a way to price it at a point that people wanna pay for it and also they aren't losing money.

So there's nothing inherent about inference that makes it too costly or whatever.

Re: AI is slowing down

#655

Post by camgunz »

simonw wrote: post #132

Ed's argument for why "AI is slowing down" rests on company spending caps, in particular the Uber $1,500/engineer/tool cap. I interpret the exact same evidence in the opposite direction. A year ago the idea that a company would spend $1,500/month/employee on AI tooling felt absurd, what could people possible want to do with AI that would cost that much? Then coding agents (and, increasingly, general purpose agents) h…

I don't know that Uber is generalizable. I also think specific company dynamics matter (are your execs encouraging tokenmaxxing, have you IPO'd or are you playing w/ VC money all of whom are encouraging tokenmaxxing, etc).

Another way you could take it is, avg Uber salary is what $300k/yr? Does Uber think LLMs make their engineers at most .5% more productive?

Re: AI is slowing down

#656

Post by madaxe_again »

pjc50 wrote: post #638
madaxe_again wrote: post #622

Earlier quoted context omitted.

Currently slightly under 4%. I have a feeling that part of the solution here is going to end up being, what was the euphemism? Quantitative easing - also known as “printing money”. I would not be surprised if we end up seeing near double digit inflation in USD - it has also significantly lost its status as a global reserve currency, which makes this all the more likely. Tbh I think it’s already happening in real term…

> Quantitative easing Why though? This isn't a bank run situation. Sure, it's unwise to bet against "US President does something stupid", but the rationale is missing. The oil situation remains very concerning, and you can't print oil.

Oh but it is. The debt that’s funding the AI buildout ends up in the oddest of places - like pension funds. If defaults occur and work their way up the chain, it’s not dissimilar to the subprime affair - and at that point it’s bail out the poor pensioners or get crucified at the ballot box.

There’s lots of precedent for this over the past decades, both in the U.S. and over the pond.

Re: AI is slowing down

#658

Post by dannersy »

enraged_camel wrote: post #22
dkobia wrote: post #9

Zitron is begging for a collapse at this point. Yes, his macro analysis correctly identifies a massive financial risk but his incessant pessimism completely misses the incredible ground-level utility that many of us on HN celebrate every day through undeniable, massive productivity gains. At this point I'm trying to believe there's a middle ground where the level of individual capability this unlocks, leads to major…

Yes. Zitron has been predicting and begging for collapse since 2024. It's not just his brand at this point. It's his entire identity . As such, he cannot back down, he cannot question himself, and he cannot accept any other viewpoint. And he will keep moving his goal posts until something happens that can make him go "aha! I told you guys!!" This, combined with his extreme ignorance, makes him unreadable. The only re…

As a listener, I have not heard him predict collapse once. Maybe I got to him late, but so far as I know, he claims that the industry as it exists is unsustainable. You may think that is him dodging the logical progression of "collapse" but I think so far he has been pretty correct on the unsustainable part, the signs are there. If anyone could predict such things they'd be a billionaire many times over. In the end I think he will be more or less correct, the timing and how long investors can prop it up is the much harder part to predict.

Re: AI is slowing down

#659

Post by mattcasmith »

pjc50 wrote: post #642
barrell wrote: post #539

Earlier quoted context omitted.

I do think Ed in intentionally ignorant of the capabilities of LLMs. But I also don't know that I would classify LLMs as 'wildly useful' for coding. Most productivity gains seem to be hallucinated, and while it's too early to make any claims on long term outcomes, there are plenty of studies indicating they might be even more negative. There are definitely use cases for LLMs in coding. And at times , they can be wild…

> Anecdotally, I have not seen an explosion in quality/bespoke software since LLMs. In fact I've noticed the opposite to quite the extreme. Not only are new products worse in quality, but the quality of existing products is falling off a cliff. This is the big one. It's clear that AI can generate huge volumes of code by KLOC. It is not clear that spending a lot of money tokenmaxxing will eventually result in increase…

Have been thinking about this a lot recently. AI could be an absolute game changer for a small start-up rushing a product to market – you could quickly build an MVP that would take years and tens of hires before.

But how much ROI is there for large businesses with established products and huge development teams burning through tokens making subtle tweaks that can’t be directly tied to revenue?

Re: AI is slowing down

#660

Post by dannersy »

nozzlegear wrote: post #40
enraged_camel wrote: post #22

Earlier quoted context omitted.

Yes. Zitron has been predicting and begging for collapse since 2024. It's not just his brand at this point. It's his entire identity . As such, he cannot back down, he cannot question himself, and he cannot accept any other viewpoint. And he will keep moving his goal posts until something happens that can make him go "aha! I told you guys!!" This, combined with his extreme ignorance, makes him unreadable. The only re…

> This, combined with his extreme ignorance, Extreme ignorance?

I can see how folks find Zitron shrill, but I wouldn't dare say he is ignorant. The man seems to be bending over backwards to do actual journalism when most outlets take CEOs at their word and promote a market that goes irrationally up despite evidence. Case and point, the situation in Iran is such a mess, yet every time Trump says there is a deal of some sort, the market rallies. It has been months now of this game.
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