121–130 of 436 posts
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Assuming the analysis is right, and most (or all) of these AI companies will default on their debts, what consequences might that have?
>what consequences might that have? All depends on who is holding the bag, and how big the bag is.
The math doesn’t add up and the wheels are starting to come off the bus. The conversation in a lot of wealth management offices has shifted dramatically in the last few month from “how do I get in on this AI thing?” to “how do I protect my assets when this AI stuff blows up.” There’s little question now if this will all implode, just when and who’s going to lose their shirt and be left without chairs when the music s…
Assuming the analysis is right, and most (or all) of these AI companies will default on their debts, what consequences might that have?
My take is that Anthropic and OpenAI simply are NOT competing on price. 2 big players are often not enough to create tension on price. Chinese models and open model providers are, indeed, competing on price, and the difference shows.
Chinese models are dropping in price thanks to ridiculous levels of state subsidy where companies are forced into aggressive price wars to survive and grab market share. I am guessing this will also blow up sometime next year or in 2029 at the maximum. Btw, some Chinese corporates have already seen this and increased their price. Zhipu AI & Tencent for example. Alibaba, Baidu, and Tencent also announced multiple pric…
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Assuming the analysis is right, and most (or all) of these AI companies will default on their debts, what consequences might that have?
If that happens the AI companies will first try to negotiate with their creditors and after that likely declare bankruptcy with the creditors taking over what’s left of the assets. Shareholders will be wiped out and employees will be left with nothing. Various franken-companies will emerge from the bankruptcy ashes and the world will move on with AI sans the present irrational exuberance.
I think the biggest problem is not necessarily the cost to develop & serve the models, but how quickly user behavior changed with token based pricing. I know a lot of people at companies where the marching orders changed on a dime end of Q1/start of Q2. These are shops that were fully on the "use AI or die (because we will fire you)" train. Now there's monitoring, reporting, alerting not just on overall cost but on "…
I can second this. Our company and department was all-in on AI. And since the token-based pricing came in, we got an email from IT that tried to explain that most developers don't know how to choose models and that the cheap models should be good enough for most of our work ..
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> Microsoft adding Deepseek support I believe this hasn't been confirmed yet but I think it speaks to a bigger problem for the AI companies which is, if you give capable developers a good reasoning LLM, they can make it work like it was a really expensive model. I believe we are 100% at the stage of good enough for the vast majority of tech companines. Fable and others will be more valuable for non-traditional tech c…
If hardware becomes the moat, the US frontier labs are screwed. We have AWS, Azure, GCP. All three have or are making inference silicon. LLMs become just another service in the public cloud's large service catalog, and open weight wins. Which makes sense to me. Selling a chatbot interface/model access to the general public was never going to be a viable long term play. You still need developers to wrap the models int…
The coming AI enshittification is going to be epic. For those of us who have been on the web for more than five minutes, we can see this a mile away. If you think search ads are annoying, pre-roll YouTube ads are annoying, streaming ads are annoying, or basically ads-on-any-screen-anywhere-at-any-time are annoying, just wait until every stupid thing is powered by AI and is subtly trying to manipulate you to buy/watch…
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> Frontier models may eventually achieve super-intelligence but super-intelligence isn't necessary for most practical day-to-day programming I think you forgot what super-intelligence means…
tbh, not sure i ever understood it
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I.e., the demand for programming tokens turns out to be quite elastic.
I would imagine it only gets worse in the face of good-enough open/chinese/local models too right? Microsoft adding Deepseek support already as I recall? That is - for any definition of "they are behind X months" then eventually they get to the point Claude was in January when the world freaked out, but at 1/10th the cost. A lot of firms are going to mandate that is good enough for their developers.