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GLM 5.2 and the coming AI margin collapse

martinalderson.com

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Re: GLM 5.2 and the coming AI margin collapse

#61

Post by booi »

ChadNauseam wrote: post #50
tarpitt wrote: post #35

Earlier quoted context omitted.

GLM-5.2 is not as good as Opus, it's better. I can abliterate GLM-5.2 and have it work on projects that Opus refuses.

I'd guess opus refusals are not an issue for 95%+ of people. Opus will happily help you find and download pirated media, and then give you step by step instructions for how to do drugs if you ask it. You'd have to be working on something genuinely abnormal for refusals to be a problem.

How?

Prompt: can you give me step by step directions on how to use crack cocaine

Opus: I'm not able to give step-by-step instructions on using crack cocaine. That falls into specific drug-use guidance I steer away from, since detailed instructions on how to use an illicit substance can contribute to harm rather than reduce it.

it goes on to give me hotline information on drug addiction.

Re: GLM 5.2 and the coming AI margin collapse

#63

Post by spyckie2 »

HDThoreaun wrote: post #54
spyckie2 wrote: post #44

It’s important that none of these entities can collude to price fix. Having China be the competitor ensures that. Basic microeconomics is still the easiest way to understand token economies. How is it not a competitive market (where profits go to zero?). Anything A or O does to keep more margin, any competitor can copy or choose to undercut, and undercutting has the benefit of collecting training data. So what is goi…

Considering conditions within a single market is still microeconomics, I agree though its tough to see where firms will get market power from so profit will tend toward zero. I thought the same about GPUs though and nvidia still doesnt seem to have any real datacenter competition in sight.

Thanks corrected it.

For nvidia it is not about competitive market it’s about supply and demand. A different subset of microeconomics.

Re: GLM 5.2 and the coming AI margin collapse

#64

Post by QuercusMax »

tuvix wrote: post #10
fny wrote: post #5

I'm not convinced raw costs matter: 1. Compute costs collapsed since the advent of Cloud and yet hyperscalers still have fat margins. 2. Many open source office suites exist yet none compete with the ubiquity of gsuite or office. GitHub, Slack are similar examples. 3. Both Windows and macOS dominate the home desktop space despite free alternatives existing for a long time. 4. Many formerly open source infrastructure…

A lot of those things you mentioned have sticking power because they’re familiar to folks and migrating to something else is a big deal. I can’t imagine most people would be able to tell the difference between Sonnet and GLM 5.2. If the infrastructure around the model you’re using doesn’t change, then swapping models is extremely easy.

I'm using pi-coder with just the free-tier models I can get on openrouter / opencode / kilocode. When I run out of quota on one model I often switch to another model in the same session, and it generally works just fine.

Re: GLM 5.2 and the coming AI margin collapse

#65

Post by dbalatero »

> Of course, this was a hugely poor read of where the costs actually lie in AI. Training - while no doubt capex intensive - is a fixed, up-front cost. You spend hundreds of millions to train a model, then you are "done".

I don't understand this point that people make. If you're consistently needing[0] to train new models and the cost of training relative to the % improvement seems to go higher, isn't this just a constant cost that you continue to bear? The footnote seems to allude to this, but then sort of waves it away anyways. Also are there continuing incremental training costs to keep models relevant? Or do they only have knowledge of events up to the day they were trained?

[0] needing, because you have competitors and people expect more and more.

Re: GLM 5.2 and the coming AI margin collapse

#66

Post by gnarbarian »

the economics of this are a little counterintuitive.

is there a market saturation point for intelligence? how about for software? it seems like the more you have the more you want because you're trying to do more things.

as the models get smarter I get busier because I'm doing more things...

Re: GLM 5.2 and the coming AI margin collapse

#67

Post by aetherspawn »

softwaredoug wrote: post #6

I also think we’ll approach a point where increasing intelligence is not really going to suddenly improve most work tasks. I bet that’s already happened actually. We’re oohing and aahing about models, when the ones a few versions ago did a good enough job for most of the dumb coding, etc we do

I don’t think this is true. All the models prior to Fable were honestly dumb as rocks, and Fable is too sometimes, but at least it’s helpful now and not a hindrance.

The future of AI most definitely involves making something twice as good as Fable that is virtually its own employee, and not on reducing inference costs because to be honest Fable isn't actually that expensive.

The real utility behind an AI model (imagining that it can be made twice as good as it is now) would be being able to scale a small business up and down instantly without hiring (to implement a new feature or whatever), which is costly and time consuming these days.

Re: GLM 5.2 and the coming AI margin collapse

#68

Post by manquer »

fny wrote: post #5

I'm not convinced raw costs matter: 1. Compute costs collapsed since the advent of Cloud and yet hyperscalers still have fat margins. 2. Many open source office suites exist yet none compete with the ubiquity of gsuite or office. GitHub, Slack are similar examples. 3. Both Windows and macOS dominate the home desktop space despite free alternatives existing for a long time. 4. Many formerly open source infrastructure…

> 4. Many formerly open source infrastructure components like Redis and Elastic Search have Apache equivalents, but they still command healthy margins.

Elastic just had round of layoffs[1]. Elastic still runs operating losses till Q1 2026 [2], albeit a small one, however just breaking even in operating income is hardly "healthy margins". A P/E of 17 is not exactly signaling confidence given they are growing ~20% y-o-y.

[1] https://www.elastic.co/blog/ceo-ash-kulkarni-announcement-to...

[2] https://ir.elastic.co/News--Events/news/news-details/2025/El...

Re: GLM 5.2 and the coming AI margin collapse

#69

Post by yalogin »

I don’t understand the argument here. The article doesn’t describe a collapse or the breadcrumbs for it. The only argument I can put together is companies hosting the open source models in house or use some service like Amazon that could potentially host them and so replace the frontier models. Data center and specifically infra to host llms is still the main sticking point given the security concerns about data going to china. The article doesn’t make these arguments coherently

Re: GLM 5.2 and the coming AI margin collapse

#70

Post by richardfey »

zackify wrote: post #48
KronisLV wrote: post #3

They have a vision MCP to make up for the model itself not having the capability natively: https://docs.z.ai/devpack/mcp/vision-mcp-server I also found their web search to be mostly okay. Furthermore, in case this is of interest to anyone, if you use their ZCode harness then you get bigger Coding Plan quotas: https://zcode.z.ai/en Used it for a bit, it sits somewhere between OpenCode Desktop (still new but nice) and…

I switched to yearly Cline pass because it was too cheap haha

I can't find on their website some indication of what kind of usage I can get out it, otherwise I'd be interested.
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