211–220 of 306 posts
The current commitment by hyperscalers is around 1.7T USD, reported liabilities 1.3T and this year global debt related to AI is 570B. So that’s around 3T total. For this to make sense AI must generate 2T in new revenue per year by the end of the decade. And that would be only a 10% ROIC. For context ROIC for big tech is around 35% so at 10% they will be barely breaking even. The SP500 gives 10-12%. With 10% ROIC from…
Earlier quoted context omitted.
Economies of scale. You need a cluster of 8-12 H100s to run the largest models locally. It doesn't make sense to run these locally yet unless your use case also involves making it available for several dozen concurrent users.
not to miss, future models will be more compute hungry too. Current hardware prices are still goin up and no it's not cheaper to run your AI for like %99 of the people because of lots of costs, it's not just hardware.
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H100 is nearing five years and costs more to buy a used one now than a new one when it was released :) You are completely missing the bet these companies are making. They think can outlast their competitors and capture a larger portion of the pie while the cost of inference keeps going down dramatically. If you haven't been paying attention, the cost is about 1/100th of what it was in 2024. This is the trajectory pre…
You just stated yourself that it costs more now used than when they were new. If everyone's running local then why are these larger companies dumping cash into data centres?
Who's running local? Image generation can make sense to run locally, but frontier LLM make no sense to run on your own hardware.
Earlier quoted context omitted.
H100 is nearing five years and costs more to buy a used one now than a new one when it was released :) You are completely missing the bet these companies are making. They think can outlast their competitors and capture a larger portion of the pie while the cost of inference keeps going down dramatically. If you haven't been paying attention, the cost is about 1/100th of what it was in 2024. This is the trajectory pre…
>H100 is nearing five years and costs more to buy a used one now than a new one when it was released :) Because everyone is buying as they want to run their own models and not pay for a cloud service?
(still somewhat outraged Reuters has a paywall now. Also BBC, CNN...)
Looking at cash burn is looking at the wrong end of the horse. Some companies, like Meta, have burned huge piles of cash in pursuit of, for example, the Metaverse and they've got nothing to show for it, not even a slight increment in ad tech, and yet they earned enough to shrug it off. There's a big difference between Google spending tens of billions on AI infrastructure and what Oracle is doing. Oracle is spending t…
I'm thinking Apple has been really smart in their AI strategy here. It seems a mistake to make unprecedentedly large capital expenditures, in a very very crowded space, without much evidence of a moat. Presumably people thought the moat would be singularity-like self-improvement of AI, but the singularity is merely a religious concept, and nobody should take religious myth as fact, it's merely narrative for orientati…
Their strategy to let Siri stagnate for 15 years and let everyone else take that market? Their strategy to put a bunch of not ready for consumer use AI features on their devices and then roll them back? They just have such a strong hardware + os ecosystem that they can sit on the sidelines. They'll be able to negotiate with some LLM provider at a good discount when the time is right and put harnesses around it for ac…
What have they lost by doing this? Did anyone switch from iPhones to something else?
Google's Assistant was and is better than Siri's. How many switched to Android because of it?
The current commitment by hyperscalers is around 1.7T USD, reported liabilities 1.3T and this year global debt related to AI is 570B. So that’s around 3T total. For this to make sense AI must generate 2T in new revenue per year by the end of the decade. And that would be only a 10% ROIC. For context ROIC for big tech is around 35% so at 10% they will be barely breaking even. The SP500 gives 10-12%. With 10% ROIC from…