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How accurate have Ed Zitron's AI skeptic predictions been?

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Re: How accurate have Ed Zitron's AI skeptic predictions been?

#561

Post by x-complexity »

maxglute wrote: post #482
nl wrote: post #432

Earlier quoted context omitted.

> you realize industry + ecosystem (politics/reporting) is tulip mania It could be "tulip mania" or it could be "the internet". Luu analyzed the numbers instead of just reacting to hype. Specifically: >> Oct 2024: OpenAI's forecast of $3.7B revenue in 2024 and $11.6B in 2025 and $100B in 2029 are absurd, "a statement so egregious that I am surprised it's not some kind of financial crime to say it out loud" > Wrong (2…

On a spectrum between tulip wilting and fiber build out, we know deprecation cycle of DC hardware leans towards tulips i.e. The numbers being cited is ~100B is well within accounting/ledger maxxxing tricks relative to current pool of investment. Luu is not analyzing number's he's just listing and believing numbers, and analytically entirely avoids the core Zitron thesis... once you tap out of easy investor $$$, FAANG…

> On a spectrum between tulip wilting and fiber build out, we know deprecation cycle of DC hardware leans towards tulips i.e. Counterargument: As advancements in transistor densities slow down, the rationale for increasing depreciation cycles makes more sense. As the performance gap between new & 5-year-old hardware continues to shrink, then the need to replace older hardware similarly shrinks, justifying longer depreciation cycles.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#562

Post by layoric »

This critique is leaning really hard on their interpretation of "dying". They take the literal company is going to fail type of dying where as I have always taken it the same way he has presented it in his "rot-economy" context. They can remain financially "successful", but more and more people hate their products, their products are getting worse, their products are "dying". Google Search is still a good example, the old Google search is "dead" if you like, a know many people, including myself who no longer use it. More people hate and getting off Facebook. More people are jumping from Windows to macOS or Linux.

These tech giants need AI to continue to grow, and that growth at the moment seems to be coming from just two AI companies who are burning a record about of investments. OpenAI has raised nearly $200B, that is more money than Australia's tax revenue.. and they are getting further from being profitable as Chinese models are getting better and much cheaper.

The article linked seems right, but you have to take these morbid analogies in a very specific way, and assume that the only way to measure these companies is revenue/profits/money rather than their products.

I wish people would hold actual professional media economists to the same standards, along with journalists who just repeat press releases without actually challenging statements. His main argument has been the numbers don't make sense, and can't see how this won't end badly for a lot of people.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#563

Post by fy20 »

jsrozner wrote: post #216

Though the bubble has not popped, I don't see the following discussed in the post: Zitron would probably point out (as have others) that many of the hyperscalers are booking valuation increases in Anthropic, OpenAI as "Other Income", which is substantially increasing their reported revenue and earnings. It's roughly: - Hyperscalers like Goog, Meta, Msft invest cash in Anthropic, OpenAI, in exchange for equity - The o…

This is basically a bs line of reasoning, and it's easy to verify in 5 minutes (go read some SEC fillings).

Yes the investments do increase GAAP, but these are seperate line items from revenue which is what is listed in the article.

Alphabet is the biggest winner in this department, it's investments gain/losses for the same period as in the article was:

2023: -$1.45B

2024: +$2.24B

2025: +$24.90B

Yes thats a lot, but compared to it's seperate revenue growth of nearly $100B in the same period, it's not that much.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#564

Post by joering2 »

goatlover wrote: post #512
thegrim33 wrote: post #118

Earlier quoted context omitted.

S&P 500 - All time high DJIA - All time high Unemployment rate - Near all time low (for last 20 years) Number of US small businesses - All time high US GDP - All time high [Sources] https://www.bls.gov/charts/employment-situation/civilian-une... https://www.sellerscommerce.com/blog/small-business-statisti... https://fred.stlouisfed.org/series/GDP

And yet with all that, Democrats are likely to retake the US Congress because a majority of Americans are experiencing an affordability crisis.

Yet with all what? AI stock pushing indexes high and US stock market being cheap because dollar lost 30% of volume in last few years so the whole world is trying to profit from short ride? Record low unemployment because gas and groceries are so expensive most people work 2 or 3 jobs just not to end up homeless? Democrats are going to retake because ballroom and gold arch does not affect gas or grocery price. They will retake because Republicans proved they are extremely soft on corruption. Not only they allow POTUS & Fam. steal billions from taxpayers, they are not stopping it and some even profit themselves. Dems will retake because we have a dangerous version of plutocracy mixed with socialism, where one person on the top (POTUS) unilaterally decides that US Government will take a free chunk out of Intel, or that 20 billion of taxpayers money will go to help Argentina or Brazil or Japan. That's why.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#565

Post by pocksuppet »

layoric wrote: post #562

This critique is leaning really hard on their interpretation of "dying". They take the literal company is going to fail type of dying where as I have always taken it the same way he has presented it in his "rot-economy" context. They can remain financially "successful", but more and more people hate their products, their products are getting worse, their products are "dying". Google Search is still a good example, th…

If I have a billion trillion dollars but 20% of the population hates me, but I get to live in a giant solid gold mansion with an army of servants keeping the 20% away from me, have I really failed?

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#566

Post by reticulates »

chrisco255 wrote: post #523
reticulates wrote: post #504

Earlier quoted context omitted.

Circular financing absolutely creates revenue. A startup raises $50 million from OpenAI and Anthropic to finance API calls to OpenAI and Anthropic that they are using at a loss who in turn spend that money on compute with Microsoft and Google who in turn invest in Anthropic and OpenAI who then invest the startup using the startup’s revenue to value it… the cycle repeats. There are multi-billion dollar valued startups…

The vast majority of startups are not funded by OpenAI or Anthropic. They are not a significant source of venture capital. Meanwhile, OpenAI is pulling in $40B+ per year and Anthropic $65B+ per year. You are mixing up valuations with liquid cash and you're also making sweeping statements about how those startups are spending their cash. A majority of a raise is not spent on AI compute. Situational Awareness blew up b…

You’re applying pre-AI investing to a post-AI world. Yes, a decade ago, a startup raised money and spent 90% of it on people. The people built software which had incredible margins. Build it and then print money for ever more. That’s not the case any more, these startups no longer have incredible margins, they’re not collecting $100/m per user and banking $99 of it. They’re collecting $1000 and sending $999 of it to Anthropic and OpenAI.

Revenue numbers are vastly inflated compared to pre-AI but these startups aren’t keeping the money. Profits are worse than ever before. Startups with 30 employees that reach $100m ARR in 6 months are not banking $90m or $80m or… they’re just passing that money straight through to OpenAI and Anthropic.

If startups aren’t just funnelling all their funds raised straight through to OpenAI and Anthropic, where is this combined $100bn in revenue coming from? Who is paying for it? My spend on software certainly hasn’t gone up in a post-AI world. My company is spending less on software now.

OpenAI have stopped being so reckless with their cash investments which is why they appear to have slowed down but they’re still investing millions in huge numbers of startups through token allowances. They invest $2 million in every YC startup (or did a few months ago). There’s an entire market of reselling these tokens!

https://mlq.ai/news/openai-and-anthropic-pour-up-to-800m-a-y...

Hell, I’ll go one step further and bet they book these credits being spent as revenue.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#567

Post by kbelder »

minimaxir wrote: post #117

Over the past few years, I had helped Ed with some difficult nuances around the obscure technical aspects of serving LLMs (e.g. benchmarks and model caching); he has also shouted myself and Simon Willison out positively multiple times. I stopped assisting him because he repeatedly misused said advice to the most cynical interpretation ("how can this be interpreted to make AI boosters sound crazy?) and often made it m…

>I will no longer be helping writers/journalists with a clear anti-AI bias.

Take out the 'anti-AI' qualification, and you've got a decent general principle.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#568

Post by pocksuppet »

sfblah wrote: post #158
arctic-true wrote: post #126

Earlier quoted context omitted.

This is exactly right. Now, that does mean something about Zitron: he’s a pundit, not an expert or a forecasting genius. You could point to any number of analogous booster types. Twitter/X somehow loves pushing these people onto my recommended feed. I remember reading breathless threads about how o3 was going to single-handedly end white collar work. There are just more of that sort of person, so none of them in part…

In my experience, people who make fun of AI's ability to eliminate white-collar work are exactly the same people who are white-knuckling it, hoping they can make another $300k next year to buy that Rivian. People who don't need a salary look at the situation more objectively and, in general, can see that a lot of white-collar work is in peril.

The flip side of that is that at least half of all white-collar work was already useless before AI. If it hasn't already been eliminated, there's no reason to assume a-priori that AI can eliminate it.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#569

Post by kshri24 »

Cannot take profits of these companies seriously when they have been laying off employees by the droves the past couple of years. Obviously profits will increase when workforce expenses have reduced. I'll only take it seriously after a couple more years and see how the company has held up with massively reduced workforce (powered by AI™). Another point would be to see how these incumbents get challenged by new startups and if incumbents can survive this phase.

Re: How accurate have Ed Zitron's AI skeptic predictions been?

#570

Post by ghostk »

pocksuppet wrote: post #565
layoric wrote: post #562

This critique is leaning really hard on their interpretation of "dying". They take the literal company is going to fail type of dying where as I have always taken it the same way he has presented it in his "rot-economy" context. They can remain financially "successful", but more and more people hate their products, their products are getting worse, their products are "dying". Google Search is still a good example, th…

If I have a billion trillion dollars but 20% of the population hates me, but I get to live in a giant solid gold mansion with an army of servants keeping the 20% away from me, have I really failed?

type shit Louis the XVI would ponder about
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