I really like reading him. I do wish is posts were a lot shorter.
I get tired of all the 60/40 percent forecasts that have enough wiggle room the forecaster never thinks he is wrong.
I certainly dont get that from Ed!
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?
#932Earlier quoted context omitted.
Why do everyone assume they are subsidized? When we seemingly have no idea what it costs? Maybe average subscription is breaking even and token spend is pretty much pure profit? Case in point, claude code seems hell bent on increasing usage at all cost. Which makes sense in the growing phase (get people hooked) but it does not make sense given the hardware shortage. So, which is it?
Anthropic admitted last year to losing money on inference, it had negative margins. The margins have improved and are now positive but there’s still a significant cost. If plans aren’t being subsidized it would mean that the margin on inference is ~99%+ which would mean OpenAI and Anthropic should be wildly profitable but both are still losing money. So, it’s mathematically impossible that they’re not subsidizing pla…
>Anthropic admitted last year to losing money on inference, it had negative margins.
No they did not. Dario has repeatedly stated if they stopped training new models, they would be very profitable.
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#933Things in general I think he's right about: 1. Revenue if anthropic and openai is unlikely to grow to the high levels they need to pay for their commitments. Many of their heavy users (coding) will eventually offset a lot of usage to more efficient and cheaper open weight models. I know of people in a company I was at that spend thousands of dollars a month on tokens. I am sure that what they're using it for can be s…
This reads to me as incredible cope. Maybe not both of these companies but certainly one of them will be enormously valuable, and there will always value in the frontier models even if much of the practical usage can be done locally
Why is it “certainly” the case that one will be enormously valuable?
Neither appears to be on track to long-term profitability specifically once you take into account depreciation on CAPEX.
On top of this the “productivity gains” from AI across the board seem to be a very mixed bag. The pitch from these companies has been huge gains in productivity and automation and although there is anecdotal evidence some people are able to do that, the broader studies seem to show marginal gains in most cases.
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#934[deleted]
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#935I think the most likely way for Zitron to find vindication is through the world war we seem to be shambling into. That could easily put a stop to AI improvements, because the supply chain is so fragile. But that would have nothing to do with his ostensible reasoning.
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#936Earlier quoted context omitted.
Yes, there are good examples of this working, anti-competitive as it may be. What if, in the DoorDash example, the pizza shop was itself venture backed and selling pizza at a loss to win customers and using this 20k revenue as a basis to raise money?
What if the same VCs were backing both and gearing up for an IPO?
Once circular funding scales, VCs become the Fed.
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#937Earlier quoted context omitted.
Ed's whole cornerstone thesis is that "AI doesn't work." Like, if I had to sum him up in a short sentence, that's what it'd be that or "Angry but doesn't know much"
I think when cornered, he does say it works for coding and some other tasks. But to be honest it also makes a lot of bugs when writing code. I don't agree with everything he thinks, but I think I agree with him more than I do Sam Altman or Jensen.
I’d be interested in a real accounting of what he said, rather than what people say they’ve heard.
If he says AI is changing work in some places but not-at-all in most… that’s defensible. Or at least we can look at that. Did he say it about the llm offerings from one or two providers or about (broad gesture) all AI efforts, everywhere? Etc.
Certainly it’s changing sw development work. It’s less clear, most everywhere else.
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#938Ed Zitron is providing his assessment and prognosis strictly on financial basis. But AI has national security and geopolitical dimensions as well. US government is fully committed to keep the AI lead for as long as possible. And they use all sorts of tricks to affect the market in AI's favor. Financial analysis alone is not enough. The government will do anything to prevent AI bubble from bursting.
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#939Now do Sam Altman, Dario Amodei and Elon Musk.
Re: How accurate have Ed Zitron's AI skeptic predictions been?
#940Things in general I think he's right about: 1. Revenue if anthropic and openai is unlikely to grow to the high levels they need to pay for their commitments. Many of their heavy users (coding) will eventually offset a lot of usage to more efficient and cheaper open weight models. I know of people in a company I was at that spend thousands of dollars a month on tokens. I am sure that what they're using it for can be s…
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