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AI companies are pivoting from creating gods to building products

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Re: AI companies are pivoting from creating gods to building products

#21

Post by hn_throwaway_99 »

simonw wrote: post #13
adventured wrote: post #9

Earlier quoted context omitted.

> LLMs and foundation models are fungible and easy. The top couple LLMs are extraordinarily expensive - will get dramatically more expensive yet - and are one of the most challenging products that have been created in all of human history. If what you're claiming were true, it wouldn't cost so much for Meta and OpenAI to do their models, and it wouldn't take trillion dollar corporations as sponsors to make it all wor…

> The top couple LLMs are extraordinarily expensive - will get dramatically more expensive yet - and are one of the most challenging products that have been created in all of human history. I disagree. The more we learn about LLMs the more it appears that they're not as difficult to build as it initially seemed. You need a lot of GPUs and electricity, so you need money, but the core ideas: dump in a ton of pre-traini…

100%. I don't think we should at all minimize the decades of research that it took to get to the current "generative AI boom", but once transformers were invented in 2018, we basically found that just throwing more and more data at the problem gave you better results.

And not to discount the other important advances like RLHF, but the reason everyone talks about the big model companies as having "no moat" is because it's not really a secret of how to recreate these models. That is basically the complete opposite of, say, other companies that really do build "the most challenging products that have been created in all of human history." E.g. nobody has really been able to recreate TSMC's success, which requires not only billions but a highly educated, trained, and specialized workforce.

Re: AI companies are pivoting from creating gods to building products

#22

Post by wongarsu »

j45 wrote: post #18
pdpi wrote: post #14

Earlier quoted context omitted.

> Imagine not understanding that their main way of doing money is through their API for other companies, and not through a product. Or, more to the point: Their primary product is B2B, not B2C.

There's no shortage of valuable B2B products to be built through an AI API.

If other people build it using OpenAIs API that's still B2B from OpenAI's point of view though.

Re: AI companies are pivoting from creating gods to building products

#23

Post by simonw »

mupuff1234 wrote: post #19
simonw wrote: post #5

Earlier quoted context omitted.

Their numbers aren't public, but I'm not 100% certain that they're making significantly more money through the API than they are through paid subscribers to their products. They have a LOT of paid subscribers, and they're signing big "enterprise" deals with companies that have thousands of seats.

How do you know they have a lot of paid subscribers if their numbers aren't public? I'd guess that outside of a core "fanbase" / early adopter type they don't have that many subscribers.

Rumors. The Information had a story about this (but it's behind a paywall): https://www.theinformation.com/articles/openais-annualized-r... - their story was based on "people with knowledge of the situation" aka insider leaks.

I don't know the source for https://www.notoriousplg.ai/p/notorious-openais-revenue-brea... but it could just be that same Information article.

Re: AI companies are pivoting from creating gods to building products

#24

Post by lagrange77 »

simonw wrote: post #13
adventured wrote: post #9

Earlier quoted context omitted.

> LLMs and foundation models are fungible and easy. The top couple LLMs are extraordinarily expensive - will get dramatically more expensive yet - and are one of the most challenging products that have been created in all of human history. If what you're claiming were true, it wouldn't cost so much for Meta and OpenAI to do their models, and it wouldn't take trillion dollar corporations as sponsors to make it all wor…

> The top couple LLMs are extraordinarily expensive - will get dramatically more expensive yet - and are one of the most challenging products that have been created in all of human history. I disagree. The more we learn about LLMs the more it appears that they're not as difficult to build as it initially seemed. You need a lot of GPUs and electricity, so you need money, but the core ideas: dump in a ton of pre-traini…

I also immediately thought about Apollo, when i read "most challenging products that have been created in all of human history".

Re: AI companies are pivoting from creating gods to building products

#26

Post by rustypotato »

> But when developers put AI in consumer products, people expect it to behave like software, which means that it needs to work deterministically. If your AI travel agent books vacations to the correct destination only 90% of the time, it won’t be successful.

This is the fundamental problem that prevents generative AI from becoming a "foundational building block" for most products. Even with rigorous safety measures in place, there are few guarantees about its output. AI is about as solid as sand when it comes to determinism, which is great if you're trying to sell sand, but not so great if you're trying to build a huge structure on top of it.

Re: AI companies are pivoting from creating gods to building products

#27

Post by crackalamoo »

j45 wrote: post #18
pdpi wrote: post #14

Earlier quoted context omitted.

> Imagine not understanding that their main way of doing money is through their API for other companies, and not through a product. Or, more to the point: Their primary product is B2B, not B2C.

There's no shortage of valuable B2B products to be built through an AI API.

In principle, yes.

In practice, it's a little more tricky. AI APIs give mostly human-level reliable results in many cases. But they don't work well 100% of the time, which affects trust in an automated B2B product meant to replace human labor.

There are still applications that aren't meant to replace human labor, just to generate natural language very quickly. I've even seen this done in academia. And also, the API AIs are expected to become more reliable over time.

Re: AI companies are pivoting from creating gods to building products

#28

Post by candiddevmike »

bamboozled wrote: post #16

I guess they've worked out making money is an important part of any business?

Their moat has evaporated on the B2C side--no friction, plenty of alternatives, overly generous free tier--and B2B is freaked out about non-local usage.
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