For a rapidly growing new line of business, this isn't bad at all.
We've spent ~3x the cost of the entire US Interstate Highway system or 7x the cost of the Apollo Project on AI infrastructure in just a few years
Is AI Profitable Yet?
201–210 of 229 posts
Re: Is AI Profitable Yet?
#202Earlier quoted context omitted.
With this line of thinking, nobody would have ever built refineries, or fabs, or clouds. The frontier labs have fantastic margin on inference. You do not understand how fantastic. And they have license to change inputs at will based on profitability. They are not only innovating on models and tooling, they are innovating on cogs (I wrote this btw, and I’m not going to stop writing this way because Claude discovered i…
> The frontier labs have fantastic margin on inference. Source? The OpenAi filing will be very interesting indeed. ("trust me bro" statements from sama et al does not count, since I don't trust them) Edit: The best argument I have seen look at the price of inference from smaller companies running open models. And assuming they are profitable-ish. Their prices are lower than the OpenAi and Anthropics best models, so m…
https://newsletter.semianalysis.com/p/ai-value-capture-the-s...
But also, trust me bro.
Re: Is AI Profitable Yet?
#203Earlier quoted context omitted.
> infrastructure beyond the company consider all the companies in a market and those that feed that market to be one virtual mega company, add up all the valuations and revenue streams, costs, etc and aggregate all the investors into one. Nothing changes about the picture I drew. We simplify models to make the real world understandable. > negative impact ripples through the economy due to misallocation of resources f…
> one virtual mega company Free market efficiency is inherently tied to having multiple companies. Treating the entire economy as a single company gives nonsensical results because it fundamentally differs from what actually occurs. You might as well compare the economy to a game of tick tack toe, inherent complexity isn’t something you can simplify it has meaningful consequences. Your ideas like many other ideas are…
>Treating the entire economy as a single company gives nonsensical results
trust me bub, I've studied much more econ than you. If a competitive market sets the prices (check, that's what is happening), and you want to analyze statistics of a sector (check, that's what we are doing), you can take those competitive prices as "given" and hold them constant, and consolidate the assets of in industry into one virtual entity. No claims were being made about competition, the claim is that "it is validate to consolidate statistic of what you are trying to study.
"how much did the AI sector make last year? how much will it make next year?" is not answered by running a simulation of competitive marketplace with production functions.
>>could somehow know the future
>Perfect accuracy isn’t the only possibility here, there’s levels of error.
if you deviate from the market's prediction of the future, you are increasing your levels of error; why do that?
Re: Is AI Profitable Yet?
#204Earlier quoted context omitted.
> infrastructure beyond the company consider all the companies in a market and those that feed that market to be one virtual mega company, add up all the valuations and revenue streams, costs, etc and aggregate all the investors into one. Nothing changes about the picture I drew. We simplify models to make the real world understandable. > negative impact ripples through the economy due to misallocation of resources f…
Keep peddling that capitalist realism. “There is no alternative!” The market may not misallocate capital, by definition, but it very clearly and routinely misallocates resources. Let me guess: you’re doing relatively well for yourself?
>Let me guess: you’re doing relatively well for yourself?
Let me guess, you sit down next to Kobe Bryant and start by saying you're going to tell him about winning basketball?
Re: Is AI Profitable Yet?
#205Earlier quoted context omitted.
Their loss, big deal. Let them suffer. The problem is that when they crash they bring a lot of other stuff down along with them. The people who lost money in the 2008 crash were not the ones who suffered the aftermath.
Because in 2008 ordinary everyday people invested in overvalued things like house.
It went beyond that. I didn’t own a house, but my employer, facing an economic downturn, laid off about half its employees.
Re: Is AI Profitable Yet?
#206Earlier quoted context omitted.
Keep peddling that capitalist realism. “There is no alternative!” The market may not misallocate capital, by definition, but it very clearly and routinely misallocates resources. Let me guess: you’re doing relatively well for yourself?
> Let me guess: you’re doing relatively well for yourself? Let me guess, you sit down next to Kobe Bryant and start by saying you're going to tell him about winning basketball?
Are you saying that you’re right because you’re rich? The equity of the economy is not very similar at all to a game.
Re: Is AI Profitable Yet?
#207Re: Is AI Profitable Yet?
#208AMD, Alibaba should be on there too. AMD is making good money on AI, with R&D at less than half the AI revenue. Whereas Alibaba's weird financials show it's kinda-sorta-protifable? I just wanna know how the OpenAI/Anthropic shell game works long-term. So both companies made equity deals with infrastructure providers; OpenAI on Azure, Anthropic on AWS, GCloud, and Colossus. They get a loan of compute credits and then…
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Re: Is AI Profitable Yet?
#209Earlier quoted context omitted.
> Let me guess: you’re doing relatively well for yourself? Let me guess, you sit down next to Kobe Bryant and start by saying you're going to tell him about winning basketball?
Are you saying that you’re right because you’re rich? The equity of the economy is not very similar at all to a game.
I know what i'm talking about, and you don't. That does not come from me being rich, it comes from me being raised as a far left-socialist, and being on the spectrum, and then studying economics and finance in graduate school and realizing what was true and what was wishing. Capitalism and free competitive markets solve exactly the problem that centrally planned economies are explicitly trying to solve but always fail to. Not only that but with predictable results. As you can now see, I not only have a heart and I have a brain, and I have education. And I have the inculcated capacity to read the socialism no matter how its hidden and between what lines.
you tried to dismiss me by saying "oh but you're doing well" as if that meant anything. You brought it up, not me, but inasmuch as it does means anything, it suggests I'm winning the race that you purport to be an expert at.
I do not come from wealth, my family is largely working class. I have grown my wealth dramatically because I understand how the market works. I didn't know a priori what would happen, I just took what they taught me in school and applied it with extreme discipline and without fear. Turns out that works.
>The equity of the economy is not very similar at all to a game
the economy is about efficiency, and supply meeting demand, and fair exchange of factors and products for pareto optimality. that is what equity should mean but it's not what you mean by it. Your equity lifts only some boats and at the cost of lowering and even sinking others. Nobody can prove except by simple observation that your equity does not in fact lift boats.
Re: Is AI Profitable Yet?
#210AMD, Alibaba should be on there too. AMD is making good money on AI, with R&D at less than half the AI revenue. Whereas Alibaba's weird financials show it's kinda-sorta-protifable? I just wanna know how the OpenAI/Anthropic shell game works long-term. So both companies made equity deals with infrastructure providers; OpenAI on Azure, Anthropic on AWS, GCloud, and Colossus. They get a loan of compute credits and then…
With this line of thinking, nobody would have ever built refineries, or fabs, or clouds. The frontier labs have fantastic margin on inference. You do not understand how fantastic. And they have license to change inputs at will based on profitability. They are not only innovating on models and tooling, they are innovating on cogs (I wrote this btw, and I’m not going to stop writing this way because Claude discovered i…
> Customers are finding value.
Where I can find confirmation of that in public sources?