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AI's $344B 'language model' bet looks fragile

bloomberg.com

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Re: AI's $344B 'language model' bet looks fragile

#31

Post by techpineapple »

brookst wrote: post #25
Mizza wrote: post #12

What's the path to recouping that money? Even if every major company in the US spends $100,000 a year on subscriptions and every household spends $20/month, it still doesn't seem like enough return on investment when you factor in inference costs and all the other overhead. New medical discoveries, maybe? I saw OpenAI's announcement about gpt-bio and iPSCs which was pretty amazing, but there's a very long gap between…

$100k/year is literally nothing. Think of it as maybe $10k/employee, figuring a conservative 10% boost in productivity against a lowball $100k/year fully burdened salary+benefits. For a company with 10,000 employees that’s $100m/year.

But we won’t get there unless the company integration failure rate falls below 95%

Re: AI's $344B 'language model' bet looks fragile

#32

Post by brookst »

jakeinspace wrote: post #5
redwood wrote: post #2

Oracle's mega moves in the market (cpl hundred $B in market cap),due to their claim that OpenAI was doing a multi-year commit to move much of their workloads to their cloud ... likely a heavy revenue play rather than profit... with an aspiration to push as much CapEx deprecation to out years as possible (btw Oracle where is all the capex?) AKA Financial aengineering... just shows how overly leveraged this bubble has…

This Oracle surge and revenue predictions really feels like jumping the shark. I mean, it's Oracle.... I've never felt confident enough to bet against a company, but a short position on Oracle may well be too tempting for me.

I lost money betting against Oracle. It taught me to never underestimate the power of a sales and marketing organization, even if the product they’re selling is technically backwards.

Re: AI's $344B 'language model' bet looks fragile

#33

Post by pixelesque »

geoduck14 wrote: post #11
redwood wrote: post #4

This technology demos incredibly well and you can just see how everyone gets giddy with excitement around using it. I watch my colleagues and executives proud to show what they could do or make endless jokes about it. It reminds me of when people first got their phones and couldn't stop showing everyone how cool they were. This leads to an over rotation in the perceived value.. the value is significant just as the mo…

>It reminds me of when people first got their phones and couldn't stop showing everyone how cool they were. Your comparison to smart phones is interesting. Smart phones are definitely transformative. There was a lot of hype, but still transformative. Do you believe that LLMs and AI is also going to be transformative?

Likewise with the dot com bubble and the web - it was a bubble and it was overhyped, but it was still transformative if you look back 20 years as to how things are different in terms of media, and commerce.

Re: AI's $344B 'language model' bet looks fragile

#34

Post by shoo »

brookst wrote: post #21
shoo wrote: post #15

How big is $344B? Apparently the total market capitalisation of the US stock market is $62.8 trillion. Shiller's CAPE ratio for the S & P index is currently about 38 -- CAPE is defined as current price / (earnings, averaged over the trailing 10 years) That suggests that over the last 10 years, the average earnings of the US stock market is about $1.7 trillion annually. So $344B of spending is about 1/5 of the average…

But the $344B figure is not annualized, it’s cumulative.

the two nested bloomberg articles say

> This year the world’s four largest tech firms will spend $344 billion on AI

> Altogether, the four companies are expected to spend more than $344 billion for the year, with much of it going to the data centers necessarily to run AI models.

so both articles frame that $344B as estimates of capex within 1 year.

Re: AI's $344B 'language model' bet looks fragile

#35

Post by redwood »

geoduck14 wrote: post #11
redwood wrote: post #4

This technology demos incredibly well and you can just see how everyone gets giddy with excitement around using it. I watch my colleagues and executives proud to show what they could do or make endless jokes about it. It reminds me of when people first got their phones and couldn't stop showing everyone how cool they were. This leads to an over rotation in the perceived value.. the value is significant just as the mo…

>It reminds me of when people first got their phones and couldn't stop showing everyone how cool they were. Your comparison to smart phones is interesting. Smart phones are definitely transformative. There was a lot of hype, but still transformative. Do you believe that LLMs and AI is also going to be transformative?

I think the transformation will primarily be in search personally. As in Google search type experiences.

What that means is the ad model of the internet will come apart.

And what that means is that the LLMs will need to charge for answer optimization to plug the ads hole.

And so where this is going is basically a whole cottage industry around that. Around controlling and shaping knowledge in other words.

Yes frightening politically more so than economically. At least from my view.

And if it dumbs us down and erodes critical thinking then maybe it will have negative effects economically and politically long term.

Re: AI's $344B 'language model' bet looks fragile

#36

Post by nwsm »

brookst wrote: post #29
frfl wrote: post #23

Earlier quoted context omitted.

Wasn't the plan AGI, not ROI on offering services based on current gen AI models. AGI was the winner takes all holy grail, so all this money was just buying lottery tickets in hopes of striking AGI first. At least that how I remember it, but AGI dreams may have been hampered by lack of exponential improvement in last year.

I’m sure somebody believed that? But I never met them.

I want to say Mark Zuckerberg but I think Meta's investment is also targeted at creating their own social media content

Re: AI's $344B 'language model' bet looks fragile

#37

Post by nancyminusone »

brookst wrote: post #17
zippyman55 wrote: post #14

Earlier quoted context omitted.

There are no error bars, no confidence intervals. Just a one trick pony that pastes tokens together to give you something that may look good to many people. Sure there are many good use cases, but there are still enough non-patchable and indeterminable in size holes in the watering pail to limit its effectiveness.

Are you saying the Internet is a fad?

Its value certainly has declined in recent years.

Re: AI's $344B 'language model' bet looks fragile

#38

Post by qsort »

redwood wrote: post #4

This technology demos incredibly well and you can just see how everyone gets giddy with excitement around using it. I watch my colleagues and executives proud to show what they could do or make endless jokes about it. It reminds me of when people first got their phones and couldn't stop showing everyone how cool they were. This leads to an over rotation in the perceived value.. the value is significant just as the mo…

> how in anonymous forums there's a lot more people pointing out that they think this is hype whereas when we wear our professional hats many of us join in

Different speeches for different audiences. On HN, for all its faults, people don't need to be told that yes, SOTA LLM can somewhat help you with code, parsing documentation, etc. A lot of people in the "real world" are still grossly underestimating this technology.

Re: AI's $344B 'language model' bet looks fragile

#40

Post by baggachipz »

redwood wrote: post #4

This technology demos incredibly well and you can just see how everyone gets giddy with excitement around using it. I watch my colleagues and executives proud to show what they could do or make endless jokes about it. It reminds me of when people first got their phones and couldn't stop showing everyone how cool they were. This leads to an over rotation in the perceived value.. the value is significant just as the mo…

> It's definitely interesting how in anonymous forums there's a lot more people pointing out that they think this is hype whereas when we wear our professional hats many of us join in. It's like we all want you to party going no we all know what's going to happen

Well, when people's financial and employment stability are dependent on placating the overlords who are entranced...

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