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How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

nytimes.com

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Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#321

Post by Marha01 »

weregiraffe wrote: post #276
Workaccount2 wrote: post #173

Earlier quoted context omitted.

The goal isn't to be the best LLM, the goal is to be the first self-improving LLM. On paper, whoever gets there first, along with the needed compute to hand over to the AI, wins the race.

Self-improving LLM is as probable as a perpetual motion machine. Practically, LLMs train on data. Any output of an LLM is a derivative of the training data and can't teach it anything new. Conceptually, if a stupid AI can build a smart AI, it would mean that the stupid AI is actually smart, otherwise it wouldn't have been able too.

Your logic might make intuitive sense, but I don't think it is as ironclad as you portray it.

The fact is, there is no law of physics that prevents the existence of a system that can decrease its internal entropy (complexity) on its own, provided you constantly supply it with energy (negative entropy). Evolutionary algorithm (or "life") is an example of such a system. It is conceivable that there is a point when a LLM is smart enough to be useful for improving its own training data, which then can be used to train a slightly smarter version, which can be used to improve the data even more etc... Every time you inference to edit the training data and train, you are supplying a large amount of energy into the system (both inferencing and training consumes a lot of energy). This is where the decrease in entropy (increase in internal model complexity and intelligence) can come from.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#322

Post by mentalgear »

brokencode wrote: post #255
Arkhaine_kupo wrote: post #61

Earlier quoted context omitted.

> they’re using their equity to buy compute that is critical to improving their core technology But we know that growth in the models is not exponential, its much closer to logarithmic. So they spend =equity to get >results. The ad spend was a merry go round, this is a flywheel where the turning grinds its gears until its a smooth burr. The math of the rising stock prices only begins to make sense if there is a possi…

Yeah, except you can keep on squeezing these lemons for a long time before they run out of juice. Even if the model training part becomes less worthwhile, you can still use the data centers for serving API calls from customers. The models are already useful for many applications, and they are being integrated into more business and consumer products every day. Adoption is what will turn the flywheel into a rocket.

Well, the thing is that that kind of hardware chips quickly decrease in value. It's not like the billions spend in past bubbles like the 2000s where internet infrastructure was build (copper, fibre) or even during 1950s where transport infrastructure (roads) were build.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#323

Post by alangibson »

vineyardmike wrote: post #307
otherjason wrote: post #162

Earlier quoted context omitted.

But, if model development stalls, and everyone else is stalled as well, then what happens to turn the current wildly-unprofitable industry into something that "it makes sense to keep spending billions" on?

Because they’re not that wildly unprofitable. Yes, obviously the companies spend a ton of money on training, but several have said that each model is independently “profitable” - the income from selling access to the model has overcome the costs of training it. It’s just that revenues haven’t overcome the cost of training the next one , which gets bigger every time.

> the income from selling access to the model has overcome the costs of training it.

Citation needed. This is completely untrue AFAIK. They've claimed that inference is profitable, but not that they are making a profit when training costs are included.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#324

Post by omnicognate »

boringg wrote: post #312
cush wrote: post #306

Earlier quoted context omitted.

It's highway robbery how cheap tokens are right now. Enjoy the free lunch while it lasts

Exactly - its like every VC company in the history of VC subsidized costs for growth. Once those tentacles have latched beware the exit costs though!

The tentacles seem a bit limp and disorientated on this one. There are lots of them but they just seem to flop wetly against the windows. I hope they're not going to start decomposing and stink the place up.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#325

Post by DenisM »

camdenreslink wrote: post #264
otherjason wrote: post #162

Earlier quoted context omitted.

But, if model development stalls, and everyone else is stalled as well, then what happens to turn the current wildly-unprofitable industry into something that "it makes sense to keep spending billions" on?

If model development stalls, then the open weight free models will eventually totally catch up. The model itself will become a complete commodity.

It very well might. The ones with most smooth integrations and applications will win.

This can go either way. For databases open source integration tools prevailed, the commercial activity left hosting those tools.

But enterprise software integration that might end up mostly proprietary.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#326

Post by moogly »

vmg12 wrote: post #37

Here is a charitable perspective on what's happening: - Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. - Nvidia instead invests in other companies that use their gpus by providing them deals that must be spent on nvidia products. - This accelerates the growth of these companies, drives further lock in to nvidia's platform, and gives nvidia an equity stake in these com…

> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally.

Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _really_ wanted to.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#327

Post by whimsicalism »

programjames wrote: post #313
whimsicalism wrote: post #228

Earlier quoted context omitted.

this is all a function of the media reporting, the change in ‘nerd culture’ has been vastly overreported. these companies are staffed by spectrum-y nerds that we are being desperately propagandized into thinking are actually frat ‘bros’.

No, they aren't. Locally, the person with the most esoteric knowledge is probably a weird nerd. It's mostly an accident that they chose to invest time in things typically associated with smarts. But globally, the best wizards got there by making it their profession. So maybe at your middling university, the people who could land a job at a frontier lab were nerdy wannabe frats, but at decent universities like MIT or…

I went to a top 5 ranked school globally (~these lists fluctuate) and have been in elite circles since then. I can promise you that even there the autistic nerd fully outcompetes the renaissaince man.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#328

Post by HDThoreaun »

moogly wrote: post #326
vmg12 wrote: post #37

Here is a charitable perspective on what's happening: - Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. - Nvidia instead invests in other companies that use their gpus by providing them deals that must be spent on nvidia products. - This accelerates the growth of these companies, drives further lock in to nvidia's platform, and gives nvidia an equity stake in these com…

> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _r…

Why would they want to do that? The only sector that matter to nvidia is datacenter, its where 90%+ of their profits are. Making their consumer sector even less profitable just seems like a waste of time

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#329

Post by Lord-Jobo »

moogly wrote: post #326
vmg12 wrote: post #37

Here is a charitable perspective on what's happening: - Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. - Nvidia instead invests in other companies that use their gpus by providing them deals that must be spent on nvidia products. - This accelerates the growth of these companies, drives further lock in to nvidia's platform, and gives nvidia an equity stake in these com…

> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _r…

I also just don’t understand, as someone with no business experience, how they aren’t just pouring all of that money into enhancing their production capacity. That’s very clearly their bottleneck here.

Yes, I’m certain they are spending an astronomical amount on that already, but why not more? Surely paying more money for construction of more facilities still nets gain even if you run into diminishing returns?

Instead they set up this whacko tax laundering scheme? Just seems like more corporate pocket filling to me, an idiot with no business knowledge.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#330

Post by DenisM »

A couple of thoughts on the big picture:

* Rise of AI is one of the biggest “transfers” of IP-generated wealth.

* It is also a dramatic increase in the “software is eating the world” trend, or at least an anticipation of such. It kinda turned from everyone dragging their feet through software andoptin over the course of 30 years into a massive stampede.

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