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How the AI Bubble Bursts

martinvol.pe

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Re: How the AI Bubble Bursts

#391

Post by hbn »

naravara wrote: post #136
pier25 wrote: post #98

Earlier quoted context omitted.

So these companies will be profitable if training stops? Is that even a real possibility?

The impetus to continue training at the pace they are is driven by the competition. So if the money starts drying up, then they’ll naturally slow down because they’ll have to figure out how to do more with less. I suspect that once the models hit a point of “good enough” for certain use cases companies will start putting R&D focus in other areas that may be less expensive. Like figuring out how to run more efficientl…

> UI/UX conventions that help users get what they’re trying to accomplish in fewer steps

If we can expect the past 15 years of software UI/UX history to continue, it's more likely they'll spend the money on making the UI/UX more confusing, removing features, and making basic tasks take more steps than they do today.

Re: How the AI Bubble Bursts

#392

Post by tartoran »

fsloth wrote: post #293
aurareturn wrote: post #230

Earlier quoted context omitted.

users are not being tricked into paying $200 a month I can't believe people actually believe that people and companies are tricked into paying for tokens. My $20 Codex subscription is so useful, I can easily see myself paying $200 for it. This belief is so common amongst AI collapse people online. I'm guessing these people have only used free ChatGPT or worse, they use Windows and get Copilot shoved down their throat…

I'm paying $20 for Codex and $90 for the Claude Max plan. They are a "pry from my cold dead fingers" product for me. IMO if someone tried this tech last time 6 months ago, or their only exposure is eg. via MS copilot, they do have a rational reason for skepticism. No technology of this complexity has improved this rapidly in my memory (well, ok, we had the CPU speed races from 90's to early 2000's).

Would you still pay if prices were to increase,say $1500-2000 monthly?

Re: How the AI Bubble Bursts

#393

Post by aurareturn »

arctic-true wrote: post #384
aurareturn wrote: post #374

Earlier quoted context omitted.

A lot of people know. A lot of insiders have been saying tokens are profitable. Is there a conspiracy theory for everyone to lie? Including OpenAI, Anthropic CEOs, employees, Cursor management, inference providers of Chinese models?

Profitable on what basis? They generate more revenue than the cost of electricity? Does that factor in the cost to service the massive, multi-layer cake of debt that was necessary to even begin to serve inference in the first place - not from a training perspective but from a hardware and facilities perspective?

Profitable as in every token they generate, they make some money.

And it's already mentioned that the path to profitability is that inference revenue eclipses training costs. It's already happening rapidly.

Re: How the AI Bubble Bursts

#394

Post by hbn »

piker wrote: post #31

> They lose a big customer for their cloud services. Even worse considering that now, using the AI they helped fund, everyone can compete with their sub-par products. GitHub is a good candidate for disruption, and that’d be just the start. Look, I'm a Microsoft hater like the rest of us, but calling Microsoft's products sub-par discredits the author a good bit. I invite anyone who thinks this to try and compete with…

If I saw a helicopter crashed into a tree, I don't have to be a helicopter pilot to know it's not an ideal state of a helicopter and something/some people failed.

When I'm using MS Word and it takes 20 seconds to cold launch on a machine that's magnitudes faster than any computers 25 years ago where it launched near instantly, I can tell something is going wrong. When all of their software is harassing me to use AI in ways I don't want to use it, I can tell something is going wrong.

Re: How the AI Bubble Bursts

#395

Post by s1artibartfast »

shimman wrote: post #265
thereitgoes456 wrote: post #70

Earlier quoted context omitted.

That is not what the article says, it says $19B ARR. I don’t necessarily see a contradiction. $19B run rate, achieved very recently, is actually consistent with $5B lifetime earnings, because their growth curve is so sharp. Zitron is not good at math.

Didn't link to Zitron site but if you can't see how dishonest it is to say you have $19b ARR when the reality is you have only a total of $5b IDK what to tell you. Says more about how you think and why you think it's okay for corporations to be misleading.

Seems natural to me too. ARR is understood as the current rate. It would be more misleading to say 5b ARR.

Its like asking how fast a car is moving.

Re: How the AI Bubble Bursts

#396

Post by hbn »

piker wrote: post #147
karolist wrote: post #105

Earlier quoted context omitted.

You can have an opinion about a tool as a user, without ever having ability to create such a tool yourself, that's literally what every tech and auto reviewer does.

Sure, and the less you understand about the tool’s fundamental capabilities, the less useful your opinion is. The best reviewers have deep knowledge.

You can use this logic to say all products are perfect and any criticisms of them by users are moot because their creator knows them best.

Re: How the AI Bubble Bursts

#397

Post by arctic-true »

aurareturn wrote: post #393
arctic-true wrote: post #384

Earlier quoted context omitted.

Profitable on what basis? They generate more revenue than the cost of electricity? Does that factor in the cost to service the massive, multi-layer cake of debt that was necessary to even begin to serve inference in the first place - not from a training perspective but from a hardware and facilities perspective?

Profitable as in every token they generate, they make some money. And it's already mentioned that the path to profitability is that inference revenue eclipses training costs. It's already happening rapidly.

I’m not talking about training costs. I’m talking about startup costs. You have to pay for GPUs (or to rent data centers). You have to pay for the electricity that runs those data centers, and in a lot of cases these frontier labs are building the data centers on credit, so you need to pay for the construction, the materials, etc. If it was as simple as “running the GPUs costs less than we charge for it,” I might be inclined to agree. But the GPUs don’t just appear by magic.

Re: How the AI Bubble Bursts

#398

Post by ethagnawl »

> If investor money dries up, they will be forced to cut their losses and pass the true costs to their users.

I do not see this talked about often enough whilst everyone is in the process of introducing hard dependencies on these services into their workflows.

Re: How the AI Bubble Bursts

#399

Post by mcv »

JCTheDenthog wrote: post #325
maeln wrote: post #323

Earlier quoted context omitted.

> > RAM prices are crashing because new models won’t need as much > Reality begs to differ [0] and following the link for that text goes to an article [1] where they talk about Google's TurboQuant which supposedly will lower the RAM requirements. Now if that means RAM prices come down (as speculated, not reported on, in the link) or the AI companies just do more things with their extra ram is yet to be determined. Th…

My favorite was when Google revealed Project Genie a month ago (which lets you generate video game worlds with AI, basically) and stocks for game companies immediately dropped. Anyone familiar with games and gaming knows that what Project Genie offers (essentially empty worlds with minimal interactivity that you can just kind of wander around in, and they struggle with simple things like object permanence if you look…

I've always seen the stock market as a mix of mass hysteria and pyramid scheme. With actual value underlying it of course, but actual stock values are frequently irrational.

Re: How the AI Bubble Bursts

#400

Post by irke »

dist-epoch wrote: post #224
Tade0 wrote: post #161

Earlier quoted context omitted.

My main worry is - once this is all over, the market consolidates and using LLMs will become a requirement in job listings, what's the highest price per million tokens companies will be able to charge us? Currently on a given day I'm chewing through approximately the equivalent of my lunch money, but where there's opportunity to extract wealth, someone will find a way to do it.

Jensen is already talking about $1000/mil tokens soon. But there is no real higher limit. Imagine a LLM which could answer the question "what does my company need to do to beat the competition?". And then realize that the competition asks their LLM the same question. So now everybody is bidding the price up or using more tokens to get a better answer

Complete nonsense.

In that world there’s no reason for a business enterprise to exist.

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