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How the AI Bubble Bursts

martinvol.pe

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Re: How the AI Bubble Bursts

#551

Post by fragmede »

niam wrote: post #482
fragmede wrote: post #479

Earlier quoted context omitted.

For people that use ChatGPT the same way you do, yeah it's not. For people in the throes of AI psychosis who've named their ChatGPT and have a deep relationship with it, switching to a newer model from OpenAI is an issue, nevermind switching to a different model from a different company.

I considered that but I don't see it being very impactful. It presumes a user who cares enough about "their" ChatGPT that they can't move from a particular model provider, but simultaneously does not care enough that model providers themselves have a financial motivation to shoo users onto their newer and more efficient models. The transition from GPT4 to GPT5 was not well recieved among this crowd -- nevermind that…

What you see as a sliver, I see as much more. Only OpenAI and their investors know for sure, but looking at a base human with a smartphone and ChatGPT, I think there are more in that group than you think.

Re: How the AI Bubble Bursts

#552

Post by MattRix »

dragonwriter wrote: post #476
shimman wrote: post #268

Earlier quoted context omitted.

It makes sense to be extremely misleading about actual accounting figures? In what world is it okay to say you have $19b in ARR when you have only ever generated $5b for the entire duration of your company's existence? Did Enron start a business school I'm unaware of something?

> In what world is it okay to say you have $19b in ARR when you have only ever generated $5b for the entire duration of your company's existence? In the same world that it makes sense to say that your current speed is 57mph when you've only driven 15 miles since starting the trip.

hah that’s a great way to explain it

Re: How the AI Bubble Bursts

#554

Post by pigpop »

philistine wrote: post #448
pigpop wrote: post #409

Earlier quoted context omitted.

If they've already built themselves a loyal customer base (which is usually the point of fighting a price war) and the customers are happy with the technology they have, then if funding is tight and turning a profit is more important why wouldn't they pivot to optimizing inference by stopping further training, freezing the model versions, burning the weights into silicon and building better caching strategies and imp…

Easier said than done. What you're describing can take years to implement. Can OpenAI et al. keep burning cash at the same rate for two years while they wait for the salvation of custom silicon if the investments dry up?

You mean like their deal with Broadcom to put their own custom silicon into production this year?

Re: How the AI Bubble Bursts

#555

Post by martinvol »

lnfromx wrote: post #334
martinvol wrote: post #277

Earlier quoted context omitted.

I don't think token demand will shrink because we're still just learning how to use it, demand will skyrocket. The problem is what price we'll be willing to pay for it, specially if competition keeps soaring.

But are we really still learning ? I feel like we already converge to a set of use cases. Also I am always wondering if LLMs are what they promise to be, why is it so difficult to find sources of real (measurable) value ? Wouldn't a disillusion of those overpromises trigger a reduction in demand ?

if they have the capital they can't risk but keep training, if someone comes up with a marginally better model than them then everyone will migrate and their business crashes down. Only big tech is in a position to take that risk.

Re: How the AI Bubble Bursts

#556

Post by veunes »

aurareturn wrote: post #543
veunes wrote: post #530

Earlier quoted context omitted.

OpenAI overtaking Microsoft? Seriously? Microsoft has a massively diversified business spanning from gaming and cloud infra to B2B software that the entire world runs on. OpenAI has exactly one product (matrix weights), which is getting heavily commoditized by open-source models every single day. Once a theoretical Llama 4 catches up to GPT-5, an API price war is going to completely nuke their hyper-margins

That one product can reproduce or replace nearly all of Microsoft's services. It's not OpenAI that is going to do it. It's people and other companies wielding OpenAI's model that will do it.

Your whole premise is built on the OpenAI model, but that's not a moat, it's just a temporary API endpoint. The second a theoretical Llama 5 drops that's 10% cheaper and 5% smarter, every single startup in that "ecosystem" will switch their base_url overnight to save their margins. Microsoft on the other hand, just owns Azure - they'll just add the new model as another option and continue to own the end customer. OpenAI it's just a swappable engine

Re: How the AI Bubble Bursts

#557

Post by T-A »

ajross wrote: post #548
T-A wrote: post #547

Earlier quoted context omitted.

> FWIW, you're misreading that chart. It shows a wild increase in memory prices When I say it's flat, I obviously mean the last couple of months. You'd have to be blind not to see last year's runup. You'd also have to be blind not to see that the charts contradict your claim that "they're going down".

No one claimed that, though. I was responding to a hypothetical. You're nitpicking, basically. Stop it.

I'm sure anyone who happens to read this will have no problem seeing who was doing what.
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