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This blog is too expensive too.
AI is too expensive
61–70 of 165 posts
Re: AI is too expensive
#62The rug pull on users is bound to happen and it will involve advertising.
Algorithmically and seamlessly weaving undisclosed advertising (or other editorial content) into conversational output is their holy grail. It's the endgame. There's a reason they're pushing so hard.
Probably endgame plus getting "too big to fail" and getting gov't bailouts if things don't work out. It's part of the lobbying theme that LLMs are the next great power struggle.
Re: AI is too expensive
#63Re: AI is too expensive
#64Imagine you were looking at Google, a sustainable and profitable business, and you thought you saw a once in a lifetime opportunity to compete with them and take their position as a leading tech company. How much money would you need to spend to make a credible attempt? Google has had decades to accumulate intellectual and physical capital. Catching up quickly means spending >500 billion. If you can actually dethrone…
Most disruptive start-ups don't come from a giant pile of cash, but from new ideas that the old players can't or won't adopt. It did not take $500B to build a digital camera.
No but the first one was the result of Sasson’s R&D while at Eastman-Kodak, a massive company that failed to capitalize on it years before anyone else was near it. They easily could’ve been the big player if they didn’t fear the impact on film sales. They had a solid decade head start and blew it.
The way digital cameras developed (hyuk hyuk) is arguably exceptional, definitely not a clean example.
Re: AI is too expensive
#65They are betting on AGI, in other words, Bullshit.
Re: AI is too expensive
#66Earlier quoted context omitted.
I would love to see the data to support the idea that Uber had solid unit economics during their expansion.
State your priors so I can determine whether you are qualified to have this discussion.
haha what
My "priors" are that I raised a search fund and analyze companies every day.
Re: AI is too expensive
#67More people need to read Ed, especially tech journalists. I feel like he's one of the rare few people that are actually speaking about the industry honestly.
I've been subscribed to ed for a long time. I commend his foundational ideas like what he laid out in "The Era of the Business Idiot" or "The Rot Economy". My recommendation line for him to anyone else is "if nothing else, he'll leave you with something to chew on for a while to come".
My issue with Ed is that he doesn't have the ability to draw the line. In the pursuit of making a point he goes so dogmatic that he is willing to make harsh statements that go beyond number backed predictions. Like in his piece "AI is really weird" he states about agents, "Probably the weirdest thing about this entire era is how nobody wants to talk about the fact that AI isn’t actually doing very much, and that AI agents are just chatbots plugged into an API.". That's a massive stretch to make. Just because he has a claim that the business doesn't make sense, he doesn't get to claim that agents are not capable of doing very real work. His assessment of cowork was "a chatbot that deleted every single one of a guy’s photos when he asked it to organize his wife’s desktop.". These statements damage his credibility and make it too easy to dismiss his writing as a rant of an angry man.
Re: AI is too expensive
#68If you're older than 30, you've seen this play out before… This is just how the VC game works. Cross-town Uber rides don't stay $5 forever. The bright side is: this is a golden era of subsidized tokens. It will not always be like this, so now is the time to churn out your passion projects.
I like writing my passion projects without AI. Is this so strange? Using AI to write my software just takes all the fun out of it for me. It feels like just reading a summary or recap instead of reading the actual full novel myself. Like it defeats the whole purpose of it. I write software because it's fun and it stimulates my mind and teaches me things and improves my skills.
Not strange at all! I think there will always be people writing code by hand. I take photos with a 100 year old camera because it's fun.
Re: AI is too expensive
#69The thing that everyone seems to be missing is that the US AI companies are focused on the frontier models, that are very expensive for diminishing returns. If suddenly the money craze stops, meaning (1) AI companies investors want them to become profitable and (2) clients start being cost-sensitive to AI bills (which they are absolutely not currently), then everyone will switch to smaller, cheaper models that are en…
I work in design services and see clients already being cost sensitive to AI bills. They have wait lists, rationing, push to lower tier / cheaper models. This is all with subsidized pricing.
People are going to decide its too expensive for everyone to use AI agents and un-subsidized pricing.
Re: AI is too expensive
#70The counter argument (not mine): Software Engineers are willing to spend their own money on AI. The same people that wouldn't pay 10 dollars for code if there was a workaround that took hours.
The same people that laugh at you when you mention paying for Kagi or alternative to an advertising supported web.