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AI is slowing down

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Re: AI is slowing down

#751

Post by mike_hearn »

dofm wrote: post #721
mike_hearn wrote: post #705

Earlier quoted context omitted.

Future demand is unknowable. He might be directionally correct but wrong in magnitude, or right about everything, or wrong about everything. Unfortunately people who call bubbles never make their claims falsifiable or do anything else to build confidence, like take short positions. Zitron attacks the very notion that he might put skin in the game like that as obviously crazy. I don't know to what extent we can say th…

All of this is fair, but it's also important to weigh your criticisms of Zitron's claims against the absolutely unsupported claims being made by Altman on a regular basis. They never show their working in even the way he does. FWIW on capacity constraints, my gut instinct is that like every other startup these AI companies are are really only now beginning to do the serious efficiency work, because they had money and…

Sure, I'm not claiming that anyone who isn't Zitron must therefore be completely reliable.

I think all the labs have done a lot of efficiency work for a long time, tbh. You can see the evidence in their papers, open source releases and product design choices like model routers. They know they need to reduce their cost base a lot to become profitable.

Re: AI is slowing down

#752

Post by CuriouslyC »

GolfPopper wrote: post #689
CuriouslyC wrote: post #516

Earlier quoted context omitted.

Inference has been going down in price on a cost/intelligence basis. If you don't need the smartest model, there are plenty of good Chinese models that are dirt cheap.

Doesn't that sort-of make one of Zitron's core points? "Chinese models are dirt cheap" isn't going to do anything good for the return the investments in OpenAI and Anthropic demand.

It supports his point that they're planning to massively overbuild compute, which was already well supported by the financials. A lot of that planned compute buildout can be walked back though, and the technology is unquestionably useful in moderation, so it's not the catastrophe he suggests, and his hyperbole is part of what makes me dislike him even if there are elements of his foundational argument I agree with.

Re: AI is slowing down

#753

Post by CuriouslyC »

CraigRood wrote: post #729
CuriouslyC wrote: post #521

Earlier quoted context omitted.

This doesn't match my experience, in academia I saw ~40-45% utilization NVIDIA GPU clusters that went 6 years with <20% failure rate. Might be a TPU thing?

I'm FAR form an expert on this, but I believe that the operating costs such as power + cooling form a big part of the lifecycle. I have no doubt that at some point within the 6 years that are being booked, that replacing entire working racks won't be more cost efficient.

That is current practice, yes. The economics of replacing racks then selling the old ones to people who will salvage and resell working components works out better than trying to repair/retrofit in place.

Re: AI is slowing down

#754

Post by efficax »

zkmon wrote: post #557

Ed's posts always sing the same tune - AI spend is unsustainable. But why are the investors pouring into these megacorps allowing them to burn cash? What calculations are the investors making? I would like to see those projections, assumptions and backout plans.

investors are driven by herding behavior. for people with enormous amounts of capital to invest, the worst thing would be for them to miss out on the next big thing. If that means losing on a bunch of bets that did not turn out to be the next big thing, that's fine, so long as you don't miss out on whatever that next big thing is. We're promised AI is the next big thing, and everyone else is throwing money at it. So that means I have to throw money at it, because otherwise I would miss out.

Re: AI is slowing down

#755

Post by evil-olive »

svantana wrote: post #680
tipiirai wrote: post #604

Earlier quoted context omitted.

Where is the source for that "makes seven million dollars a year" claim?

Probably this: [1] 80k * $7/month * 12 months/year = $6.7M/year [1] https://www.theguardian.com/technology/2026/jan/19/ed-zitron...

that's confusing "subscribers" and "paid subscribers".

from Zitron's own website [0]:

> I have 84,000 subscribers and a 55-60% open rate, as well as an 8-11% clickthrough rate.

if the 84k number was all paid subscribers, then the "55-60% open rate" would mean that ~40% of his paying audience doesn't bother to read the thing they're paying for, which does not add up.

also, that's in the "Can I Advertise On Your Newsletter?" section. if there were an even higher number of non-paying subscribers, he'd have an obvious incentive to mention that, because the total number of eyeballs is what a potential advertiser cares about.

0: https://www.wheresyoured.at/about/

Re: AI is slowing down

#757

Post by tcp_handshaker »

avarun wrote: post #578
jollyllama wrote: post #220

Lots of dismissive comments ITT, very few tackling the substance of the article. > AI Cannot Afford To Slow Down — It Needs $3 Trillion Or More In Revenue By End Of 2030 To Sustain Its Existence Is this true? With the total 2024 wages being 11.7 trillion USD [0], and nonfarm payrolls totaling 158,000 in the same year [1], it's an order of magnitude higher than my back of the napkin guesses I've made that AI needs to…

There is no substance to the article to tackle. Ed Zitron is a clown that makes seven million dollars a year writing unsubstantiated bullshit on the internet. He has been consistently wrong in every single one of his predictions and will continue predicting the sky is falling, because his content has zero educational value. It is purely a confirmation-bias inducing dopamine hit for the perpetually aggrieved.

Go ahead. Spend all your money on the SpaceX IPO. I always love to see newcomers in Financial Darwin Awards Prize.

Re: AI is slowing down

#758

Post by anthonypasq »

hungryhobbit wrote: post #39
adamtaylor_13 wrote: post #35

Ed is an interesting character. His financial analysis of the AI industry makes logical sense to me (though I am not knowledgeable enough to actually know if it is correct .) However, he seems to be so angry at AI in general, that he misses the obvious areas where LLMs are actually changing the State of the Art. Coding seems to be one of the core use-cases for LLMs (as Simon Willison pointed out recently) and even if…

I don't think whether "LLMs are actually changing the State of the Art" or not matters for anything he wrote. If the AI companies need $X billion in revenue to stay afloat, it doesn't matter if 0.5% or 5% or 50% of that revenue is from transforming the State of the Art. It's 100% irrelevant: what matters is that, transformation or no, these companies won't have the income to pay their bills. And if they can't pay the…

maybe its insane to think this, but if all AI providers turned off free plans tomorrow i think they would easily have enough people willing to pay $20 a month for it to sustain all their spending.

everyone is still fighting for market share so they are giving stuff away, but that doesnt mean people wouldnt be willing to pay for it if it wasnt free.

Re: AI is slowing down

#759

Post by anthonypasq »

overgard wrote: post #509
DonsDiscountGas wrote: post #125

Earlier quoted context omitted.

It's pretty likely that inference will get substantially cheaper. His argument is that for these companies to be profitable some very major and (pre 2022) unprecedented things have to happen. Which I tend to agree with, except I think they will happen, seeing as how they've been happening for a few years.

Except inference has been getting more expensive, not less

American AI companies are charging more, that doesnt mean inference isnt getting cheaper. idk why this is so hard for people to understand.

Re: AI is slowing down

#760

Post by anthonypasq »

sownkun wrote: post #693
sunkeeh wrote: post #687

Ed Zitron with his subpar takes again. You could kill all the major AI labs today, and even just today's open-weight models are enough to absolutely transform society, with video-game GPU stuck together at homes.

How would they transform society and why haven't they yet?

because theyve been out for 6 months? i mean what the hell are you people expecting?
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