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The beginning of scarcity in AI

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Re: The beginning of scarcity in AI

#91

Post by random_human_ »

rstuart4133 wrote: post #86
random_human_ wrote: post #81

Earlier quoted context omitted.

Is foo a pointer in your example? Is free(NULL) not a valid operation?

Yes `foo` is a pointer. `free(NULL)` is harmless in C89 onwards. As I said, programmers freeing NULL caused so many issues they changed the API. It doesn't help that `malloc(0)` returns NULL on some platforms. If you are writing code for an embedded platform with some random C compiler, all bets on what `free(NULL)` does are off. That means a cautious C programmer who doesn't know who will be using their code never a…

So what would be the best practice in a situation like that? I would (naively?) imagine that a null pointer would mostly result from a malloc() or some other parts of the program failing, in which case would you not expect to see errors elsewhere?

Re: The beginning of scarcity in AI

#92

Post by wg0 »

drra wrote: post #83
solenoid0937 wrote: post #73

Earlier quoted context omitted.

Pro and Max plans are probably a drop in the bucket for them.

Seems like everybody an their mothers are using max plans these days. I wouldn't be surprised if LTV of each customer was big enough to justify spending.

Assuming there are 10 million developers and everyone is at $200 max plan, that would be $2 billion/month or $24 billion/year maximum.

Note - this is just the revenue not the profit. No salaries, no compute paid for. Just plain revenue. Profit would be way less.

But even that - if we take it to $24 billion/year and we take a 10x multiple, the company is barely valued at $240 billon dollar, lets be generous and make it double at $480 billion and then round it up to $500 billion for a nice round number.

Far far from the $800 billion valuation Anthropic is looking at.

Only a matter of time.

EDIT: Fixed math

Re: The beginning of scarcity in AI

#93

Post by thelastgallon »

hvb2 wrote: post #78
thelastgallon wrote: post #65

Earlier quoted context omitted.

US energy is constrained by the utility monopolies/oligopolies which have to extract more rents, specifically by increasing costs. Their profit is a percentage of cost, these perverse incentives + oligopolies will make it increasingly expensive to make anything (including AI) in US.

Or simply by the fact that increasing production takes time? Any power plant takes years to build? Years, is like a lifetime for AI at this point...

> increasing production takes time?

This is true of nearly everything (except money). I'm not sure of the point you are trying to make.

Re: The beginning of scarcity in AI

#95

Post by andersmurphy »

keiferski wrote: post #89

We just had a realization during a demo call the other day: The companies that are entirely AI-dependent may need to raise prices dramatically as AI prices go up. Not being dependent on LLMs for your fundamental product’s value will be a major advantage, at least in pricing.

Yup. Also regardless of price they need to spend more and more as the project collapses under the inevitable incidental complexity of 30k lines of code a day.

It's similar to how if you know what you're doing you can manage a simple VPS and scale a lot more cost effectively than something like vercel.

In a saturated market margins are everything. You can't necessarily afford to be giving all your margins to anthropic and vercel.

Re: The beginning of scarcity in AI

#96

Post by tim333 »

>For the first time since the 2000s, technology companies are confronting the limits of their supply chain.

I thought there'd been a shortage of cheap GPUs since ChatGPT took off and also before that in various crypto booms. I'm not sure it's a new thing.

Re: The beginning of scarcity in AI

#97

Post by ElFitz »

dataviz1000 wrote: post #37
dmazin wrote: post #14

Constraints can lead to innovation. Just two things that I think will get dramatically better now that companies have incentive to focus on them: * harness design * small models (both local and not) I think there is tremendous low hanging fruit in both areas still.

What do you mean by harness here?

It’s the tool that calls the model, give it access to the local file system, calls the actual tools and commands for the model, etc, and provide the initial system prompt.

Basically a clever wrapper around the Anthropic / OpenAI / whatever provider api or local inference calls.

Re: The beginning of scarcity in AI

#98

Post by ElFitz »

wg0 wrote: post #70
solenoid0937 wrote: post #68

Earlier quoted context omitted.

OpenAI has an absurdly high valuation given their cash burn vs RRR. Anthropic's is far more reasonable. It makes no sense to lump these two companies together when talking about valuation. They have completely different financial dynamics

No matter how low and reasonably Anthropic is valued, don't think $200 Max plans are going to recoup the investment + some return on top because size of the software industry is not that huge and profit margins for AI inference aren't very high either.

> because size of the software industry is not that huge

I onboarded marketing on a premium team Claude seat yesterday. And one of our sales vibecoded an internal tool in the last three weeks using Claude Code that they now use every day. I wouldn’t have imagined it a month ago. We still had to take care of deployment for him, but things are moving fast.

Re: The beginning of scarcity in AI

#99

Post by ElFitz »

thelastgallon wrote: post #67
odo1242 wrote: post #48

Earlier quoted context omitted.

Performance per dollar may be more important than performance per watt here, though

A dollar is an entirely fictional unit and trillions of it can be manufactured at no cost, while watts are constrained by the laws of physics, photons/electrons, supply chain of electricity and all that fun stuff in the real world.

> A dollar is an entirely fictional unit and trillions of it can be manufactured at no cost

It’s still a useful proxy for resources allocation and viability.

Re: The beginning of scarcity in AI

#100

Post by billziss »

wg0 wrote: post #92
drra wrote: post #83

Earlier quoted context omitted.

Seems like everybody an their mothers are using max plans these days. I wouldn't be surprised if LTV of each customer was big enough to justify spending.

Assuming there are 10 million developers and everyone is at $200 max plan, that would be $2 billion/month or $24 billion/year maximum. Note - this is just the revenue not the profit. No salaries, no compute paid for. Just plain revenue. Profit would be way less. But even that - if we take it to $24 billion/year and we take a 10x multiple, the company is barely valued at $240 billon dollar, lets be generous and make i…

While I agree with you that AI companies are overvalued, I think 10 million developers at $200 per month makes 2 billion.

    >>> f"{10_000_000 * 200:_}"
    '2_000_000_000'
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