Comment by alvah
1 year ago
Ed occasionally makes good points, but he's very very angry at Big Tech, and his anger often gets in the way of his message. Reading his latest rant reminds me of Karl Denninger railing against Google around the time of their IPO, claiming they would never make enough money to justify an $85 share price (a $1000 investment then would be worth around $375,000 today).
I think there's the same logic flaw of looking at how things are at the start - so so - and how they may be in 20 years - Google getting an advertising cut for most of the world's commerce, AI replacing/doubling the ~100tn/yr labour market.
Fortunately his message is still big enough to get through.
Maybe OpenAI can become an advertising company?
Maybe. Did you foresee Google becoming a massively profitable advertising company with a search engine attached in 2004? I certainly didn't.
By 2004 AdWords was already like 90% of their revenue. If anything, with their cloud business they are less of an advertising company now.
Google solved a real problem. They indexed the web and made search work, and they did it very cheaply. So cheaply, in fact, that they could give their service away to users and monetize it with ads. LLMs are not like this. They're both extremely expensive to run and they don't do anything truly valuable--there's no killer app. So how exactly is OpenAI or their ilk (or for that matter the rest of us) supposed to use these things to make money?
This is the only question, and the fact it's still an open question just screams "hype bubble". My bet is this AI stuff goes the way of the NFT.
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