Comment by nostrademons

Interesting way of viewing this!

Business also has a “blue team” (those industries that the rest of the economy is built upon - electricity, oil, telecommunications, software, banking; possibly not coincidentally, “blue chips”) and a “red team” (industries that are additive to consumer welfare, but not crucial if any one of them goes down. Restaurants, specialty retail, luxuries, tourism, etc.)

It is almost always better, economically, to be on the blue team.” That’s because the blue team needs to ensure they do everything right (low supply) but has a lot of red-team customers they support (high demand). The red team, however, is additive: each additional red team firm improves the quality of the overall ecosystem, but they aren’t strictly necessary* for the success of the ecosystem as a whole. You can kinda see this even in the examples of Tao’s post: software engineers get paid more than QA, proof-creation is widely seen as harder and more economically valuable than proof-checking, etc.

If you’re Sam Altman and have to raise capital to train these LLMs, you have to hype them as blue team, because investors won’t fund them as red team. That filters down into the whole media narrative around the technology. So even though the technology itself may be most useful on the red team, the companies building it will never push that use, because if they admit that, they’re admitting that investors will never make back their money. (Which is obvious to a lot of people without a dog in the fight, but these people stay on the sidelines and don’t make multi-billion dollar investments into AI.)

The same dynamic seems to have happened to Google Glasses, VR, and wearables. These are useful red-team technologies in niche markets, but they aren’t huge new platforms and they will never make trillions like the web or mobile dev did. As a result, they’ve been left to languish because capital owners can’t justify spending huge sums on them.