Comment by mattmaroon
6 hours ago
It makes sense, it’s a simple expected value calculation.
There are trillions of labor dollars that can be replaced by software. The US alone has almost $12 trillion of labor annually.
If an AI company has a 10% shot of developing a product that can replace 10% of it, they are worth $120 billion in expected value. (These numbers are obviously just for illustration).
The unprecedented numbers are a simple function of the unprecedented market size. Nobody has ever had a chance of creating trillions of dollars of economic value in a handful of years before.
>If an AI company has a 10% shot of developing a product that can replace 10% of it, they are worth $120 billion in expected value.
that's not how profits work. Companies don't get paid for the value they create but for the value they can capture, otherwise the ffmpeg people would already be trillionaires.
If you have a dozen companies making the same general purpose technology, not product, your only hope is being able to slap ads on top of it, which is why they're so keen on targeting consumers rather than trying to automate jobs.
Yeah, it was intentionally oversimplified to illustrate a point. Not everybody knows what the phrase expected value means or realizes the size of the market that is being addressed here.
This is the same game of poker investors have been playing forever, there just are a few more zeros on the chips.