Comment by czhu12
5 hours ago
I don’t necessarily disagree but to provide some counter points:
1. Model providers are currently profitable when just counting the cost to serve tokens for inference[1]. They lose money training the next generation of models.
2. Open models don’t work nearly as well. Given that tokens are still relatively cheap, and hallucinations are expensive, I’ve not seen a huge up tick in open model usage for coding agents yet.
3. On the AI economy front, I really have no idea, but AI companies (meta, msft) have already come down in value. It seems investors are at least a little wary of AI over valuation. Of course, the stock market is not the economy, but it’s not clear where warning signs would be. Earnings are healthy.
1: https://martinalderson.com/posts/no-it-doesnt-cost-anthropic...
2: https://www.economist.com/finance-and-economics/2026/04/20/a...
Your point 1 and point 2 live in direct tension. The reason the closed models are better is very likely that they are paying so much to train them.
If I start a business making a really special beef sandwich where I have to buy a farm every year for $1mil dollars, and then sell the sandwiches for $5, I can't get away with saying that my sandwiches turn a profit if the raw margin on the bread, the lettuce and the technical value of the weight of the beef is $3.
Sure my gross margin might be $2 on each sammie sold but I need to sell 500,000 sandwiches just to break even to be a viable business. The fact is these AI companies are playing the game where they talk about revenue and gross profit per token and just try to wave their hands in the face of anyone looking behind them at the crater they're throwing investor money into.
It's nothing but a gamble for AGI but the grand irony is that if that genie escapes out of the bottle the whole world economy is toast and money becomes meaningless anyway. I just can't comprehend the logic of why anyone is investing in this apart from short term gains.
They're literally hoping to make it up on volume. The AGI thing is a boondoggle that I doubt any serious person actually believes or takes seriously. But let's say for the sake of the hypothetical that tomorrow Microsoft Tay or whatever they call it now wakes up and becomes superintelligent? So what? Would everyone's head simultaneously explode like the aliens in Mars Attacks? No. It wouldn't collapse the global economy, people still need to eat and work--a really smart silicon brain in a box can't raise livestock or pick lettuce. It's not even clear whether the superintelligent Tay would have any economic utility at all? The whole "AGI changes everything" narrative seems like total bullshit. It might be scientifically or philosophically interesting, maybe.. But I share your wonderment at why anyone would invest in this space, it's perplexing af.
EDIT: I spent most of the day today pulling an 8/3 cable through conduit and routing it through a crawlspace to run 240V service to my barn for a workshop. If Tay wakes up tomorrow and becomes AGI, how will that help me finish the wiring job? Now extrapolate to almost every single other thing humans do. Even if Tay can write all the world's computer programs forever, it barely means anything for the vast majority of people, and therefore the global economy.