Comment by noosphr

I don't want to spoil it for you, but ...

But cyberpunk is the best kind of dystopia!

Manufactured Scarcity is the new post-scarcity

What? In what way does companies becoming dependent on AI chatbots will solve the world-spanning problem of resource scarcity?

The hell?

Just a year ago, Elon Musk was gleefully destroying the US government agency that provides food and medicine for many of the poorest, most desperate people on earth. He was literally tweeting about missing out on great parties to put USAID into the "wood chipper".

The tech overlords don't even want to spend a minuscule percentage of the federal budget helping starving people, even when it benefits the US. They are not going to give us a post-scarcity society.

Weird predicament you've set for yourself there.

Good luck with whatever you got going on.

IMHO this is only temporary, china buying themselves some time and want to make sure none of US models get entrenched in their position in the next few years (also putting pressure on US AI companies bleeding them)

The same way like Windows got entrenched everywhere even though linux desktop is pretty good even for non-tech savvy people and free.

Downward pressure on proprietary model pricing until a lab can catch up. Also good for hiring talent (who love OSS).

Cultural influence is another benefit. China is securing its sphere of influence as well as keeping us ai in check.

It's analogous to open-source software, which never had an obvious economic incentive either, although training an LLM necessary costs money whereas developing an OSS project might only cost time, which people are probably more likely to give up.

https://try.works/why-chinese-ai-labs-went-open-and-will-rem...

Big AI labs are losing money. Open Models is making the pricing equation a lot trickier for them.

They are making the hardware and commoditizing the complement.

Balaji's "AI OVERPRODUCTION" post is the most compelling thesis that I've come across

Right now it’s so the Chinese can undermine the frontier models in the US. In areas they’re doing well like video generation (ie seedance) they won’t open source anything.

There are some short term ones but I doubt this will continue, especially for the more powerful models.

I mean, this is straight out of chinas playbook, it should not be surprising that China is making an inferior derivative product at an artificially lower price point: state subsidies to massively drive up internal scale and supply chains leading to artificially lower priced goods which then suffocate the competition has lead to *gestures vaguely at everything* being made in china.

People use their model otherwise they would not.

> What is the advantage to their companies to release them?

It's a distribution strategy. It costs something to serve the models - let's say $5/1M tokens.

If Qwen required $5 from anyone who was curious so you could even begin to test it out, a lot of people just wouldn't.

Now Qwen could offer a "free" tier, but it's infinitely cheaper to provide the weights and let people run it themselves including opening up the ability for anyone else on the planet to test it against other (open weight) models.

The costs to build the open weight models are sunk, but the costs to serve them, get them tested are not.

It's also precisely why the .NET SDK is free or the ESP32 SDK is free - they sell more Microsoft or ESP32 products.

The majority are released by socialists, and by socialist I mean the People's Republic of China. Which everyone seems to forget is a socialist country working towards world communism.

They are a prestige propaganda tool on par with the space race. On top of that they insert a subtle pro-socialist bias in everything they touch.

Ask deepseek about the US economic system for a blatant example.

Now think what something as innocent seeming as the qwen retrieval models are doing in the background of every request.

Unlike Jevons, [Carl] Menger [(1840–1921)] did not believe that goods provide “utils,” or units of utility. Rather, he wrote, goods are valuable because they serve various uses whose importance differs. For example, the first pails of water are used to satisfy the most important uses, and successive pails are used for less and less important purposes.

Menger used this insight to resolve the diamond-water paradox that had baffled Adam Smith (see marginalism). He also used it to refute the labor theory of value. Goods acquire their value, he showed, not because of the amount of labor used in producing them, but because of their ability to satisfy people’s wants. Indeed, Menger turned the labor theory of value on its head. If the value of goods is determined by the importance of the wants they satisfy, then the value of labor and other inputs of production (he called them “goods of a higher order”) derive from their ability to produce these goods. Mainstream economists still accept this theory, which they call the theory of “derived demand.”

Menger used his “subjective theory of value” to arrive at one of the most powerful insights in economics: both sides gain from exchange. People will exchange something they value less for something they value more. Because both trading partners do this, both gain. This insight led him to see that middlemen are highly productive: they facilitate transactions that benefit those they buy from and those they sell to. Without the middlemen, these transactions either would not have taken place or would have been more costly.

https://www.econlib.org/library/Enc/bios/Menger.html

If you want the neoclassical version:

What happens when there is an oligopoly in the supply of labor?

Same answer. Nothing good for the consumers of labor.

"Observation of how economies actually work has upended 150 year of economics."

True for both Marxist and neoclassical economics.

By who? The capitalist economists that presided over the 2008 financial crisis and its response? And the response to COVID that has seen inequality rocket?

The reason why labor is weak relative to capital is that there is a huge number of somewhat fungible suppliers, viz. humans, and that they all need to work constantly to keep themselves alive.

If we assume that ai makes humans obsolete then you end up in a situation where your workforce is effectively perfectly unionised against you and the only thing you can do is choose which union you hire.

If you think you can bring them to the negotiation table by starving them all the providers are dozens to thousands of times bigger than you are.

This is a completely new dynamic that none of the business signing up for ai have ever seen before.

The human labor just said:

"Losing access to GPT‑5.5 feels like I've had a limb amputated.”

How well would an assembly line of quadriplegics work?

Also this isn't a Marxist analysis. Underneath all the formulas neo-classical economics makes the same assumptions about labor.

Nobody is a Marxian economics expert if it helps

Labor replacing devices means nobody works in those fields anymore. If AI can do this for every field, nearly no one will need to work in any field. We'll have a giant fully automated resource-extraction machine.

Hopefully 1.

I can't imagine the bots could ever cost McDonald's less than people cost.

15 years ago I worked at McDonald's for a few months after graduating into the Great recession. I worked from 5am to 1pm-ish 5 days a week. They paid workers weekly and I remember getting those checks for ~$235 each week (for 38 to 39.5 hours a week; they were vigilant about never letting anyone get overtime). About $47 per day.

The federal minimum wage has not risen since then, remaining at $7.25/hr. Inflation adjusted, $7.25 today would have been just under $5 then, so I guess I had it good.

Anyway, I would be shocked if bots could cost less than labor in min wage jobs.

A lot of people already did. All their children and descendants now are staunch capitalists because they saw first hand the horrors of communism.

I am from India and have friends who are immigrants from Russia, China and Cuba. We don't take lightly to being lectured about communism. We didn't move to the U.S., the bastion of capitalism, because communism had worked well for our grandfathers and parents and continues to do wonders for its society.