Comment by maltalex
2 hours ago
These companies have a coordination problem.
They're all burning billions to incrementally one-up each other with no hope of these investments ever paying off since models are interchangeable and have no moat. They're trying to get regulators to step in and force a pause.
The investments don't pay off if they don't have (enough) revenue, but have you seen any indication either lab is not growing revenue fast enough?
It's hard to say anything about the actual financials with the main players being private companies.
However, we know that users frequently switch models/providers, and that models stay relevant for (increasingly) short periods release. I don't know what the training costs are, but I bet they're very substantial.
They would recover the training cost eventually if they stop training, but they have all that CapEx that they can't flood the market with without another high volume buyer. Look for a huge push for another use-case of high end compute that coincides with a pause on frontier models.
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