Comment by als0
5 hours ago
Why? Do you think frontier AI will never generate enough profit to justify its costs? The market seems to move on vibes rather than logic. I can imagine one of those company failing and the other seizing the market.
5 hours ago
Why? Do you think frontier AI will never generate enough profit to justify its costs? The market seems to move on vibes rather than logic. I can imagine one of those company failing and the other seizing the market.
while what you say is true, trillions of dollars and thousands of people invested in something that ultimately leads to a few companies from china doing the same 10x cheaper is a vibe that can go so far
I know that there are a few regulated industries that will go out of their way to not have any prod data ever exposed outside of the United States.
"China can do it cheaper" applies well to your personal projects. It doesn't apply well when you handle things like trade secrets, healthcare, or financial data.
> It doesn't apply well when you handle things like trade secrets, healthcare, or financial data.
OpneAI stole valuable secrets from their customers Buckmaster and Alpöge, why should a company expect them not to do the same with their trade secrets?
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I promise you China can do it cheaper is good enough for many corporates that have neutral views at best on the labs
These are open models, go speak to corporates see what they’re up to
Also the healthcare bit is funny. Go ask the healthcare bigs and their intermediates what they’re doing today, hint it’s India
American corporates have zero loyalty to America or Americans, and they love bypassing laws, attempting regulatory capture on American corps is braindead and shows a weak hand, as they speak all this bluster about 2-3T valuations for an easily reproducible technology
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huh? assuming you're in america right now, the device you're using to publish that comment has been built in china or had most of it's components anyways, which are from some very trade secret-sensitive companies
Tangentially: The costs could be justified even if it doesn't turn into profit, no? Because if the price of good, robust software plummets, then that itself would be a a solid return on investment for the world.
> Do you think frontier AI will never generate enough profit to justify its costs?
I don't know, but I'm not sure it matters. Anthropic and OpenAI still have such large market shares only because their services are heavily subsidized. This can't go on forever.
At some point, they will have to stop burning investor money and start hiking prices. At that point, all of their competitors will look even better than they do now. So I don't see how these two companies in particular can generate enough profit to justify their costs.
Correct and before some idiot comes in and says ‘high gross profit margin’
Yeah shut up idiot - they need to raise prices to cover operating expenditures and reinvestment that stays inline with the valuation. If it implodes they’ll have trouble raising money later and they’ll need to lay off people - aka on bad terms.
They and their partners can’t pay off the debt to buy top-of-the-line inference hardware before it becomes obsolete and requires more debt to buy the next generation of top-of-the-line inference hardware.
This cycle will continue every 3-5 years. Given the supply for this hardware can’t keep up with the demand, they’ll be expected to pay more with each cycle.