Comment by CoolestBeans
12 hours ago
1. They are starting to do it. Take a look at OpenAI's product portfolio, there's a galaxy of attempts at application.
2. Selling tokens via long running agents is the only thing that's provably working with respect to revenue growth.
3. They need revenue yesterday. Increases in borrowing rates means access to capital isn't what it was in the 10s. Their runway is much shorter than you would imagine.
4. Some of the decision makers at these companies believe AI will exhibit Jevons Paradox and that any decrease in price will result in induced demand.
5. The frontier models are still subject to the limitations of AI. They're not good at everything. Better to have someone else learn that on their dime rather than yours.
3 is biggest point imo.
Openai haven't yet amortised their current investments into the space and nor have they stopped making new ones.
I'm sure they'd be totally capable of bringing 1k new biz online but that's even more debt, and even more uncertainty.
Some variation(s) of 5 is carrying a lot of weight. Need a person with an Idea. Need someone to refine their idea. Need someone to spend the time filtering through the slop to find the good bits. Much better to sell people on the idea of their dream being created while you sell them tokens to do that.
That all said, A person trusting the big AI companies with their golden goose idea seed leaves a lot of concerning openings down the road if that idea gets "leaked" out to others. Similar concern of mine with if the LLM outputs that made your idea happen to be reused by the big company if someone else asks similar enough questions or otherwise coaxes the AI to reveal what it did for you.
All this AI generation is gonna be a lead to a wild time for IP law.
>3. They need revenue yesterday. Increases in borrowing rates means access to capital isn't what it was in the 10s
This is a huge problem, why is it like this
they've borrowed so much they're directly competing with national governments in capital markets.
OpenAI has hardly borrowed anything. They have a $4B revolving credit line but have hardly touched it. They haven't issued any bonds.
Investment isn't debt.
4 replies →
The 10s were totally fake due to ZIRP.
> why is it like this
In part it is like this because they've already borrowed so much.
They have borrowed almost nothing.
Investment isn't debt.
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Is 4 correct or incorrect? What data do we have so far in this regard?