Comment by Silhouette
5 hours ago
Surely the thing the AI giants fear the most in this respect must be the possibility that competitive open models and locally available hardware reach the point of viability for most people. If that happens then where is the moat for the giants?
If progress with frontier models doesn't continue at the same pace then the investments and funny money deals might start to look very fragile.
If progress does continue then that progress might be towards smaller models more than quantum steps up in quality or capability that would increase the risk of the scenario above.
All of this is set against a backdrop of public hostility and political problems that I can only imagine increasing in the near term as well.
This feels like an unusually high stakes game of poker. I don't think I'd want to bet on Big AI right now if I had a few billion lying around. Then again - maybe that's why I don't have a few billion lying around!
Well, they are ensuring that hardware prices stay extremely high by buying all the flash memory at a premium, so at least they've got that aspect kinda under control?
I've made that same point myself in the past. It's more of an accidental moat though - and not one they can defend for very long if they're no longer getting value out of those components themselves.
I saw an interesting observation the other day that Jensen Huang has played this game the best because his company is the one actually selling real products and making real money in return. If all the AI giants are buying up huge amounts of hardware speculatively because they assume they will need those data centres in the future and then the bottom falls out of the market then it's the AI companies left holding the baby. And if we do get to a point where local models are competitive then the OpenAIs and Anthropics of the industry might face real difficulties but it would just be a different market for Nvidia to also be selling real hardware and still in exchange for real money.