Comment by sorenjan
20 hours ago
I really hope the future is local models, because the idea that all companies will need to buy tokens from a handfull of tech companies to run their businesses or make their products is awful.
20 hours ago
I really hope the future is local models, because the idea that all companies will need to buy tokens from a handfull of tech companies to run their businesses or make their products is awful.
I find it hard to believe that at least a robust hybrid model won't be. There's just too much money to be made selling hardware at relatively high margins to customers with limited market power to keep hardware vendors out of consumer and small business markets indefinitely.
I've been ripped (on this site) for making this prediction. While the frontier (i.e. The toughest problems) will always push the limits of available computing power, what typical people do with AI won't always be on the frontier, nor will what appears on the frontier necessarily be lucrative. The frontier used to be playing Chess, Atari, and Go. These were challenging and really advanced AI, but they didn't make a lot of money. Now a phone can do these things.
You're an example of this process. You used to require a frontier model running on a data centre. Algorithms improved and, perhaps, your hardware as well, but your requirements didn't go up. Now you can do what you need to do with local hardware. You're one AI user who might not need to send money to Anthropic going forward unless you find a new frontier application that interests you.
This is why I'm a little bearish when it comes to the valuation of the AI giants. Yes, there are some extremely lucrative things on the frontier right now but, in the future, people may shift a lot of what they're doing now to local hardware while new things on the frontier may not produce the kind of profits that will pay back trillions in debt. AI companies have bet big on themselves being able to constantly and perpetually find new applications, and also that those new applications will make money.
I agree with you that if the trends of 2025-2026 continue into 2027-2028 for open weight models and local inference, 120b param open models will be more than good enough for 80% of today's use cases. If so how can you justify OpenAI and Anthropic and the AI buildout?
> but your requirements didn't go up.
I am definitely building more and more ambitious projects as models improve. Both personally and at work
I suppose I should have said they just didn't go up faster than the capabilities of local models are improving. I suspect local model/hardware capability will scale up faster than most people's needs when it comes to coding. That's likley why Sam Altman has naughty designs on your RAM.
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I think we will see good enough local models, excellent cloud models, and then simpler focused models embedded on silicon running on every small device.
Why only a handfull? There can be (maybe already are) hundreds of LLM API providers.
There’s no way to make that economic.
There are already 80 providers on Openrouter.
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> the idea that all companies will need to buy tokens from a handfull of tech companies to run their businesses or make their products
Did you somehow become incapable of doing things without models? Most of us have not.
This is exactly what I'm seeing all over the place. I'd like to say it's not true for me, but I'd probably be lying a little bit to say so. It is causing some atrophy in my skillset. One could argue that I'm gaining something different through LLM usage like "getting good at asking the model questions" or something, but it doesn't frankly feel like a skill which is all that useful on a going forward basis.
Imagine if only KB Home and D.R. Horton had access to power tools while all the other homebuilders big and small had to use hand saws and screwdrivers. Would they be incapable of building houses without power tools? No. Will they be relatively screwed as companies? Yes.
You're changing the goalposts.
The above comment said:
> need to buy tokens from a handfull of tech companies to run their businesses or make their products
That's clearly indicating necessity.
That would indeed be concerning if it was the case, but it's not.
So now the case is just "you can pay more money to do things faster".
And guess what? That's been the case for centuries if not millennia. Nothing special or concerning at all.
And so your analogy is misleading. You're trying to imply that only a tiny number (2-3?) of companies make the tools, and nobody else does. You either pay those companies, or you don't get them.
That's just false. There are hundreds of companies that will sell you tokens - just not for frontier models. The correct analogy is how Samsung, Google, and Apple make the best phones in the world, so you can buy from one of them - or you can buy a still-good but not bleeding-edge phone from another vendor. And everyone is fine with that.
> the idea that all companies will need to buy tokens from a handfull of tech companies to run their businesses or make their products is awful.
To the leadership of these tech companies that actually is the dream. Sam Altman said the quiet part aloud recently: "From a global allocation perspective, actually, it's quite terrible to have everybody have a bunch of the world's limited supply of DRAM sitting in their own computer, and being used maybe 5% of the time."
And it certainly fits into the neofeudal worldview of other relevant Big Tech leaders. Be it Peter "I no longer believe that freedom and democracy are compatible" Thiel, or unnamed bigwigs discussing if shock collars are effective to prevent their staff from revolting after a doomsday scenario [2].
We shall own nothing and rent everything, that is the mindset these people believe.
(And if you ask me: the AI IPOs are part of that strategy. Assuming OpenAI and Anthropic both IPO, they will get part of every American's and most other countries' pension funds... and when they collapse, a lot of that value will be gone. The initial investors into SpaceX, OAI and Anthropic all will have made their money and put it aside, and we will be left holding bags)
[1] https://www.ign.com/articles/openai-ceo-sam-altman-thinks-it...
[2] https://www.rte.ie/news/business/2025/0511/1512086-doomsday-...
How is that saying the quiet part out loud?
Easy: it's an open secret (the quiet part) that the rich fucks want us to rent everything and us own nothing. Real estate was the first to go unaffordable without taking up debt. Then came cars. Then phones. And now it's computers. Hell I've seen kitchen appliances for rent.
And now this mf'er (or to be more precise, alleged sf'er [1]) goes on the record to say it's bad if we the people have RAM.
Fuck him, fuck everything he stands for.
[1] https://www.theguardian.com/technology/2026/oct/20/judge-dis...
He literally said we'll own nothing and be happy
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Altman was simply making an accurate observation about DRAM, in the context of a conversation about DRAM shortages and precisely why it is difficult for DRAM manufacturers to respond to the market price incentive to increase DRAM production. Even if you think it is bad that DRAM is currently expensive, as I do, that doesn't change the underlying fact about the world that Altman's comment reflects.
Thiel's comment is also pro-individual-ownership - in context he was talking about the danger that in a mass democracy the people as a whole would vote to have the government restrict the freedom and confiscate the property of successful people (particularly prescient in light of the recent California attempt at a billionaire wealth tax). RAM being expensive is better than RAM being rationed by a democratically-elected government so no one person has too much, as judged by the voting masses.
> Altman was simply making an accurate observation about DRAM
no, he was lying by omission
"it's quite terrible" only if you ignore all the problems with plans they promote and measure it only in metrics Altman wants to measure, as they support his plans
For start, Altman would charge as much as possible to optimize profits, so very significant part of efficiency increase would become profits of "Open"AI.
As another obvious problem: handing so much power to a specific company has own costs.
There are so many problems here with this specific part - starting from their power dictating how can you use it, access to your data. And that part is getting worse for anyone not planning to obey all decisions coming from USA. We have already seen export controls being invoked.
But wider, if you think that outsourcing thinking to a specific SaaS has no costs, beyond current subscription costs, then I have several thousands of bridges for sale.
> Altman was simply making an accurate observation about DRAM
Which might be true, I'm willing to accept that, but it does not change the fact his message was incredibly tone deaf.
Cost of living in general is through the roof for years now, many people haven't had the financial ability to meaningfully upgrade their computers for just about the same timeframe - first Bitcoin drove CPU prices through the roof, then GPU prices, once that died down due to ASICs there were a few fads that "mined" RAM, HDD and SSD, and in parallel to the latter Covid hit, disrupting supply chains. After Covid was somewhat over, the Russians invaded Ukraine, then we got the various MENA conflicts after Oct 7th, and now the Iran war is wrecking everything - and ever since AI entered the picture somewhat three years ago, first GPUs and now everything else has exploded in price. Entry level smartphones have all but disappeared. And don't forget our existing computers got less and less useful because first Microsoft pushed the garbage called Windows 11 onto everyone it could and second, everyone and their dog went for Electron resource hog apps.
For Altman to now say "your unused RAM could be of much better use in our servers" is like a giant fat fucking middle finger, telling us to sacrifice even more of our needs just for the opportunity of him and his fellow rich bastard friends to make more money, all while he and his fellow rich bastard friends are executing the setup of a financial crisis that will make 2007 look fucking tame.
> Thiel's comment is also pro-individual-ownership - in context he was talking about the danger that in a mass democracy the people as a whole would vote to have the government restrict the freedom and confiscate the property of successful people (particularly prescient in light of the recent California attempt at a billionaire wealth tax).
Oh for fucks sake. Taxes aren't theft, they provide for the environment that makes these rich fucks able to earn money in the first place. Thiel is worth 38 billion dollars. Even if you'd tax the guy 50% of his wealth, he'd still have more than one single human and their descendants can ever feasibly gamble away.
> RAM being expensive is better than RAM being rationed by a democratically-elected government so no one person has too much, as judged by the voting masses.
At least in a rationed system that allocates supply fairly, ordinary people wouldn't have to run with barely working hardware because they can't afford to buy something new and modern for once as all the new stuff is hoarded by the rich like a LotR dragon hoards his gold pile.
And as evidenced by this week's elections - the people are fed up beyond belief. Either we the people get some relief, the sooner the better, or the situation may indeed devolve into open riots.
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Successful people are not successful without keeping unsuccessful people from success; inflation since Millennials were born is almost 300% and taxes have been slashed; takes 800k/yr now to have the buying power of $200k in the 1980s
Thiel has benefited from wealth being wielded by rich media owners to convince the masses decades long trends in deflation of buying power through inflation of costs are good for them
With such a system giving him a boost he was successful before Millennials and GenZ were adults or even born
Altman came along during ZIRP; being successful when the government is intentionally printing money is not really success