Comment by beloch

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.