[HN Gopher] OpenAI's cash burn will be one of the big bubble que...
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OpenAI's cash burn will be one of the big bubble questions of 2026
Author : 1vuio0pswjnm7
Score : 478 points
Date : 2025-12-30 21:44 UTC (1 days ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| dredmorbius wrote:
| Archive/Paywall: <https://archive.is/rHPk3>
| bariswheel wrote:
| thank you!
| laweijfmvo wrote:
| why does the article used words like burn and incinerate,
| implying that OpenAI is somehow making money disappear or
| something? They're spending it; someone is profiting here, even
| if it's not OpenAI. Is it all Nvidia?
| zaphar wrote:
| Because that's normal language idioms in financial analysis
| reporting?
| popalchemist wrote:
| Because typically one expect a return on investment with that
| level of spending. Not only have they run at a loss for years,
| their spending is expected to increase, with no path to
| profitability in sight.
| bdangubic wrote:
| not that I disagree but would it be fair to say though that
| we have seen this before where it turned out OK? say Uber?
| Amazon?
| oh_my_goodness wrote:
| To become the next Uber, do I just need to run huge losses?
| bdangubic wrote:
| I wouldn't but path to success can clearly come from
| running 10-digit losses for a loooong time, no?
| oh_my_goodness wrote:
| I think you're saying that just running up huge losses
| _is_ sufficient to create a successful company? But that
| you personally wouldn 't want to run up huge losses? Not
| sure.
| bdangubic wrote:
| nah, I am saying that many (super) successful businesses
| ran in red financially for a very long time. I would not
| run a business that way but I am also (fortunately) not a
| CEO of a multibillion dollar company
| jcranmer wrote:
| IIRC, current estimates are that OpenAI is losing as much
| money a year as Uber or Amazon lost in their entire
| lifetime of unprofitability. Also, both Uber and Amazon
| spent their unprofitable years having a clear roadmap to
| profitability. OpenAI's roadmap to profitability is "???"
| bdangubic wrote:
| I have lived through Amazon's rags to riches and there
| was never a clear plan to profitability. Vast majority of
| people were questioning sanity of anyone investing in
| Amazon.
|
| I am not saying OpenAI is Amazon but am saying I have
| seen this before where masses are going "oh business is
| bad, losses are huge, where is path to profitability..."
| esafak wrote:
| Your recollection is hazy. Bezos chose not to be
| profitable in order to grow the company, and reap greater
| rewards in the future.
| https://www.youtube.com/shorts/wjLs22dNOCE
| tptacek wrote:
| I don't know either way but _every_ company does this, it
| 's not saying anything meaningful to say that a new
| company is taking an "investment year" or two or ten.
|
| I do know that in the late aughts, people were writing
| stories about how Amazon was a charity run on behalf of
| the American consumer by the finance industry.
| mrwrong wrote:
| and those stories were in the short run correct, since
| Amazon and Uber succeeded by massively undercutting
| existing businesses. reel customers in with charity, then
| turn the screws. what business is ChatGPT undercutting?
| bdangubic wrote:
| all of them :)
| toxic72 wrote:
| To my knowledge Amazon never debt financed their ops like
| this
| oh_my_goodness wrote:
| Amazon did borrow money, for a long time.
| dylan604 wrote:
| Where did their financing come from then?
| samx18 wrote:
| They had a cash-cow called AWS to keep the retail
| business afloat
| bdangubic wrote:
| not right away
| dylan604 wrote:
| Somebody must not be old enough to remember Amazon before
| AWS. Maybe you also don't remember that Amazon started
| selling books before becoming the world's largest fencing
| for selling stolen merch. They used to be the butt of
| many jokes for losing so much money for so many years
| while they expanded warehouses.
| andy81 wrote:
| Amazon paid no dividends, that's their big debt
| financing.
| simonw wrote:
| Your burn is the money you spend that exceeds the money you
| earn, see also "burn rate".
| wat10000 wrote:
| "Burn rate" is a standard financial term for how much money a
| startup is losing. If you have $1 cash on hand and a burn rate
| of $2 a year, then you have six months before you either need
| to get profitable, raise more money, or shut down.
| lexicality wrote:
| I suspect most of it is going to utilities for power, water and
| racking.
|
| That being said, if I was Sam Altman I'd also be stocking up on
| yachts, mansions and gold plated toilets while the books are
| still private. If there's $10bn a year in outgoings no one's
| going to notice a million here and there.
| slashdave wrote:
| How many gold toilets do you need? I mean, I don't even own
| one.
| lexicality wrote:
| Tragically I don't make CEO money so I also don't have one
| but I presume you'd want to have _at least_ one per mansion
| and another one in the office. Maybe a separate one for
| special occasions.
| nutjob2 wrote:
| > They're spending it
|
| That's what the words mean in this context.
| andsoitis wrote:
| In a parallel universe, governments invest in the
| compute/datacenters (read: infra), and let model makers compete
| on the same playing field.
| websiteapi wrote:
| why would they do that? not to mention governments are already
| doing that indirectly by taking equity stakes in some of the
| companies.
| candiddevmike wrote:
| Same reason they should own access lines: everyone needs
| rackspace/access, it should be treated like a public service
| to avoid rent seeing. Having a data center in every city
| where all of the local lines terminate into could open the
| doors to a lot of interesting use cases, really help with
| local resiliency/decentralization efforts, and provide a
| great alternative to cloud providers that doesn't break the
| bank.
| websiteapi wrote:
| should the government own all types of "public services"?
| e.g. search index, video serving infra, etc?
| toxic72 wrote:
| Public ownership of public services hmm?
| paulryanrogers wrote:
| Smells like socialism. Around here we privatize the
| profits and only socialize the costs. Like the impending
| bailout of the most politically connected AI companies.
| simonw wrote:
| If that did happen, how would the government then issue those
| resources?
|
| OpenAI ask for 1m GPUs for a month, Anthropic ask for 2m, the
| government data center only has 500,000, and a new startup
| wants 750,000 as well.
|
| Do you hand them out to the most convincing pitch? Hopefully
| not to the biggest donor to your campaign.
|
| Now the most successful AI lab is the one that's best at
| pitching the government for additional resources.
|
| UPDATE: See comment below for the answer to this question:
| https://news.ycombinator.com/item?id=46438390#46439067
| 3eb7988a1663 wrote:
| National HPC labs have been over subscribed for decades with
| extensive queueing/time sharing allocation systems.
|
| It would still likely devolve into most-money-wins, but it is
| not an insurmountable political obstacle to arrange some sort
| of sharing.
|
| Edit: I meant to say over _subscribed_ , not over
| provisioned. There are far more jobs in the queue than can be
| handled at once
| simonw wrote:
| Huh, TIL - thanks for the correction.
|
| https://www.ornl.gov/news/doe-incite-program-
| seeks-2026-prop...
|
| > The Innovative and Novel Computational Impact on Theory
| and Experiment, or INCITE, program has announced the 2026
| Call for Proposals, inviting researchers to apply for
| access to some of the world's most powerful high-
| performance computing systems.
|
| > The proposal submission window runs from April 11 to June
| 16, 2025, offering an opportunity for scientific teams to
| secure substantial computational resources for large-scale
| research projects in fields such as scientific modeling,
| simulation, data analytics and artificial intelligence.
| [...]
|
| > Individual awards typically range from 500,000 to
| 1,000,000 node-hours on Aurora and Frontier and 100,000 to
| 250,000 node-hours on Polaris, with the possibility of
| larger allocations for exceptional proposals. [...]
|
| > The selection process involves a rigorous peer review,
| assessing both scientific merit and computational
| readiness. Awards will be announced in November 2025, with
| access to resources beginning in 2026.
|
| Not sure OpenAI/Anthropic etc would be OK with a six month
| gap between application and getting access to the
| resources, but this does indeed demonstrate that government
| issued super-computing resources is a previously solved
| problem.
| pear01 wrote:
| Well, people bid for USA government resources all the time.
| It's why the Washington DC suburbs have some of the country's
| most affluent neighborhoods among their ranks.
|
| In theory it makes the process more transparent and fair,
| although slower. That calculus has been changing as of late,
| perhaps for both good and bad. See for example the Pentagon's
| latest support of drone startups run by twenty-year-olds.
|
| The question of public and private distinctions in these
| various schemes are very interesting and imo, underexplored.
| Especially when you consider how these private LLMs are
| trained on public data.
| wat10000 wrote:
| That seems like a terrible idea. Data centers aren't a natural
| monopoly. Regulate the externalities and let it flourish.
| amelius wrote:
| Don't forget that the internet exists because of government
| agencies.
| Mountain_Skies wrote:
| Cool. Time for the government to seize Amazon.
| wat10000 wrote:
| I'm not sure how that's relevant here.
| echelon wrote:
| That's malinvestment. Too much overhead, disconnected from long
| term demand. The government doesn't have expertise, isn't lean
| and nimble. What if it all just blows over? (It won't? But who
| knows?)
|
| Everything is happening exactly as it should. If the "bubble"
| "pops", that's just the economic laws doing what they naturally
| do.
|
| The government has better things to do. Geopolitics, trade,
| transportation, resources, public health, consumer safety,
| jobs, economy, defense, regulatory activities, etc.
| aucisson_masque wrote:
| I'd rather stay far away from this parallel universe.
|
| Why would you want my money to be used to build datacenter that
| won't benefit me ? I might use a LLM once a month, many people
| never use it.
|
| Let the one who use it pay for it.
| inerte wrote:
| That's like every government initiative. Same as healthcare?
| School? I mean if you don't have children why do you pay
| taxes... and roads if you don't drive? I mean the examples
| are so many... why do you bring this argument that if it
| doesn't benefit you directly right now today, it shouldn't be
| done?
| magpi3 wrote:
| Healthcare, schools, roads, generative AI. One of these
| things is not like the others.
| inerte wrote:
| We gave incentives to broadband, why not generative AI?
| wat10000 wrote:
| Last-mile services like roads, electricity, water, and
| telecommunications are natural monopolies. Normal market
| forces fail somewhat and you want some government
| involvement to keep it running smoothly.
|
| This is not at all true of generative AI.
| zdragnar wrote:
| There are arguments aplenty that schooling and a minimum
| amount of healthcare are public goods, as are roads built
| on public land (the government owns most roads after all).
|
| What is the justification for considering data centers
| capable of running LLMs to be a public good?
|
| There are many counter examples of things many people use
| but are still private. Clothing stores, restaurants and
| grocery stores, farms, home appliance factories, cell phone
| factories, laundromats and more.
| wahnfrieden wrote:
| a distinction: the data centers have become the means of
| production, unlike clothing from a store
| zdragnar wrote:
| How is that distinct from any of my other examples which
| listed factories? Very few factories in the US are
| publicly owned; citing data centers as places of
| production merely furthers the argument that they should
| remain private.
| reverserdev wrote:
| Libraries with books are likely considered public goods
| right?
|
| Why not an LLM datacenter if it also offers information?
| You could say it's the public library of the future
| maybe.
| zdragnar wrote:
| Not all libraries are publicly owned or accessible. Most
| are run by local municipalities because they wouldn't
| exist otherwise.
|
| Data centers clearly can exist without being owned by the
| public.
| bjt wrote:
| So can bookstores.
| llmslave2 wrote:
| I have no idea why you're being downvoted because you're
| right. The entire point of taxation is to spread the cost
| among everyone, and since everyone doesn't utilise every
| government service every tax payer ends up paying for stuff
| they don't use. That like, the whole point...
| 3eb7988a1663 wrote:
| You are already paying for several national lab HPC centers.
| These are used for government/university research - no idea
| if commercial interests can rent time on them. The big ones
| are running weather, astronomy simulations, nuclear
| explosions, biological sequencing, and so on.
| nine_k wrote:
| Many more people materially benefit from e.g. good weather
| forecasts than form video slop generation.
| serf wrote:
| >The big ones are running weather, astronomy simulations,
| nuclear explosions, biological sequencing, and so on.
|
| these things constitute public goods that benefit the
| individual regardless of participation.
| fdr wrote:
| The biggest run classified nuclear stockpile loads, at
| least in the US. They cost about half a billion apiece. And
| are 30 (carefully cooled and cabled) megawatts.
| https://en.wikipedia.org/wiki/El_Capitan_(supercomputer)
|
| No chance they're going to take risks to share that
| hardware with anyone given what it does.
|
| The scaled down version of El Capitan is used for non-
| classified workloads, some of which are proprietary, like
| drug simulation. It is called Tuolumne. Not long ago, it
| was nevertheless still a top ten supercomputer.
|
| Like OP, I also don't see why a government supercomputer
| does it better than hyperscalers, coreweave, neoclouds, et
| al, who have put in a ton of capital as even compared to
| government. For loads where institutional continuity is
| extremely important, like weather -- and maybe one day, a
| public LLM model or three -- maybe. But we're not there
| yet, and there's so much competition in LLM infrastructure
| that it's quite likely some of these entrants will be bag
| holders, not a world of juicy margins at all...rather,
| playing chicken with negative gross margins.
| nialv7 wrote:
| if datacenters are built by the government, then i think it's
| fair to assume there will be some level of democratic control
| of what those datacenters will be used for.
| quantified wrote:
| What's the democratic control of existing resources? I
| would make the opposite assumption, it would be captured by
| the wealthiest interests.
| shimman wrote:
| This is literally the current system... adding more
| democratic controls is a good thing, the alternative is
| that only rich control these systems and would you look
| at it only the rich control these systems.
|
| Uncanny really.
| nine_k wrote:
| Certainly! Your congress representatives would be voting on
| how to allocate its computing power. (Do you remember who
| did you vote for last time?)
| GaryBluto wrote:
| Sure. Same for healthcare and education right? If you don't
| have a child or need medical attention, why should you pay
| for them?
| cambrianentropy wrote:
| In a completely alternate dimension, a quarter of the capital
| being invested in AI literally just goes towards making sure
| everyone has quality food and water.
| dmitrygr wrote:
| Without capital invested in the past we wouldn't have almost
| anything of modern technology. That has done a lot more for
| everyone, including food affordability, than actually simply
| buying food for people to eat once.
| marcellus23 wrote:
| I'd rather live in a universe where that money is taken out
| of the military budget.
| serf wrote:
| you'll never win that argument, but I absolutely agree.
|
| people have no idea about how big the military and defense
| budgets worldwide are next to _any_ other example of a
| public budget.
|
| throw as many pie charts out as you want; people just can't
| see the astronomical difference in budgets.
|
| I think it's based on how the thing works; a good defense
| works until it doesn't -- the other systems/budgets in
| place have a bit more of a graceful failure. This concept
| produces an irrationality in people that produces windfalls
| of cash availability.
| GaryBluto wrote:
| As we all know, throwing money at a problem solves it
| completely. Remember how Live Aid saved Ethiopia from
| starvation and it never had any problems again?
| paulcole wrote:
| Do you like this idea?
| Zigurd wrote:
| Prediction: on this thread you'll get a lot of talk about how
| government would slow things down. But when the AI bubble
| starts to look shaky, see how fast all the tech bros line up
| for a "public private partnership."
| nutjob2 wrote:
| That sounds like a nightmare.
| andy99 wrote:
| That could make sense in some steady state regime where there
| were stable requirements and mature tech (I wouldn't vote for
| it but I can see an argument).
|
| I see no argument why the government would jump into a hype
| cycle and start building infra that speculative startups are
| interested in. Why would they take on that risk compared to
| private investors, and how would they decide to back that over
| mammoth cloning infra or whatever other startups are doing?
| Mountain_Skies wrote:
| Given where we are posting, the motive is obvious: to
| socialize the riskiest part of AI while the investors retain
| all the potential upside. These people have no sense of shame
| so they'll loudly advocate for endless public risk and
| private rewards.
| JoshTriplett wrote:
| In a better parallel universe, we found a different innovation
| without using brute-force computation to train systems that
| unreliably and inefficiently compute things and still leaves us
| able to understand what we're building.
| zozbot234 wrote:
| Datacenters are not a natural monopoly, you can always build
| more. Beyond what the public sector itself might need for its
| own use, there's not much of a case for governments to invest
| in them.
| JumpCrisscross wrote:
| > _governments invest in the compute /datacenters (read:
| infra), and let model makers compete on the same playing field_
|
| Hmm, what about member-owned cooperatives? Like what we have
| for stock exchanges.
| sc68cal wrote:
| Socialized losses, private profits
| mvkel wrote:
| The fact is nobody has any idea what OpenAI's cash burn is.
| Measuring how much they're raising is not an adequate proxy.
|
| For all we know, they could be accumulating capital to weather an
| AI winter.
|
| It's also worth noting that OpenAI has not trained a new model
| since gpt4o (all subsequent models are routing systems and prompt
| chains built on top of 4), so the idea of OpenAI being stuck in
| some kind of runaway training expense is not real.
| micromacrofoot wrote:
| they're paying million dollar salaries to engineers and
| building data centers, it's not a huge mystery where their
| expenses are
| wahnfrieden wrote:
| wasn't 4.5 new
| FergusArgyll wrote:
| Yes it was, op didn't read the reporting closely enough. It
| said something to the effect of "Didn't pretrain a new
| broadly released, generally available model"
| mvkel wrote:
| That's what I meant, though. That's the expensive part.
| Taek wrote:
| Wasn't 4.5 before 4o?
| Imustaskforhelp wrote:
| Didn't they create Sora and other models and literally burned
| so much money with their AI video app which they wanted to make
| a social media but what ended up happening was that they burned
| billions of dollars.
| rozap wrote:
| I wonder about what happens to people who make these
| hilariously bad business decisions? Like the person at
| Twitter who decided to kill Vine. Do they spin it and get
| promotoed? Something else?
|
| I'd love a blog or coffee table book of "where are they now"
| for the director level folks who do dumb shit like this.
| bravetraveler wrote:
| Building fiefdoms elsewhere, or whatever. _" Have you heard
| about the new hire from XYZ?"_
| computerphage wrote:
| Why do you think they have not trained a new model since 4o?
| You think the GPT-5 release is /just/ routing to differently
| sized 4o models?
| wahnfrieden wrote:
| they're incorrect about the routing statement but it is not a
| newly trained model
| ta9000 wrote:
| How are they updating the data then? Wouldn't the cutoff date
| be getting further away from today?
| MagicMoonlight wrote:
| They're just feeding a little bit of slop in every so often.
| Fine tuning rather than training a new one.
| 3eb7988a1663 wrote:
| RAG? Even for a "fresh" model, there is no way to keep it up
| to date, so there has to be a mechanism by which to reference
| eg last night's football game.
| yojo wrote:
| They have not _successfully_ trained a new model since 4o. That
| doesn't mean they haven't burned a pile of cash trying.
|
| I know sama says they aren't trying to train new models, but
| he's also a known liar and would definitely try to spin
| systemic failure.
| sod22 wrote:
| lol the typical AI boosters are down voting you.
| osiris970 wrote:
| Gpt-5.2 was new pretrain run i believe
| slashdave wrote:
| > they could be accumulating capital to weather an AI winter
|
| Doubtful. This would be the very antithesis of the Silicon
| Valley way.
| ajross wrote:
| > The fact is nobody has any idea what OpenAI's cash burn is.
|
| Their investors surely do (absent outrageous fraud).
|
| > For all we know, they could be accumulating capital to
| weather an AI winter.
|
| If they were, their investors would be freaking out (or
| complicit in the resulting fraud). This seems unlikely. In
| point of fact it seems like they're playing commodities market-
| cornering games[1] with their excess cash, which implies
| strongly that they know how to spend it even if they don't have
| anything useful to spend it on.
|
| [1] Again c.f. fraud
| andrewflnr wrote:
| > For all we know, they could be accumulating capital to
| weather an AI winter.
|
| Right, this is nonsense. Even if investors wanted to be
| complicit in fraud, it's an insane investment. "Give us money
| so we can survive the AI winter" is a pitch you _might_ try
| with the government, but a profit-motivated investor will...
| probably not actually laugh in your face, but tell you they
| 'll call you and laugh about you later.
| reissbaker wrote:
| The GPT-5 series is a new model, based on the o1/o3 series.
| It's very much inaccurate to say that it's a routing system and
| prompt chain built on top of 4o. 4o was not a reasoning model
| and reasoning prompts are _very_ weak compared to actual RLVR
| training.
|
| No one knows whether the base model has changed, but 4o was not
| a base model, and neither is 5.x. Although I would be kind of
| surprised if the base model hadn't also changed, FWIW: they've
| significantly advanced their synthetic data generation pipeline
| (as made obvious via their gpt-oss-120b release, which
| allegedly was entirely generated from their synthetic data
| pipelines), which is a little silly if they're not using it to
| augment pretraining/midtraining for the models they actually
| make money from. But either way, 5.x isn't just a prompt chain
| and routing on top of 4o.
| doug_durham wrote:
| Prior to 5.2 you couldn't expect to get good answers to
| questions prior to March 2024. It was arguing with me that
| Bruno Mars did not have two hit songs in the last year. It's
| clear that in 2025 OpenAI used the old 4.0 base model and
| tried to supercharge it using RLVR. That had very mixed
| results.
| brokencode wrote:
| That just means their pretraining data set was older. You
| can train as many models as you want on the same data.
|
| I'm sure all these AI labs have extensive data gathering,
| cleanup, and validation processes for new data they train
| the model on.
|
| Or at least I hope they don't just download the current
| state of the web on the day they need to start training the
| new model and cross their fingers.
| super256 wrote:
| I think you are messing up things here, and I think your
| comment is based on the article from semi analysis. [1]
|
| It said: OpenAI's leading researchers have not completed a
| successful full-scale pre-training run that was broadly
| deployed for a new frontier model since GPT-4o in May 2024,
| highlighting the significant technical hurdle that Google's TPU
| fleet has managed to overcome.
|
| However, pre-training run is the initial, from-scratch training
| of the base model. You say they only added routing and prompts,
| but that's not what the original article says. They most likely
| still have done a lot of fine tuning, RLHF, alignment and tool
| calling improvements. All that stuff is training too. And it is
| totally fine, just look at the great results they got with
| Codex-high.
|
| If you got actually got what you said from a different source,
| please link it. I would like to read it. If you just messed
| things up, that's fine too.
|
| [1] https://newsletter.semianalysis.com/p/tpuv7-google-takes-
| a-s...
| orbital-decay wrote:
| _> It's also worth noting that OpenAI has not trained a new
| model since gpt4o (all subsequent models are routing systems
| and prompt chains built on top of 4)_
|
| At the very least they made GPT 4.5, which was pretty clearly
| trained from scratch. It was possibly what they wanted GPT-5 to
| be but they made a wrong scaling prediction, people simply
| weren't ready to pay that much money.
| brokencode wrote:
| People would have paid it if it was actually significantly
| better. It was a huge cost increase for a pretty minor
| performance increase.
| nl wrote:
| > It's also worth noting that OpenAI has not trained a new
| model since gpt4o (all subsequent models are routing systems
| and prompt chains built on top of 4), so the idea of OpenAI
| being stuck in some kind of runaway training expense is not
| real.
|
| This isn't really accurate.
|
| Firstly, GPT4.5 _was_ a new training run, and it is unclear how
| many other failed training runs they did.
|
| Secondly "all subsequent models are routing systems and prompt
| chains built on top of 4" is completely wrong. The models after
| gpt4o were all post-trained differently using reinforcement
| learning. That is a substantial expense.
|
| Finally, it seems like GPT5.2 _is_ a new training run - or at
| least the training cut off date is different. Even if they didn
| 't do a full run it must have been a very large run.
| stevenjgarner wrote:
| Well we do know their consumption of energy is not
| insignificant and comes at great cost.
| louiereederson wrote:
| i'm sure openai and their investors know what the cash burn is.
| it's also been well reported by The Information with no
| pushback from the company or investors. they have also reported
| that openai is forecasting $9b in training compute spending for
| 2025, up from $3b last year. this more or less lines up with
| Epoch's estimate that training compute has reliably grown by
| ~4x per year. the vast majority of that is just from building
| bigger data centers rather than chip performance improvements.
| you obviously need to grow revenue pretty quickly to absorb
| that.
|
| https://www.theinformation.com/articles/openai-says-business...
|
| https://epoch.ai/blog/training-compute-of-frontier-ai-models...
| adriand wrote:
| This article doesn't add anything to what we know already. It's
| still an open question what happens with the labs this coming
| year, but I personally think Anthropic's focus on coding
| represents the clearest path to subscriber-based success (typical
| SaaS) whereas OpenAI has a clear opportunity with advertising.
| Both of these paths could be very lucrative. Meanwhile I expect
| Google will continue to struggle with making products that people
| actually want to use, irrespective of the quality of its models.
| esel2k wrote:
| Where does google struggle to make products people don't want
| to use? Is it a personal opinion?
| _ache_ wrote:
| Bart was a flop. Google search is losing market share to
| other LLM providers. Gemini adoption is low, people around me
| prefer OpenAI because it is good enough and known.
|
| But on the contrary, Nano Banana is very good, so I don't
| know. And in the end, I'm pretty confident Google will be the
| AI race winner, because they got the engineers, they tech
| background and the money. Unless Google Adsense die, they can
| continue the race forever.
| agentifysh wrote:
| what are you talking about Gemini adoption has tripled in a
| few months alone and have around 18% of marketshare and its
| accelerating.
| robkop wrote:
| I've heard too many rumors that much of that adoption is
| from copying ms i.e. bundling gemini into their office
| suite
| woooooo wrote:
| Gemini adoption via search is legit, though. I had a
| question, I got an answer, its not forced, fake adoption
| in that case.
| krige wrote:
| It's hardly legit for everyone. I had a question, I got
| an incorrect answer I didn't ask for, scrolled past it
| and got actual results.
| woooooo wrote:
| Fair
| andrekandre wrote:
| gemini is in basically everything from google now, from
| google docs to firebase to android studio so i wouldn't
| be surprised...
| bee_rider wrote:
| If Google is producing very good models and they aren't
| gaining much traction, that seems like a pretty bad sign
| for them, right? If they were failing with bad models, the
| solution would be easy: math and engineer harder, make
| better models (I mean, this is obviously very hard but it
| is a clear path). Failing with good models is... confusing,
| it indicates there's some unknown problem.
| sod22 wrote:
| It's irrelevant, Google needs to focus on performance
| enhancements that the enterprise market segment demands -
| who only operate in the air of objectivity.
|
| If they can achieve that they will cut off a key source
| of blood supply to MSFT+OAI. There is not much money in
| the consumer market segment from subscribers and entering
| the ad-business is going to be a lot tougher than people
| think.
| bloppe wrote:
| > Gemini adoption is low, people around me prefer OpenAI
| because it is good enough and known.
|
| Gemini is built into Android and Google search. People may
| not be going to gemini.google.com, but that does not mean
| adoption is low.
| raw_anon_1111 wrote:
| I mean it's a simple Google search to show that Google
| isn't loosing much market share to ChatGPT and most ChatGPT
| users still use Google.
|
| https://searchengineland.com/nearly-all-chatgpt-users-
| visit-...
|
| But even more importantly, it obviously isn't losing money
| from advertisers to ChatGPT. You can look at their
| quarterly results.
| wg0 wrote:
| Anti Gravity is a flop. I mean it uses Gemini under the hood.
|
| But you cannot use it with an API key.
|
| If you're on a workspace account, you can't have normal
| individual plan.
|
| You have to have the team plan with $100/month or nothing.
|
| Google's product management tier is beyond me.
| glial wrote:
| OK, but Gmail, Google Maps, Google Docs, and Google Search
| etc are ubiquitous. `Google' has even become a verb. Google
| might take a shotgun approach, but it certainly does create
| widely used products.
| wg0 wrote:
| That doesn't negate my original point.
| nateb2022 wrote:
| I will add that there's also Gemini in Chrome. With
| Chrome being the largest browser by market share, that's
| a powerful de facto default.
| andrekandre wrote:
| > With Chrome being the largest browser by market share,
| that's a powerful de facto default.
|
| where art thou anti-trust enforcement...
| raw_anon_1111 wrote:
| Every personal computer user except Chromebook users went
| out of their way to download Chrome. What exactly do you
| want "anti trust" to do?
| andrekandre wrote:
| maybe not allow google to bundle gemini with chrome?
| raw_anon_1111 wrote:
| So should we also not allow OpenAI to bundle the OpenAI
| model with the ChatGPT app
|
| Absolutely no one besides ChromeOS users are forced to
| use Chrome.
| wyre wrote:
| Anti-trust doesn't have to involve force, but
| monopolistic behavior.
|
| Google has spent over a decade advertising Chrome on all
| their properties and has an unlimited budget and active
| desire to keep Chrome competitive. Mozilla famously needs
| Google's sponsorship to stay solvent. Apple maintains
| Safari to have no holes in their ecosystem.
|
| Stop being silly defending trillion dollar companies that
| are actively making the internet worse, it's not
| productive or funny.
| doctaj wrote:
| What Google AI products do people not want to use? Gemini is
| catching up to chatpt from a MAU perspective, ai overviews in
| search are super popular and staggeringly more used than any
| other ai-based product out there, a Google ai mode has decent
| usage, and Google Lens has surprisingly high usage. These
| products together dwarf everyone else out there by like 10x.
| ajross wrote:
| > ai overviews in search are super popular and staggeringly
| more used than any other ai-based product out there
|
| This really is the critical bit. A year ago, the spin was
| "ChatGPT AI results are better than search, why would you use
| Google?", now it's "Search result AI is just as good as
| ChatGPT, why bother?".
|
| When they were disruptive, it was enough to be different to
| believe that they'd win. Now they need to _actually be
| better_. And... they kinda aren 't, really? I mean, lots of
| people like them! But for Regular Janes at the keyboard, who
| cares? Just type your search and see what it says.
| famouswaffles wrote:
| >Gemini is catching up to chatpt from a MAU perspective
|
| It is far behind, and GPT hasn't exactly stopped growing
| either. Weekly Active Users, Monthly visits...Gemini is
| nowhere near. They're comfortably second, but second is still
| well below first.
|
| >ai overviews in search are super popular and staggeringly
| more used than any other ai-based product out there
|
| Is it ? How would you even know ? It's a forced feature you
| can not opt out of or not use. I ignore AI overviews, but
| would still count as a 'user' to you.
| websiteapi wrote:
| we're curious what your source is
| famouswaffles wrote:
| Monthly Visits (chatGPT #5, Gemini #26):
| https://www.similarweb.com/blog/research/market-
| research/mos...
|
| Search Traffic:
| https://x.com/Similarweb/status/2003078223135990246
| websiteapi wrote:
| doesn't seem accurate since gemini has many entry points
| famouswaffles wrote:
| Entry points ? The visits are accurate for the website
| and app. If you're talking about AI overviews, then
| that's meaningless for reasons I've already explained.
| RandallBrown wrote:
| I do understand why it makes it very hard to compare but
| it's certainly not meaningless. Google's AI overviews are
| pretty much the only way that I use AI.
| famouswaffles wrote:
| I mean we're all talking about how Google is 'catching
| up' and 'taking over' Open AI right ? In that case, it
| genuinely is meaningless. AI Overviews, even if it had
| the usage OP assumes, is not a threat to Open AI or
| chatGPT. People use chatGPT for a lot of different
| things, and AI overviews only handles (rather poorly in
| my opinion) a small, limited part of the kind of things
| it gets used for. I use AI mode a lot. It's better than
| Overviews in every conceivable way, and it's still not a
| chatGPT replacement.
|
| https://cdn.openai.com/pdf/a253471f-8260-40c6-a2cc-
| aa93fe9f1...
| RandallBrown wrote:
| I guess I use Google's AI that's built into their search
| engine the same way I've used ChatGPT or Claude. I ask it
| a question and it provides me an answer. I can then
| interact with it further if I want or look through the
| rest of the search results.
| tim333 wrote:
| I use Google's AI much more often that OpenAI's but the
| URL I use is usually google.co.uk and so wouldn't appear
| if your numbers.
| empiko wrote:
| ChatGPT - 5.8b visits - -5.2% MoM
|
| Gemini - 1.4b visits - +14.4% MoM
|
| Yeah, ChatGPT is still more popular, but this does not
| show Gemini struggling exactly.
| madeofpalk wrote:
| Is Gemini, as a chatbot, a product that sustains current
| valuations and investment?
| tim333 wrote:
| It's hard to say with Google because they make most of
| their money from ads and you can't really tell if people
| who clicked were there for normal search or Gemini. They
| seem to be doing ok though, profits up 66% from a couple of
| years ago.
| tim333 wrote:
| >Google Lens has surprisingly high usage
|
| I use it several times a day just to change text in image
| form to text form so you can search it and the like.
|
| It's built into chrome but they move the hidden icon about
| regularly to confuse you. This month you click the url and it
| appears underneath, helpfully labeled "Ask Google about this
| page" so as to give you little idea it's Google Lens.
| IshKebab wrote:
| I don't. Google has at least a few advantages:
|
| 1. Google books, which they legally scanned. No dubious
| training sets for them. They also regularly scrape the entire
| internet. And they have YouTube. Easy access to the best
| training data, all legally.
|
| 2. Direct access to the biggest search index. When you ask
| ChatGPT to search for something it is basically just doing what
| we do but a bit faster. Google can be much smarter, and because
| it has direct access it's also faster. Search is a huge use
| case of these services.
|
| 3. They have existing services like Android, Gmail, Google
| Maps, Photos, Assistant/Home etc. that they can integrate into
| their AI.
|
| The difference in model capability seems to be marginal at
| best, or even in Google's favour.
|
| OpenAI has "it's not Google" going for it, and also AI brand
| recognition (everyone knows what ChatGPT is). Tbh I doubt that
| will be enough.
| ok123456 wrote:
| Google's most significant advantage in this space is its
| organizational experience in providing services at this
| scale, as well as its mature infrastructure to support them.
| When the bubble pops, it's not lights-out or permanently
| degraded performance.
| Al-Khwarizmi wrote:
| And they have hardware as well, and their own cloud platform.
|
| In my view Google is uniquely well positioned because,
| contrary to the others, it controls most of the raw materials
| for Ai.
| johnnyanmac wrote:
| What "we" know already is hard to add to, as a forum that has a
| dozen AI articles a day on every little morsel of news.
|
| >whereas OpenAI has a clear opportunity with advertising.
|
| Personally, having "a clear opportunity with advertising" feels
| like a last ditch effort for a company that promised the moon
| in solving all the hard problems in the world.
| what wrote:
| Probably more people use googles AI than anything else. Every
| search result has an LLM generated summary at the top.
| Davidzheng wrote:
| There are other avenues of income. You can invade other
| industries which are slow on AI uptake and build an AI-from-
| ground competitor with large advantages over peers. There are
| hints of this (not AI-from-ground but with more AI) with
| deepmind's drug research labs. But this can be a huge source of
| income. You can kill entire industries which inevitably cannot
| incorporate AI as fast as AI companies can internally.
| gip wrote:
| There is no doubt that OpenAI is taking a lot of risks by betting
| that AI adoption will translate into revenues in the very short
| term. And that could really happen imo (with a low probability
| sure, but worth the risk for VCs? Probably).
| Alconicon wrote:
| Apparently we all have enough money to put it into OpenAI.
|
| Some players have to play, like google, some players want to
| play like USA vs. China.
|
| Besides that, chatting with an LLM is very very convincing.
| Normal non technical people can see what 'this thing' can
| already do and as long as the progress is continuing as fast as
| it currently is, its still a very easy to sell future.
| bigyabai wrote:
| > Some players have to play, like google
|
| I don't think you have the faintest clue of what you're
| talking about right now. Google authored the transformer
| architecture, the basis of every GPT model OpenAI has
| shipped. They aren't obligated to play any more than OpenAI
| is, they do it because they get results. The same cannot be
| said of OpenAI.
| agentifysh wrote:
| It's mathematically impossible what OpenAI is promising. They
| know it. The goal is to be too big to fail and get bailed out
| by US taxpayers who have been groomed into viewing AI as a cold
| war style arms race that America cannot lose.
| senshan wrote:
| > It's mathematically impossible what OpenAI is promising
|
| Citation is needed
| testing22321 wrote:
| Don't that have to make more money in the next 10 years
| than any company ever has... and that is just to break
| even.
|
| It's going to crash, guaranteed
| senshan wrote:
| It is the term "mathematically impossible" that caught my
| attention. Since it is about the future promise of
| OpenAI, one could debate the likelihood or "statistically
| improbable", but "mathematically impossible" implies some
| calculation, proof and certainty. Hence my curiosity.
| CharlieDigital wrote:
| I've seen some calculation I think from an HSBC analyst
| that it would take a monthly subscription of $200/mo.
| from some large portion of the US population for some
| insane number of years to break even.
| Aurornis wrote:
| > from some large portion of the US population
|
| What a silly calculation.
|
| OpenAI's customer base is global. Using US population as
| the customer base is deliberately missing the big
| picture. The world population is more than 20X larger
| than the US population.
|
| It's also obvious that they're selling heavily to
| businesses, not consumers. It's not reasonable to expect
| consumers to drive demand for these services.
| johnnyanmac wrote:
| >OpenAI's customer base is global.
|
| I'd be willing to bet that, like many US websites,
| OpenAI's users are at lest 60% American. Just because
| there's 20x more people out there doesn't mean they have
| the same exposure to American products.
|
| For instance, China is an obvious one. So that's 35%+ of
| the population already mostly out of consideration.
|
| >It's also obvious that they're selling heavily to
| businesses, not consumers.
|
| I don't think a few thousand companies can outspend 200m
| users paying $200 a month. I won't call it a
| "mathematical impossibility", but the math also isn't
| math-ing here.
| Marsymars wrote:
| Even if you grant that OpenAI might be as successful as
| Apple at international expansion and support, that's
| still only a non-US market about double the size of the
| US market.
| consp wrote:
| > OpenAI's customer base is global.
|
| Since when is English everyone's _primary_ language?
| eisfresser wrote:
| ChatGPT is totally fluid in German and French (i.e.),
| their market size is my no means limited to the
| anglosphere.
| doctorpangloss wrote:
| on the one hand, i understand you are making a stylized
| comment, on the other hand, as soon as i started writing
| something reasonable, i realized this is an "upvote lame
| catastrophizing takes about" (checking my notes) "some
| company" thread, which means reasonable stuff will get
| downvoted... for example, where is there actual scarcity in
| their product inputs? for example, will they really be paying
| retail prices to infrastructure providers forever? is that a
| valid forecast? many reasonable ways to look at this. even if
| i take your cynical stuff at 100% face value, the thing about
| bailouts is that they're more complicated than what you are
| saying, but your instinct is to say they're not complicated,
| "grooming" this and "cold war" that, because your goal is to
| concern troll, not advance this site's goal of curiosity...
| krupan wrote:
| They've already spent so much money that even if they get
| any new hardware at a deep discount they will have a very
| hard time breaking even
| bloppe wrote:
| Bailing out OAI would be entirely unnecessary (crowded field)
| and political suicide (how many hundreds of billions that
| could have gone to health care instead?)
|
| If it happens in the next 3 years, tho, and Altman promises
| enough pork to the man, it could happen.
| johnnyanmac wrote:
| This administration has "committed political suicide"
| dozens of times this year. What's one more to add to the
| pile?
| jjulius wrote:
| >Bailing out OAI would be ... political suicide (how many
| hundreds of billions that could have gone to health care
| instead?)
|
| Not that I have an opinion one way or another regarding
| whether or not they'd be bailed out, but this particular
| argument doesn't really seem to fit the current political
| landscape.
| Aurornis wrote:
| > The goal is to be too big to fail and get bailed out by US
| taxpayers
|
| I know this is the latest catastrophizion meme for AI
| companies, but what is it even supposed to mean? OpenAI
| failing wouldn't mean AI disappears and all of their
| customers go bankrupt, too. It's not like a bank. If OpenAI
| became insolvent or declared bankruptcy, their intellectual
| property wouldn't disappear or become useless. Someone would
| purchase it and run it again under a new company. We also
| have multiple AI companies and switching costs are not that
| high for customers, although some adjustment is necessary
| when changing models.
|
| I don't even know what people think this is supposed to mean.
| The US government gives them money for something to prevent
| them from filing for bankruptcy? The analogy to bank bailouts
| doesn't hold.
| liamconnell wrote:
| > Someone would purchase it and run it again under a new
| company.
|
| That happened a long time ago! Microsoft already owns the
| model weights!
| johnnyanmac wrote:
| >I know this is the latest catastrophizion meme for AI
| companies, but what is it even supposed to mean?
|
| Someone else put it succintly.
|
| "When A million dollar company fails, it's their problem.
| When a billion dollar company fails, it's _our_ problem "
|
| In essence, there's so much investment in AI that it's a
| significant part of the US GDP. If AI falters, that is
| something that the entire stock market will feel, and by
| effect, all Americans. No matter how detached from tech
| they are. In other words, the potential for the another
| great depression.
|
| In that regard, the government wants to avoid that. So they
| will at least give a small bailout to lessen the crash. But
| more likely (as seen with the Great Financial Crisis), they
| will likely supply billions upon billions to prop up
| companies that by all business logic deserved to fail.
| Because the alternative would be too politically damaging
| to tolerate.
|
| ----
|
| That's the theory. These all aren't certain and there are
| arguments to suggest that a crash in AI wouldn't be as bad
| as any of the aforementioned crashes. But that's what
| people mean by "become too big to fail and get bailed out".
| zozbot234 wrote:
| The closest analogy is the dot-com crash and there really
| wasn't any bailout for that, despite the short term GDP
| impact. And billion-dollar companies were involved back
| in the day too, like Apple, Microsoft, Amazon, Ebay etc.
| etc.
| OGEnthusiast wrote:
| OpenAI isn't a publicly-traded company though, how will
| it going to zero affect the stock market?
| johnnyanmac wrote:
| OpenAI collapses and MSFT tanks. Microsoft shareholders
| aren't quite that dumb.
|
| And that's ignoring the dominoes of other AI firms being
| pulled out of because OpenAi falters.
| OGEnthusiast wrote:
| > Microsoft shareholders aren't quite that dumb.
|
| If they aren't dumb, why are they investing in MSFT now
| then if it's a bubble that's doomed to fail? And even in
| the worst case scenario, a 10-15% decline in the S&P 500
| won't trigger the next Great Depression. (Keep in mind
| that we already had a ~20% drawdown in public equities
| during the interest rate hikes of 2022/2023 and the
| economy remained pretty robust throughout.)
| johnnyanmac wrote:
| Like I said, they aren't "that" dumb. They are playing a
| risky game, but when they see the number go down rapidly
| they will pull. Which will make the line go down even
| faster.
|
| >And even in the worst case scenario, a 10-15% decline in
| the S&P 500 won't trigger the next Great Depression
|
| Only if you believe the 10% decline won't domino and that
| the S&P500 is secluded from the rest of the global
| economy. I wish I shared your optimism.
|
| > and the economy remained pretty robust throughout.
|
| Yeah and we voted the person who orchestrated that out.
| We don't have the money to pump trillions back in a 2nd
| time in such a short time. Something's gonna give, and
| soon.
| OGEnthusiast wrote:
| > Only if you believe the 10% decline won't domino and
| that the S&P500 is secluded from the rest of the global
| economy. I wish I shared your optimism.
|
| So your hypothesis is that a 10% decline in the S&P 500
| will trigger the next Great Depression, i.e. years of
| negative GDP growth and unemployment? I agree that it
| could cause a slight economic slowdown, but I don't think
| AI and tech stocks are a large enough part of the economy
| to cause a Great Depression-style catastrophe.
| johnnyanmac wrote:
| >So your hypothesis is that a 10% decline in the S&P 500
| will trigger the next Great Depression, i.e. years of
| negative GDP growth and unemployment?
|
| Yup. I won't say it's the only factor, nor biggest. But
| I'm focusing on this topic and not 40+ years of
| government economic abandonment of the working class.
| It's the straw that will break the camel's back.
| samiv wrote:
| The problem is that the non AI economy is already in the
| toilet. The consumer and commodities markets are all
| flashing red. Consumer debt is all time high. Inflation
| is still punishing the bottom end of workers severely and
| the ACA cuts will cause a lot of financial stress (unless
| people of course discountinue their plans)
|
| An expected outcome from a AI blowout is the uncertainty
| and everyone holding onto their assets and credit recalls
| plus interest rate hikes.
|
| During the great depression it wasn't the stock market
| collapse that caused it as much as it was the credit
| crunch that followed. Prior to the blowout people
| literally bought stocks on credit.
| KaiserPro wrote:
| Its about "animal spirits"
|
| The stock market isn't rational, its a room full of
| people talking loudly, and moving to various tables.
|
| All it takes is someone outside the room to shout
| something that triggers panic, and most of the people in
| the room will run for the exit.
| eek2121 wrote:
| Multiple publicly traded companies, including Microsoft,
| have invested significant amounts of money in OpenAI.
| calvinmorrison wrote:
| > If OpenAI became insolvent or declared bankruptcy, their
| intellectual property wouldn't disappear or become useless
|
| Yes but with all stock growth being in AI companies it
| would tank the market for one. Secondly, all of those
| dollars they are using are backed by creditors who would
| have a default. short of another TARP (likely IMO, the US
| NEEDS to keep pumping AI to compete with China) .... it
| could scare investors off too..
|
| Plus with the growth in AI effecting the overall makeup of
| the stockmarket, something like this hurts every Americans
| 401k
| jordanb wrote:
| I think what Altman is looking at is becoming so
| codependent with NVidia and Microsoft that they'll all go
| down together, meaning the US government would have to deal
| with the biggest software company and the biggest chip
| company both imploding together.
|
| If you look at the financial crisis, the US government
| decided to bail out AIG, after passing on Bear Sterns,
| because big banks like Goldman Sachs and Morgan Stanley
| (and even Jack Welch's General Electric) all had huge
| counterparty risk with AIG.
| throw-12-16 wrote:
| Unlikely, Elon bought the presidency and owns a competitor.
| senshan wrote:
| Correction: OpenAI _investors_ do take that risk. Some of the
| investors (e.g. Microsoft, Nvidia) dampen that risk by making
| such investment conditioned on boosting the investor 's own
| revenue, a stock buyback of sorts.
| Avicebron wrote:
| On the radio they mentioned that the total global chocolate
| market is ~100B, I googled it when I was home and it seems to be
| about ~135B. Apparently that is ... all chocolate, everywhere..
| OpenAI's valuation is about 500B. Maybe going up to like 835B.
|
| I'd love to see the rationale that OpenAI (not "AI" everywhere)
| is more valuable than chocolate globally.
|
| ... so crash early 2026?
| NewJazz wrote:
| Wait, aren't you comparing revenue and market cap?
|
| People take old things for granted often. Explains the Coolidge
| effect, and why plenty of people cheat.
| vegabook wrote:
| yes. stock v flow error again ("company X cap bigger than
| country Y GDP" another all too common version).
| kyyt wrote:
| I love AI, and ChatGPT has been transformative for me. But
| would I give it up for chocolate? I honestly don't think I
| could.
| cameronh90 wrote:
| Ignoring that those numbers aren't directly comparable, it did
| make me wonder, if I had to give up either "AI" or chocolate
| tomorrow, which would I pick?
|
| Even as an enormous chocolate lover (in all three senses) who
| eats chocolate several times a week, I'd probably choose AI
| instead.
|
| OpenAI has alternatives, but also I do spend more money on
| OpenAI than I do on chocolate currently.
| hervature wrote:
| I am just trying to help you write better. Your writing says
| "if I had to give up either AI or chocolate [...] I would
| probably choose AI". However, your language and intent seems
| to be that you would give up chocolate.
| NewJazz wrote:
| If you really wanted to know you could stop eating chocolate
| or stop using ai and see if you break. Or do both at
| different times and see how long you last without one or the
| other.
| Marsymars wrote:
| It's a bit of a weird comparison, AI vs a luxury sweet.
|
| Maybe instead of the chocolate market, look at the global
| washing machine market of $65 billion.
|
| I'd rather give up both AI and chocolate than my washing
| machine.
| CryptoBanker wrote:
| I spend a lot more time using AI for work than I do eating
| chocolate
| GannaIlinykh wrote:
| Burn rate often gets treated as a hard signal, but it is mostly
| about expectations. Once people get used to the idea of cheap
| intelligence, any slowdown feels like failure, even if the
| technology is still moving forward. That gap is usually where
| bubbles begin.
| password54321 wrote:
| Not sure why they put so much investment into videoSlop and
| imageSlop. Anthropic seems to be more focused at least.
| SAI_Peregrinus wrote:
| Because their main use is for advertising/propaganda, which is
| largely videoSlop & imageSlop even without AI.
| password54321 wrote:
| Outside of this: https://openai.com/index/disney-sora-
| agreement/ I don't think there has been much of a win for
| them even in advertising for image/video slop.
| anomaly_ wrote:
| It's like half the poster on here live in some parallel
| universe. I am making real money using generated
| image/video advertising content for both B2C and B2B goods.
| I am using Whisper and LLMs to review customer service call
| logs at scale and identity development opportunities for
| staff. I am using GPT/Gemini to help write SQL queries and
| little python scripts to do data analysis on my customer
| base. My business's productivity is way up since GenAI
| become accessible.
| bdangubic wrote:
| that (very vocal) half tried it once and it didn't work
| :)
| piskov wrote:
| Because as with the internet 99% of the usage won't be for
| education, work, personal development, what have you. It will
| be for effing kitten videos and memes.
| nine_k wrote:
| Are the posters of effing kitten videos a customer base with
| a significant LTV?
|
| (The obvious well-paying market would be erotic / furry /
| porn, but it's too toxic to publicly touch, at least in the
| US.)
| piskov wrote:
| Openrouter stats already mention 52% usage is roleplay.
|
| As for photo/video very large number of people use it for
| friends and family (turn photo into creative/funny video,
| change photo, etc.).
|
| Also I would think photoshop-like features are coming more
| and more in chatgpt and alike. For example, "take my
| poorly-lit photo and make it look professional and suitable
| for linkedin profile"
| Tcepsa wrote:
| Also FWIW I understand that the furry community has a
| strong culture of _commissioning artists for their work_ ,
| so that's likely to be a headwind against using genAI that
| isn't explicitly trained only on licensed materials. Sure,
| there are likely some who would use it regardless, but I
| expect _the use of genAI_ to generate furry porn to be at
| least as toxic within that community as the use of genAI
| _to generate furry porn_ outside of that community.
| candiddevmike wrote:
| If only 99% of the Internet was kitten videos and memes
| piskov wrote:
| Well, it sure as hell not all 3blue1brown, crr0ww, Feynman,
| and alike
| only-one1701 wrote:
| That's an unusual way of saying uh...adult entertainment
| sph wrote:
| It's pussies one way or another
| password54321 wrote:
| It is a matter who will actually _pay_ for compute. Is it
| people who care about work or entertainment?
|
| Even if developers are 1:1000 of your users, I'm going to
| guess that ratio shifts a lot when you look at subscribers.
| johnnyfived wrote:
| But how much more profitable are they? We see revenue but not
| profits / spending. Anthropic seems to be growing faster than
| OpenAI did but that could be the benefit of post-GPT hype.
| Alconicon wrote:
| Because OpenAI stands for AI leader.
|
| If Gemini can create or edit an image, chatgpt needs to be able
| to do this too. Who wants to copy&paste prompts between ai
| agents?
|
| Also if you want to have more semantics, you add image, video
| and audio to your model. It gets smarter because of it.
|
| OpenAI is also relevant bigger than antropic and is known as a
| generic 'helper'. Antropic probably saw the benefits of being
| more focused on developer which allows it to succeed longer in
| the game for the amount of money they have.
| password54321 wrote:
| >Also if you want to have more semantics, you add image,
| video and audio to your model. It gets smarter because of it.
|
| I think you are confusing generation with analysis. As far I
| am aware your model does not need to be good at generating
| images to be able to decode an image.
| adastra22 wrote:
| It is, to first approximation, the same thing. The
| generative part of genAI is just running the analysis model
| in reverse.
|
| Now there are all sorts of tricks to get the output of this
| to be good, and maybe they shouldn't be spending time and
| resources on this. But the core capability is shared.
| kaoD wrote:
| > The generative part of genAI is just running the
| analysis model in reverse.
|
| I think that hasn't been the case since DeepDream?
| mbreese wrote:
| I think you're partially right, but I don't think being an AI
| leader is the main motivation -- that's a side effect.
|
| I think it's important to OpenAI to support as many use-cases
| as possible. Right now, the experience that most people have
| with ChatGPT is through small revenue individual accounts.
| Individual subscriptions with individual needs, but modest
| budgets.
|
| The bigger money is in enterprise and corporate accounts. To
| land these accounts, OpenAI will need to provide coverage
| across as many use-cases as they can so that they can operate
| as a one-stop AI provider. If a company needs to use OpenAI
| for chat, Anthropic for coding, and Google for video, what's
| the point? If Google's chat and coding is "good enough" and
| you _need_ to have video generation, then that company is
| going to go with Google for everything. For the end-game I
| think OpenAI is playing for, they will need to be competitive
| in all modalities of AI.
| JumpCrisscross wrote:
| > _Who wants to copy &paste prompts between ai agents?_
|
| An AI!
|
| The specialist vs generalist debate is still open. And for
| complex problems, sure, having a model that runs on a small
| galaxy may be worth it. But for most tasks, a fleet of
| tailor-made smaller models being called on by an agent seems
| like a solidly-precedented (albeit not singularity-
| triggering) bet.
| andrekandre wrote:
| > But for most tasks, a fleet of tailor-made smaller models
| being called on by an agent seems like a solidly-
| precedented (albeit not singularity-triggering) bet.
|
| not an expert by any means, but wouldn't smaller but highly
| refined models also output more reproducible results?
|
| intuitively it sounds akin to the unix model...
| nubg wrote:
| But then again the main selling point of using LLMs as
| part of some code that solves a certain business need is
| that you don't have to finetune a usecase-specific model
| (like in the mid 2010s), you just prompt engineer a bit
| and it often magically works.
| nutjob2 wrote:
| > Because OpenAI stands for AI leader.
|
| It'll just end up spreading itself too thin and be second or
| third best at everything.
|
| The 500lb gorilla in the room is Google. They have endless
| money and maybe even more importantly they have endless
| hardware. OpenAI are going to have an increasingly hard time
| competing with them.
|
| That Gemini 3 is crushing it right now isn't the problem.
| It's Gemini 4 or 5 that will likely leave them in the dust
| for the general use case, meanwhile specialist models will
| eat what remains of their lunch.
| jdminhbg wrote:
| Because for all the incessant whining about "slop," multimodal
| AI i/o is incredibly useful. Being able to take a photo of a
| home repair issue, have it diagnosed, and return a diagram
| showing you what to do with it is great, and it's the same
| algos that power the slop. "Sorry, you'll have to go to Gemini
| for that use case, people got mad about memes on the internet"
| is not really a good way for them to be a mass consumer
| company.
| tayo42 wrote:
| Can Claude not do that? I've sent it pictures for simpler
| things and got answers, usually Id of bugs and plants.
| esafak wrote:
| Yes, Claude is multi-modal.
| Ginden wrote:
| Because almost everyone involved in AI race grew up in "winner
| takes it all" environments, typical for software, and they try
| really hard to make it reality. This means your model should do
| everything to just take 90% of market share, or at least 90% of
| specific niche.
|
| The problem is, they can't find the moat, despite searching
| very hard, whatever you bake into your AI, your competitors
| will be able to replicate in few months. This is why OpenAI is
| striking deal with Disney, because copyright provides such
| moat.
| sod22 wrote:
| Striking deals without a proper vision is a waste of
| resources. And that's the path OAI is on.
| worldsayshi wrote:
| > your competitors will be able to replicate in few months.
|
| Will they really be able to replicate the quality while
| spending significantly less in compute investment? If not
| then the moat is still how much capital you can acquire for
| burning on training?
| the_gipsy wrote:
| What does moat even mean anymore
| AlotOfReading wrote:
| Is that not what distillation is?
| Ginden wrote:
| There are multiple tech companies with quadrillion-deep
| pockets.
| thisgetsit wrote:
| > copyright provides such a moat.
|
| Been saying this since the 2016 Alice case. Apple jumped into
| content production in 2017. They saw the long term value of
| copyright interests.
|
| https://arstechnica.com/information-
| technology/2017/08/apple...
|
| Alice changed things such that code monkeys algorithms were
| not patentable (except in some narrow cases where true
| runtime novelty can be established.) Since the transformers
| paper, the potential of self authoring content was obvious to
| those who can afford to think about things rather than hustle
| all day.
|
| Apple wants to sell AI in an aluminum box while VCs need to
| prop up data center agrarianism; they need people to believe
| their server farms are essential.
|
| Not an Apple fanboy but in this case, am rooting for their
| "your hardware, your model" aspirations.
|
| Altman, Thiel, the VC model of make the serfs tend their
| server fields, their control of foundation models, is a gross
| feeling. It comes with the most religious like sense of
| fealty to political hierarchy and social structure that only
| exists as hallucination in the dying generations. The 50+
| year old crowd cannot generationally churn fast enough.
| CodingJeebus wrote:
| Totally agree, people love to talk about how hopelessly
| behind Apple is in terms of AI progress when they're in a
| better position to compete directly against Nvidia on
| hardware than anyone else.
| madeofpalk wrote:
| Apple's always had great potential. They've struggled to
| execute on it.
|
| But really, so has everyone else. There's two "races" for
| AI - creating models, and finding a consumer use case for
| them. Apple just isn't competing in creating models
| similar to the likes of OpenAI or Google. They also
| haven't really done much with using AI technology to
| deliver 'revolutionary' general purpose user-facing
| features using LLMs, but neither has anyone else beyond
| chat bots.
|
| I'm not convinced ChatGPT as a consumer product can
| sustain current valuations, and everyone is still
| clamouring to find another way to present this tech to
| consumers.
| calvinmorrison wrote:
| I think a major part of it is the shovel selling. Nvidia
| is selling shovels to OpenAI. OpenAI is selling shovels
| to endless B2B, Consulting, Accounting, software firms
| buying into it...
| PeterHolzwarth wrote:
| My goodness, are you really saying, in effect, "I wish
| people over 50 would just hurry up and die"?!?
|
| Good lord, expressing that kind of sentiment does _not_
| make for a useful and engaging conversation here on hacker
| news.
| Zetaphor wrote:
| Clutch pearls
| wincy wrote:
| OpenAIs opsec must be amazing, I had fully expected some
| version of ChatGPT to be leaked on torrent sites at some
| point this year. How do you manage to avoid something that
| could be exfiltrated on a hard disk from escaping your
| servers in all cases, forever?
| KaiserPro wrote:
| The model size is probably the thing here. I suspect they
| took the FAANG remote workstation approach, where VScode
| runs on a remote machine. After all its not that great
| having a desktop with 8 monster GPUs under your desk.
| (x100)
|
| Plus moving all that data about is expensive. Keeping
| things in the datacenter is means its faster and easier
| to secure.
| odo1242 wrote:
| It's also why they bought 40% of the world's RAM supply, too
| aenis wrote:
| Committed to buying. They dont have the money to actually
| buy it (at least not yet).
| Cyclone_ wrote:
| The fact that they do this isn't very bullish for them
| achieving whatever they define as AGI.
| fastball wrote:
| You don't expect AGI to be multi-modal?
| madeofpalk wrote:
| What is AGI?
| fittingopposite wrote:
| Artificial general intelligence
| dyauspitr wrote:
| Because those and world models are the endgame, way way more
| than text is.
| dktp wrote:
| OpenAI is (was?) extremely good at making things that go viral.
| The successful ones for sure boost subscriber count
| meaningfully
|
| Studio Ghibli, Sora app. Go viral, juice numbers then turn the
| knobs down on copyrighted material. Atlas I believe was a less
| successful than they would've hoped for.
|
| And because of too frequent version bumps that are sometimes
| released as an answer to Google's launch, rather than a
| meaningful improvement - I believe they're also having harder
| time going viral that way
|
| Overall OpenAI throws stuff at the wall and see what sticks.
| Most of it doesn't and gets (semi) abandoned. But some of it
| does and it makes for better consumer product than Gemini
|
| It seems to have worked well so far, though I'm sceptical it
| will be enough for long
| raw_anon_1111 wrote:
| Selling a bunch of $20 a month subscriptions isn't going to
| make a dent in OpenAI losses. Going viral for a day or two
| doesn't help.
|
| Normal people are already getting tired of AI Slop
| johnnyanmac wrote:
| Going viral is great when you're a small team or even a
| million dollar company. That can make or break your business.
|
| Going viral as a billion dollar company spending upward of 1T
| is still not sustainable. You can't pay off a trillion
| dollars on "engagement". The entire advertising industry is
| "only" worth 1T as is:
| https://www.investors.com/news/advertising-industry-to-
| hit-1...
| drowsspa wrote:
| I guess we'd have to see the graph with the evolution of
| paying customers: I don't see the number of potential-but-
| not-yet clients being that high, certainly not one order of
| magnitude higher. And everyone already knows OpenAI, they
| don't have the benefit of additional exposure when they go
| viral: the only benefit seems to be to hype up investors.
|
| And there's something else about the diminishing returns of
| going viral... AI kind of breaks the usual assumptions in
| software: that building it is the hard part and that scaling
| is basically free. In that sense, AI looks more like regular
| commodities or physical products, in that you can't just
| Ctrl-C/Ctrl-V: resources are O(N) on the number of users, not
| O(log N) like regular software.
| johnnyanmac wrote:
| because these are mostly the same players of the 2010's. So
| when they can't get more investor money and the hard problems
| are still being cracked, the easiest fallback is the same
| social media slop they used to become successful 10-15 years
| prior. Falling back on old ways to maximize engagement and
| grind out (eventually) ad revenue.
| conception wrote:
| When they released their first good image model is when they
| got a new 100 million users in a week.
| mFixman wrote:
| Because there is only so much programmers and companies will
| pay for AI coders. The big prizes is AI-generated TikTok.
|
| The entertainment industry is by far the easiest way to tap
| into global discretionary income.
| andy12_ wrote:
| Because the general idea here is that image and video models,
| when scaled way up, can generalize like text models did[1], and
| eventually be treated as "world models"[2]; models that can
| accurately model real world processes. These "world models"
| then could be used to train embodied agents with RL in an
| scalable way[3]. The video-slop and image-slop generators is
| just a way to take advantage of the current research in world
| models to get more out of it.
|
| [1] https://arxiv.org/pdf/2509.20328
|
| [2] https://deepmind.google/blog/genie-3-a-new-frontier-for-
| worl...
|
| [3] https://arxiv.org/pdf/2509.24527
| Verdex wrote:
| I get the allure of the hypothetical future of video slop.
| Imagine if you could ask the AI to redo lord of the rings but
| with magneto instead of gandalf. Imagine watching shawshank
| redemption but in the end we get a "hot fuzz" twist where andy
| fights everyone. Imagine a dirty harry style police movie but
| where the protagonist is a xenomorph which is only barely
| acknowledged.
|
| You could imagine an entirely new cultural engine where entire
| genres are born off of random reddit "hey have you guys every
| considered" comments.
|
| However, the practical reality seems to be that you get tick
| toc style shorts that cost a bunch to create and have a dubious
| grasp on causality that have to compete with actual tick toc, a
| platform that has its endless content produced for free.
| ep103 wrote:
| You and I see the tiktok slop. But as that functionality
| improves, its going to make its way into the toolchain of
| every digital image and video editing software in existence,
| the same way that its finding its way into programming IDEs.
| And that type of feature build is worth $. It might be a
| matter of time until we get to the point where we start
| seeing major Hollywood movies (for example) doing things that
| were unthinkable the same way that CGI revolutionized cinema
| in the 80s. Even if it doesn't, from my layman perception, it
| seems that Hollywood has spent the last ~20 years
| differentiating itself from the rest of global cinema largely
| based on a moat built on IP ownership and capital intensive
| production value (largely around name brand actors and
| expensive CGI). AI already threatens to remove one of those
| pillars, which I have to think in turn makes it very
| valuable.
| geldedus wrote:
| paywall, no upvote
| Skyy93 wrote:
| Someone posted already the non-paywall version:
| https://news.ycombinator.com/item?id=46438679
| jeffbee wrote:
| For what I use them for, the LLM market has become a two player
| game, and the players are Anthropic and Google. So I find it
| quite interesting that OpenAI is still the default assumption of
| the leader.
| acoustics wrote:
| ChatGPT dominates the consumer market (though Nano Banana is
| singlehandedly breathing some life into consumer Gemini).
|
| A small anecdote: when ChatGPT went down a few months ago, a
| lot of young people (especially students) just waited for it to
| come back up. They didn't even think about using an
| alternative.
| jeffbee wrote:
| That's pretty nuts. With the models changing so much and so
| often, you have to switch it up sometimes just to see what
| the other company is offering.
| adastra22 wrote:
| How often do you or people you know use a search engine
| other than google?
| jeffbee wrote:
| That is different because all of the players I mentioned
| have credible, near-leading products in the AI model
| market, whereas nobody other than Google has search
| results worth a damn. I wouldn't recommend anyone
| squander their time by checking Kagi or DDG or Bing more
| than once.
| adastra22 wrote:
| I don't use google. Believe it or not, I get better
| results via Bing (usually via DDG, which is a frontend
| for Bing). But I asked the rhetorical question expecting
| the answer you gave. These people use ChatGPT only for
| the same reason you exclusively use Google.
| jeffbee wrote:
| Right, that's consistent with what I said if you re-read
| it. Search isn't changing. If you are happy with your
| search you would be wasting your time to shop around.
| dom96 wrote:
| When ChatGPT starts injecting ads or forcing payment or doing
| anything else that annoys its userbase then the young people
| won't have a problem looking for alternatives
|
| This "moat" that OpenAI has is really weak
| PeterHolzwarth wrote:
| They took early steps to do so (ads) just recently. User
| response was as you'd expect.
| throw-12-16 wrote:
| The consumer market is a loss leader.
| reilly3000 wrote:
| codex cli with gpt-5.2-codex is so reliably good, it earns the
| default position in my book. I had cancelled my subscription in
| early 2024 but started back up recently and have been blown
| away at how terse, smart, and effective it is. Their CLI
| harness is top-notch and it manages to be extremely efficient
| with token usage, so the little plan can go for much of the
| day. I don't miss Claude's rambling or Gemini's random
| refactorings.
| gizmodo59 wrote:
| Only in HN and some reddit subs I even see the name claude. In
| many countries AI=ChatGPT.
| bjt wrote:
| And at one point in the 90s, Internet=Netscape Navigator.
|
| I see Google doing to OpenAI today what Microsoft did to
| Netscape back then, using their dominant position across
| multiple channels (browser, search, Android) to leverage
| their way ahead of the first mover.
| jeffbee wrote:
| That's funny, the way I see it is Microsoft put tens of
| billions of dollars behind an effort to catch Google on the
| wrong foot, or at least make Google look bad, but they
| backed the wrong guy and it isn't quite going to make it to
| orbit.
| phito wrote:
| From what I've seen, 99% of people are using the free version
| of ChatGPT. Those who are using Claude are on the
| subscription, very often the $100/month one.
| joegibbs wrote:
| Interestingly Claude is so far down in traffic it's below
| things like CharacterAI, it's the best model but it's something
| like 70% ChatGPT, 10% Gemini and Claude is only 1% or so
| aurareturn wrote:
| What do you use them for?
|
| GPT5.2 Codex is the best coding model right now in benchmarks.
| I use it exclusively now.
| agentifysh wrote:
| 2008: US Banks pump stocks -> market correction -> taxpayer
| bailout
|
| 2026: US AI companies pump stocks -> market correction ->
| taxpayer bailout
|
| Mark my words. OpenAI will be bailed out by US taxpayers.
| senshan wrote:
| Not really. It was not about stocks. It was the collapse of
| insurance companies at the core of 2008 crisis.
|
| The same can happen now on the side of private credit that
| gradually offloads its junk to insurance companies (again):
|
| _As a result, private credit is on the rise as an investment
| option to compensate for this slowdown in traditional LBO
| (Figure 2, panel 2), and PE companies are actively growing the
| private credit side of their business by influencing the
| companies they control to help finance these operations. Life
| insurers are among these companies. For instance, KKR's
| acquisition of 60 percent of Global Atlantic (a US life
| insurer) in 2020 cost KKR approximately $3billion._
|
| https://www.imf.org/en/Publications/global-financial-stabili...
| smj-edison wrote:
| In 2008 the US government ended up making more money then they
| spent though (at least with the tarp), because they invested a
| ton of money after everything collapsed, and thus was extremely
| cheap. Once the markets recovered, they made a hefty sum
| selling all the derivatives they got at the lowest point. Seems
| like the epitome of buy when low and sell when high tbh.
| bjt wrote:
| I'll take that bet.
|
| Banks get bailed out because if confidence in the banking
| system disappears and everyone tries to withdraw their money at
| once, the whole economy seizes up. And whoever is Treasury
| Secretary (usually an ex Wall Street person) is happy to do it.
|
| I don't see OpenAI having the same argument about systemic risk
| or the same deep ties into government.
| zozbot234 wrote:
| Even in a bank bailout, the equity holders typically get
| wiped out. It's really not that different from a bankruptcy
| proceeding, there's just a whole lot more focus on keeping
| the business itself going smoothly. I doubt OpenAI want to be
| in that kind of situation.
| Ekaros wrote:
| Even if there is a bailout. Will it happen in time? Once the
| confidence is lost it is lost and valuations have dropped.
| Bailout would just mean that who ever gave money would end up
| as bag holder of something now worth lot less.
|
| Banks needed bailout to keep lending money. Auto industry
| needed one to keep employing lot of people. AI doesn't employ
| that many.
|
| I just don't believe bailout can happen before it is too late
| for it to be effective in saving the market.
| throw-12-16 wrote:
| I don't think so.
|
| Elon owns a competitor and bought the White House.
| HardCodedBias wrote:
| OpenAI has #5 traffic levels globally. Their product-market fit
| is undeniable. The question is monetization.
|
| Their cost to serve each request is roughly 3 orders of magnitude
| higher than conventional web sites.
|
| While it is clear people see value in the product, we only know
| they see value at today's subsidized prices. It is possible that
| inference prices will continue their rapid decline. Or it is
| possible that OAI will need to raise prices and consumers will be
| willing to pay more for the value.
| pclmulqdq wrote:
| It's easy to get product-market fit when you give away dollars
| for the price of pennies.
| PeterHolzwarth wrote:
| Yes, but that is the standard methodology for startups in
| their boost phase. Burn vast piles of cash to acquire users,
| then find out at the end if a profitable business can be made
| of it.
| EA-3167 wrote:
| It's also the standard methodology for a number of scams.
| mjamesaustin wrote:
| Scams are our entire economy now. Do whatever you can to
| own a market, then squeeze your customers miserably once
| you have their loyalty. Cash out, kick the smoking
| remains of the company to the curb, use your payout to
| buy into another company, and repeat.
| lotsofpulp wrote:
| Kind of like paying more and more to Social Security and
| Medicare and getting less and less.
|
| And the backstop on asset prices at the expense of the
| currency's purchasing power.
| Analemma_ wrote:
| Most startups have big upfront capital costs and big
| customer acquisition costs, but small or zero marginal
| costs and COGS, and eventually the capital costs can slow
| down. That's why spending big and burning money to get a
| big customer base is the standard startup methodology. But
| OpenAI _doesn 't_ have tiny COGS: inference is expensive as
| fuck. And they can't stop capex spending on training
| because they'll be immediately lapped by the other frontier
| labs.
|
| The reason people are so skeptical is that OpenAI is
| applying the standard startup justification for big
| spending to a business model where it doesn't seem to
| apply.
| famouswaffles wrote:
| >But OpenAI doesn't have tiny COGS: inference is
| expensive as fuck.
|
| No, inference is really cheap today, and people saying
| otherwise simply have no idea what they are talking
| about. Inference is not expensive.
| cherryteastain wrote:
| Clearly not cheap enough.
|
| > Even at $200 a month for ChatGPT Pro, the service is
| struggling to turn a profit, OpenAI CEO Sam Altman
| lamented on the platform formerly known as Twitter
| Sunday. "Insane thing: We are currently losing money on
| OpenAI Pro subscriptions!" he wrote in a post. The
| problem? Well according to @Sama, "people use it much
| more than we expected."
|
| https://www.theregister.com/2025/01/06/altman_gpt_profits
| /
| aurareturn wrote:
| So just raise the price or decrease the cost per token
| internally.
|
| Altman also said 4 months ago: Most of
| what we're building out at this point is the inference
| [...] We're profitable on inference. If we didn't pay for
| training, we'd be a very profitable company.
|
| https://simonwillison.net/2025/Aug/17/sam-altman/
| rand_r wrote:
| Only in as much as their product is a pure commodity like
| oil. Like yes it's trivial to get customers if you sell gas
| for half the price, but I don't think LLMs are that simple
| right now. ChatGPT has a particular voice that is different
| from Gemini and Grok.
| robkop wrote:
| Does that cost to serve multiple stay the same when
| conventional sites are forced to shovel ai into each request?
| e.g. the new google search
| doctorpangloss wrote:
| it's a simple problem really. what is actually scarce?
|
| a spot on the iOS home screen? yes.
|
| infrastructure to serve LLM requests? no.
|
| good LLM answers? no.
|
| the economist can't tell the difference between scarcity and
| real scarcity.
|
| it is extremely rare to buy a spot on the iOS home screen, and
| the price for that is only going up - think of the trend of
| values of tiktok, whatsapp and instagram. that's actually
| scarce.
|
| that is what openai "owns." you're right, #5 app. you look at
| someone's home screen, and the things on it are owned by 8
| companies, 7 of which are the 7 biggest public companies in the
| world, and the 8th is openai.
|
| whereas infrastructure does in fact get cheaper. so does
| energy. they make numerous mistakes - you can't forecast retail
| prices Azure is "charging" openai for inference. but also,
| NVIDIA participates in a cartel. GPUs aren't actually scarce,
| you don't actually need the highest process nodes at TSMC, etc.
| etc. the law can break up cartels, and people can steal
| semiconductor process knowledge.
|
| but nobody can just go and "create" more spots on the iOS home
| screen. do you see?
| somewhereoutth wrote:
| depends if they can monetize that spot. So either ads or
| subscription. It is as yet unclear whether ads/subscription
| can generate sufficient revenue to cover costs and return a
| profit. Perhaps 'enough ads' will be too much for users to
| bear, perhaps 'enough subscription' will be too much for
| users to afford.
| doctorpangloss wrote:
| right now google pays apple almost $30b a year to be
| default search in safari. google only has one icon on the
| home screen (YouTube). just originating google searches
| could be worth tens of billions. so i don't know. there are
| a bajillion ways to monetize.
| avalys wrote:
| AI is going to be a highly-competitive, extremely capital-
| intensive commodity market that ends up in a race to the bottom
| competing on cost and efficiency of delivering models that have
| all reached the same asymptotic performance in the sense of
| intelligence, reasoning, etc.
|
| The simple evidence for this is that everyone who has invested
| the same resources in AI has produced roughly the same result.
| OpenAI, Anthropic, Google, Meta, Deepseek, etc. There's no
| evidence of a technological moat or a competitive advantage in
| any of these companies.
|
| The conclusion? AI is a world-changing technology, just like the
| railroads were, and it is going to soon explode in a huge bubble
| - just like the railroads did. That doesn't mean AI is going to
| go away, or that it won't change the world - railroads are still
| here and they did change the world - but from a venture
| investment perspective, get ready for a massive downturn.
| ares623 wrote:
| Just in time for a Government guaranteed backstop.
| bee_rider wrote:
| Massive upfront costs and second place is just first loser.
| It's like building fabs but your product is infinitely
| copyable. Seems pretty rough.
| gerdesj wrote:
| What exactly is "second" place? No-one really knows what
| first place looks like. Everyone is certain that it will cost
| an arm, a leg and most of your organs.
|
| For me, I think that, the possible winners will be close to
| fully funded up front and the losers will be trying to turn
| debt into profit and fail.
|
| The rest of us self hoster types are hoping for a massive
| glut of GPUs and RAM to be dumped in a global fire sale. We
| are patient and have all those free offerings to play with
| for now to keep us going and even the subs are so far
| somewhat reasonable but we will flee in droves as soon as you
| try to ratchet up the price.
|
| It's a bit unfortunate but we are waiting for a lot of large
| meme companies to die. Soz!
| raw_anon_1111 wrote:
| First place looks a lot like Google...
| vkou wrote:
| You and the other hobbyists aren't what's driving
| valuations. Enterprise subscriptions are.
| ljlolel wrote:
| OpenAI is 80% consumer subs
| vkou wrote:
| And do those subs justify their valuation?
|
| They don't, the only thing that can justify it is if they
| get themselves into every business workflow. That's what
| the investors are counting on.
| fooblaster wrote:
| There is a pretty big moat for Google: extreme amounts of video
| data on their existing services and absolutely no dependence on
| Nvidia and it's 90% margin.
| fooblaster wrote:
| And yes, all their competitors are making custom chips.
| Google is on TPU v7. absolutely nobody is going to get this
| right on the first try among their competitors - Google
| didn't.
| CharlieDigital wrote:
| Bigger problem for late starts now is that it will be hard
| to match the performance and cost of Google/Nvidia. It's an
| investment that had to have started years ago to be
| competitive now.
| nateb2022 wrote:
| I have yet to be convinced the broader population has an
| appetite for AI produced cinematography or videos.
| Independence from Nvidia is no more of a liability than
| dependence on electricity rates; it's not as if it's in
| Nvidia's interest to see one of its large customers fail. And
| pretty much any of the other Mag7 companies are capable of
| developing in-house TPUs + are already independently
| profitable, so Google isn't alone here.
| fooblaster wrote:
| If you think they are going to catch up with Google's
| software and hardware ecosystem on their first chip, you
| may be underestimating how hard this is. Google is on TPU
| v7. meta has already tried with MTIA v1 and v2. those
| haven't been deployed at scale for inference.
| nateb2022 wrote:
| I don't think many of them will want to, though. I think
| as long as Nvidia/AMD/other hardware providers offer
| inference hardware at prices decent enough to not justify
| building a chip in-house, most companies won't. Some of
| them will probably experiment, although that will look
| more like a small team of researchers + a moderate budget
| rather than a burn-the-ships we're going to use only our
| own hardware approach.
| fooblaster wrote:
| Well, anthropic just purchased a million TPUs from Google
| because even with a healthy margin from Google, it's far
| more cost effective because of Nvidia's insane markup.
| That speaks for itself. Nvidia will not drop their margin
| because it will tank their stock price. it's half of the
| reason for all this circular financing - lowering their
| effective margin without lowering it on paper.
| fragmede wrote:
| And, don't forget everyone's buying from TSMC in every
| case!
| Seattle3503 wrote:
| The video data is probably good for training models,
| including text models.
| margalabargala wrote:
| It's in Nvidia's interest to charge the absolute maximum
| they can without their customers failing. Every dollar of
| Nvidia's margin is your own lost margin. Utilities don't do
| that. Nvidia is objectively a way bigger liability than
| electricity rates.
| bdangubic wrote:
| it is in every business's best interest to charge the
| maximum...
| wrs wrote:
| Utilities and insurance companies are two examples of
| business regulated to not charge the maximum, for public
| policy reasons.
| bdangubic wrote:
| we suggesting that nvidia/google/.. be regulated for like
| utilities?
| wrs wrote:
| Just expanding on the above sentence "utilities don't do
| that". Which is why depending on Nvidia isn't like
| depending on electricity.
| ralph84 wrote:
| The value of YouTube for AI isn't making AI videos, it's
| that it's an incredibly rich source for humanity's current
| knowledge in one place. All of the tutorials, lectures,
| news reports, etc. are great for training models.
| Nextgrid wrote:
| Is that actually a moat? Seems like all model providers
| managed to scrape the entire textual internet just fine.
| If video is the next big thing I don't see why they won't
| scrape that too.
| monocasa wrote:
| And we're probably already starting to see that, given
| the semirecent escalations in game of cat and also cat of
| youtube and the likes of youtube-dl.
|
| Reminds me of Reddit's cracking down on API access after
| realizing that their data was useful. But I'd expect both
| youtube to be quicker on the gun knowing about AI data
| collection, and have more time because of the orders of
| magnitude greater bandwidth required to scrape video.
| jakeydus wrote:
| And reddit turned around and sold it all for a mess of
| pottage...
| satvikpendem wrote:
| Sold being the operative word, rather than giving it away
| for free.
| monocasa wrote:
| Well, it is available for free either way. They pissed
| off their user base all for a horse that had already left
| the stable.
|
| https://academictorrents.com/details/2d056b22743718ac8191
| 5f2...
| satvikpendem wrote:
| Look at their stock price. They are doing very well since
| IPO, and much of it was revenue from selling their data.
| monocasa wrote:
| Google's $60m/yr is the only thing keeping them
| profitable.
|
| Mozilla's business model isn't really something to
| emulate, even if the stock market doesn't really see it
| that way.
| satvikpendem wrote:
| Not really. Lots of companies have valuable data they
| sell and have been in business for decades just fine.
| It's even better for reddit because it's user generated
| so they don't even have to do anything. The users who
| left during the API debacle are not the vast majority of
| users which are generally casual and do not give a single
| shit about what happened, much as tech people like to
| think otherwise.
| monocasa wrote:
| The causal users (to say nothing of the the massive
| uptick in bot traffic) are some of the more useless data
| from an AI training perspective.
| satvikpendem wrote:
| Again, this is a techie take. Lots of people for example
| use ChatGPT for personal therapy and guess which subs
| their training data comes from, r/relationships etc.
| Those trying to use them for other means are
| comparatively less frequent.
| awesome_dude wrote:
| > Seems like all model providers managed to scrape the
| entire textual internet just fine
|
| Google, though, has been doing it for literal decades.
| That could mean that they have something nobody else
| (except archive.org) has - a history on how the
| internet/knowledge has evolved.
| jmb99 wrote:
| Scraping text across the entire internet is orders of
| magnitudes easier than scraping YouTube. Even ignoring
| the sheer volume of data (exabytes), you simply will get
| blocked at an IP and account level before you make a
| reasonable dent. Even if you controlled the entire IPv4
| space I'm not sure you could scrape all of YouTube
| without getting every single address banned. IPv6 makes
| address bans harder, true, but then you're still left
| with the problem of actually transferring and then
| storing that much data.
| earthnail wrote:
| For now, you actually get pretty far with Tor. Just reset
| your connection when you hit an IP ban by sending SIGHUP
| to the Tor daemon.
|
| I did that when I was retraining Stable Audio for fun and
| it really turned out to be trivial enough to pull of as a
| little evening side project.
| tucnak wrote:
| IPv6 doesn't make it "harder," as they would typically
| ban whole /48 prefixes.
| why-o-why wrote:
| Given the fact that Apple and Coke but rushed to produce AI
| slop, and the agreements with Disney, we are going to see a
| metric fuck-ton of AI-generated cinema in the next decade.
| The broader population's tastes are absolute harbage when
| it comes to cinema, so I don't see why you need convincing.
| 40+ superhero films should be enough.
| Ekaros wrote:
| I think it will be accepted by broader population. But if
| generation is easy and cheap I wonder if there is demand.
| And I mean as total demand in the segment. Will there be
| enough impressions to go around to actually profit from the
| content. Especially if storage is also considered.
| loloquwowndueo wrote:
| In this case the difference between its and it's does alter
| the meaning of the sentence.
| simonsarris wrote:
| Google has several enviable, if not moats, at least redoubts.
| TPUs, mass infrastructure and own their own cloud services,
| they own delivery mechanisms on mobile (Android) and every
| device (Chrome). And Google and Youtube are still #1 and #2
| most visited websites in the world.
| devsda wrote:
| Don't forget the other moat.
|
| While their competitors have to deal with actively hostile
| attempts to stop scraping training data, in Google's case
| almost everyone bends over backwards to give them easy
| access.
| catoc wrote:
| 'Actively hostile' as in objecting to your content
| getting ripped off without permission?
| satvikpendem wrote:
| It's a matter of perspective. In this scenario both sides
| see the other as hostile, just as one would look at a war
| happening as an outside observer.
| xivzgrev wrote:
| Not to mention security. I'd trust Google more not to have
| a data breach than open AI / whomever. Email accounts are
| hugely valuable but I haven't seen a Google data breach in
| the 20+ years I've been using them. This matters because I
| don't want my chats out there in public.
|
| Also integration with other services. I just had Gemini
| summarize the contents of a Google Drive folder and it was
| effortless & effective
| mootothemax wrote:
| While I don't disagree with you, for historical purposes
| I think it's important to highlight why google started
| its push for 100% wire encryption everywhere all the
| time:
|
| The NSA and GHCQ and basically every TLA with the ability
| to tap a fibre cable had figured out the gap in Google's
| armour: Google's datacenter backhaul links were
| unencrypted. Tap into them, and you get _everything_.
|
| I've no idea whether Snowdon's leaks were a revelation or
| a confirmation for google themselves; either way, it's
| arguably a total breach.
| jedberg wrote:
| When I worked at PayPal back in 2003/4, one of the things
| we did (and I think we were the first) was encrypt the
| datacenter backhaul connections. This was on top of
| encrypting all the traffic between machines. It added a
| lot of expense and overhead, but security was important
| enough to justify it.
| guelo wrote:
| And yet Venmo, a Paypal company, publishes transaction
| data publicly by default, no need to decrypt anything
| -\\_(tsu)_/-
| hrimfaxi wrote:
| Venmo publishes raw unencrypted transaction data? Or are
| you referring to their social network features?
| matkoniecz wrote:
| where?
| why-o-why wrote:
| Is Google even required to inform you of a data breach?
| bjt wrote:
| They're subject to California law, so yeah.
|
| https://oag.ca.gov/privacy/databreach/reporting
| dilyevsky wrote:
| Not that I disagree with your assessment but in the
| spirit of hn pedantry - google had a very significant
| breach where gmail was a primary target and that was
| "only" 16 years ago in mid 2009. So bad that it has its
| own wikipedia page:
| https://en.wikipedia.org/wiki/Operation_Aurora
| charcircuit wrote:
| >very significant breach
|
| That page says it was only 2 accounts and none of the
| messages within the mail was accessed. I wouldn't call
| that very significant.
| DoesntMatter22 wrote:
| They also have one of the biggest negatives in that they
| abandon almost everything they build so it's hard to get
| invested in thier products.
|
| I agree with the rest though
| satvikpendem wrote:
| They don't abandon their money makers. That's the thing
| people don't get about the Google graveyard meme, they
| only cut things that obviously aren't working to make
| them more money.
| troupo wrote:
| The biggest moat is amount of money. Google has infinite
| amounts of money the print out of thin air (ads). They
| don't need complex entangled schemes with circular debts to
| prop up their operations.
| stevenjgarner wrote:
| Agreed. Even xAI's (Grok's) access to live data on x.com and
| millions of live video inputs from Tesla is a moat not
| enjoyed by OpenAI.
| chroma205 wrote:
| >Agreed. Even xAI's (Grok's) access to live data on x.com
| and millions of live video inputs from Tesla is a moat not
| enjoyed by OpenAI.
|
| Tesla does not have live video feed from (every) Tesla car.
| johnnyfived wrote:
| That live data for X is mostly gonna consist of brainrot
| and egotistical founders and rising vibe coders, that data
| has to be worth so much less than something like Reddit.
| cdf wrote:
| On paper, Google should never have allowed the ChatGPT moment
| to happen ; how did a then non-profit create what was
| basically a better search engine than Google?
|
| Google suffers from classic Innovator's Dilemma and need
| competition to refocus on what ought to be basic survival
| instincts. What is worse is the search users are not the
| customers. The customers of Google Search are the advertisers
| and they will always prioritise the needs of the customers
| and squander their moats as soon as the threat is gone.
| hattmall wrote:
| Exactly, Google's business isn't search, it's ads. Is
| ChatGPT a more profitable system for delivering ads? That
| doesn't appear so, which means there's really no reason for
| Google to have created it first.
| razodactyl wrote:
| There was a very negative "immune" response from the
| users when they perceived suggestions from ChatGPT as
| ads.
|
| This will be hard for them to integrate in a way that
| won't annoy users / will be better implemented than any
| other competitor in the same space.
|
| Or perhaps we just deal with all AI across the board
| serving us ads.... this makes more sense unfortunately.
| transcriptase wrote:
| There's a very negative immune response to the idea of
| Netflix running ads.
|
| And yet they're there, in the form of prominent product
| placement in all of their original series along with
| strategic placement in the frame to make sure they appear
| in cropped clips posted to social media and made into
| gifs.
|
| Stranger Things alone has had 100-200 brands show up
| under the warm guise of nostalgia, with Coke alone
| putting up millions for all the less-than-subtle screen
| time their products get.
|
| I'm certain AI providers will figure out how to slyly put
| the highest bidder into a certain proportion of output
| without necessarily acting out that scene in Wayne's
| World.
| mahirsaid wrote:
| I suspect google can last much longer in regards to an AI
| model chat engine that competes with open AI and other
| companies, without needing a profit from that particular
| product in a timely manner. I can's say the same for the
| others. Google is using it's own money to fund this
| without mch pressure for immediate profit in a time
| deadline. They can rely on their other services for
| revenue and profit for the meantime.
| razodactyl wrote:
| Think about it in terms of the research they put out into
| the ether though. The research grows into something viable,
| they sit back and watch the response and move when it makes
| sense.
|
| It's like that old concept of saying something wrong in a
| forum on purpose to have everyone flame you for being wrong
| and needing to prove themselves better by each writing more
| elaborate answers.
|
| You catch more fish with bait.
| miohtama wrote:
| Google allowed this to happen because they listened to
| their compliance department and were afraid of a backslash
| if LLM says something that could anger people.
|
| Sergey Brin interview: https://x.com/slow_developer/status/
| 1999876970562166968?s=20
|
| This attitude also partially explains the black vikings
| incident.
| gniv wrote:
| Google had an in-house chatbot that was never allowed to
| launch. I used to think that they were wrong but now I'm
| pretty sure they were right to not launch it. Users are
| very forgiving with a newcomer but not with an established
| company.
| choudharism wrote:
| The TAM for video generation isn't as big as the other use
| cases.
| lokar wrote:
| YT is also a giant corpus of English via the transcription
| xnx wrote:
| I agree, but isn't the TAM for video generation all of
| movies, TV, and possibly video games, or all entertainment?
| That's a pretty big market.
| dilyevsky wrote:
| What you're competing for is people's attention and the tam
| for that is biggest there is
| IncreasePosts wrote:
| Hasn't it all been scraped by other ai companies already?
| nateb2022 wrote:
| > AI is going to be a highly-competitive, extremely capital-
| intensive commodity market
|
| It already is. In terms of competition, I don't think we've
| seen any groundbreaking new research or architecture since the
| introduction of inference time compute ("thinking") in late
| 2024/early 2025 circa GPT-o4.
|
| The majority of the cost/innovation now is training this 1-2
| year old technology on increasingly large amounts of content,
| and developing more hardware capable of running these larger
| models at more scale. I think it's fair to say the majority of
| capital is now being dumped into hardware, whether that's HBM
| and research related to that, or increasingly powerful GPUs and
| TPUs.
|
| But these components are applicable to a lot of other places
| other than AI, and I think we'll probably stumble across some
| manufacturing techniques or physics discoveries that will have
| a positive impact on other industries.
|
| > that ends up in a race to the bottom competing on cost and
| efficiency of delivering
|
| One could say that the introduction of the personal computer
| became a "race to the bottom." But it was only the start of the
| dot-com bubble era, a bubble that brought about a lot of
| beneficial market expansion.
|
| > models that have all reached the same asymptotic performance
| in the sense of intelligence, reasoning, etc.
|
| I definitely agree with the asymptotic performance. But I think
| the more exciting fact is that we can probably expect LLMs to
| get a LOT cheaper in the next few years as the current
| investments in hardware begin to pay off, and I think it's safe
| to assume that in 5-10 years, most entry-level laptops will be
| able to manage a local 30B sized model while still being
| capable of multitasking. As it gets cheaper, more applications
| for it become more practical.
|
| ---
|
| Regarding OpenAI, I think it definitely stands in a somewhat
| precarious spot, since basically the majority of its valuation
| is justified by nothing less than expectations of future
| profit. Unlike Google, which was profitable before the
| introduction of Gemini, AI startups need to establish
| profitability still. I think although initial expectations were
| for B2C models for these AI companies, most of the ones that
| survive will do so by pivoting to a B2B structure. I think it's
| fair to say that most businesses are more inclined to spend
| money chasing AI than individuals, and that'll lead to an
| increase in AI consulting type firms.
| mark_l_watson wrote:
| > in 5-10 years, most entry-level laptops will be able to
| manage a local 30B sized model
|
| I suspect most of the excitement and value will be on edge
| devices. Models sized 1.7B to 30B have improved incredibly in
| capability in just the last few months and are unrecognizably
| better than a year ago. With improved science, new efficiency
| hacks, and new ideas, I can't even imagine what a 30B model
| with effective tooling available could do in a personal
| device in two years time.
| sigbottle wrote:
| Very interested in this! I'm mainly a ChatGPT user; for me,
| o3 was the first sign of true "intelligence" (not
| 'sentience' or anything like that, just actual, genuine
| usefulness). Are these models at that level yet? Or are
| they o1? Still GPT4 level?
| logicprog wrote:
| Not _nearly_ o3 level. Much better than GPT4, though! For
| instance Qwen 3 30b-a3b 2507 Reasoning gets 46 vs GPT 4
| 's 21 and o3's 60-something on Artificial Analysis's
| benchmark aggregation score. Small local models ~30b
| params and below tend to benchmark far better than they
| actually work, too.
| torginus wrote:
| I think having massive amounts of high-bandwidth memory on
| consumer grade hardware could become a reality via flash.
|
| How Flash in SSDs works is you have tens to hundreds of
| dies stacked on top of each other in the same package, and
| their outputs are multiplexed so that only one of them can
| talk at the same time.
|
| We do it like this because we still can get 1-2 GB/s out of
| a chip this way, and having the ability to read hundreds of
| times faster is not justified for storage use.
|
| But if we connected these chips to high speed transcievers,
| we could get out all the 100s of GBs of bandwidth at the
| same time.
|
| I'm probably oversimplifying things, and it's not that
| simple IRL, but I'm sure people are already working on this
| (I didn't come up with the idea), and it might end up
| working out and turn into a commercial product.
| airstrike wrote:
| > One could say that the introduction of the personal
| computer became a "race to the bottom." But it was only the
| start of the dot-com bubble era, a bubble that brought about
| a lot of beneficial market expansion.
|
| I think the comparison is only half valid since personal
| computers were really just a continuation of the innovation
| that was general purpose computing.
|
| I don't think LLMs have quite as much mileage to offer, so to
| continue growing, "AI" will need at least a couple step
| changes in architecture and compute.
| zozbot234 wrote:
| I don't think anyone _knows_ for sure how much mileage
| /scalability LLMs have. Given what we do know, I suspect if
| you can afford to spend more compute on even longer
| training runs, you can still get much better results
| compared to SOTA, even for "simple" domains like
| text/language.
| airstrike wrote:
| I think we're pretty much out of "spend more compute on
| even longer training runs" atp.
| skort wrote:
| > But I think the more exciting fact is that we can probably
| expect LLMs to get a LOT cheaper in the next few years as the
| current investments in hardware begin to pay off
|
| Citation needed!
| visarga wrote:
| > I don't think we've seen any groundbreaking new research or
| architecture since the introduction of inference time compute
| ("thinking") in late 2024/early 2025 circa GPT-o4
|
| It was model improvements, followed by inference time
| improvements, and now it's RLVR dataset generation driving
| the wheel.
| snet0 wrote:
| I haven't read much about it to understand what's going on,
| but the development of multi-modal models has also felt like
| a major step. Being able to paste an image into a chat and
| have it "understand" the image to a comparable extent to
| language is very powerful.
| phyzix5761 wrote:
| I, personally, use chatGPT for search more than I do Google
| these days. It, more often than not, gives me more exact
| results based on what I'm looking for and it produces links I
| can visit to get more information. I think this is where their
| competitive advantage lies if they can figure out how to
| monetize that.
| aprilthird2021 wrote:
| I'm genuinely curious. Why do you do this instead of Google
| Searches which also have an AI Overview / answer at the top,
| that's basically exactly the same as putting your search
| query into a chat bot, but it ALSO has all the links from a
| regular Google search so you can quickly corroborate the info
| even using sources not from the original AI result (so you
| also see discordant sources from what the AI answer had)?
| thom wrote:
| The regular google search AI doesn't do thinky thinky mode.
| For most buying decisions these days I ask ChatGPT to go
| off and search and think for a while given certain
| constraints, while taking particular note of Reddit and
| YouTube comments, and come back with some recommendations.
| I've been delighted with the results.
| Marsymars wrote:
| I wouldn't be surprised if ChatGPT was Pareto optimal for
| buying decisions... but I suspect there are a whole pile
| of Pareto optimal ways to make buying decisions,
| including "buy one of the Wirecutter picks" or "buy
| whatever Costco is selling".
| thom wrote:
| Even in the case where you have a good shortlist of
| items, the ability to then ask follow up questions in a
| conversational format is very useful for me. Anyway, just
| explaining why one might use ChatGPT for this rather than
| the Google search box, obviously your mileage is welcome
| to vary.
| blinding-streak wrote:
| I chuckled at "thinky thinky" mode. If some ai company
| used this branding it would win a lot of hearts and minds
| methinks
| heresie-dabord wrote:
| It could backfire badly.
|
| "Some messages are tough to write, let's thinky-think it
| through together."
|
| "Golly, your codey-code could use some help. Ask me what
| I thinky-think!"
|
| "I'm here to help you thinky-think while you worky-work!"
| raw_anon_1111 wrote:
| We don't need anecdotes. We have data. Google has been
| announcing quarter after quarter of record revenues and
| profits and hasn't seen any decrease in search traffic. Apple
| also hinted at the fact that it also didn't see any decreased
| revenues from the Google Search deal.
|
| AI answers is good enough and there is a long history of
| companies who couldn't monetize traffic via ads. The
| canonical example is Yahoo. Yahoo was one of the most traffic
| sites for 20 years and couldn't monetize.
|
| 2nd issue: defaults matter. Google is the default search
| engine for Android devices, iOS devices and Macs whether
| users are using Safari or Chrome. It's hard to get people to
| switch
|
| 3rd issue: any money that OpenAI makes off search ads, I'm
| sure Microsoft is going to want there cut. ChatGPT uses Bing
|
| 4th issue: OpenAIs costs are a lot higher than Google and
| they probably won't be able to command a premium in ads.
| Google has its own search engine, its own servers, its own
| "GPUs" [sic],
|
| 5th: see #4. It costs OpenAI a lot more per ChatGPT request
| to serve a result than it costs Google. LLM search has a
| higher marginal cost.
| matkoniecz wrote:
| > Google has been announcing quarter after quarter of
| record revenues and profits and hasn't seen any decrease in
| search traffic.
|
| this kind of things may take some time to spread across
| population
| sod22 wrote:
| I personally know people that used ChatGPT a lot but have
| recently moved to using Gemini.
|
| There's a couple of things going on but put simply - when
| there is no real lock in, humans enjoy variety. Until one
| firm creates a superior product with lock in, only those who
| are generating cash flows will survive.
|
| OAI does not fit that description as of today.
| gerdesj wrote:
| "AI is going to be a highly-competitive" - In what way?
|
| It is not a railroad and the railroads did not explode in a
| bubble (OK a few early engines did explode but that is
| engineering). I think LLM driven investments in massive DCs is
| ill advised.
| fcantournet wrote:
| Yes they did, at least twice in the 19th century. It was the
| largest financial crisis before 1929
| johnnyanmac wrote:
| It did. I question the issue of "what problem am I trying
| to solve" with AI, though. Transportation across a huge
| swath of land had a clear problem space, and trains offered
| a very clear solution; created dedicated railing and you
| can transport 100x the resources at 10x the speed of a
| horseman (and I'm probably underselling these gains). In
| times where trekking across a continent took months, the
| efficiencies in communication and supply lines are
| immediately clear.
|
| AI feels like a solution looking for a problem. Especially
| with 90% of consumer facing products. Were people asking
| for better chatbots, or to quickly deepfake some video
| scene? I think the bubble popping will re-reveal some
| incredible backend tools in tech, medical, and (eventually)
| robotics. But I don't think this is otherwise solving the
| problems they marketed on.
| heavyset_go wrote:
| > _AI feels like a solution looking for a problem._
|
| The problem is increasing profits by replacing paid labor
| with something "good enough".
| MangoToupe wrote:
| This is a use case that hasn't yet been proven out,
| though. "Good enough" for an executive may not be "good
| enough" to keep the company solvent, and there's no
| shortage of private equity morons who have no
| understanding of their own assets.
| heavyset_go wrote:
| I agree, but it's the bet they're making. You don't end
| up with trillions in investment and valuations with
| chatbots and meme video generators.
| johnnyanmac wrote:
| Doesn't sound like a very profitable problem to solve. At
| least, not in the long term (which no one orchestrating
| this is thinking in).
| heavyset_go wrote:
| Long term is feudalism, the short term is how we get
| there.
| johnnyanmac wrote:
| Well I wish them the worst of luck. Those doing this need
| to go back to the 1880s and see how that ended long term.
| kolinko wrote:
| Isn't this what industrialisation was always about?
| aaronblohowiak wrote:
| Your view is ahistorical.
| variadix wrote:
| This will remain the case until we have another transformer-
| level leap in ML technology. I don't expect such an advancement
| to be openly published when it is discovered.
| energy123 wrote:
| > There's no evidence of a technological moat or a competitive
| advantage in any of these companies.
|
| I disagree based on personal experience. OpenAI is a step above
| in usefulness. Codex and GPT 5.2 Pro have no peers right now.
| I'm happy to pay them $200/month.
|
| I don't use my Google Pro subscription much. Gemini 3.0 Pro
| spends 1/10th of the time thinking compared to GPT 5.2 Thinking
| and outputs a worse answer or ignores my prompt. Similar story
| with Deepseek.
|
| The public benchmarks tell a different story which is where I
| believe the sentiment online comes from, but I am going to
| trust my experience, because my experience can't be
| benchmaxxed.
| harrall wrote:
| I use both and ChatGPT will absolutely glaze me. I will
| intentionally say some BS and ChatGPT will say "you're so
| right." It will hilariously try to make me feel good.
|
| But Gemini will put me in my place. Sometimes I ask my
| question to Gemini because I don't trust ChatGPT's
| affirmations.
|
| Truthfully I just use both.
| gridspy wrote:
| I told ChatGPT via my settings that I often make mistakes
| and to call out my assumptions. So now it
|
| 1. Glazes me 2. Lists a variety of assumptions (some can be
| useful / interesting)
|
| Answers the question
|
| At least this way I don't spend a day pursuing an idea the
| wrong way because ChatGPT never pointed out something
| obvious.
| nubg wrote:
| Care to share the system prompt?
| wild_egg wrote:
| I still find it so fascinating how experiences with these
| models are so varied.
|
| I find codex & 5.2 Pro next to useless and nothing holds a
| candle to Opus 4.5 in terms of utility or quality.
|
| There's probably something in how varied human brains and
| thought processes are. You and I likely think through
| problems in some fundamentally different way that leads to us
| favouring different models that more closely align with
| ourselves.
|
| No one seems to ever talk about that though and instead we
| get these black and white statements about how our personally
| preferred model is the only obvious choice and company XYZ is
| clearly superior to all the competition.
| avalys wrote:
| I'm not saying that no company will ever have an advantage.
| But with the pace of advances slowing, even if others are
| 6-12 months behind OpenAI, the conclusion is the same.
|
| Personally I find GPT 5.2 to be nearly useless for my use
| case (which is not coding).
| ashirviskas wrote:
| Can you give specific examples? I'm super interested to see
| where it fails.
| yoyohello13 wrote:
| There is always a comment like this in these threads. It's
| just 50-50 whether it's Claude or OpenAI.
| razodactyl wrote:
| We never hear what the actual questions are. I reckon it's
| Claude being great at coding in general and GPT being good
| at niche cases. "Spikey intelligence"
| guluarte wrote:
| codex is sooo slow but it is good at planning, opus is good
| at coding but not at good at seeing the big picture
| import wrote:
| For me OpenAI is the worst of all. Claude code and Gemini
| deep research is much much more better in terms of quality
| while ChatGPT hallucinating and saying "sorry you're right".
| adventured wrote:
| Your premise is wrong in a very important way.
|
| The cost of entry is far beyond extraordinary. You're acting
| like anybody can gain entry, when the exact opposite is the
| case. The door is closing right now. Just try to compete with
| OpenAI, let's see you calculate the price of attempting it.
| Scale it to 300, 500, 800 million users.
|
| Why aren't there a dozen more Anthropics, given the valuation
| in question (and potential IPO)? Because it'll cost you tens of
| billions of dollars just to try to keep up. Nobody will give
| you that money. You can't get the GPUs, you can't get the
| engineers, you can't get the dollars, you can't build the
| datacenters. Hell, you can't even get the RAM these days, nor
| can you afford it.
|
| Google & Co are capturing the market and will monetize it with
| advertising. They will generate trillions of dollars in revenue
| over the coming 10-15 years by doing so.
|
| The barrier to entry is the same one that exists in search:
| it'll cost you well over one hundred billion dollars to try to
| be in the game at the level that Gemini will be at circa
| 2026-2027, for just five years.
|
| Please, inform me of where you plan to get that one hundred
| billion dollars just to try to keep up. Even Anthropic is going
| to struggle to stay in the competition when the music (funding
| bubble) stops.
|
| There are maybe a dozen or so companies in existence that can
| realistically try to compete with the likes of Gemini or GPT.
| zozbot234 wrote:
| > Just try to compete with OpenAI, let's see you calculate
| the price of attempting it. Scale it to 300, 500, 800 million
| users.
|
| Apparently the DeepSeek folks managed that feat. Even with
| the high initial barriers to entry you're talking about,
| there will always be ways to compete by specializing in some
| underserved niche and growing from there. Competition seems
| to be alive and well.
| thom wrote:
| DeepSeek certainly managed that on the training side but in
| terms of inference, the actual product was unusably slow
| and unreliable at launch and for several months after. I
| have not bothered revisiting it.
| snuxoll wrote:
| Are you talking about the _model_ or their _service_?
| There 's plenty of options for using their models other
| than the official DeepSeek API.
| johnnyanmac wrote:
| >That doesn't mean AI is going to go away, or that it won't
| change the world - railroads are still here and they did change
| the world - but from a venture investment perspective, get
| ready for a massive downturn.
|
| I don't know why people always imply that "the bubble will
| burst" means that "literally all Ai will die out and nothing
| will remain that is of use". The Dotcom bubble didn't kill the
| internet. But it was a bubble and it burst nonetheless, with
| ramifications that spanned decades.
|
| All it really means when you believe a bubble will pop is "this
| asset is over-valued and it will soon, rapidly deflate in value
| to something more sustainable" . And that's a good thing long
| term, despite the rampant destruction such a crash will cause
| for the next few years.
| mr_toad wrote:
| But some people do believe that AI is all hype and it will
| all go away. It's hard to find two people who actually mean
| the same thing when they talk about a "bubble" right now.
| latchup wrote:
| I don't think anyone seriously believes AI will disappear
| without a trace. At the very least, LLMs will remain as the
| state of the art in high-level language processing (editing,
| translation, chat interfaces, etc.)
|
| The real problem is the massive over-promises of transforming
| _every_ industry, replacing _most_ human labor, and
| eventually reaching super-intelligence based on current
| models.
|
| I hope we can agree that these are all wholly unattainable,
| even from a purely technological perspective. However, we are
| investing as if there were no tomorrow _without_ these
| outcomes, building massive data-centers filled with "GPUs"
| that, contrary to investor copium, will quickly become
| obsolete and are increasingly useless for general-purpose
| datacenter applications (Blackwell Ultra has NO FP64
| hardware, for crying out loud...).
|
| We can agree that the bubble deflating, one way or another,
| is the best outcome long term. That said, the longer we fuel
| these delusions, the worse the fallout will be when it does.
| And what I fear is that one day, a bubble (perhaps this one,
| perhaps another) will grow so large that it wipes out
| globalized free-market trade as we know it.
| zozbot234 wrote:
| > Blackwell Ultra has NO FP64 hardware, for crying out
| loud...
|
| But can it run Crysis?
| latchup wrote:
| Games tend to avoid FP64 compute as Nvidia has always
| gimped it in consumer GPUs, so you are somewhat lucky
| there. "Lucky" as in, you get to enjoy the broken-ass,
| glitchy FP32 physics that we've all grown to love so
| much.
|
| However, if you actually need the much higher precision
| of FP64 for scientific computing (like most non-AI data
| center users do) and extremely slow emulation is not an
| option, consider yourself fucked.
| juped wrote:
| Bubbles bursting aren't bad unless you were overinvested in
| the bubble. Consider that you'll be wiping your ass with
| DIMMs once this one bursts; I can always put more memory to
| good use.
| latchup wrote:
| > Bubbles bursting aren't bad unless you were
| overinvested in the bubble.
|
| That's what I am trying to say: every big technology
| player, every industry, _every government_ is _all in_ on
| AI. That means you and I are along for the ride, whether
| we like it or not.
|
| > Consider that you'll be wiping your ass with DIMMs once
| this one bursts; I can always put more memory to good
| use.
|
| Except you can't, because DRAM makers have almost
| entirely pivoted from making (G)DDR chips to making HBM
| instead. HBM must be co-integrated at the interposer
| level and 3D-stacked, resulting in terrible yield. This
| makes it extremely pricy and impossible to package
| separately (no DIMMs).
|
| So when I say the world is all in on this, I mean it.
| With every passing minute, there is less and less we can
| salvage once this is over; for consumer DRAM, it's
| already too late.
| adamnemecek wrote:
| AI is capital intensive because autodiff kinda sucks.
| api wrote:
| If performance indeed asymptotes, and if we are not at the end
| of silicon scaling or decreasing cost of compute, then it will
| eventually be possible to run the very best models at home on
| reasonably priced hardware.
|
| Eventually the curves cross. Eventually the computer you can
| get for, say, $2000, becomes able to run the best models in
| existence.
|
| The only way this doesn't happen is if models do not asymptote
| or if computers stop getting cheaper per unit compute and
| storage.
|
| This wouldn't mean everyone would actually do this. Only
| sophisticated or privacy conscious people would. But what it
| would mean is that AI is cheap and commodity and there is no
| moat in just making or running models or in owning the best
| infrastructure for them.
| guluarte wrote:
| Also that open source models are just months behind
| dheera wrote:
| People seem to have the assumption that OpenAI and Anthropic
| dying would be synonymous with AI dying, and that's not the
| case. OpenAI and Anthropic spent a lot of capital on important
| research, and if the shareholders and equity markets cannot
| learn to value and respect that and instead let these companies
| die, new companies will be formed with the same tech, possibly
| by the same general group of people, thrive, and conveniently
| leave out the said shareholders.
|
| Google was built on the shoulders of a lot of infrastructure
| tech developed by former search engine giants. Unfortunately
| the equity markets decided to devalue those giants instead of
| applaud them for their contributions to society.
| tootie wrote:
| Isn't it really the other way around? Not to say OpenAI and
| Anthropic haven't done important work, but the genesis of
| this entire market was paper on attention that came out of
| Google. We have the private messages inside OpenAI saying
| they needed to get to market ASAP or Google would kill them.
| raw_anon_1111 wrote:
| You weren't around pre Google were you? The only thing Google
| learned from other search engines is what not to do - like
| rank based on the number of times a keyword appeared and not
| to use expensive bespoked servers
| dheera wrote:
| I was around pre-Google.
|
| Ranking was Google's 5% contribution to it. They stood on
| the shoulders of people who invented physical server and
| datacenter infrastructure, Unix/Linux, file systems,
| databases, error correction, distributed computing, the
| entire internet infrastructure, modern Ethernet, all kinds
| of stuff.
| raw_anon_1111 wrote:
| And none of that had to do with learning from other
| search engines...
| golem14 wrote:
| Eh ... I question that 5% ranking is google's only
| contribution, even if it was important.
|
| Everyone stood on the shoulders of file systems and
| databases, ethernet (and firewalls and netscreens, ...)
| Well, maybe a few stood on the shoulder of PHP.
|
| Google did in fact pretty much figure out how to scale
| large number of servers (their racking, datacenters,
| clustering, global file systems etc) before most others
| did. I believe it was their ability to run the search
| engine cheap enough that enabled them to grow while
| largely retaining profitability early on.
| ashirviskas wrote:
| Yeah, I remember the moment search engines invented
| computing, I cannot look at sand the same way anymore /s
| Davidzheng wrote:
| Um meta didn't achieve the same results yet. And does it matter
| if they can all achieve the same results if they all manage
| high enough payoffs? I think subscription based income is only
| the beginning. Next stage is AI-based subcompanies encroaching
| on other industries (e.g. deepmind's drug company)
| jfrbfbreudh wrote:
| Google's moat:
|
| Try "@gmail" in Gemini
|
| Google's surface area to apply AI is larger than any other
| company's. And they have arguably the best multimodal model and
| indisputably the best flash model?
| avalys wrote:
| If the "moat" is not AI technology itself but merely
| sufficient other lines of business to deploy it well, then
| that's further evidence that venture investments in AI
| startups will yield very poor returns.
| tjwebbnorfolk wrote:
| It's funny that a decade ago the exit strategy of many of
| these startups would have been to get acquired by MSFT /
| META / GOOG. Now, the regulators have made a lot of these
| acquisitions effectively impossible for antitrust reasons.
|
| Is it better for society for promising startups to die on
| the open market, or get acquired by a monopoly? The third
| option -- taking down the established players -- appears
| increasingly unlikely.
| maeln wrote:
| > Now, the regulators have made a lot of these
| acquisitions effectively impossible for antitrust
| reasons.
|
| Is there any evidence that this is the case ? For very
| big merger (like nvdia and Arm tried) sure, but I can't
| think of a single time regulator stop a big player from
| buying a start up.
| edaemon wrote:
| That kind of makes it sound like AI is a feature and not a
| product, which supports avalys' point.
| dartharva wrote:
| Also, Google doesn't have to finance Gemini using venture
| capital or debt, it can use its own money.
| latentsea wrote:
| DeepMind also solved the protein folding problem, so they
| have that going for them.
| johnisgood wrote:
| Did it really? That is actually huge if so.
| venusenvy47 wrote:
| I tried it, but nothing happened. It said that it sent an
| email but didn't. What is supposed to happen?
| onion2k wrote:
| _Try "@gmail" in Gemini_
|
| I think this is a problem for Google. Most users aren't going
| to do that unless they're told it's possible. 99% of users
| are working to a mental model of AI that they learned when
| they first encountered ChatGPT - the idea that AI is a
| separate app, that they can talk to and prompt to get
| outputs, and that's it. They're probably starting to learn
| that they can select models, and use different modes, but the
| idea of connecting to other apps isn't something they've
| grokked yet (and they won't until it's very obvious).
|
| What people see as the featureset of AI is what OpenAI is
| delivering, not Google. Google are going to struggle to
| leverage their position as custodians of everyone's data if
| they can't get users to break out of that way of thinking.
| And honestly, right now, Google are delivering lots of
| disparate AI interfaces (Gemini, Opal, Nano Banana, etc)
| which isn't really teaching users that it's all just facets
| of the same system.
| troupo wrote:
| > I think this is a problem for Google. Most users aren't
| going to do that unless they're told it's possible.
|
| Google is telling this in about a hundred different popups
| and inline hints when you use any of its products
| onion2k wrote:
| I've use the Gemini app on my phone a fair bit recently
| and I've not seen it. That said, I don't think I've seen
| any popups either. Maybe I've blocked them...
| mikkupikku wrote:
| Users are trained to close those without reading.
| dbbk wrote:
| Gemini can't even create a Google Doc if you prompt it to.
| xbmcuser wrote:
| This is why I think China will win the AI race. As once it
| becomes a commodity no other country is capable of bringing
| down manufacturing and energy costs the way China is today. I
| am also rooting for them to get on parity with node size for
| chips for the same reason as they can crash the prices PC
| hardware.
| BenFranklin100 wrote:
| I'm waiting to get an RTX 5090 on the cheap.
| 2OEH8eoCRo0 wrote:
| A penny saved is a penny earned
| 578_Observer wrote:
| The "Railway Bubble" analogy is spot on.
|
| As a loan officer in Japan who remembers the 1989 bubble, I see
| the same pattern. In the traditional "Shinise" world I work
| with, Cash is Oxygen. You hoard it to survive the inevitable
| crash. For OpenAI, Cash is Rocket Fuel. They are burning it all
| to reach "escape velocity" (AGI) before gravity kicks in.
|
| In 1989, we also bet that land prices would outrun gravity
| forever. But usually, Physics (and Debt) wins in the end. When
| the railway bubble bursts, only those with "Oxygen" will
| survive.
| ManuelKiessling wrote:
| I'm aware this means leaving the original topic of this
| thread, but would you mind giving us a rundown of this whole
| Japan 1989 thing? I would love to read a first-person
| account.
| 578_Observer wrote:
| I am honored to receive a question from a fellow
| "Craftsman" (I assume from your name).
|
| To be honest, in 1989, I was just a child. I didn't drink
| the champagne. But as a banker today, I am the one cleaning
| up the broken glass. So I can tell you about 1989 from the
| perspective of a "Survivor's Loan Officer."
|
| I see two realities every day.
|
| One is the "Zombie" companies. Many SMEs here still list
| Golf Club Memberships on their books at 1989 prices. Today,
| they are worth maybe 1/20th of that value. Technically,
| these companies are insolvent, but they keep the "Ghost of
| 1989" on the books, hoping to one day write it off as a tax
| loss. It is a lie that has lasted 30 years.
|
| But the real estate is even worse. I often visit apartment
| buildings built during the bubble. They are decaying, and
| tenants have fled to newer, modern buildings. The owner
| cannot sell the land because demolition costs hundreds of
| thousands of dollars--more than the land is worth.
|
| The owner is now 70 years old. His family has drifted
| apart. He lives alone in one of the empty units, acting as
| the caretaker of his own ruin.
|
| The bubble isn't just a graph in a history book. It is an
| old man trapped in a concrete box he built with "easy
| money." That is why I fear the "Cash Burn" of AI. When the
| fuel runs out, the wreckage doesn't just disappear. Someone
| has to live in it.
| octoberfranklin wrote:
| I nominate Sam Altman to be that Someone.
| 578_Observer wrote:
| That is an interesting nomination.
|
| But in my experience as a banker, the ones left in the
| wreckage are rarely the ones who drank the champagne. It
| is usually the ones who were hired to clean the glasses.
|
| I hope history proves me wrong this time.
| ifwinterco wrote:
| Beautiful writing, poetic.
|
| I've always had a morbid fascination with financial
| bubbles and the Japanese one of the late 1980s might be
| the most epic in history (definitely in modern times at
| least).
| 578_Observer wrote:
| "Spectacular" is an interesting word choice. To be
| honest, for us on the ground, it just feels like cleaning
| up a very long party that ended 30 years ago.
|
| But I appreciate your perspective. It is refreshing to
| know that someone finds a poetic texture in what I simply
| call "bad loans."
| lelanthran wrote:
| > Cash is Oxygen. You hoard it to survive the inevitable
| crash. For OpenAI, Cash is Rocket Fuel. They are burning it
| all to reach "escape velocity" (AGI) before gravity kicks in.
|
| For OpenAI, cash is oxygen too; they're burning it all to
| reach escape velocity. They _could_ use it to weather the
| upcoming storm, but I don 't think they will.
| 578_Observer wrote:
| Exactly. They have chosen to burn the lifeboats to power
| the engine.
|
| It is a magnificent gamble. If they reach escape velocity
| (AGI), they own the future. But if they run out of fuel
| mid-air, gravity is unforgiving.
|
| As a loan officer, I prefer businesses that don't need to
| leave the atmosphere to survive.
| parentheses wrote:
| This is different because now the cats out of the bag: AI is
| big money!
|
| I don't expect AGI or Super intelligence to take that long but
| I do think it'll happen in private labs now. There's an AI
| business model (pay per token) that folks can use also.
| oblio wrote:
| > don't expect AGI or Super intelligence to take that long
|
| I appreciate the optimism for what would be the biggest
| achievement (and possibly disaster) in human history. I wish
| other technologies like curing cancer, Alzheimer's, solving
| world hunger and peace would have similar timelines.
| barrenko wrote:
| We are making decent strides on the first two, the latter
| two are like wanting cats to stop scratching. What's the
| point of being a cat than?
| __MatrixMan__ wrote:
| I think we'll find that that asymptote only holds for cases
| where the end user is not really an active participant in
| creating the next model:
|
| - take your data
|
| - make a model
|
| - sell it back to you
|
| Eventually all of the available data will have been squeezed
| for all it's worth the only way to differentiate oneself as an
| AI company will be to propel your users to new heights so that
| there's new stuff to learn. That growth will be slower, but I
| think it'll bear more meaningful fruit.
|
| I'm not sure if today's investors are patient enough to see us
| through to that phase in any kind of a controlled manner, so I
| expect a bumpy ride in the interim.
| conartist6 wrote:
| Yeah except that models don't propel communities towards new
| heights. They drive towards the averages. They take from the
| best to give to the worst, so that as much value is destroyed
| as created. There's no virtuous cycle there...
| __MatrixMan__ wrote:
| Is that constraint fundamental to what they are? Or are
| they just reflecting the behavior of markets when there's
| low hanging fruit around?
|
| When you look at models that were built for a specific
| purpose, closely intertwined with experts who care about
| that purpose, they absolutely propel communities to new
| heights. Consider the impact of alphafold, it won a Nobel
| prize, proteomics is forever changed.
|
| The issue is that that's not currently the business model
| that's aimed at most of us. We have to have a race to the
| bottom first. We can have nice things later, if we're
| lucky, once a certain sort of investor goes broke and a
| different sort takes the helm. It's stupid, but its a
| stupidity that predates AI by a long shot.
| conartist6 wrote:
| Experts making a specialized model isn't an example of an
| AI contributing value to society. All the value a model
| can offer comes from one of exactly two places: the
| person building the model, or the people the model
| trained on.
|
| We know that the model training on the model training on
| the model leads to model collapse...
| __MatrixMan__ wrote:
| Your word choice implies a very zero-sum perspective on
| value.
|
| Value is determined by what we value, it's a choice. If a
| bunch of scientists value good approximations for how a
| protein will fold, and then a model generates more such
| things in a year than those scientists could make in a
| century, that's a lot of value. Not extracted from
| anyone, created.
| conartist6 wrote:
| Yes. Value created by the people who made the data the
| model trained on, and the people who ensured that the
| training created a good model. I'm just saying it's not
| _magic_ , just another kind of high-level work that
| people do.
| hakfoo wrote:
| The railroads provided something of enduring value. They did
| something materially better than previous competitors
| (horsecarts and canals) could. Even today, nothing beats
| freight rail for efficient, cheap modest-speed movement of
| goods.
|
| If we consider "AI" to be the current LLM and ImageGen bubble,
| I'm not sure we can say that.
|
| We were all wowed that we could write a brief prompt and get
| 5,000 lines of React code or an anatomically questionable
| deepfake of Legally Distinct Chris Hemsworth dancing in a tutu.
| But once we got past the initial wow, we had to look at the
| finished product and it's usually not that great. AI as a
| research tool will spit back complete garbage with a straight
| face. AI images/video require a lot of manual cleanup to hold
| up to anything but the most transient scrutiny. AI text has
| such distinct tones that it's become a joke. AI code isn't
| better than good human-developed code and is prone to its own
| unique fault patterns.
|
| It can deliver a lot of mediocrity in a hurry, but how much of
| that do we really need? I'd hope some of the post-bubble
| reckoning comes in the form of "if we don't have AI to do it
| (vendor failures or pricing-to-actual-cost makes it
| unaffordable), did we really need it in the first place?" I
| don't need 25 chatbots summarizing things I already read or
| pleading to "help with my writing" when I know what I want to
| say.
| cco wrote:
| I was really hoping, and with a different administration I
| think there was a real shot, for a huge influx of cash into
| clean energy infrastructure.
|
| Imagine a trillion dollars (frankly it might be more, we'll
| see) shoved into clean energy generation and huge upgrades to
| our distribution.
|
| With a bubble burst all we'd be left with is a modern grid
| and so much clean energy we could accelerate our move off
| fossil fuels.
|
| Plus a lot of extra compute, that's less clear of a long term
| value.
|
| Alas.
| choeger wrote:
| You're absolutely correct! ( ;) )
|
| The issue is that generation of error-prone content is indeed
| not very valuable. It can be useful in software engineering,
| but I'd put it way below the infamous 10x increase in
| productivity.
|
| Summarizing stuff is probably useful, too, but its usefulness
| depends on you sitting between many different communication
| channels and being constantly swamped in input. (Is that why
| CEOs love it?)
|
| Generally, LLMs are great translators with a (very) lossly
| compressed knowledge DB attached. I think they're great user
| Interfaces, and they can help streamline buerocracy (instead
| of getting rid of it) but they will not help getting down the
| cost of production of tangible items. They won't solve
| housing.
|
| My best bet is in medicine. Here, all the areas that LLMs
| excell at meet. A slightly distopian future cuts the
| expensive personal doctors and replaces them with (few)
| nurses and many devices and medicine controlled by a medical
| agent.
| re_chief wrote:
| Yes, exactly -- AI would only be analogous to railroads if
| passenger trains took you to the wrong location roughly 50%
| of the time.
| pier25 wrote:
| Did railroads change the world though?
|
| They only lasted a couple of decades as the main transportation
| method. I'd say the internal combustion engine was a lot more
| transformative.
| xhevahir wrote:
| Pretty much every major historical trend of Western societies
| in the second half of the eighteenth century, from the
| development of the modern corporation to the advent of total
| war, was intimately tied to railroad transportation.
| Marsymars wrote:
| Transportation of people, yeah, but it still carries a
| majority of inter-city freight in North America.
| anshumankmr wrote:
| Umm yes? The metro even if not a big deal in the states is
| like a small but quiet way it has changed public transport,
| plus moving freight, plus people over large distances, plus
| the bullet train that mixed luxury, speed and efficiency onto
| trains, all of these are quietly disruptive transformations,
| that I think we all take for granted.
| oblio wrote:
| Railroads built America and won multiple large wars.
| tliltocatl wrote:
| Besides from he fact the freight is still universally carried
| by the rail when possible, railroads changed the world just
| like the vacuum valves did. If not for them nobody would
| invest in developing tire transport or transistors.
| jotras wrote:
| Something nobody's talking about: OpenAI's losses might
| actually be attractive to certain investors from a tax
| perspective. Microsoft and other corporate investors can
| potentially use their share of OpenAI's operating losses to
| offset their own taxable income through partnership tax
| treatment. It's basically a tax-advantaged way to fund R&D -
| you get the loss deductions now while retaining upside
| optionality later. This is why the "cash burn = value
| destruction" framing misses the mark. For the right investor
| base, $10B in annual losses at OpenAI could be worth $2-3B in
| tax shields (depending on their bracket and how the structure
| works). That completely changes the return calculation. The
| real question isn't "can OpenAI justify its valuation" but
| rather "what's the blended tax rate of its investor base?" If
| you're sitting on a pile of profitable cloud revenue like
| Microsoft, suddenly OpenAI's burn rate starts looking like a
| pretty efficient way to minimize your tax bill while getting a
| free option on the AI leader. This also explains why big tech
| is so eager to invest at nosebleed valuations. They're not just
| betting on AI upside, they're getting immediate tax benefits
| that de-risk the whole thing.
| rebuilder wrote:
| It's hardly a free option, by your numbers it'd be a 20-30%
| discount.
| thrwaway55 wrote:
| Sure but if there's no moat would you rather pay 100% or
| 80% until the credits run out? You reap the 100% spend in
| the meantime. Not everyone even has the no moat discount.
| ludicrousdispla wrote:
| >> For the right investor base, $10B in annual losses at
| OpenAI could be worth $2-3B in tax shields
|
| So just a loss for governments, or in other words,
| socializing the losses.
| booi wrote:
| Hi, I'm here to hold the bag?
| Groxx wrote:
| We really should have thought of this before becoming
| peasants.
| chrishare wrote:
| Have you tried not being poor?
| nineteen999 wrote:
| It gives you a new opportunity to pull yourself up by the
| bootstraps. Until mommy and daddy come along with another
| cash infusion.
| chinathrow wrote:
| Your pension fund, yes.
| lotsofpulp wrote:
| This comment makes even less sense than jotras' comment.
|
| Pension funds buy shares in businesses such as Microsoft.
| The money going into the pension fund is not typically a
| function of the tax paid by companies such as Microsoft,
| but rather from a combination of actuaries'
| recommendations, payroll tax receipts, and politicians'
| priorities.
|
| Therefore a pension funds' equity holdings, such as
| Microsoft, doing well means taxes can be lower.
| jdiez17 wrote:
| If only my country (Germany)'s pension fund was
| capital/stock based.
| lotsofpulp wrote:
| Most countries' broadest defined benefit pensions are
| just simple wealth redistribution schemes from workers to
| non workers as opposed to being paid from funds that were
| previously invested.
|
| In the USA, Social Security defined benefit pensions are
| cash from workers today going to non workers today, same
| as Germany's national scheme (gesetzliche
| Rentenversicherung?).
|
| The other defined benefit benefit pension schemes are
| what are usually invested in equities, and the investment
| restrictions section in this document indicate Germany's
| "occupational pensions" can also invest in equities.
| (page 12)
|
| https://www.aba-
| online.de/application/files/2816/2945/5946/2...
| joncrane wrote:
| You guys are getting bags?
| aembleton wrote:
| Under our eyes
| philipallstar wrote:
| Private industry loses 10B. Governments mostly affected as
| they have less free money to extract.
| nkmnz wrote:
| OpenAIs losses are someone else's (taxed) earnings.
| gruez wrote:
| >So just a loss for governments, or in other words,
| socializing the losses.
|
| How's that different than any other sort of R&D incentive?
| Would you rather that companies return as much money as
| possible to shareholders, future growth be damned? What
| about other sorts of tax incentives, which by definition
| also "just a loss for governments"? Are tax breaks for
| people with kids also "socializing the losses", given that
| most households don't have kids?
| missedthecue wrote:
| No, because income equals expenditure. They are one and the
| same.
| Jare wrote:
| > For the right investor base, $10B in annual losses at
| OpenAI could be worth $2-3B in tax shields (depending on
| their bracket and how the structure works). That completely
| changes the return calculation
|
| I know nothing about finances at this level, so asking like a
| complete newbie: doesn't that just mean that instead of
| risking $10B they're risking $7-8B? It is a cheaper bet for
| sure, but doesn't look to me like a game changer when the
| range of the bet's outcome goes from 0 to 1000% or more.
| sigmoid10 wrote:
| It all depends on the actual numbers. Consider this
| simplified example: If you are offered a deal that requires
| you to lay down 10 billion today and it has a 5% chance to
| pay out 150 billion tomorrow, your accountants will tell
| you not to take this deal because your expected return is
| -2.5 billion. But if you can offset 3 billion in cost to
| the tax payer, your expected return suddenly becomes $500
| million, making it a good deal that you should take every
| time.
| lotsofpulp wrote:
| This applies to any spending Microsoft does. What does it
| have to do with OpenAI?
|
| Also, classifying business expenses as "cost to the tax
| payer" seems less than useful, unless you are a proponent
| of simply taxing gross receipts. Which has its merits,
| but then the discussion is about taxing gross receipts
| versus income with at least some deductible expenses, not
| anything to do with OpenAI.
| Fraterkes wrote:
| I get that this example is simplified, but doesn't the
| maths here change drastically when the 5% changes by even
| a few percentage points? The error bars on Openais chance
| of succes are obviously huge, so why would this be
| attractive to accountants?
| sigmoid10 wrote:
| That's why you have armies of accountants rating stuff
| like this all day long. I'm sure they could show you a
| highly detailed risk analysis. You also don't count on
| any specific deal working, you count on the overall
| statistics being in your favour. That's literally how
| venture capital works.
| Fraterkes wrote:
| (I think) I get how venture capital works, my point is
| that the bullish story for openAI has them literally
| restructuring the global economy. It seems strange to me
| that people are making bets with relatively slim profit
| margins (an average of 500m on a 10b investment in your
| example) on such volatile and unpredictable events.
| jbs789 wrote:
| I think you're right that the critical assumption in that
| example is the 5pct rather than the tax treatment.
| sakjur wrote:
| What if your 10B investment encourages others to invest
| 50B and much of that makes it back to you indirectly via
| selling more of your core business?
|
| I may be way off, but to me it seems like the AI bubble
| is largely a way to siphon money from institutional
| investors to the tech industry (and try to get away with
| it by proxying the investments) based on a volatile and
| unpredictable promise?
| sdwr wrote:
| AI has a lot lower bar to clear to upend the tech
| industry compared to the global economy. Not being in on
| AI is an existential risk for these companies.
| rat9988 wrote:
| I'm pretty the armies of accountants would have rated it
| higher if the cashflow was positive than negative.
| Negative can't be good even while accounting for taxes.
| well_ackshually wrote:
| If your accountants suggest that you take a single 5%
| chance deal, they probably skipped maths and statistics
| and you should fire them.
|
| It's the dumb as rocks MBAs that will go head first into
| the 5% chance deal.
| yossi_peti wrote:
| I guess the reasoning assumes that you have multiple eggs
| in your basket. A 95% chance of failure is bad if you're
| pinning the whole business on it, but if you have a
| variety of 5% chance deals, then it can make sense to
| pursue them, which is basically what venture capitalists
| do.
| smeeagain2 wrote:
| The whole thing will crash in the next few years. The
| economy will have its Wile E Coyote moment, all these
| "valuations" will evaporate overnight, the Shitcoins will
| instantly go to zero, the music will stop, and the
| bagholders will look down to find themselves in
| possession of their shiny new bag of pet rocks. (A few
| lumps of coal.) All of these mental flipflops people are
| using to attempt to justify current insane valuations
| will be revealed as the evidence of _intellectual
| bankruptcy_ that they are.
| dangus wrote:
| It's easy to predict that, but when has "the whole thing"
| ever crashed?
|
| Sure, markets can crash, but this idea of "go to zero"
| never happens.
|
| That's the whole calculus of these investments. Many of
| them are expected to fail.
|
| The fact that it's painful to the average person means
| nothing to the people who run the system.
| smeeagain2 wrote:
| > 'this idea of "go to zero" never happens.'
|
| Apparently you've never lived through the crash of a
| 'currency' which is based on a flawed mathematical
| concept. You'll get to experience what that's like (for
| the first time in history!) when it's revealed there is
| some kind of subtle flaw in SHA-256 which renders it
| worthless as the basis of _anything_ important, let alone
| a 'currency.'
|
| How do you sell your 'coin' to anyone when the market
| disappears at the speed of news? Yes, it will go to ZERO,
| INSTANTLY.
|
| Guess what happens when the crypto crash is combined with
| a) collapse of the real estate bubble, especially
| commercial real estate; b) the ongoing IT crash that is
| only just getting started; c) whatever damage the
| (current, red-flavored) orangutan in the White House
| manages to accomplish in his 3+ remaining years of hell;
| d) fear of looming war; e) economic fallout from COVID
| which is still ongoing and expanding (hint--many
| destroyed businesses and people out of work); f) a
| thousand other icebergs, minefields, and financial
| hazards confronting us in the near future? Buckle up!
| dangus wrote:
| I don't really see what's relevant about crypto nonsense
| in this context. We are really talking about the overall
| economy especially in the tech sector.
|
| Even if every cryptocurrency becomes worthless overnight,
| that doesn't represent the market going to zero.
|
| I see you've edited your comment with more doom and
| gloom. It's easy to view everything as a bubble when
| you're in a negative mental space.
|
| > a) collapse of the real estate bubble, especially
| commercial real estate;
|
| Any proof of this bubble? Housing construction continues
| to lag demand. Offices are largely RTO and Covid-era
| remote jobs are basically legacy and grandfathered. Every
| remote employee I know who was laid off in the past
| couple years had to get a hybrid/in-person job. You can't
| just assume 2008 is going to happen again without some
| real data that shows real estate instability. Where are
| the poorly qualified borrowers?
|
| > b) the ongoing IT crash that is only just getting
| started;
|
| That's one industry of many. One specific industry
| struggling doesn't mean much.
|
| > c) whatever damage the (current, red-flavored)
| orangutan in the White House manages to accomplish in his
| 3+ remaining years of hell;
|
| Lame duck presidency, he can't crash shit. Congress will
| be unfriendly next year and already isn't even very
| supportive within his own party.
|
| > d) fear of looming war;
|
| In what universe is any impending war impacting the
| American economy? You mean the one where defense
| contractors are hiring and the US is selling weapons to
| the nations who are doing the fighting?
|
| > e) economic fallout from COVID which is still ongoing
| and expanding (hint--many destroyed businesses and people
| out of work);
|
| You are gonna need to explain this one and back this up
| with some numbers that make sense.
|
| > f) a thousand other icebergs, minefields, and financial
| hazards confronting us in the near future?
|
| Sounds like internal anxiety demons that are not
| tangible.
|
| Look, I'm in full agreement that AI will face some kind
| of correction or crash, but predicting once in a century
| catastrophe is a losing game.
| smeeagain2 wrote:
| OK.
| aleph_minus_one wrote:
| > A 95% chance of failure is bad if you're pinning the
| whole business on it, but if you have a variety of 5%
| chance deals, then it can make sense to pursue them
|
| This is only true if the probability distributions for
| the values of the individual deals are rather
| uncorrelated (or even better: stochastically mostly
| independent).
| sigmoid10 wrote:
| Venture capitalists never take on a single deal. The same
| way you shouldn't put all your life savings into one
| stock, even if it has a 90% chance of working out. That's
| not how any of this stuff works.
| matkoniecz wrote:
| Would you take 5% chance of earning 100 dollars if it
| would cost 1 dollar?
| well_ackshually wrote:
| You cannot just scale down the numbers and pretend like
| the world around you doesn't exist. There isn't much I'll
| do with 1 dollar. There's a shitload Microsoft could do
| with 10 000 000 000 dollars.
|
| Opportunity costs are a thing.
| dangus wrote:
| There actually becomes a point where there's not that
| many things you can do with your money when you have so
| much of it.
|
| This is especially true when your investors/owners expect
| you to generate better returns than the risk-free rate.
| Jare wrote:
| Thank you, that made perfect sense and in a very simple
| (simplified but relevant) way. Besides the idea that such
| risks get aggregated over a portfolio, I can also imagine
| how the raw numbers flipping from - to + may be useful to
| paint as acceptable to accounting a bet you want to take
| anyway for strategic reasons.
| socialcommenter wrote:
| Those 150 billion will be taxable at the same
| (hypothetically 30%) tax rate, reducing the expected
| return by 45bn * 5% chance. The expected return is still
| negative; all this bet does is shift tax liabilities in
| time, which admittedly would matter to some people who
| subscribe to short-termism.
| rjzzleep wrote:
| That just doesn't sound right. This kind of thought process
| only works if you think you are guaranteed more than that
| the next year. It only works in crony capitalism where your
| friends in government put money in your pockets. It's where
| we are right now, but definitely not something that is
| sustainable or something to aspire to.
| evrydayhustling wrote:
| Your intuition is exactly correct. An investor with tax to
| offset can essentially access the same future upside at a
| discount
|
| However, this discussion will be a perfect introduction to
| "finances at this level", where about 60% of the action is
| injecting more variables until you can fit a veneer of
| quantification onto any narrative.
| lumost wrote:
| The taxes on returning profits to investors via dividends
| are quite high. You'd be looking at the corporate tax rate
| (35%) + the dividend tax rates (between 15 and 35%). For
| any company which may need to raise equity finance later,
| this is an awful deal - but growing a cash balance doesn't
| do the job either.
|
| So MSFT is effectively getting 2x the equity by putting
| money into OpenAI, it also conveys some financial
| engineering capability as they can choose to invest more
| when profits are high to smooth out cash flow growth.
| gruez wrote:
| >The taxes on returning profits to investors via
| dividends are quite high.
|
| isn't that what buybacks are for?
| cjblomqvist wrote:
| If that $7-8 billion is spent on Azure, then it's basically
| a way to invest in data center capacity while also getting
| a big piece of Open AI ownership at the same time.
|
| Ar the same time, MS revenues are looking real good,
| causing the stock price to go up. It's a win win win maybe
| win huge situation.
| danielscrubs wrote:
| Can you explain it in another way? What you are saying is
| that instead of loosing 100% they loose 70% and loosing 70%
| is somehow good? Or are you saying the risk adjusted returns
| are then 30% better on the downside than previously thought?
| Because if you are, I think people here are saying the risk
| is so high that it is a given they will fail.
| gosub100 wrote:
| Let's say they are paying for "research". The research is
| very expensive and has a high likelihood of being
| worthless, but a small likelihood of having value later. So
| by claiming the financial loss, they can offset the cost of
| the expensive research by 30%, making it an even more
| attractive gamble.
| pvtmert wrote:
| Amazon already has not been paying any sort of income tax to
| the EU. There was a lawsuit in Belgium but Amazon has won
| that in late-2024 since they had a separate agreement in/with
| Luxembourg.
|
| Speaking for EU, all big tech already not paying taxes one
| way or another, either using Dublin/Ireland (Google, Amazon,
| Microsoft, Meta, ...) and Luxembourg (Amazon & Microsoft as
| far as I can tell) to avoid such corporate/income taxes.
| Simply possible because all the earnings go back to the U.S.
| entity in terms of "IP rights".
| lotsofpulp wrote:
| > Amazon already has not been paying any sort of income tax
| to the EU.
|
| That should be expected, because
|
| https://european-union.europa.eu/priorities-and-
| actions/acti...
|
| > The EU does not have a direct role in collecting taxes or
| setting tax rates.
|
| > There was a lawsuit in Belgium but Amazon has won that in
| late-2024 since they had a separate agreement in/with
| Luxembourg.
|
| Dec 2023.
|
| > Speaking for EU, all big tech already not paying taxes
| one way or another, either using Dublin/Ireland (Google,
| Amazon, Microsoft, Meta, ...) and Luxembourg (Amazon &
| Microsoft as far as I can tell) to avoid such
| corporate/income taxes. Simply possible because all the
| earnings go back to the U.S. entity in terms of "IP
| rights".
|
| Ireland (due to pressure from EU) closed this in 2020. The
| amount of tax collected by Ireland quadrupled. See Figure 5
| and 6 in link below.
|
| https://budgetmodel.wharton.upenn.edu/issues/2024/10/14/the
| -...
| benjiro wrote:
| > any sort of income tax to the EU.
|
| Its clear that OP means "in the EU".
|
| > Ireland (due to pressure from EU) closed this in 2020.
| The amount of tax collected by Ireland quadrupled. See
| Figure 5 and 6 in link below.
|
| And Ireland fought against this tooth and nail. Yes, a
| country was fighting to have less income. All out of fear
| that the companies will leave the little tax heaven. Did
| they leave? No ...
|
| > See Figure 5 and 6 in link below.
|
| Figure 7 is also interesting if we look at the tax income
| increase and the outbound.
| pvtmert wrote:
| I find it funny because;
|
| 1. Amazon reports 250bn$+ revenue for entire EU in 2025.
| (of course, revenue != profit) while all 250bn$+
| evaporates to somewhere. Their own page [1] reports 225k
| employees across EU, meaning that each employee returns
| whopping 1 million plus dollars! While being compensated
| less than 10% of their value!
|
| 2. In their own article [1], they boast how they invested
| (translated; smuggled money out) and enabled SMEs 20bn$+
| revenue. (Like seriously, less than 10%?! actually goes
| back into the economy...)
|
| 3. Amazon says that they have invested 250bn$ in EU since
| 2010. It is completely unknown what or where that was
| invested. I do not see my street lightning being improved
| by the Amazon's investment or garbage being collected
| better.
|
| 4. Luxembourg's GDP is ~95bn$ in 2025. Amazon has
| contributed to that with the 0$ corporate tax. Obviously
| they employed about 4.5k people which they've decided to
| let go about 10% of them. Where the median/average yearly
| gross salary stands somewhere around 80k eur, it is
| hardly anywhere near 1mm+$ total income. I am guessing
| that they heat up the offices with burning the remaining
| cash...
|
| [1]: https://www.aboutamazon.eu/news/job-creation-and-
| investment/...
|
| For the date of the verdict for Amazon vs EU, apologies.
| The article date was November 2024 in the source [2].
|
| [2]: https://www.techtimes.com/articles/308509/20241129/a
| mazons-2...
|
| For the Ireland, I only knew similarities between
| Luxembourg and specific laws allowing such loopholes pre-
| brexit period. The source is certainly interesting and I
| need to dive deeper to understand better.
| tacker2000 wrote:
| The EU doesnt collect income/corporate tax, the individual
| countries do.
|
| These big corps use holdings in low tax jurisdisctions like
| Ireland and Luxemburg, funnel all their EU subsidiaries'
| revenues there and end up paying 0 tax in the individual EU
| countries.
|
| This system is actually legal, EU lawmakers should pass
| laws to prevent this.
| abc123abc123 wrote:
| And let us not forget the millions and billions the
| global IT corporations pay in the EU in form of social
| security taxes, income taxes, the jobs they create, and
| the further millions and billions in the form of
| purchases from local delivery companies, consultants, DC
| vendors, office suppliers, taxi companies, delivery
| companies, food and catering and all the other local EU-
| based companies who benefit from having these giants
| walking among us.
| saghm wrote:
| If that's a substitute for corporate taxes, why even have
| them at all, instead of there needing to be schemes so
| specific that they have their own Wikipedia articles to
| describe them [1]? Either you think that corporate taxes
| should exist, and therefore companies shouldn't just get
| to opt out of them based on whether they can make a claim
| to benefiting the economy via trickling down, or you
| don't, in which case you might as well just state that
| directly.
|
| [1]:
| https://en.wikipedia.org/wiki/Dutch_Sandwich?wprov=sfla1
| pvtmert wrote:
| Those taxes are paid by the individuals, not by the
| companies.
|
| And the decision _how_ to distribute these (corporate
| tax) should be done by the government. Essentially,
| companies evading [corporate] tax decides themselves
| where to distribute that money. Obviously, they make
| decisions that drives more profits and income, not the
| public good. Even if it improves living conditions (ie.
| delivery service would help elderly), it still requires
| that person to be user of the product. A layman /citizen
| cannot effectively utilize the benefits.
| parineum wrote:
| I don't really understand this perspective.
|
| What should be taxed?
|
| Amazon, as an example, has servers in country X. Country
| X taxes the transaction or the income from the server
| company.
|
| Amazon pays delivery drivers in country X to deliver
| goods, and the driver is taxed through various means
| (vehicle, fuel, payroll, etc).
|
| What is Amazon doing in country X that should be taxed?
| matkoniecz wrote:
| > What is Amazon doing in country X that should be taxed?
|
| its profits within that country (income minus actual
| expenses)
|
| in practice expenses are fakely inflated to transfer tax
| payments top jurisdiction with near-zero taxes
| lotsofpulp wrote:
| How can profit be calculated if a significant component
| of expenses is intellectual property and brand awareness
| which was paid for somewhere else?
|
| Amazon can add up the costs to install and operate a
| datacenter or warehouse in country X, but most of the
| demand for services from that datacenter or warehouse
| will be due to expenses incurred in country Y.
| pvtmert wrote:
| Let me explain in-depth; > What should
| be taxed?
|
| Profits of the company, like all other (local) companies
| do. > Amazon, as an example, has
| servers in country X. Country X taxes the transaction or
| the income from the server company.
|
| Amazon has servers in Germany, Germany is unable to tax
| the transaction or income from Amazon, because;
|
| 1. The user completes a transaction either on Amazon
| (buying a product) or in AWS (running an EC2 instance)
|
| 2. If the user is a business, there is no VAT. Because
| VAT is applied only to the end user. (To prevent
| compounding effect also). If it was the end-user, then
| end-user already pays for their VAT, usually around
| 18-20% in the case of an EC2 instance. But that has
| nothing to do with Amazon. User technically pays the VAT
| directly to the government depending on where he/she is
| located and where the server is.
|
| 3. Obviously Amazon does not sell the products or servers
| for free, they have a markup or profit margin, let's say
| 40% for a 100eur EC2 instance. So, 40eur lands into
| Amazon's bank account. While other 60eur goes to the
| operating expenses. (ie. Electricity, maintenance,
| employees' salaries, etc...)
|
| 4. In this case, Amazon should be taxed from that 40%,
| (ie. from the 40eur profit). Luxembourg corporate tax is
| about ~16-17%. Mind that US federal corporate tax is 21%
| itself. For the sake of simplicity, let's take 20% as the
| corporate tax. This would make 8eur going into the
| government's pocket. while 32eur stays as the profit with
| amazon.
|
| 5. All other companies provide the same service and has
| no _magical entity_ outside pays that ~8eur to the
| government. Which in turn used to provide services to the
| citizens. (For example, Luxembourg has completely free
| public transportation that works 24 /7, subsidized by the
| taxes)
|
| 6. However, Amazon having a _magical entity_ , they
| declare all that 40eur profit belongs to the US entity
| due to the IP rights. They essentially say 100% of the
| things that are produced _in Luxembourg, by employees in
| Luxembourg_ even owned by the US entity. Therefore, they
| do not pay any income tax as in fact there is no income
| on paper.
|
| 7. Instead, since they were able to save that 8eur, they
| can reduce the prices of the services up to that amount.
| But instead, Amazon usually reduces prices about half,
| reducing 4eur for customers and other 4eur going into
| Amazon's profit pocket.
|
| 8. It all seems nice so far, since users also benefit
| from reduced prices, right? Unfortunately, no. In the
| longer term, it hurts competition as other companies must
| pay taxes and losing the customers [to Amazon].
|
| 9. When there is no competition left, then Amazon can
| just start syphoning all the 8eur profit back to
| themselves. Even setting the prices as there is no longer
| any alternative to go.
|
| 10. Not only it hurts customers, it also hurts the random
| person on the street; as they receive services from
| government which were subsidized by the taxes. You may
| say that Amazon can or may invest even better products or
| services, but that's again not helping the layman unless
| he/she is an Amazon customer. And mind that a citizen
| does not need to be Amazon customer to get their
| electricity and water running. > Amazon
| pays delivery drivers in country X to deliver goods, and
| the driver is taxed through various means (vehicle, fuel,
| payroll, etc).
|
| Similar to the above, Amazon does not pay VAT or any
| other service taxes for any of the services they provide.
| But the driver does! It is even worse for the driver when
| he/she uses Amazon because on the net balance sheet, the
| driver pays income tax from his/her salary. Pays VAT for
| the services they receive. If he/she receives 1000eur
| salary at the end of the month, they can use at most
| about ~60% of their salary to receive goods and services.
| (~20% income tax + ~20% VAT). Hence, there is a corporate
| tax that balance these scenarios. But evading it causes
| more harm than good in the long run. >
| What is Amazon doing in country X that should be taxed?
|
| All the profits (earnings, surpluses) they receive should
| be taxed.
| rizzom5000 wrote:
| > EU lawmakers should pass laws to prevent this.
|
| So EU lawmakers should determine the amount member
| countries collect in tax?
| tacker2000 wrote:
| No, actually the EU cant force this, you are of course
| right.
|
| The countries like Ireland and Luxembourg need to stop
| granting these loopholes.
| pvtmert wrote:
| No, but EU should somehow mandate products and services
| that are built within EU and used within EU or elsewhere,
| should receive the benefit(s) in terms of taxation.
|
| To give an (absurd) example; You work in country X, but
| the parent company is in country Y. Imagine your income
| tax is not going to where you reside but where you work,
| (usually the opposite) in this case, country Y. (~20-40%
| of the gross salary).
|
| One day, your basic needs (electricity, water, etc) stops
| working. You call the relevant government department
| asking what's the problem. They reply with saying they do
| not know and cannot afford to figure our or fix because
| they do not have the money to do so.
|
| But you've been paying at least 20% (and up to 46%) of
| your salary as the income tax. Where the money go? Why do
| you work _here_ but someone else in the other side of the
| world getting that slice for free?
| lenkite wrote:
| > OpenAI's losses might actually be attractive to certain
| investors from a tax perspective.
|
| OpenAI is anyways seeking Govt Bailout for "National
| Security" reasons. Wow, I earlier scoffed at "Privatize
| Profits, Socialize Losses", but this appears to now be
| Standard Operating Procedure in the U.S.
|
| https://www.citizen.org/news/openais-request-for-massive-
| gov...
|
| So the U.S. Taxpayer will effectively pay for it. And not
| just the U.S. Taxpayer - due to USD reserve currency status,
| increasing U.S. debt is effectively shared by the world. Make
| billionaires richer, make the middle class poor. Make the
| poor destitute. Make the destitute dead. (All USAID cuts)
| alex43578 wrote:
| There's already a lot that the US taxpayer is on the hook
| for that's a lot less valuable than a best on the next big
| thing in software, productivity, and warfare.
|
| It shouldn't be the job of the US taxpayer to feed someone
| that doesn't want to work, study, or pass a drug test, and
| it absolutely shouldn't be the job of the US taxpayer to
| feed another country's citizens half a world away.
| Ar-Curunir wrote:
| The modern welfare state is the compromise reached by
| capitalist democracies to stave off communist
| revolutions. If you're going to kill of the welfare part,
| be ready for the uprising part.
| nosianu wrote:
| That's where the surveillance and the militarized police
| force(s) come in. Especially the former now has reached
| extraordinary levels, given that almost all communication
| now is easily trackable.
|
| Compare that to when we still had revolutions, where it
| was very hard for government to know what is going on,
| and to find individuals without a huge effort.
|
| I think revolutions have become next to impossible,
| unless it is lead by significant parts of the elite that
| controls at least part of the apparatus.
|
| That's not even counting the far more sophisticated
| propaganda methods, so that many of the affected people
| won't even begin to target the actual culprits but are
| lead to chase shadows, or one another.
| victorbjorklund wrote:
| We still have revolutions because if enough people go out
| on the street it doesn't matter how good your
| surveillance state is. You can't kill/arrest 25% of your
| population. That is why Russia/China/etc are so scared to
| let any protests begin even with 5 people because if they
| grow there comes a point it can't be stopped with
| violence.
| gosub100 wrote:
| You forgot gun control. Is it really a coincidence that
| the highest concentrations of rich people seem to be the
| places where citizens have the fewest rights to own guns?
| sigwinch wrote:
| If you're comparing Dubai and Abu Dhabi with New York
| City, there's larger variation than, say, China and
| Brazil.
| nielsbot wrote:
| > It shouldn't be the job of the US taxpayer to feed
| someone that doesn't want to work, study, or pass a drug
| test
|
| What about someone who works and still can't afford
| enough housing/food?
|
| > shouldn't be the job of the US taxpayer to feed another
| country's citizens half a world away.
|
| I mean where's the profit in that, am i right?
| alex43578 wrote:
| > What about someone who works and still can't afford
| enough housing/food?
|
| Food stamps? The original comment is addressing those not
| working or studying, or staying off drugs.
|
| >I mean where's the profit in that, am i right?
|
| We're $38 trillion dollars in debt. Digging a deeper
| whole isn't a sound decision.
| ben_w wrote:
| Hello, I'm British by birth.
|
| That's pretty close to the story other Brits give
| themselves for why losing the empire was actually a good
| thing for the UK.
| epolanski wrote:
| > It shouldn't be the job of the US taxpayer to feed
| someone that doesn't want to work, study, or pass a drug
| test
|
| This would make sense if every person was given similar
| opportunities, like providing quality education to all of
| our youngest and making higher education a mission rather
| than a business as a starter.
|
| As a society we move at the speed of the weakest among
| us, we only move forward when we start lifting and
| helping the weakest and most vulnerable.
|
| You also need to realize that _not_ doing that work is
| also cause for other taxpayer money to be spent
| elsewhere, such as spending an average of 37k $ per
| incarcerated person, and that ignores all the damage that
| criminal might 've caused, all the additional police
| staffing and personal security that is needed to be spent
| outside prisons, etc.
|
| Those are complex systems, are you sure it wouldn't be
| better to spend the same gargantuan amount of money
| that's spent on millions of inmates and fighting crime
| into fighting the causes that make many fall into that?
|
| Again, those are complex, but closed systems and the
| argument of "we shouldn't spend on X" often ignores the
| cost of not spending on X.
| c1sc0 wrote:
| No that's the system working as intended: there's good
| private money to be made on incarcerating the poor and
| uneducated!
| alex43578 wrote:
| The US already spends 38% more than the OECD average on
| education per student, just lagging Luxembourg, Austria,
| Norway, etc - if you're a student in America, you have
| access to plenty of resources.
|
| You're right that these are complex systems, and just
| pouring more tax dollars and more debt into them isn't
| working. Portions of our society need to value education,
| value contributing to society instead of taking, and
| reject criminality - but those changes require more than
| blind spending.
| hvb2 wrote:
| Let me phrase it this way for you. The best universities
| are in the US for a lot of things. But they don't scale.
|
| In another way, the top talent gets Ferraris for their
| tuition, the rest gets a bike. In a lot of European
| countries everyone can get the Toyota Camry of education,
| decent but not world class. That does scale though.
|
| Spending isn't everything, it's how you apply that
| spending.
| epolanski wrote:
| I very much disagree with your statement.
|
| A lot.
|
| As an European I can assure you even public second tier
| universities have excellent education.
|
| Where they lag the rankings is where money matters:
| politics to be highly ranked and money for high impact
| research.
|
| But when it comes to testing proficiency in e.g. science
| and math, the second university of Rome ranks higher than
| most ivy leagues in US ;)
| lo_zamoyski wrote:
| It is true that throwing money at problems is a lazy and
| ineffective way to address them. American education is
| very well funded in general, but very poorly executed.
| There is absolutely no room for arguments about the lack
| of money where the US is concerned. It is shameful for
| Americans to make such arguments.
|
| Much of the problem comes from a poor grasp of what
| education _is_ and is _for_ , and because of that, money
| and effort are not allocated properly. One source of the
| problem are various educational fads. I personally
| remember when computers were artificially jammed into
| school curricula for no good reason. There was absolutely
| no merit to what was being done. But how much do you
| think the companies selling that garbage made out?
|
| Or consider the publishing industry that fleeces schools
| and students with 12978th editions of the same poorly-
| presented material packaged in overpriced books.
| Financially, education is quite cheap, but there are
| sectors of the economy devoted to convincing pedagogues
| and politicians that it isn't, and that what you need to
| do is buy in order to "change with the times". Sorry, but
| basic education isn't fast fashion. Materially, basic
| education is stable and cheap.
|
| Another problem is that American culture is pragmatic to
| a fault. Americans have a long history of viewing
| education, particularly the university, with distaste, as
| some kind of "European", un-American, and aristocratic
| thing. This explains the appeal of the pragmatic turn of
| the university: you now go to university to "get a job".
| Of course, that isn't the core mission of the university,
| and most professions don't require anything the
| university might provide, especially not at these absurd
| costs (hence why GenZ is seeing something like a 1500%
| increase in pursuing trades).
|
| We have a cultural momentum that must fizzle out or must
| be reshaped. Where the modern university specifically is
| concerned, its days may very well be numbered. It may
| very well be forced to undergo very painful changes, or
| crumble, with a new crop of smaller colleges taking their
| place. Where primary education is concerned, parents are
| increasingly taking their children out of the savage
| factory known as public education. This, too, may force
| public education to finally deal with its dysfunction, or
| collapse.
| epolanski wrote:
| That's a meaningless stat in absolute terms, US lags
| other developed nations as % of GDP spending, and the
| level of primary and secondary education shows it. US
| adults lag in cognitive or even reading capabilities.
| irishcoffee wrote:
| > ... into fighting the causes that make many fall into
| that?
|
| A morbid thought that would probably address the bulk of
| this: male birth control.
|
| The backlash would be profound, it'll never happen. But
| if there were a way to make a "perfect
| pill/shot/procedure" boys had maybe at birth to prevent
| unplanned pregnancies... just think about it.
|
| I'm not even sure I'm advocating for it. Everyone says
| "education will fix all the things!" I think raising kids
| where the parents wanted to be parents would fix a whole
| lot, at least on the incarnation side.
| Ar-Curunir wrote:
| And that wouldn't be abused? We already means test access
| to basic necessities; you don't think "access to
| producing offspring" wouldn't be similarly gated?
| lo_zamoyski wrote:
| As intrinsically social animals, we have general
| obligations toward other people that precede our consent.
| How these play out in practice will be determined by the
| limitations and conditions of the situation. But in
| general, such obligations radiate outward based on
| proximity of relation.
|
| Our first obligations are toward our immediate families.
| As the human race is essentially a large extended family,
| the obligations dissipate the further out we go. We do
| have a general obligation to help those _in need_ , but
| this obligation is prioritized. In classical texts, this
| is called the _ordo amoris_ or "order of love" (in the
| older, more technically accurate terminology, order of
| _charity_ , where "charity" - from _caritas_ - means
| willing the good of the other).
|
| Now, to address your comment specifically...
|
| > There's already a lot that the US taxpayer is on the
| hook for that's a lot less valuable than a best on the
| next big thing in software, productivity, and warfare.
|
| For example? Whatever the benefits of LLMs, I find this
| relative exuberance unreasonable.
|
| > It shouldn't be the job of the US taxpayer to feed
| someone that doesn't want to work,
|
| In someone able-bodied and of sound mind _refuses_ to
| work, then we don 't have an obligation to support
| someone like that. This is true. In fact, it would be
| uncharitable to enable their laziness, because it harms
| the character and virtue of that person. Of course, in
| practice, if someone you have determined is able to work
| is found starving and in danger of death, for example,
| then it is unlikely they are merely lazy. Would a man of
| sound mind allow himself to starve?
|
| The manner in which we deal with such cases is a
| prudential matter, not a matter or principle. We need to
| determine how best to satisfy the principle in the given
| circumstances, and there is room for debate here.
|
| > it absolutely shouldn't be the job of the US taxpayer
| to feed another country's citizens half a world away.
|
| If there is a humanitarian crisis somewhere in the world,
| for example, then there is a general obligation of the
| entire world to help those affected. How that happens,
| how that is coordinate, is a matter of prudence and
| implementation detail, as it were. Naturally, several
| factors enter the equation (proximity, wealth, etc).
| parineum wrote:
| > Make billionaires richer, make the middle class poor.
| Make the poor destitute. Make the destitute dead. (All
| USAID cuts)
|
| How do you square this thought with the actual rate of
| poverty being on a steady downward trend while billionaires
| do their things?
| lenkite wrote:
| Kindly use the Supplemental Poverty Measure (SPM) - which
| accounts for government benefits (e.g., tax credits,
| SNAP), taxes, and expenses like medical costs.
|
| This does not show your "steady downward trend", but has
| considerably fluctuated over the last few years. It is an
| increase to 12.9% in 2024, compared to 7.1% in 2020-21.
| Will need to wait till end of 2026 for the 2025
| computation.
| parineum wrote:
| For the world?
| lenkite wrote:
| Global poverty reduction has slowed to a near standstill,
| with 2020-2030 set to be a lost decade - World Bank.
|
| https://thedocs.worldbank.org/en/doc/ec3d46c25a822d6d248e
| 86d...
|
| Please note that if you exclude China, the trend of
| poverty reduction is laughable.
| Zenst wrote:
| Whilst that is an option, it wont cover the share price hit
| from the fallout, which would wipe out more than the debt as
| when the big domino falls, others will follow as the market
| panic shifts.
|
| So kinda looking at a bank level run on tech companies if
| they go broke.
| sod22 wrote:
| Lmao this is ridiculous. If MSFT really wanted the tax
| benefits they should've just wholly acquired OAI long ago to
| acquire the financial synergy you speak of.
| visarga wrote:
| > The real question isn't "can OpenAI justify its valuation"
| but rather "what's the blended tax rate of its investor
| base?"
|
| Was that an organic "it's not A, it's B" or synthetic?
| mbesto wrote:
| None of this is how taxes work.
| louiereederson wrote:
| this is not accurate. microsoft recognizes openai losses on
| their income statement, proportionate to their ownership
| stake. this has created a huge drag on eps, along with a lot
| more eps volatility than in the past. it's gotten so bad that
| microsoft now points people to adjusted net income, which is
| notable as they had always avoided those games. none of this
| has been welcomed
| rrrrrrrrrrrryan wrote:
| > Something nobody's talking about
|
| Nobody is talking about this because it's not a thing.
|
| People here will shit on LLMs all day for being confidently
| incorrect, then upvote aggressively financially illiterate
| comments like this.
| zeofig wrote:
| I still don't understand how it's world-changing apart from
| considerably degrading the internet. It's laughable to compare
| it to railroads.
| kolinko wrote:
| Did you try asking chatgpt to explain?
| tliltocatl wrote:
| Translation is big thing, maybe not the same scale as
| railroads, but still important. The rest is of dubious
| economic utility (as in you can do it with LLM easier than
| without, but if you think a little you could just as well not
| do it at all without losing anything). On the other hand,
| disrupting signalling will have pretty long-lasting
| consequences. People used to assume that a long formal-
| sounding text is a signal of seriousness, certainly so if
| it's personally addressed. Now it's just a sign of
| sloppiness. School essays are probably dead as a genre (good
| riddance). Hell, maybe even some edgy censorable language
| will enter mainstream as a definite proof of non-LLMness -
| and stay.
| tim333 wrote:
| When it gets a bit better two robots can make four robots and
| so on to infinity.
| matwood wrote:
| Or the airlines. Airlines have created a huge amount of
| economic value that has mostly been captured by other entities.
| Chyzwar wrote:
| Anthropic is building moat around theirs models with claude
| code, Agent SDK, containers, programmatic tool use, tool
| search, skills and more. Once you fully integrate you will not
| switch. Also being capital intensive is a form of moat.
|
| I think we will end up with market similar to cloud computing.
| Few big players with great margins creating cartel.
| mhuffman wrote:
| >Anthropic is building moat around theirs models with claude
| code, Agent SDK, containers, programmatic tool use, tool
| search, skills and more.
|
| I think this is something the other big players could
| replicate rapidly, even simulating the exact UI,
| interactions, importing/exporting existing items, etc. that
| people are used to with claude products. I don't think this
| is that big of a moat in the long run. Other big players just
| seem to be carving up the landscape and see where they can
| can fit in for now, but once resource rich eyes focus on
| them, Anthropic's "moat" will disappear.
| iLoveOncall wrote:
| A GPT wrapper isn't a moat.
| bogdan wrote:
| Most things are wrappers around RDBMSs.
| blinding-streak wrote:
| Most true and interesting comment I've read on HN in a
| while!
| visarga wrote:
| A generic wrapper is not a moat, but the context is. Both
| the LLM provider and the wrapper provider depend on local
| context for task activities. The value flows to the
| context, the LLMs and wrappers are commodities. Who sets
| the prompts stands to benefit, not who serves AI services.
| mupuff1234 wrote:
| All those features are basically prompts in various formats,
| not much of a moat.
| atombender wrote:
| I thought that, too, but lately I've been using OpenCode with
| Claude Opus, rather than Claude Code, and have been loving
| it.
|
| OpenCode has LSPs out of the box (coming to Claude Code, but
| not there yet), has a more extensive UI (e.g. sidebar showing
| pending todos), allows me to switch models mid-chat, has a
| desktop app (Electron-type wrapper, sure, but nevertheless,
| desktop; and it syncs with the TUI/web versions so you can
| use both at the same time), and so on.
|
| So far I like it better, so for me that moat isn't that. The
| technical moat is still the superiority of the model, and
| others are bound to catch up there. Gemini 3 Preview is
| already doing better at some tasks (but frequently goes
| insane, sadly).
| jghn wrote:
| > coming to Claude Code, but not there yet
|
| Wasn't this released a couple of weeks ago?
| atombender wrote:
| It was added in 2.0.74 according to the changelog, but
| it's not functional:
| https://news.ycombinator.com/item?id=46357036. I've
| certainly not been able to use it.
| dbbk wrote:
| Does OpenCode work with their subscription Max plan or is
| it API pricing only?
| atombender wrote:
| Pretty sure it does. It just uses whatever you log in as.
| croes wrote:
| If AI is capable of doing what they claim then these aren't
| moats because they are just one prompt away from being
| replicated.
| eikenberry wrote:
| Except most of their product line is oriented towards
| software development which has historically been dominated by
| free software. I don't see developers moving away from this
| tendency and IMO Anthropic will find themselves in a similar
| position to JetBrains soon enough (profitable, but niche)...
| assuming things pan out as you describe.
| throw310822 wrote:
| > AI is a world-changing technology, just like the railroads
| were
|
| This comparison keeps popping up, and I think it's misleading.
| The pace of technology uptake is completely different from that
| of railroads: the user base of ChatGPT alone went from 0 to 200
| million in nine months, and it's now- after just three years-
| around 900 million users on a weekly basis. Even if you think
| that railroads and AI are equally impactful (I don't, I think
| AI will be far more impactful) the rapidity with which
| investments can turn into revenue and profit makes the
| situation entirely different from an investor's point of view.
| steve1977 wrote:
| Railroads enabled people and goods to move from one place to
| another much easier and faster.
|
| AI enables people to... produce even more useless slop than
| before?
| throw310822 wrote:
| At this point I'm taking the word "slop" as a sign meaning
| "I really didn't think this through and I'm just
| autocompleting based on a gut feeling and the first word
| that comes to mind".
| steve1977 wrote:
| That's an easy way out, isn't it?
| mikkupikku wrote:
| Using thought terminating cliches in general is, and that
| can include "slop".
| adammarples wrote:
| The irony of atacking thought terminating cliches while
| defending slop
| mikkupikku wrote:
| I have no love for slop. But I also don't write off the
| whole technology as only being good for slop.
| steve1977 wrote:
| It wasn't meant to be thought terminating. If anything,
| it was a bit provocative.
| latchup wrote:
| Well unfortunately for you, it has a precisely defined
| and well-understood meaning for all those not covering
| their eyes and ears in denial. Quoting Merriam-Webster:
|
| > Digital content of low quality that is produced usually
| in quantity by means of artificial intelligence.
|
| Chosen by the editors as word of the year, by the way.
| throw310822 wrote:
| "Slop" in English means "liquid junk, rubbish, tripe". No
| need to call for Merriam Webster's help.
|
| The point is that AI _can_ produce slop (as people do,
| too), but it 's just silly to imply that everything it
| can produce is slop. That's just lazy, sloppy thinking.
| steve1977 wrote:
| Sure. I'm fully aware that AI can be useful, especially
| once we move past LLMs.
|
| However, I do think that the majority (or mainstream) use
| of GenAI today is indeed not very useful or even harmful.
| And I do think that something like railroads are more
| useful by orders of magnitude.
| bdangubic wrote:
| > I do think that the majority (or mainstream) use of
| GenAI today is indeed not very useful or even harmful.
|
| What are you basing this opinion on?
| matkoniecz wrote:
| > but it's just silly to imply that everything it can
| produce is slop
|
| that is why people use slop qualifier, rather than not
| using qualifier
| shaky-carrousel wrote:
| Paid user base or free user base? Because free user base on a
| very expensive product is next to meaningless.
| throw310822 wrote:
| It's meaningful because it shows that people like the
| product _a lot_ , and for a lot of different reasons. There
| are only few products that can reach such market
| penetration, not to mention in only three years. As the
| quality of AI increases, people will quickly realise that
| they are willing to pay for it as much as they pay for
| electricity. And the same goes for businesses.
| shaky-carrousel wrote:
| They like the AI chat. Not ChatGPT. AI chats are
| interchangeable.
| throw310822 wrote:
| Indeed, but in the end they all have to cover their
| costs. People are already getting real, measurable value
| out of them and they will be willing to pay for it like
| they pay for utilities. Though I'm not excluding that the
| AI companies will manage to create some kind of moat to
| keep their customers (such as personalisation, memory,
| etc.).
| gosub100 wrote:
| Isn't that akin to a 1990s tech model like CompuServe or
| AOL? "Let's create this awesome environment where people
| will want to pay us for this wonderful service, we'll
| send them a CD in the mail to get them started withh a
| free month, then charge $0.30/minute. We'll make a
| fortune!"
| lm28469 wrote:
| > just three years- around 900 million users on a weekly
| basis.
|
| Well, I rotate about a dozen of free accounts because I don't
| want to send 1 cent their way, I imagine I'm not the only
| one. I do the same for gemini, claude and deepseek, so all in
| all I account for like 50 "unique" weekly users
|
| Apparently they have about 5% of paying customers, the amount
| of total users is meaningless, it just tells you how much
| money they burn and isn't an indication of anything else.
| throw310822 wrote:
| > I rotate about a dozen of free accounts .. I do the same
| for gemini, claude and deepseek
|
| For someone who doesn't like the product and doesn't care
| about it, you surely make a lot of effort to use it.
| lm28469 wrote:
| Sometime you have to force the trickle down economy a
| bit, these people are destroying my industry I might as
| well cost them as much as possible before I have no
| choice but to move on.
|
| It's also literally 0 effort, click > sign out > click >
| sign in. It saves me $200 a month, that's not too far
| from half of my rent
| throw310822 wrote:
| I can understand the spirit, though this reinforces my
| impression that the product is so good that people jump
| through hoops to use it, even if they hate it in
| principle. If they suddenly cut off any free access to
| it, how much would you be willing to pay per month to
| keep using it? One dollar? Ten? Twenty?
|
| Also, maybe I'm missing something, but no amount of free
| accounts on ChatGPT gives you what you get with a paid
| subscription, especially with a $200 one; and there's
| paid plans from just $8/month.
| lm28469 wrote:
| I like movies, I still torrent them, if tomorrow a police
| officer is being my back 24/7 I will just stop
| torrenting, but I still won't pay $20 a pop to go to the
| cinema.
|
| > Also, maybe I'm missing something, but no amount of
| free accounts on ChatGPT gives you what you get with a
| paid subscription, especially with a $200 one
|
| These days I'm mostly running opus 4.5 through
| "antigravity" and I'd rather become a potatoe farmer than
| give $8 to Altman
| throw310822 wrote:
| It's a really tiresome conversation, and I should just
| stop replying, but...
|
| If you have to stop torrenting it doesn't mean that you
| have to pay $20 per movie. There is a price >0 that
| you're willing to pay to do something you love. On
| youtube there's a lot of movies for 4 or 5 dollars.
|
| I'm also using Claude, both through Cursor (paid by my
| company) and privately (paid by me, $20/ month).
| mikkupikku wrote:
| I'm going to go out on a limb here and say that users who
| put that much effort into using this stuff for free, using
| a dozen different accounts, are very rare.
| nosianu wrote:
| It is beside the point, but
|
| > _I think AI will be far more impactful_
|
| is not correct IMO. Those are two very different areas. The
| impact of railroads on transport and everything transport-
| related cannot be understated. By now roads and cars have
| taken over much of it, and ships and airplanes are doing much
| more, but you have to look at the context at the time.
| freehorse wrote:
| Railroads carried the goods that everybody used. That's like
| almost 100% in a given country.
|
| The pace was slower indeed. It takes time to build the
| railroads. But at that time advancements also lasted longer.
| Now it is often cash grabs until the next thing. Not
| comparable indeed but for other reasons.
| utopiah wrote:
| > user base of ChatGPT alone went from 0 to 200 million in
| nine months, and it's now- after just three years- around 900
| million users on a weekly basis.
|
| Doesn't have anything to do with AI itself. Consider
| Instagram then TikTok before this, WhatsApp before, etc.
| There is a clear adoption curve timeline : it's going
| WorldWide faster. AI is not special in that sense. It doesn't
| mean AI itself isn't special (arguable, in fact Narayanan
| precisely argue it's "normal") but rather than adoption pace
| is precisely on track with everything else.
| nr378 wrote:
| > The simple evidence for this is that everyone who has
| invested the same resources in AI has produced roughly the same
| result.
|
| I think this conflates together a lot of different types of AI
| investment - the application layer vs the model layer vs the
| cloud layer vs the chip layer.
|
| It's entirely possible that it's hard to generate an economic
| profit at the model layer, but that doesn't mean that there
| can't be great returns from the other layers (and a lot of VC
| money is focused on the application layer).
| londons_explore wrote:
| Whilst those other layers are useful, none of them are
| particularly hard to build or rebuild when you have many
| millions of dollars on hand.
|
| One doesn't need tens of billions for them.
| tucnak wrote:
| Yeah, because making good chips (TPU) and compilers (XLA)
| is notoriously easy, right?
| londons_explore wrote:
| All of that is _below_ the model
| retinaros wrote:
| for me its clear OpenAI and Anthropic have a lead. I dont buy
| Gemini 3 being good. it isnt. whatever the benchmark said. same
| for meta and deepseek.
| Bombthecat wrote:
| Eh, I wouldn't be so sure, chips with brain matter and or light
| are on its way and or quantum chips, one of those or even a
| combination will give AI a gigantic boost in performance.
| Finally replacing a lot more humans and whoever implements it
| first will rule the world.
| nineteen999 wrote:
| You seem to have forgotten that the ruling class requires tax
| payers to fund their incomes. If we're all out of work,
| there's nobody to buy their products and keep them rich.
| CuriousSkeptic wrote:
| Not sure this equation works out. If demand for labor goes
| towards zero it really means there is no demand. In other
| words, when AI and robots fulfil every desire of their
| owners there really is no need for "tax payers"
| nineteen999 wrote:
| If you really think 8 billion people are going to not
| tear the arms and legs off their overlords and their
| robot minions before that you're completely daft.
| oblio wrote:
| > chips with brain matter and or light
|
| The... what now?
| cma wrote:
| Deepseek has invested the same amount as OpenAI?
| sunchit wrote:
| Have you thought about what happens if we get a new improvement
| in model architecture like transformers that grows the compute
| needs even further
| epolanski wrote:
| Like railroads, internet, electricity, aviation or car
| industries before: they've all been indeed the future, and they
| all peaked (in relative terms), at the very early stages of
| these industries future.
|
| And among them the overwhelming majority of companies in the
| sectors died. Out of the 2000ish car-related companies that
| existed in 1925 only 3 survived to today. And none of those 3
| ended up a particularly good long term investment.
| trgn wrote:
| very few software has commoditized, doubt it will be the fate
| of AI tech stack.
| o_nate wrote:
| Perhaps it would be useful to define what we mean by
| "commoditization" in terms of software. I would say a
| software product that is not commoditized is one where the
| brand still can command a premium, which in the world of
| software, generally means people are willing to pay non-zero
| dollars for it. Once software is commoditized it generally
| becomes free or ad-supported or is bundled with another non-
| software product or service. By this standard I would say
| there are very few non-commoditized consumer software
| products. People pay for services that are delivered via
| software (e.g. Spotify, Netflix) but in this case the
| software is just the delivery mechanism, not the product. So
| perhaps one viable path for chatbots to avoid commoditization
| would be to license exclusive content, but in this scenario
| the AI tech itself becomes a delivery mechanism, albeit a
| sophisticated one. Otherwise it seems selling ads is the only
| viable strategy, and precedents show that the economics of
| that only work when there is a near monopoly (e.g. Meta or
| Google). So it seems unlikely that a lot of the current AI
| companies will survive.
| louiskottmann wrote:
| This is so obviously right.
|
| I may add that investors are mostly US-centric, and so will the
| bubble-bursting chaos that ensues.
| jklinger410 wrote:
| > The simple evidence for this is that everyone who has
| invested the same resources in AI has produced roughly the same
| result. OpenAI, Anthropic, Google, Meta, Deepseek, etc. There's
| no evidence of a technological moat or a competitive advantage
| in any of these companies.
|
| I think this is analysis is too surface level. We are seeing
| Google Gemini pull away in terms of image generation, and their
| access to billions of organic user images gives them a huge
| moat. And in terms of training data, Google also has a huge
| advantage there.
|
| The moat is the training data, capital investment, and simply
| having a better AI that others cannot recreate.
|
| I don't see how Google doesn't win this thing.
| kkukshtel wrote:
| I like to tell people that all the AI stuff happening right now
| is capitalism actually working as intended for once. People
| competing on features and price where we arent yet in a
| monopoly/duopoly situation yet. Will it eventually go rotten?
| Probably -- but it's nice that right now for the first time in
| a while it feels like companies are actually competing for my
| dollar.
| the_overseer wrote:
| Aaahh the beautiful free market where the energy prices keep
| increasing and if it all fails they will be saved by the
| government that they bribed before. Don't forget the tax
| subsidies. AKA your money. Pure honest capitalism....
| heresie-dabord wrote:
| > AI is a world-changing technology
|
| As stated in TFA, this simply has _not been demonstrated_ , nor
| are there any artifacts of proof. It 's reasonable to suspect
| that there is no special apparatus behind the curtain in this
| Oz.
|
| From TFA: "One vc [sic] says discussion of cash burn is taboo
| at the firm, even though leaked figures suggest it will
| incinerate more than $115bn by 2030."
| siliconc0w wrote:
| The best case I can see is they integrate shopping and steal the
| best high-intent cash cow commercial queries from G. It's not
| really about AI, it's about who gets to be the next toll road.
| therobots927 wrote:
| Google already puts AI summaries at the top of search. It would
| be trivial for them to incorporate shopping. And they have
| infinitely more traffic than OpenAI does. I just don't see how
| OpenAI could possibly compete with that. What are you seeing
| that I'm not?
| sothatsit wrote:
| ChatGPT has already won a lot of people away from Google like
| my mum, who now defaults to ChatGPT when she has a question.
| I was just talking to one of their friends last night who is
| in his 90s and he loves using Perplexity to learn about
| cooking and gardening.
|
| A lot of people now reach for ChatGPT by default instead of
| Google, even with the AI summaries. I wonder whether they
| just prefer the interface of the chat apps to Google that can
| be a bit cluttered in comparison.
| thimabi wrote:
| > A lot of people now reach for ChatGPT by default instead
| of Google, even with the AI summaries.
|
| I'm one of those people, and the reason for that is that
| Google's AI summaries are awful more times than not. With
| ChatGPT I can (kind of) set how much "thinking" to do for
| each query and guide the model into producing better
| results via prompting.
| siliconc0w wrote:
| I can see users preferring GPT for big ticket items like
| cars, travel or service companies where you don't have a rec
| and want something a bet better curated than sponsored
| results. Especially if they improve the integration so you
| can book your entire iterary through the chat interface.
| deadbabe wrote:
| What does it mean for the AI bubble to pop? Everyone stops using
| AI en masse and we go back to the old ways? Cloud based AI no
| longer becomes an available product?
| stephen_g wrote:
| I think it mostly just means a few hundred billion dollars of
| value wiped from the stock market - all the models that have
| been trained will still exist, as well as all the datacentres,
| even if the OpenAI entity itself and some of the other startups
| shut down and other companies else get their assets for pennies
| on the dollar.
|
| But it might mean that LLMs don't really improve much from
| where they are today, since there won't be the billions of
| dollars to throw at training for small incremental improvements
| that consumers mostly don't care to pay anything for.
| deadbabe wrote:
| Sounds like a big nothingburger then.
|
| I don't really have faith the current LLMs will improve
| dramatically anyway, not without totally new approaches to
| AI.
| andrewflnr wrote:
| It probably means a price correction on cloud based AI, rather
| than it disappearing entirely.
| aurareturn wrote:
| It's a good question. Sad that you're downvoted.
| deadbabe wrote:
| It happens a lot. People here just want to silence voices
| that don't fit their agenda.
| cmiles8 wrote:
| AI is turning into the worst possible business setup for AI
| startups. A commodity that requires huge capital investment and
| ongoing innovation to stay relevant. There's no room for someone
| to run a small but profitable gold mine or couple of oil wells on
| the side. The only path to survival is investing crazy sums just
| to stay relevant and keep up. Meanwhile customers have virtually
| zero brand loyalty so if you slip behind just a bit folks will
| swap API endpoints and leave you in the dust. It's a terrible
| setup business wise.
|
| There's also no real moat with all the major models converging to
| be "good enough" for nearly all use cases. Far beyond a typical
| race to the bottom.
|
| Those like Google with other products will just add AI features
| and everyone else trying to make AI their product will just get
| completely crushed financially.
| mizzao wrote:
| If you think of it like cloud, where it's a commodity that
| reaches competitive prices, then you can use it to build
| products and applications, instead of competing for
| infrastructure (see also: railroads, optical fiber)
|
| There is tons of money to be made at the application layer, and
| VCs will start looking at that once the infrastructure layer
| collapses.
|
| Here's a blog post I wrote about that:
| https://parsnip.substack.com/p/models-arent-moats
| cmiles8 wrote:
| Not really though. The cloud has some stickiness. It's pretty
| hard to move once you've settled in. For a lot of AI
| integrations though it's just swapping some API endpoints and
| maybe tweaking the prompting a bit. For probably 95% of AI
| use cases there almost no barrier to switching.
| r0b05 wrote:
| It's a good take. I think both trajectories are occurring
| simultaneously.
|
| OpenAI challenging Google search is a winner takes all
| situation, not to mention the vast amounts of user data.
|
| On the other hand, us lesser mortals can leverage AI like a
| commoditized service to build applications with it.
| aurareturn wrote:
| There is clearly a very strong moat. OpenAI is close to 1
| billion active users on ChatGPT while Claude barely have any
| non-business users. Even though Anthropic had better models at
| different times this year, I never stopped using ChatGPT and
| paying for Plus.
|
| We just don't know who will win in which area yet. It doesn't
| mean there is no moat.
| ashirviskas wrote:
| I did, moved off to Claude in 2024 and many others around me
| did the same. Do you have data for non-business claim besides
| anecdotal evidence?
| aurareturn wrote:
| Yes.
|
| Claude has 1% based on this: https://gs.statcounter.com/ai-
| chatbot-market-share
|
| Consumers overwhelmingly use ChatGPT over Claude. ChatGPT
| dominance has not wavered.
| shaky-carrousel wrote:
| OpenAI has close to 1 billion users which are mostly free
| users and will switch provider the moment OpenAI start
| charging them or adding ads. Which they will, as OpenAI
| themselves said they are losing money even with 200$ subs. So
| that amount of users is pretty meaningless.
| aurareturn wrote:
| Google search is free to use too. So is Instagram.
| Facebook. Whatsapp. All of these have ads.
|
| OpenAI says they're very profitable on inference.
| shaky-carrousel wrote:
| All of these have ads. And none of these have an equal
| value alternative. OpenAI, Claude, Deepseek, Mistral,
| Gemini, are mostly the same to a regular user.
| aurareturn wrote:
| Bing is mostly the same. Kagi is mostly the same. Yahoo,
| Yandex, etc. It's 2025. Hardly any difference. There were
| tens of search engines in the 90s and 2000s that were
| generally mostly the same. Yet, Google still won and
| owned nearly all search monetization.
|
| Search was even easier to switch. At least ChatGPT has
| memory.
|
| Most chat apps are the same as Whatsapp. All of them are
| free too.
|
| "Ask ChaGPT" is the equivalent to "google it" in 2025.
| shaky-carrousel wrote:
| Hah, no, not by far. Bing, Yahoo, Yandex are way worse
| than Google. Saying anything different is delusional.
|
| The comparison with WhatsApp feels like trolling.
| WhatsApp has a network effect...
| array_key_first wrote:
| No those are all significantly worse products, or at
| least were for a long time. I don't think OpenAI has
| anything close to a moat. They don't even have a short
| fence.
| KaiserPro wrote:
| > OpenAI says they're very profitable on inference.
|
| Great, but they need to burn billions on advertising,
| freemeium, and mostly R&D for new models.
| aurareturn wrote:
| So do all their competitors.
| rurp wrote:
| Google and Microsoft have immense money printing
| machines. They can lose many billions of dollars for
| years and be fine as a business. OpenAI, not so much.
| scoopertrooper wrote:
| I don't think it's a question of moat. The usage limits on
| the chat interface with the more advanced Claud models are
| brutal. I feel like I can barely start a conversation before
| I get shutdown. However, I switched over to Gemini almost
| completely and barely ever checkin with ChatGPT these days.
| egeozcan wrote:
| I can't prove it (because they show no stats) but I feel
| like you get more Gemini Pro with a normal subscription
| than Opus with a Max plan.
|
| Maybe the new more efficient models made it better for
| Claude users but that was my experience a couple months
| ago.
|
| For professional usage though, Calude Code is so much ahead
| of Antigravity that it didn't even make sense to make a
| formal comparison. That, even when using the same model
| (Opus).
| gordonhart wrote:
| For consumers, the chat history is the moat. Why switch to a
| different provider for a marginal model improvement when
| ChatGPT already "knows" you? The value of sticking to a single
| provider is already there, even with the limited memory
| features they've implemented thus far.
| g947o wrote:
| Do we know as a matter of fact that people don't want to
| leave ChatGPT for Gemini just because of chat history?
| gordonhart wrote:
| N=2, but for my wife and me, yes. Doubt that real numbers
| for this question exist even at the big labs.
| CodinM wrote:
| Let's put N=3 there.
| senordevnyc wrote:
| N=4
| vmg12 wrote:
| The chat history feature makes the product worse, I had to
| turn it off.
| burnte wrote:
| Agreed, I don't have a single user who finds a large number
| of old chats useful.
| senordevnyc wrote:
| I'm a heavy user of ChatGPT, and this is exactly why I
| haven't switched. I frequently search my old chats, or
| pick up one I started weeks or even months ago.
| juped wrote:
| Just wait until you ask chatgpt where the export chat history
| button is!
| juped wrote:
| Well, Claude has the best personality in a field where the rest
| are in a race to make the most awful personality. That's kind
| of a moat. The models were smarter too though the others have
| largely caught up, especially Gemini.
|
| I'll be sad when $20 a month Claude goes away.
| g-unit33 wrote:
| Well they got $40B more to burn lol
| Abh1Works wrote:
| I think I super important aspect that people are overlooking, is
| that every VC wants to invest in the next "big" AI company, and
| the probability is in your favor to only give funding to AI
| companies, bc any one of them could be the next big thing. I
| think, with a downturn of VC investment, we will see some more
| investment in companies that arent AI native, but use AI as a
| tool in the toolbox to deliver insights.
| camillomiller wrote:
| It's like watching a train wreck waiting to happen, while
| everyone praise the madman conduct or who's operating the
| locomotor at full steam.
| neilv wrote:
| I don't think that's diagnosis (as a clinical term); closer to
| defamation.
|
| Is it necessary to a point you want to make?
|
| You can just point to behavior of a given entity, such as to
| conclude it's untrustworthy, without the problematic area of
| armchair psychoanalysis.
| camillomiller wrote:
| I redacted the comment because you're right. I need a better
| form to express the point.
| neilv wrote:
| Good move. We all have second thoughts on occasion.
|
| You might want to include an "Edit:" when substantially
| changing or replacing a comment.
| amkharg26 wrote:
| The comparison to railroad bubble economics is apt. OpenAI's
| infrastructure costs are astronomical - training runs, inference
| compute, and scaling to meet demand all burn through capital at
| an incredible rate.
|
| What's interesting is the strategic positioning. They need to
| maintain leadership while somehow finding a sustainable business
| model. The API pricing already feels like it's in a race to the
| bottom as competition intensifies.
|
| For startups building on top of LLM APIs, this should be a wake-
| up call about vendor lock-in risks. If OpenAI has to dramatically
| change their pricing or pivot their business model to survive, a
| lot of downstream products could be impacted. Diversifying across
| multiple model providers isn't just good engineering - it's
| business risk management.
| aurareturn wrote:
| Railroad peaked at 6% of GDP in the US.
|
| AI is at 1% of total US GDP right now.
|
| We have 6x more to go.
| zackify wrote:
| Surprised they burn cash advertising on Reddit to "make a mini
| me" version of yourself where you hold your body in your hand.
| What a waste of AI lol
| aurareturn wrote:
| I believe in OpenAI but they were running turn your cat into
| studio ghibili ads on Reddit up until a week or 2 ago.
|
| They need a better marketing strategy.
| jillesvangurp wrote:
| I don't see a bubble, I see a rapidly growing business case.
|
| MS Office has about 345 million active users. Those are paying
| subscriptions. IMHO that's roughly the totally addressable market
| for OpenAI for non coding users. Coding users is another few
| 20-30 million.
|
| If OpenAI can convert double digit percentages of those onto 20$
| and 50$ per month subscriptions by delivering good enough AI that
| works well, they should be raking in cash by the billions per
| month adding up to close to the projected 2030 cash burn per
| year. That would be just subscription revenue. There is also
| going to be API revenue. And those expensive models used for
| video and other media creation are going to be indispensable for
| media and advertising companies which is yet more revenue.
|
| The office market at 20$/month is worth about 82 billion per year
| in subscription revenue. Add maybe a few premium tiers to that at
| 50$/month and 100$/month and that 2030 130 billion per year in
| cash burn suddenly seems quite reasonable.
|
| I've been quite impressed with Codex in the last few months. I
| only pay 20$/month for that currently. If that goes up, I won't
| loose sleep over it as it is valuable enough to me. Most
| programmers I know are on some paid subscription to that,
| Anthropic's Claude, or similar. Quite a few spend quite a bit
| more than that. My Chat GPT Plus subscription feels like really
| good value to me currently.
|
| Agentic tooling for business users is currently severely lacking
| in capability. Most of the tools are crap. You can get models to
| generate text. But forget about getting them to format that text
| correctly in a word processor. I'm constantly fixing bullets,
| headings and what not in Google docs for my AI assisted writings.
| Gemini is close to ff-ing useless both with the text and the
| formatting.
|
| But I've seen enough technology demos of what is possible to know
| that this is mostly a UX and software development problem, not a
| model quality problem. It seems companies are holding back from
| fully integrating things mainly for liability reasons (I
| suspect). But unlocking AI value like that is where the money is.
| Something similarly useful as codex for business usage with full
| access to your mail, drive, spread sheets, slides, word
| processors, CRMs, and whatever other tools you use running in
| YOLO mode (which is how I use codex in a virtual machine
| currently, --yolo). That would replace a shit ton of manual
| drudgery for me. It would be valuable to me and lots of other
| users. Valuable as in "please take my money".
|
| Currently doing stuff like this is a very scary thing to do
| because it might make expensive/embarrassing mistakes. I do it
| for code because I can contain the risk to the vm. It actually
| seems to be pretty well behaved. The vm is just there to make me
| feel good. It could do all sorts of crazy shit. It mostly just
| does what I ask it to. Clearly the security model around this
| needs work and instrumentation. That's not a model training
| problem though.
|
| Something like this for business usage is going to be the next
| step in agent powered utility that people will pay for at MS
| office levels of numbers of users and revenue. Google and MS
| could do it technically but they have huge legal exposure via
| their existing SAAS contracts and they seem scared shitless of
| their own lawyers. OpenAI doing something aggressive in this
| space in the next year or so is what I'm expecting to happen.
|
| Anyway, the bubble predictors seem to be ignoring the revenue
| potential here. Could it go wrong for OpenAI? Sure. If somebody
| else shows up and takes most of the revenue. But I think we're
| past the point where that revenue is not looking very realistic.
| Five years is a long time for them to get to 130 billion per year
| in revenue. Chat GPT did not exist five years ago. OpenAI can
| mess this up by letting somebody else take most of that revenue.
| The question is who? Google, maybe but I'm underwhelmed so far.
| MS, seems to want to but unable to. Apple is flailing. Anthropic
| seems increasingly like an also ran.
|
| There is a hardware cost bubble though. I'm betting OpenAI will
| get a lot more bang for its buck in terms of hardware by 2030. It
| won't be NVidia taking most of that revenue. They'll have
| competition and enter a race to the bottom in terms of hardware
| cost. If OpenAI burning 130 billion per year, it will probably be
| getting a lot more compute for it than currently projected. IMHO
| that's a reasonable cost level given the total addressable market
| for them. They should be raking in hundreds of billions by then.
| aurareturn wrote:
| There is a hardware cost bubble though. I'm betting OpenAI will
| get a lot more bang for its buck in terms of hardware by 2030.
| It won't be NVidia taking most of that revenue.
|
| Whoever has the most compute will ultimately be the winner.
| This is why these companies are projecting hundreds of billions
| in infrastructure spend.
|
| With more compute, you can train better models, serve them to
| more users, serve them faster. The more users, the more compute
| you can buy. It's a run away cycle. We're seeing only 3 (4 if
| you count Meta) frontier LLM providers left in the US market.
|
| Nvidia's margins might come down by 2030. It won't stay in the
| 70s. But the overall market can expand quicker than Nvidia's
| profits shrink so that they can be more profitable in 2030
| despite lower market share.
| moezd wrote:
| In other words, OpenAI is a freight train without functioning
| brakes. There I said it.
| throw-12-16 wrote:
| And thats brave.
| WhereIsTheTruth wrote:
| The Microsoft effect, everything they touch turns to shit
| gorgoiler wrote:
| A second, less likely bubble?: IP rights enforcement. While the
| existing content hosters might have a neatly sewn up content
| agreement with their users such that all their group chats and
| cat photos can be used for training, I am a lot less confident
| that OAI came by its training data legitimately.
|
| (Adjacent to this is how crazy it was that Meta were accused of
| torrenting ebooks. Did they need them for the underlying
| knowledge? I can't imagine they needed them for natural langauge
| examples.)
| singingwolfboy wrote:
| https://archive.ph/rHPk3
| holri wrote:
| I would call it the ELIZA bubble.
| https://en.wikipedia.org/wiki/ELIZA_effect
| Zenst wrote:
| it is a large spinning plate that can only keep spinning with
| more money, so the plate gets bigger and bigger, with everyone
| betting that it would carry on spinnning by itself to the stage
| that it has become too big to fail, due to the fallout, the
| impact on the stock market upon others companies would wipe out
| more than the sum of their debts. It's kinda at that stage now as
| when one domino falls, the impact on others will follow.
|
| Just a case of too many companies have skin in OpenAI's game for
| it to be allowed to fail now.
| christkv wrote:
| How much of this capital is cheap printed credit from the covid
| area?
| Gud wrote:
| Personally I use ChatGPT a lot, it is a wonderful service.
|
| I use it in conjunction with Claude. I've gotten pretty good
| results using both of them in tandem.
|
| However on a principal basis I prefer to self host, I wonder if
| an advantage of OpenAI imploding wouldn't generate basement level
| prices of useful chips? Ideally I want to run my LLM and train it
| on my data.
| AbstractH24 wrote:
| It'll be interesting to see if and how the latest release of
| Gemini is seen in the story that is this bubble
| otikik wrote:
| The bubble is not at question. What's at question is how big will
| the pop be.
| ulfw wrote:
| Can't wait for this stupid bubble to finally burst so we can all
| move on
| duxup wrote:
| Their acquisition of Jony Ive's organization for a ton of money
| and that creepy webpage https://openai.com/sam-and-jony/ makes me
| think OpenAI is just racing for headlines and groping in the dark
| for some magic fairy dust.
|
| ChatGPT isn't bad, I use it for some things / pay for it, but
| their spend and moves make me think that they don't seem
| confidant in it ...
|
| Is all the doomer-ism about AI companies not being profitable
| right? Do the AI companies believe it? Seems like it sometimes.
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