[HN Gopher] Last gasps of the rent seeking class?
___________________________________________________________________
Last gasps of the rent seeking class?
Author : surprisetalk
Score : 128 points
Date : 2026-03-27 14:40 UTC (8 hours ago)
(HTM) web link (geohot.github.io)
(TXT) w3m dump (geohot.github.io)
| throwway120385 wrote:
| It seems like the rent seeking class is just moving to selling
| you access to LLMs in data centers by the token. In the past, the
| "rent-seeking class" being described here was at least part of
| the middle class. Now a few billionaires are going to capture all
| of the value, but the rent-seeking isn't going away.
| singpolyma3 wrote:
| Since the article is largely about open weights models, I think
| the argument is that this is the "last gasp" and soon doing
| inference at home will be common.
| vjvjvjvjghv wrote:
| The trend over the last decades was towards more
| centralization and I don't see that changing. Unless we
| radically change our economic system, the rent seekers will
| always win. There will be probably less of them but they will
| be even bigger.
| philipkglass wrote:
| The small models that I can run at home are becoming more
| capable, and I have replaced some API-based tasks with local
| inference as they improve, but large open weights models are
| still a lot stronger. The nice thing with larger open weights
| models is that competing providers serve them at modest
| margins and prices. I don't have the hardware to run the
| largest Qwen models, but I can get API access at low cost.
| Since there are only modest barriers to new commercial
| inference providers for these models I'm not worried that API
| access to them will become drastically more expensive at some
| future time.
| CamperBob2 wrote:
| _And since there are only modest barriers to new commercial
| inference providers for these models..._
|
| Congress: "Hold my beer and watch _this_ "
| filleduchaos wrote:
| Running on what devices (and additionally, purchased with
| what money)?
| guzfip wrote:
| > How often do you diligently check Uber and Lyft and select the
| cheaper one?
|
| Almost always nowadays lol. Shit I've gotten poorer over the past
| few years.
| johngossman wrote:
| Like self-driving taxis where the business model is to stop
| paying drivers so we can pay more to big tech companies. Viva la
| revolution!
| singpolyma3 wrote:
| In a free market it would be stop paying drivers so everyone
| can pay less for taxis.
|
| But the market is so unbelievably messed up that this is not
| what happens in practise.
| fn-mote wrote:
| Disagree.
|
| The work on self-driving cars would not be done if there were
| not a way to profit from it. If it isn't expected to earn
| more than it costs, it wouldn't be done.
|
| Now maybe it's all being done because of expectations of a
| monopoly (this is a free market consequence, right?), but ...
| convolvatron wrote:
| I think you made the assumption that gp is disagreeing
| with, that reducing costs necessarily reduces prices.
| (hence the bit about messed up markets)
| kingstnap wrote:
| Research has a large asymmetry to it. Once someone shows
| something can be done. Others can follow quite easily.
|
| And more substantial is that when someone shows something
| can be done, its orders of mangnitude easier for $ENGINEER
| at $CORP to get $CSUITEs attention to get a budget /
| justify the risk.
|
| Your self driving car example is the best example of this.
| Since waymo and tesla got popular NVIDIA really started
| pushing their self driving cars for everyone tech.
|
| https://youtu.be/EzAVW1VgzcI?si=gfnOJoaO9hfIFXX1
|
| And NVIDIA isn't the only one.
| palmotea wrote:
| > The work on self-driving cars would not be done if there
| were not a way to profit from it. If it isn't expected to
| earn more than it costs, it wouldn't be done.
|
| I disagree. "Expected" is hiding a lot of the work there,
| and the reasons for that expectation could be rational or
| completely irrational.
|
| Hypothetically "work on self-driving cars" would be done if
| some crazy psychic-trusting billionaire's psychic told him
| they would be profitable, even if all rational analysis
| said they'd be a bad business. A lot of major investments,
| especially in tech, and done based on hope or as a bet, not
| due to any real foresight.
| skybrian wrote:
| The safety improvements seem pretty substantial, though.
| anonymousiam wrote:
| I wonder how many people noticed that geohot is George Hotz,
| who authored the article on his GitHub page.
|
| George Hotz runs Comma AI, a self driving car company.
|
| https://comma.ai
| reedf1 wrote:
| funny. people are probably more likely to know him as geohot
| here. and afaik he is ex-comma. a more likely motivation (if
| you wanted to suppose one) is that he sells local compute.
| https://tinygrad.org/#tinybox
| WJW wrote:
| People used to call him "egohot" back in the day when he
| was cracking playstation games, because he was already
| incredibly arrogant even at a young age.
| yabutlivnWoods wrote:
| Yeah. This has strong self-selection bias. Egohot thinks
| about this stuff a lot so obviously everyone does!
|
| Most people only care about money as they have no choice.
| Absent a cash-first system money has become a social
| construct. The valuation of a dollar is entirely
| ephemeral now.
|
| I see that social reality becoming more realized and the
| existing social system around money collapsing due to
| generational churns attenuation of the social
| significance.
|
| Tech bros are little more than disciples of a dogma being
| missionaries for their dogma. There are other dogmas.
| ares623 wrote:
| Fuck Geohot for lending his hand to Musk during the
| Twitter takeover. He is obviously "sorted" and
| successful. But his recent blog posts suggests to me that
| he has started to realize, despite all his success, that
| if/when the system collapses, he'll be queuing up in the
| breadlines just like the rest of us.
|
| The sooner the other techbros get the same realization
| the better.
| temp8830 wrote:
| How is paper money any less of a social construct? How is
| a gold coin that you can't actually use in any other way
| than trading it to another hairless monkey?
| qoez wrote:
| I'm not sure I buy the "everyone will be AI coding to replace
| things that cost money with their own apps" idea. I only have so
| much limited time in my day (and only so many tokens on my claude
| account per week). It's probably going to make more sense for me
| to buy a tool that's been given human attention over the span of
| weeks over something i prompt into existence in a few hours
| (especially if I need 10 such tools to accomplish something).
| piker wrote:
| "The economics of opportunity cost are unchanged" a friend told
| me recently, and I think that's exactly what is driving your
| intuition here as well.
| conductr wrote:
| I can't always see the personal appeal, however when I view
| through the lens of businesses that buy very expensive
| enterprise software and other SaaS products (maybe blending
| into consumer market), well I think they're toast. I think the
| acceleration of AI tools recently isn't going to be indicative
| of how long the full transformation will take, but a lot of
| companies will start preferring Build over Buy. I have no idea
| the scope, but this is already happening at some partial scale.
| qoez wrote:
| I agree the free money in like one month coded SaaS apps are
| in big trouble. But like there's no way I'm gonna have the
| vision to desire to play a game I made myself using AI for
| instance (just the fact that I prompted it into existence
| ruins some of the exploration of a game made by someone
| else). So at the low end of the extreme (easy to make SaaS
| apps with basic code and a db) AI is a thread, but at the
| other end of the extreme (requiring vision and where human
| attention is a bottleneck) there's definitely still tons of
| opportunity.
| FuckButtons wrote:
| I think a lot of people will do this, it remains to be seen
| how the actual economics of this shake out in the long run,
| especially considering, it's not like the existing vendors
| are going to remain static.
| aerodexis wrote:
| The choice isn't between A) the expensive, proven tool and B)
| the thing I promoted in a few hours - it's b/w A, B and also C)
| the less expensive, somewhat proven tool that someone else
| prompted over a couple of days. I can see, over time, a slow
| drift towards "free".
|
| Factor in how a lot of tools have weaponized their interfaces
| against their users - then the motivation isn't just cost, but
| usability.
| 1970-01-01 wrote:
| Let's not gloss over the electrical supply. These chips won't
| work for free.
| jampekka wrote:
| LLM inference uses on the order of 1 Wh per query. That's under
| 10 meters of driving on an EV or running air conditioning for
| under 5 seconds.
|
| https://hannahritchie.substack.com/p/ai-footprint-august-202...
| deadbabe wrote:
| Or a human riding a stationary bike for 36 seconds.
| bluefirebrand wrote:
| One query is not going to be a useful benchmark when people
| are deploying AI swarms in loops to solve simple problems
| notfried wrote:
| This is a highly sensational take that is basically fan fiction.
| From "the era of purposefully frustrating humans is over", to
| "the added bonus of the collapse of the US economy. Frankly, it's
| well deserved." and "everyone in the world is rooting for the
| Chinese models"; nothing of that is grounded in reality.
|
| The Chinese models are open source because they are not state of
| the art. Once they catch-up or lead, they will likely close them
| down by a government mandate. Just like Meta was fine with Llama
| being open source but once they started to get close to
| OpenAI/Google/Anthropic, they shifted their language to "maybe we
| won't keep doing that."
|
| The idea that AI will end the "rent-seeking class" that has
| effectively existed for thousands of years is... not going to
| happen! The business model just adjusts. And if AI is going to be
| an economy-shaping super disruptor, the cloud-hosted models will
| continue evolving beyond what you could ever run at home under
| the desk.
| CoolGuySteve wrote:
| > The Chinese models are open source because they are not state
| of the art
|
| I think geohot is burying the lead in this text in his post
| with a lot of speculation.
|
| It's not not that these specific models will become closed it's
| that the hardware/hosting vendors have an incentive to train
| models where inference is custom tuned to their chip's
| dimensions and VRAM.
|
| The Chinese models do a great job of showing what's capable on
| consumer/prosumer hardware because of export restrictions but
| anyone entering the hardware space has the same incentives to
| undercut the frontier labs so they can sell more hardware.
|
| It's also not clear if being at the forefront of inference
| quality really matters. The open source models appear to be
| doing a fine enough job of keeping up even if they're a few
| months behind. So it seems like there's not much of a
| technology moat for these labs other than the capital costs of
| training/serving.
| aerodexis wrote:
| > the "rent-seeking class" that has effectively existed for
| thousands of years
|
| This "rent seeking class" is not a historical universal,
| regardless of how much college marxists insist that it is.
| Leaders can be good or bad, and they hold power in different
| ways. In America today we have bad leaders (across the entirety
| of the political spectrum) - and AI poses a lot of challenges
| in how they hold power. This is not to say Chinese leaders are
| any better - but the way they hold power is not challenged by
| AI. Business models will indeed adapt - but the condition is
| excellent, as they say.
| umeshunni wrote:
| To be fair, the author does explicitly state that their blog
| is:
|
| > A home for poorly researched ideas that I find myself
| repeating a lot anyway
| danans wrote:
| > The best anyone can hope for is a free market, with everything
| properly priced. But for decades, the American market has not
| been free. It's used purposefully added friction to exploit a
| time asymmetry between the business and you.
|
| A free market that is "properly priced" is a not a real state of
| existence.
|
| Resource and information asymmetry, and the exploitation by the
| those with resource and information privilege of those without it
| has been present from the very beginning. A free market is just a
| tool (among many) to achieve a goal for a society.
|
| For some, that goal is explicitly the concentration of wealth and
| welfare in very few hands. This is oligarchy.
|
| For others, it's the advantaging the welfare and dignity of their
| "tribe" at the cost of welfare and dignity to perceived
| outsiders.
|
| And for yet others, it is the advancement of universal welfare
| and dignity.
|
| Neither a free market nor socialism gets you any of these. What
| gets you there are the shared narratives that utilize tools like
| free markets, regulation, and redistribution.
| palmotea wrote:
| > The best anyone can hope for is a free market, with everything
| properly priced. But for decades, the American market has not
| been free. It's used purposefully added friction to exploit a
| time asymmetry between the business and you. And due to things
| like call centers, this has been very profitable for the
| businesses. Cable companies and insurance rely on the fact that
| your time is more valuable than theirs. They can hire people in
| India at scale to waste your time. They can use procedure and big
| data to design protocols to drive you just to the point of
| frustration at little cost to them. How often do you diligently
| check Uber and Lyft and select the cheaper one?
|
| > Enter AI, the great equalizer of time.
|
| I didn't read any futher: this article is dumb. If a company has
| the capability to hire _literal people_ to waste your time, they
| can deploy more AI than you to waste the time of your AI.
|
| Or they just use price to limit access instead of time. Which
| means you're totally SOL if you have time but no money. Pay to
| win, that game everyone loves /s!
|
| AI doesn't flatten asymmetries, it exacerbates them.
| mtlynch wrote:
| > _If a company has the capability to hire literal people to
| waste your time, they can deploy more AI than you to waste the
| time of your AI._
|
| I don't totally buy OP's argument, but I think you're
| dismissing it unfairly.
|
| His point is that in the pre-LLM world, if a company wants to
| waste your time, they can hire a call center employee overseas
| for US$4/hr and make you wait for an hour to talk to them for
| 30 minutes. If you value your time at $80/hr, then the
| 90-minute call cost you $120, but it only cost the company
| about $2, thus the asymmetry.
|
| OP's claim is that now, the asymmetry is gone. If both you and
| the company try to use AI, the company has less leverage to
| impose costs on you. They can deploy more AI to waste more of
| your time, but that means the asymmetry now is in the
| customer's favor because it costs the company more than the
| customer to get support.
| JambalayaJimbo wrote:
| But the company can deploy economies of scale to make their
| AI chatbots defeat yours? Company A can still hire someone in
| India to continually change their chat bot protocol or
| whatever to make it difficult for you chat bot to succeed in
| getting support.
| PaulHoule wrote:
| "But like people who are good with computers, the models want a
| terminal, not some candy ass iPad UI."
|
| Back before the iPhone I used to get into arguments with HCI
| specialists that phones could be like butlers and should know
| with all the sensors that they have that you put it in your bag
| and behaved accordingly. I was told that was impossible then but
| it seems more possible now. Had the world gone at all that way
| we'd have a freakin' API to make a restaurant reservation and
| wouldn't have to go through multimodal hell.
| sublinear wrote:
| Where does this hypothetical API live? Within a walled garden?
| We almost have that already with delivery apps and some credit
| cards. They're awful precisely because they are rent seeking in
| the form of convenience fees and artificial scarcity.
|
| What you call multimodal hell is what others call meaningful
| choice and market competition.
| PaulHoule wrote:
| I get it. Usually when there is the possibility of using an
| API team A is still fighting to log in while as a 1 man team
| B I have something using the plain web already running.
|
| Right now people are so angry about LLMs being a driver of
| enshittification that they aren't realizing that LLMs are the
| first real threat to enshittification we've seen as they can
| wait for those stupid little anime girls and click on the
| street lights and the GDPR popups and ignore the ads and all
| of that.
|
| I still imagine there's another world where there was an open
| API for e-commerce that didn't suck and the choice was adopt
| it or go out of business.
| aerodexis wrote:
| What's that adage about premature optimization?
| gopher_space wrote:
| "All of my interviews involve premature optimization"?
| stronglikedan wrote:
| > phones could be like butlers and should know with all the
| sensors that they have that you put it in your bag and behaved
| accordingly
|
| Do you mean like the pocket protection on my galaxy phone where
| it knows when it's in my pocket and blocks accidental touches?
| ej88 wrote:
| Im starting to believe that the biggest moats will be in the
| application layer, and that people are starting to realize
| traditional saas moats apply to those companies too
|
| network effects, distribution, proprietary data, systems of
| record
|
| companies like opencode have none of the above
|
| cursor's distribution has been faltering and they're hard
| pivoting to training their own models with their proprietary data
| to try to build their moat back
| brookst wrote:
| Exactly this. Also global sales and marketing and support.
| aerodexis wrote:
| The network effects and distribution moats are subject to the
| same erosion. proprietary data less so. Systems of record the
| least so. The real value-add over the next decades is gonna be
| around providing "stability". In multiple domains, from service
| stability to cultural stability. The "disruption" formula will
| be flipped on it's head, and ppl will be motivated to "move
| slow and fix things".
| OrangePilled wrote:
| 1. This gentleman appears to write with an optimism that befits a
| sliver of society.
|
| 2. Anthropic does not care about what models and hardware he is
| running under his desk.
|
| 3. When you look behind the cupboard--Anthropic is "rent seeking"
| on a level well above consumers.
|
| 4. I've got "AI safety" + "Capitalism" + "Military-industrial
| complex" bound together on my mental corkboard.
| happytoexplain wrote:
| >The best anyone can hope for is a free market, with everything
| properly priced
|
| This is an oxymoron.
| someguydave wrote:
| "But like people who are good with computers, the models want a
| terminal, not some candy ass iPad UI."
|
| Giving functionally illiterate people computers with GUIs should
| be regarded as a mistake.
| jitl wrote:
| A society/country that produces functionally illiterate adults
| should be regarded as a mistake.
| doodlebugging wrote:
| At some point you were part of that group that you are labeling
| a mistake. At another point, your children are or will be if
| you have any. Locking all of these productivity tools in one
| generation is a recipe for failure. You should think outside
| the box that you are currently trapped in.
| someguydave wrote:
| nope, I learned how to compute on the DOS command line
| doodlebugging wrote:
| Same here. It's been a while.
| someguydave wrote:
| DOS still works
| doodlebugging wrote:
| Yes it does. So does my old HP-11C calculator I used to
| write the first programs, in RPN for oil well log
| analysis, that I ever wrote outside of a class
| assignment.
|
| All of those routines were reprogrammed originally in a
| flavor of BASIC and it soon became obvious that ASCII log
| displays from digitized published materials were
| marginally useful as interpretation tools. Tabular data
| was far too dense. We needed pictures. Therefore we
| chased graphical methods of displaying data leading us to
| C and then C++ for the graphical routines that made it
| easy to display all of the data from an oil well log and
| to scroll the logs while zooming in and out.
|
| We started all that in some flavor of DOS and as time
| went by and everyone dumped their latest OS incarnation,
| we moved thru MS-DOS, PC-DOS, DR-DOS, etc until MS
| finally got with the GUI environment plan like Apple's
| Mac and produced a near worthless GUI called Win386 and
| later Win95. For a time it was fun.
|
| Linux, the old new kid on the block, still works great
| from the command line too. The GUI exists to streamline
| some of the things that are more easily digested in
| graphical formats. It has nothing to do with anyone's
| intelligence or ability to pick up skills they don't have
| today.
| matthest wrote:
| It's undeniable that technology over the past decades has
| increased democratization in _something_ every step of the way.
|
| YouTube destroyed Hollywood's monopolization of entertainment.
| Anyone with a smartphone now has a shot at becoming a full-time
| creator. Prior to this, it was gate kept by Hollywood execs.
|
| Smartphones destroyed Microsoft's monopolization of apps.
|
| Not a leap to believe this will happen to some extent with AI
| (and it's already happening to some degree).
| _DeadFred_ wrote:
| Not really. It's undeniable that technology reset power
| structures, but ultimately it just ended up with new power
| structures/new people made the gatekeepers.
|
| Just look at the people whose success was broken by Youtube
| overnight. Youtube/BigTech won over Hollywood, not the people
| 100% beholden to Youtube. Under Hollywood people still got
| their residuals. Under Youtube, next day you can be cut off
| completely.
| matthest wrote:
| Power structures still exist for sure. But objectively, there
| are tens of thousands currently making a living from YouTube
| who would've never been able to become entertainers if
| Hollywood was the only game in town.
|
| The barriers to entry for entertainers have never been so
| low.
| ReptileMan wrote:
| To me it seems like the rent seeking is everywhere and getting
| strong in all facets of our lives. Tech companies, utilities,
| marketplaces, car companies, appliance companies - everyone is
| pushing subscriptions, gate keeping features and milking every
| possible dime.
| _DeadFred_ wrote:
| Local veterinary, dentists, medical practices, funeral home,
| retirement homes, roofing, HVAC, etc are being bought by
| private equity and wealth extracted.
|
| When every financial transaction I make in part goes to a layer
| at the top that exists solely because they leveraged some digit
| in a balance book it is techno feudalism with an owning class
| being paid because they are the owning class, only instead of
| the baron always getting his cut it's invisible someones with
| even less accountability than the local feudal baron had.
| jmyeet wrote:
| This argument is a bit scattered. "Rent seeking" is being misused
| here. It's a relatively new term (~50 years old) but it has a lot
| of history behind it, specifically with _enclosures_. The
| Enclosure Acts [1] were a series of laws that took what was
| common property open to all and made them private property. This
| was embryonic capitalism [2].
|
| Anyway, I remember that Google demo of making restaurant
| reservations. I believe it was scripted and had a human fallback.
| Little did we know that Google would drop the bag on the whole
| transformer thing that came out soon after. I wouldn't be
| surprised if it was some of the same people involved.
|
| What the author is talking about isn't _rent-seeking_ per se but
| a _moat_. The entire proposition of OpenAI is that they can build
| a moat and recoup the _billions_ of investment. I 'm not
| convinced that's true, which is part of the author's point, for
| some of the same reasons:
|
| 1. Cost of hardware and training and tokens keeps going down. We
| saw the same thing with Bitcoin mining. I wonder if we'll see
| ASICs enter the fray here too; and
|
| 2. China will make sure no one company owns this future. DeepSeek
| was a shot across the bow of OpenAI, Google and Anthropic. It is
| a national security issue for China.
|
| Where I disagree is that this will be an end for the rent-seeking
| class. I think we're bouldering towards a dystopian future of
| even more wealth concentration where most people get displaced by
| automation and AI, which suppresses wages and ultimately leads to
| a situation where a handful of people have all the money and
| almost everyone else has no money.
|
| [1]: https://en.wikipedia.org/wiki/Inclosure_act
|
| [2]: https://medium.com/@jrcoleman97/the-hidden-origins-of-
| capita...
| dragonwriter wrote:
| > This argument is a bit scattered. "Rent seeking" is being
| misused here.
|
| It's being used in a more literal-meanings-of-the-words sense
| ("pursuing monopoly rents") rather than the narrow economic
| term-of-art sense of "pursuing monopoly rents _through
| influence over public policy_ by means that do not create, or
| which inhibit the creation of, additional wealth " (the
| definition you seem to be complaining about it not adhering to
| without actually providing.)
|
| But _most_ of the usages would also be correct in the narrower
| sense, because virtually ever actor referred to as rent-seeking
| in the broader sense are also rent-seeking in the narrow sense
| as part of that. (E.g., actively lobbying for "safety"
| regulation which would disproportionately impair non-incumbent
| new competitors.)
|
| > What the author is talking about isn't rent-seeking per se
| but a moat.
|
| Pursuing a moat is just another term for seeking monopoly rents
| by any means, including rent-seeking in the narrow sense.
|
| (There's also obviously an ideological angle in creating the
| term "rent seeking" as a term of criticism to those seeking
| monopoly rents through means that the creators of the term
| disapprove of, excluding seeking the same kind of rents by
| other means from "rent seeking".)
| jmyeet wrote:
| No, a moat is a competitive advantage/ OpenAI in particular
| is predicated on the belief that they will have a compeitive
| advantage. ASML is a compeitive advantage with EUV (for now).
| You can overcharge for if you have a compeititve advantage
| but that's not the same as rent-seeking.
|
| Rent-seeking is fundamentally intermediation like a health
| insurer putting themselves between a patient and a healthcare
| provider or privatizing grazing lands or controlling water
| supplies from snowmelt (like the Resnicks) or privatizing
| trains in the UK.
|
| Microsoft has a compeitive advantage with Windows, Google
| with its search engine and the ad business that funds it,
| Amazon with AWS or NVidia with GPUs. There are alternatives
| to all of these things but these companies maintain dominance
| with a combination of scale, cost, technology and network
| effects. That's not rent-seeking in a broad or narrow sense.
|
| Rent-seeking would be Microsoft lobbying lawmakers to
| _require_ schools and governments to purchase Windows, for
| example.
| dragonwriter wrote:
| > No, a moat is a competitive advantage
|
| No, a moat is a barrier to people closing the gap of an
| existing competitive advantage. The barrier is literally
| the point of the metaphor. If there is no barrier, there is
| no moat, just a transitory advantage; that's the whole
| basis of the famous "we have no moat and neither does
| OpenAI" memo at Google; its not that the big established
| players had (at that time, or now) no current competitive
| advantage over open source competition, its that there was
| no structual barrier preserving it.
|
| > Rent-seeking is fundamentally intermediation
|
| No, rent-seeking is using influence over public policy as a
| means to extracting monopoly rents. State policy favoring
| intermediation is one manner of rent seeking, yes.
|
| > Rent-seeking would be Microsoft lobbying lawmakers to
| require schools and governments to purchase Windows, for
| example.
|
| That is _an example_ , but lobbying for specific mandates
| for purchases from the specific firm is a fairly extreme
| case of rent-seeking, not the general case; a more common
| for of rent-seeking is firms in a narrow group of leading
| incumbents lobbying for various standards (either for
| public market access or government contracts) to be set for
| the industry that are not a particular burden for existing
| large firms to meet but which create additional friction
| for new competitors. In the specific case of software, this
| can include lobbying for rules that specifically treat open
| source solutions as suspect and dangerous, as well.
| zozbot234 wrote:
| > If there is no barrier, there is no moat, just a
| transitory advantage
|
| A moat can very much be transitory and caused by natural
| (or at least, not specifically intended) factors. Perhaps
| we could then call it something different, like a river
| as opposed to a moat, but the strategic effect is the
| same either way so it makes sense to use the established
| term for it.
| GeoAtreides wrote:
| ah yes, capitalism is over because the chinese are benevolent
| people that just give away the goose that lays golden eggs out of
| the goodness of their hearts
|
| this will continue forever and no rugs, chinese or otherwise,
| will ever be pulled
|
| we know that because the label on the rug says "open source"
| brookst wrote:
| I find it amusing and, IDK, charming how "rent-seeking" has
| become a general purpose pejorative, like "bourgeoisie" was at
| one time.
| bluefirebrand wrote:
| More like "rent-seeking" has become a general purpose business
| strategy
|
| Instead of selling products companies want recurring revenue
| from subscription. That's rent seeking. And look how
| commonplace it is now
| theturtletalks wrote:
| > Over the past fifty years, the U.S. economy built a giant rent-
| extraction layer on top of human limitations: things take time,
| patience runs out, brand familiarity substitutes for diligence,
| and most people are willing to accept a bad price to avoid more
| clicks. Trillions of dollars of enterprise value depended on
| those constraints persisting. - Citrini Research
|
| Agentic commerce will render Amazon and the rest of the rent
| seeking marketplaces obsolete given enough time. Because LLMs can
| literally go straight to the seller and perform checkout, do
| market research to make sure the seller is legit, and the seller
| can sell for lower than on the marketplace since they aren't
| paying a 15-20% cut.
| eloisant wrote:
| How long until the AI provider takes a 15%-20% cut? "Affiliate
| fees"...
| theturtletalks wrote:
| It's why I'm building an open-source agentic commerce chat
| vineyardmike wrote:
| I don't buy it.
|
| First, I think there is value in the "rent seeking" Amazon
| marketplace because how else would the models "go straight to
| the seller", another centralized search engine? Why not just
| use the Amazon one then?
|
| Second, one of LLMs big weaknesses is judgement on what to
| trust. I would not trust the judgment of an LLM to determine
| "the seller is legit"... unless we outsource trust verification
| to a third party marketplace (who will want a cut).
|
| Finally, OpenAI has been aggressively pushing for this so they
| can take a cut of the transaction. So it'll just be another
| middle man.
| CodingJeebus wrote:
| > So it'll just be another middle man.
|
| Exactly this, and not just another middleman, a middleman
| with an obscene burn rate that isn't close to profitability
| and is incentivized to ratchet up prices as soon as they can.
|
| And then AI procurement has problems on the buyer side. Do I
| just blindly trust that the model is going to make the
| purchase as specified? Do I trust the model's search
| capabilities and objectivity of returning results? How do I
| know that OpenAI isn't running its own "marketplace", only
| showing me options to buy that they want me to see while
| filtering out less desirable options for them?
|
| It's a fundamentally less transparent experience than Amazon.
| micromacrofoot wrote:
| You disregard the fact that the sellers will have opposing LLMs
| constantly adding more signals that they're legitimate.
|
| The sellers and the marketplaces can spend more time on their
| LLMs because it's their livelihood. It's the same asymmetry
| with different tooling.
| paxys wrote:
| "We are going to put online shopping on the blockchain and
| eliminate gatekeepers and fraud"
| theturtletalks wrote:
| Who mentioned blockchain? You just need to allow e-commerce
| website to expose their storefront as a MCP app or UI and
| then clients can interact with them directly.
| ks2048 wrote:
| Amazon has giant warehouses all over the country to deliver
| things to people quickly, sometimes within a couple of hours.
| What is an LLM going to do about that?
| theturtletalks wrote:
| Amazon has a monopoly in the US, but elsewhere in the world,
| 3rd party sellers have their own infra. Even in the US,
| sellers that sell outside Amazon have 3PLs they use that
| aren't as fast as Amazon, but also don't take a 20% cut on
| every sale.
| zadikian wrote:
| Amazon has brand value because both buyers and sellers trust
| it, aside from the shipping speed. An LLM can't evaluate trust
| for you, and it especially won't win in adverserial games like
| price haggling.
| SpicyLemonZest wrote:
| > The best anyone can hope for is a free market, with everything
| properly priced. But for decades, the American market has not
| been free. It's used purposefully added friction to exploit a
| time asymmetry between the business and you. And due to things
| like call centers, this has been very profitable for the
| businesses.
|
| I just think this analysis is wrong from the start. The "proper"
| pricing structure, the one tracking the actual costs involved,
| would be that you don't get to talk to a human being at all
| unless you pay for their time. Human frictions are what allow no-
| charge customer support to exist.
| efficax wrote:
| you do pay for their time, when you (or someone else) buys the
| company's products. but customer support exists because it
| makes the company _money_ , so really they should be _paying
| you_
| SpicyLemonZest wrote:
| Again, while this is a popular and widely desired price
| structure, it works only because the annoying customers who
| generate bad customer support tickets are constrained by
| human friction. If Bonzo who doesn't know what he's doing
| starts generating 10 pages a day of plausible LLM slop
| demanding a response, you can't tuck the cost of handling
| that behind a standard product price. Enterprise-facing
| businesses will have to be more aggressive about rejecting or
| overcharging customers who are insufficiently sophisticated;
| consumer-facing businesses will be pushed towards the Gmail
| route of just not offering meaningful customer support at
| all.
| antisthenes wrote:
| > Agentic commerce will render Amazon and the rest of the rent
| seeking marketplaces obsolete given enough time. Because LLMs can
| literally go straight to the seller and perform checkout, do
| market research to make sure the seller is legit, and the seller
| can sell for lower than on the marketplace since they aren't
| paying a 15-20% cut.
|
| Right.
|
| You'll just end up paying the 15-20% cut to the people who train
| the model and keep it updated and run the agents that you rent
| from them.
| strangattractor wrote:
| I think self driving cars are important for a couple of reasons:
|
| 1. Demographics - Aging population needs transportation. God
| knows we certainly don't need really old people driving
| themselves. We got a taste of the future in West Portal in that
| regard not long ago.
|
| 2. Human Capital - The US has pretty much demonstrated that there
| is little desire to import low skilled labor. Where do these
| theoretical Taxi drivers come from? Or welders or plumbers. Labor
| is going to become increasing expensive no matter how you slice
| the pie.
|
| 3. Younger US citizens are going to gravitate to non-manual labor
| jobs. It is not just that every one is being steered toward
| college. Physical labor (trades) take a toll on the body. I know
| - I have work in them - and you quickly extrapolate what that
| will be like when you are 50.
| lapetitejort wrote:
| Public transportation solved this before cars were commonplace.
| Implement ubiquitous and free public transportation in every
| urban center (where 80% of the American population lives [0])
| and you'll save billions from not having to manufacture (and
| store!) cars.
|
| 0: https://www.census.gov/programs-
| surveys/geography/guidance/g...
| hax0ron3 wrote:
| For public transportation to be broadly appealing it has to
| be clean, safe, and fast. Which means that you have to
| prevent people who are antisocial (playing loud music, etc.),
| violent, or just have terrible hygiene from boarding. You
| can't expect the bus driver to double-task as a security
| guard, so you have to somehow figure out a different way to
| implement security enforcement on the vehicles. You also may
| have to be ruthless in optimizing overall transportation
| value, of which speed is a factor, which may mean cutting
| some stops.
|
| You have to have the political will and support to do all
| this even as the almost inevitable controversial videos hit
| social media: people being manhandled by security guards
| while protesting their innocence, people complaining about
| how there used to be a stop on their street but now it's
| gone, etc.
| smeeth wrote:
| Methinks this post conflates "rent seeking" with "return on
| investment" just a tad.
|
| Economic rent is the extra money you can charge for owning a
| scarce resource. ML models are not waterfront real estate, they
| are IP. Other people can make more models if they can/want to.
|
| Now, whether IP should be legally protected is a totally separate
| question, and while we in the West tend to assume the answer is
| obvious geohot would certainly not be the first person to suggest
| broadly applying private property rights to information makes
| questionable sense.
| lukev wrote:
| Rent is charging money for access to an asset or _property_.
|
| The P in IP is Property.
| smeeth wrote:
| The "rent" in "rent-seeking" does not refer to "rent" it
| refers to "economic rent."
|
| Totally different concept. But don't take my word for it:
|
| > "Rent-seeking" is an attempt to obtain economic rent (i.e.,
| the portion of income paid to a factor of production in
| excess of what is needed to keep it employed in its current
| use) by manipulating the social or political environment in
| which economic activities occur, rather than by creating new
| wealth.[0]
|
| > In economics, economic rent is any payment to the owner of
| a factor of production in excess of the costs needed to bring
| that factor into production. [1]
|
| [0] https://en.wikipedia.org/wiki/Rent-seeking
|
| [1] https://en.wikipedia.org/wiki/Economic_rent
| happytoexplain wrote:
| People can make beaches. And they have.
| lukev wrote:
| Also, the defining feature of capitalism is that it _encloses_
| what was previously _common_.
|
| Land used not to be owned (feudal lordship was functionally
| different than private ownership.) Then, society shifted, land
| became private, and that was the beginning of rent. This is
| enclosure.
|
| The whole concept of IP is to explicitly extend this process to
| ideas -- they are not free, they are owned, and I have to pay
| you to use them. This is also enclosure, precisely.
| mistrial9 wrote:
| almost.. you missed this part
|
| https://en.wikipedia.org/wiki/History_of_slavery
| lukev wrote:
| I could not possibly enumerate all the possible things that
| have been enclosed. Human beings obviously being the most
| morally egregious.
| CGMthrowaway wrote:
| >Third party marketplaces sprung up for reservations, and idk
| it's been a while since I went to fancy dinner, but I imagine the
| restaurants have just started charging. Or at least the first
| party reservation sites do.
|
| Yes, this is what Tock is for. It's not clear to me that it's a
| bad thing. It replaces the old $20 in a handshake I used to do
| with the maitre d at the front of the restaurant. Democratizes
| opportunity and improves transparency
| deathanatos wrote:
| Betteridge's Law of Headlines hard here.
|
| > _The era of purposefully frustrating humans is over. The
| Chinese open source model running on the box under my desk can
| pass the Turing Test. When you call, e-mail, text, or show me an
| ad, you'll never know if it's me or my model seeing it._
|
| But at some point, you're going to want to _do_ something, like,
| e.g., buy something. Then you 're right back to the problem in
| the opening quote:
|
| > _things take time, patience runs out, brand familiarity
| substitutes for diligence, and most people are willing to accept
| a bad price to avoid more clicks._
|
| & we're _already_ seeing AI used to do this. E.g., Amazon
| listings where product photos are AI generated. (... not that
| many product photos weren 't "bad photoshop of product onto hot
| sexy model who is obviously not using our product" _before_ ...
| but now it 's AI!) Whereas before someone would have had to spend
| a modicum of time badly using Photoshop, now AI can just churn
| out the same fraudulent result in a fraction of the time.
|
| Now, if I have a problem with a product, instead of just calling
| a number, browsing a phone tree, getting put on hold, and
| _finally_ having to struggle to get some human to understand the
| basic logistics of "I paid for X, I did not get X, I demand X or
| refund", I get to do all that but with the extra step of "forced
| engagement with an AI that is incapable of actually solving my
| problem". (This somehow still manages to apply even when the
| problem is seemingly trivial enough that I find myself thinking
| "... this actually _should_ be something an AI can do " but
| inevitably, no, the AI is "sorry", it cannot do that.)
|
| And besides, calls, emails, etc. are already handled without AI:
| I (and everyone I really care about) have either allowlisted all
| inbound comms, or abandoned the medium altogether. Moreover, _any
| communications medium_ is useful because it is not infested with
| spam, and will eventually be destroyed by spam. At least until we
| grow laws for mediums like phone /email, maybe named things like
| "Do Not Call" or "CAN-SPAM" _and those laws are enforced._ But
| the GOP has no interest in enforcing _any_ level of consumer
| protection, so here we are.
| micromacrofoot wrote:
| It's going to be the same asymmetry with different tooling. Why
| does he think people will be the only ones with these tools?
| Companies will utilize them, as they already are, and will also
| have more time to fine-tune, manage, and improve them.
|
| It's going to be your bots vs theirs. Theirs will have more
| resources. Net result? probably fewer jobs and wealthier
| companies yet again.
| paxys wrote:
| I wish I could be this optimistic. The reality is that as we
| speak the average consumer doesn't have access to cheap
| electricity or affordable inference hardware or powerful models
| that work out of the box on existing computers. The only
| realistic option for the 99% is to buy a $20-$200 monthly AI
| subscription, and I don't see that changing anytime soon.
|
| A couple decades ago people used to think that since anyone can
| build a website internet businesses will never have a moat. In a
| hyper-capitalist system the top players will always find a way to
| dig a moat.
| GMoromisato wrote:
| You should be more optimistic.
|
| 92% of the world has electricity. 74% of the world has internet
| access. 58% of the world has a personal mobile internet device.
|
| That means the median consumer can access the free AI chatbots
| from OpenAI, Anthropic, etc.
|
| Moreover, if you compare this to the world in 2000, you'll see
| that things have only gotten better. ~25 years ago, only 78% of
| the world had access to electricity, and only 6% had access to
| the internet. Effectively 0% had access to a personal mobile
| internet device.
|
| I think, if you look at actual statistics, it is easy to be
| optimistic.
| kibwen wrote:
| _> But for decades, the American market has not been free._
|
| The grand, boneheaded naivete to fail to understand that
| middlemen are an emergent and intrinsic property of free markets
| in practice.
| marginalia_nu wrote:
| Antitrust legislation used to be very effective at dealing with
| this sort of stuff. These laws were designed to put an end to
| the gilded age (Standard Oil in particular), and accomplished
| what it set out to do.
|
| Though Ronald Reagan dared asked what nobody else thought to
| ask, "what if monopolies ... good?", so now we're back with a
| new set of Morgans and Vanderbilts.
| thelastgallon wrote:
| The Morgans, Vanderbilts, etc at least built things that
| create value (and extracted wealth from them), things that
| didn't exist before in the economy.
|
| The billionaires of today are just pure rent extraction
| schemes on things that already exist, make money by
| enshittification of what is already there. Nothing of value
| ever needs to be created. They use the govt to help them,
| after all why create anything new at all, when you can just
| take it?
| registeredcorn wrote:
| If you haven't, I'd encourage you to give "The House of
| Morgan" by Chernow a read.
| kmeisthax wrote:
| Sometimes the real market failure is just that a market exists
| _at all_.
|
| Like, in some really fucked up neoliberal hellscape it might
| make sense to charge money for reservations separately, but
| that introduces all sorts of extra new inefficiencies that
| weren't there before. Like, now that reservations can be bought
| and sold, it's now legal, possibly moral, and most notably,
| _profitable_ to hoard them. And since reservations are a
| derivative on the underlying capacity of a restaurant, you 're
| going to have tables that are "reserved" but unused because the
| "owner" of that reservation happened to sell it on to a third-
| party vendor that's now trying to hike the price to last-minute
| diners.
|
| Meanwhile, the actual restaurant trying to sell food, _can 't
| sell food in their own restaurant_, because their salesfloor is
| full of empty tables that are worth more to the market dead
| than alive. They are undergoing demand destruction as they are
| involuntarily transformed from a food vendor into a landlord of
| tiny plots of real estate whose desirability has long since
| been detached from any surrounding circumstances.
|
| The argument for markets is that unregulated commerce is very
| good at calculation. Or, more specifically, that price
| discovery is the process of putting bounties on better
| information than is currently available. The flipside of this
| is that everything around the market needs to be regulated or
| you're calculating garbage into garbage.
| solarkraft wrote:
| > The best anyone can hope for is a free market, with everything
| properly priced. But for decades, the American market has not
| been free. It's used purposefully added friction to exploit a
| time asymmetry between the business and you. And due to things
| like call centers, this has been very profitable for the
| businesses. Cable companies and insurance rely on the fact that
| your time is more valuable than theirs. They can hire people in
| India at scale to waste your time.
|
| That is the market being free, George.
| schubidubiduba wrote:
| No. The market being free would mean that a private person can
| also hire Indians to call companies.
| lisper wrote:
| What is stopping them?
| bdangubic wrote:
| what's stopping them from doing so?
| antonymoose wrote:
| I don't want to give private data up to and including my
| social security number for verification to start.
| triceratops wrote:
| No law against doing that. You could use Fiverr for it right
| now.
| dpark wrote:
| People often confuse "free" with "fair".
| altairprime wrote:
| People often confuse "free" with "unregulated", too.
| readthenotes1 wrote:
| My understanding of the definition of a "free" market is it
| would have almost no external regulation.
|
| However, a "unregulated free market" is nearly impossible--
| somw player will eventually drive out competition to
| maximize profits and some will not be troubled at harming
| or killing their customers in the name of immediate profit
| (tobacco, sugared drinks, talc powder, and round-up come to
| mind immediately but the list is very long).
|
| Is market with enough regulations to ensure competitiveness
| and transaction transparency (including long-term
| consequences) truly "free"?
| adi_kurian wrote:
| No they don't. That is the very definition.
| bigbadfeline wrote:
| >> People often confuse "free" with "unregulated", too.
| >No they don't. That is the very definition.
|
| Using that definition amounts to classifying all real
| markets as non-free.
|
| Unregulated markets cannot exists in reality or in a
| sound theory, only in wishy-washy fairy tales.
| nine_k wrote:
| The market actually is not very free, because large companies
| increasingly use their weight to pull off things that smaller
| companies or individual customers cannot afford: lobby to
| obtain preferences, tax exemptions, exclusive deals, other
| favors that violate or at least skirt the law.
|
| But running a call center overseas is not one of these things.
| psadauskas wrote:
| A "free market" is one in which all the participants of the
| market have perfect information and act completely rationally.
| This is, of course, an academic ideal, similar to solving a
| physics problem that tells you to ignore friction.
|
| What we have is a "capitalist market", where those with more
| power (capital) within the market leverage it to exploit the
| other participants. Capitalists use their money to extract as
| much money as possible from a segment of the market, usually
| destroying it in the process. But for a beautiful moment in
| time they created a lot of value for shareholders!
| TZubiri wrote:
| I don't understand how you can look at LLMs and how you think
| they will result in less time wasting bureocracy? Sure the users
| can use LLMs to talk to call centers, but businesses will
| absolutely block the sun with the amount of LLMs they'll throw
| back at you, try to literally do anything on the phone, it's
| starting to be all LLMs.
|
| In an LLM arms race, corporations will win bud, sorry.
| some_random wrote:
| >Not to mention the added bonus of the collapse of the US
| economy. Frankly, it's well deserved. Nobody should build an
| economy based on rent seeking and increasing friction. I pray the
| collapse will be swift and legible so that reconstruction (in the
| right way) can begin as soon as possible.
|
| Insane take for a bunch of reasons, the destruction of the US
| economy would necessarily entail the destruction of the world
| economy. Hopefully I don't have to explain why that would be bad.
| Furthermore, a ton of the "rent seeking" Citrini Research was
| discussing isn't traditional rent seeking but the cognitive
| services previously necessary. Software engineering, for
| instance, falls into that bucket.
| janalsncm wrote:
| > Enter AI, the great equalizer of time.
|
| Enter Terms of Service, monopolies and duopolies, and maybe even
| cybercrime statutes.
|
| There's no law that says AT&T can't just ban your account if you
| hook up your "talk to customer service" bot to their AI/overseas
| customer service phone tree army.
|
| Or, they can just lock your account for "safety" reasons.
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