LLM providers on the cusp of an 'extinction' phase as capex realities bite

Re:LLM providers on the cusp of an 'extinction' phase as cap... by paulluuk on Tuesday April 01, 2025 @04:12AM (#43544101)

I could be wrong, but I believe Amazon's business model was very simple: do everything as cheaply as possible, run at a loss until all competition is dead, and then raise prices once we dominate the market.

I don't think OpenAI has that option.

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Re:LLM providers on the cusp of an 'extinction' phase as cap... by dukeyukey on Tuesday April 01, 2025 @04:15AM (#43544122)

I don't think that's true, even in rural areas without choices Amazon is pretty cheap.

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Re:LLM providers on the cusp of an 'extinction' phase as cap... by karmakurtisaani on Tuesday April 01, 2025 @04:20AM (#43544148)

Also, I think Amazon invested everything into growth, for which there was a lot of potential. Seems different for the AI companies.

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Re:LLM providers on the cusp of an 'extinction' phase as cap... by delecti on Tuesday April 01, 2025 @06:30AM (#43545087)

Eh, it's more that per-transaction they were profitable, so they needed to scale enough to make up for their fixed costs. OpenAI's fixed costs are enormous, and they're only bringing in pennies from subscriptions.

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Re:LLM providers on the cusp of an 'extinction' phase as cap... by rongrobert on Tuesday April 01, 2025 @07:03AM (#43545318)

This wasn't the business model.

The business model was you could sell books over the internet at a much cheaper cost compared to Barnes and Noble or Borders because they weren't paying for physical locations and there was no sales tax on the transactions because it was on the internet.

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