I am no economist or business person but AFAICT the massive amount of money being burned is because everyone in the space believes there will be a Google-like (for search) single winner who takes all when the dust settles on the AI race.

Because of this belief they are willing to burn any amount of money they can get their hands on to get to this mythical finish line as fast as they possibly can, seeing it as existential. Moving fast means moving expensively.

The real question is why anyone believes this single-winner theory when all available evidence so far suggests there is neither a moat nor a lock-in opportunity at all.

they're already making a business model where enterprises buy tokens and put them in a pool for their users to use, and I feel like that's exactly where some companies will then compare that token pricing to open source models and find it hard to justify the prices, especially as it's quite obvious that many models https://news.ycombinator.com/formatdocare now "good enough"

I shortened my list to NVidia and AMD because putting Apple in muddies my point: I'd argue they'll be able to sell laptops + phones in that world, but only if you can run frontier open models on their devices, and do so efficiently. This is definitely not the case for their in-house AI offerings, like Siri, but it is already true if you install llama.cpp or whatever. I suspect that AI will not be a big revenue source for them (unless they completely turn around their software engineering org), but instead will be a "good enough to keep people from dumping their iCloud subscription" offering instead. Siri is basically that: It's completely useless, but people aren't switching to android because of it.

In the First World War, when they introduced the tank, everybody assumed its role would be to punch a big enough hole in the front lines that the horse cavalry could ride through and attack the enemy's supply lines, because That's How Wars End™. You fight the war you know, even when it's not the one you're actually fighting.

This is a really great identification of why, from an investing perspective, AI is nothing like past technologies.

That ain't going to happen, and if it somehow did in the US, things like Anna's Archive + libgen will save the rest of the planet from our self-imposed dark ages.

As for those data centers: The cost of inference and training on the same hardware is dropping much faster than Moore's Law. That multiplies with hardware advances, since Moore's Law isn't quite done yet.

So, those datacenters are depreciating at 50% every 18 months (Moore's law) at the same time as performance/$ and performance/watt of the software is dropping at some crazy rate like 10x per year. So, token per unit of data center is increasing by something like > 20x every 18 months, and that'll probably happen at least one more time. If it does, the datacenters will be provisioned to produce 400x more tokens than they could have when they were sized.

Put another way, if the singularity is coming, the first things it will destroy are those data center build outs. That doesn't matter though: the data centers are being built on circular loans, so the money needed to complete them probably never existed.

Dark times ahead; hopefully Trump will be blamed, since all this corruption happened on his watch while he had control of the senate, house and (partially) the courts. The stock-goes-down graph will show it happening after the midterms, of course.

This, to me, is the most interesting question in all of this. I increasingly feel like we live in a 'post-truth' world with regards to money and the stock market in particular. Like even during the COVID lockdowns the market blinked and then was at record highs within 6 months. It was just lol and completely out of touch with the reality on the ground.

The fed, and government alike, seem to have gradually shifted their mandates from trying to provide to a stable playground to trying to create a playground where important kids are never allowed to fall down. And when your existence is tied to trillions of dollars of the economy, you become the important kid.

Come to think of it this is also probably being exasperated by the rise of money management firms controlling tens of trillions of dollars. When the market valuation is technically just based on sentiment and you control that much money in a self-interested way, you're going to get weird outcomes.