adventured
Well that one is false. They print and debase any income or wealth held in USD.
So their print-against base is any and all assets held in USD globally.
The Japanese are also not broke, they've merely spent the past two decades destroying the Yen and chopping down the Japanese standard of living. Print, print, print.
War with Russia does not mean nuclear war with Russia. As we can clearly see from what Ukraine is doing to Moscow et al.
Also, an aggressive stance in fighting Russia, would have caught them early on when their military was entirely a disaster. The beating would have been an epic humiliation. Instead Russia has spent years re-learning how to wage war, which is not what you actually want.
The cheap money days are likely over or rapidly diminishing. The next plot of cheap money to add to their pile, is public investors (if they hurry). They can raise $75-$100 billion that way, pushing their pile well over $200 billion. One assumes based on their obligations and expenditures projected over the coming 3-5 years, they'll need it.
You might be better off taking out a loan against the value of the business to pay the tax, if it's a one-time tax. The problem is when they come for the second wealth tax, and then the bi-annual wealth tax, and then the annual wealth tax. There is no likely scenario where it's a one-time tax.
Intentionally or unintentionally isn't so interesting as the fact that it is happening: humanity has begun to be 'edited' by the new dominant form of intelligence on the planet.
There are multiple types of intelligence, from your typical pet dog to human to LLM, and we're likely to invent more types over the coming decades.
LLMs are vastly more intelligent than humans at nearly all things, but not all things. Another couple of years will just increase the gap a lot further.
How fast can a human draw a life-like photo quality scene (or eg something complex related to graphic design)? I know how fast Krea 2 [insert leading edge model here] can assemble that, trivially so, and at extreme quality. That's a form of intelligence in action. These AI systems have moved almost comically beyond human capabilities, they're increasingly best defined as superhuman (at a thing), and closer to omnimath for the frontier models.
In June Goldman Sachs put out an article noting how well Spain's economy is doing, which included this employment comparison (showing Spain's outperformance versus its peers):
Spain's unemployment rate has converged with Finland's, a remarkable improvement:
The jobs being created are tending more toward high value, high productivity jobs that pay better than average. That's no doubt helping diversify Spain's economy further away from tourism, which should provide greater long-term economic strength and stability. Overall it might be a really good decade coming up for the people of Spain.
HN is in denial. Just watch what happens over the next ~36 months.
$32b -> $37b -> $44b -> $52b -> $57b
That's Uber's sales growth year by year. And now they're solidly profitable.
The sole threat to Uber is the Waymo / Tesla automation angle. A merger is most likely there.
The many professionals are the ones that could most easily understand how to switch to GIMP, which is free to use. They could save enormous amounts of money. They prefer to spend money and stick with Photoshop instead. That has persisted for a very long time now.
The Chinese models have no great branding with the masses, they have no service layer that any average user understands. Where does Joe go to use the Chinese model that he doesn't even know the name of? Joe has no clue what the difference between DeepSeek and Kimi is, and Joe will never know that.
They all know ChatGPT, they have all been trained on how to use it and what it is. The inertia is enormous and HNers endlessly undercount how that works because deep tech users all want to think the masses view tools like they do and approach tech like they do (which is entirely false).
OpenAI's future is as an ad platform in terms of its business. That's at least 2x-4x larger as a business opportunity than anything they have going on now. Which is to say $80-$160 billion minimum. That requires they maintain the giant userbase, we'll see how that goes. Losing it requires someone take it from them. Joe isn't just going to wake up tomorrow and go seek out how to use Kimi.
The LLM space is worth a minimum of half a trillion dollars per year in ad revenue. It will subsume all of search. Search becomes merely a service of an LLM, which will perform the function on your behalf. Google is on top of that shift, so OpenAI has its work cut out for it competing with Google there.
Of the US big three, Anthropic is by far the one most threatened by the persistence of the Chinese models. Anthropic will probably never stop being chased by them and will have to endlessly race to try to stay ahead. Anthropic has to figure out how to build out the LLM+ equivalent of AWS before China figures out how to beat them, ie build a very deep service / tool moat around Claude that the userbase gets stuck to. In short dramatically increase the difficulty in peeling away users, it has to become a big chore to switch (which eventually this is exactly what someone will figure out in that area of LLM competition).
One million software developers will lose their jobs in the US over the next ten years.
The big firing waves will begin when valuations decline as the initial AI boom slows. That has started already, although it's early. Companies like CoreWeave will basically collapse. Investors will demand & reward the layoffs, efficiency push, the end of rah rah times will prompt the inflection on employment in tech. And it'll never be like it was ever again.
My suggestion to anybody staring this down is: do something for yourself while you can, while we're in the early going. Most people still have no understanding of AI, most tech employees are doing absolutely nothing interesting with it other than prompt prompt prompt prompt while at work and effectively doodling at home.
Go high value and go for the users. Do things that don't scale, that actually rings more true now than ever. Focus on areas of tech where it's really hard to get the users, where you have to practically hand acquire them to get started. Users are the moat.
It's not build the software and they will come. That's what nearly everybody has wrong about what is going on right now. The value is not in the software. Users, users, users, users - they should be your primary focus.
Also consider looking at software more as a layer related to something else you do, not as The Thing you do. Related to another service you offer, improving that service.
Let's say you started consolidating in the physical self-storage space ten years ago. You read that it was a very wide open field, where the market was not yet highly concentrated, 3/4 of the market was mom & pop operators. Over the next ten years you built up a lot of storage locations. LLMs can amplify your business, they can help you automate, layer better software on top of your physical business. You know what LLMs can't do? They can't build storage units, and humans love their storage space. That's just one example out of a zillion out there.
You don't want to be in the CD selling or radio business with the Internet & digital & streaming & smartphones & iPods bearing down on you. Go for concerts. Notice that humans are spending more than ever on live concerts. Disney World and Disneyland still command extraordinary pricing power, despite everybody hiding inside on their phones.
LLM clones of eg Photoshop will end up being worthless, like ideas generally. The software will be worthless for the same reason ideas are: they're too easy. Users are hard, software will be (relatively) easy.
Is the value in McDonalds in the food? Everybody knows it's not. McD captured consumers, their heft is extraordinarily difficult to displace. Ie habits, brand awareness, location, etc.
So mighty Google can't manage it. But it's a commodity that's easily copied.
Somehow HN can't reconcile the contradiction even though it's laughably obvious.
Hey anybody could go MVP a ride hailing app over the weekend. It's a commodity app. Should be super easy with LLMs.
Oh shit, wait, you mean I'd have to take a billion users away from GPT and getting those users is now 50x harder than it was four years ago? You mean it's drastically harder to peel users away from existing services than if you get to start fresh? Ohhhh.
They have gigantic moats and so long as they don't do anything too stupid, those moats will just get stronger with time.
No VC is giving you money to try to run down OpenAI and Anthropic. Nobody is writing that $100 billion check. It's already over, HN is just in its standard denial phase.
The bottom 2/3 of the human market is entirely dead. Their jobs are gone (AI-shored) they just haven't all gotten the forced retirement or pink slips yet, while they click a few more prompts for a few more pay checks. The frontier pushing forward will knock out most of the remaining top 1/3 without breaking a sweat over the next few years. The really good developers will graduate into babysitting AI as managers.
It is legitimately sad, it's millions of high paying jobs just in the US alone. It's going to be brutal on the housing market. Automation came for another field.
They have been chasing extreme growth with cheap money. That enabled them to hyper scale at a pace the world has rarely seen before. They have made the correct choice so far.
The absolute dumbest thing they could have done up to this point is slow down to try to turn a profit. They have not needed to. Market capture is the sole thing they should be focused on. Here's a hint: how many users does GPT have now versus three years ago?
There appears to be very widespread confusion about what purpose turning a profit serves and how business operations actually work.
Go back in time and tell Uber in ~2013-2015 that it needs to immediately become profitable and not focus on capturing the market.
It's 1987: The PC is underdelivering.
It's 2000: the Internet is underdelivering.
It's 2010: smartphones are underdelivering.
Well of course it is.
And that's why so many applications today are giant chonks of resource waste. For a long time now we've had it to spare.
Disregarding the moral debate about resource wasting of course. That's a different discussion. The why is: we have had the resources to burn, so they do. Resource usage is as tight as it has to be very generally speaking.
GPT's pie keeps getting larger, not smaller. Anthropic is growing hyper fast. DeepSeek and Kimi were supposed to put an end to that and the exact opposite has happened. The HN doomsayers are at 100% on being wrong spanning years at this point. It should be embarassing to be so wrong at some point.
The userbase that GPT has is not going to migrate to Chinese models. They don't even know where to find them to use them for the most part. They don't know their names. They don't know the difference between any of the models. They know: Google, GPT, Microsoft, Apple, Android, Samsung, etc.
GPT's foundation and future is as a service model. Anthropic is the frontier player that is potentially heavily threatened by China's models. It will require that Anthropic stay out in front and remain price competitive, and so far they're growing at the fastest pace of any start-up in world history.
You can't get the first and you can't get the money for the second. Nobody is going to give you $100 billion to underwrite the cost of competing with GPT at a one billion user scale (or even a 100 million user scale). The easy money is already drying up, the field is set, and you will not be able to get anybody to give you a huge check to attempt to chase OpenAI, Google, Anthropic, China. That's already over. No VCs will fund you on this particular business pursuit.
You couldn't meaningfully compete with OpenAI and Anthropic if you wanted to. There's absolutely nothing you can do about it.
There's a trillion dollar valuation waiting for you. What's up?
Even nation-state pockets Microsoft can't compete. If there were no moat, Microsoft would have their own GPT killer, and GPT would be dead. Microsoft has $160 billion per year in op income. They can freely afford to spend more than the entire EU (is willing to) on AI matters if it makes sense. They can't compete no matter how much they spend and they know it.
Google has nation-state money. They have chips. They have software developers by the zillions. They have a frontier or very near frontier model in Gemini / Argon. They invented a lot of the category. They can't kill GPT. I repeat, no matter what Google has thrown at the matter, they have failed to kill or stop GPT.
Google can't beat them. Microsoft can't beat them. China's models haven't stopped them (DeepSeek was supposed to kill them years ago; Kimi was supposed to kill them).
That's one helluva non-moat. They must just be really lucky.
You might as well claim Coca Cola has no moat because it's just sugar water. Brand at scale is a large moat. People use what they know unless you severely disrupt them. They're being taught to use GPT, they know GPT, and so long as OpenAI doesn't screw it all up, people will just keep using it. To say nothing of the fact that GPT still has one of the elite frontier models, so you also still have to compete with them on quality.
Market captured. Whoops.
Uber now: $55b in sales, $6.7b in op income. They won.
And to be clear, OpenAI can easily permanently subsidize a fake low cost for their LLMs if they get off their asses and attach a monster ad network to GPT already. They're years behind where they should have already been with ads, the easy money made it so they didn't have to think about it. If they miscalculate the timing on switching over from easy money (market) to ads (also easy money) it could certainly kill them.
OpenAI can knock out a lot of competition by building the largest ad network, then undercutting the cost that consumers see. The margins in ads make that possible. Google already knows how that works, they're doing the same thing right now.
I'd rather have the OpenAI + consumer base + ads position, than being Anthropic. China is a far, far larger threat to Anthropic over time. OpenAI is building a service business more comparable to what Google does. Chinese models don't actually threaten either OpenAI or Google insofar as their positions are user capture based, whereas constantly improving Chinese models are a never-ending threat to Anthropic.