sgt101
There is a paradox here, I think that there is a lot of denial about it.
I think that the first issue you raise is "why would they" and the answer is (IMHO) because there are a bunch of people who are trying to make money anyway that they can and as far as they are concerned it's just bad luck and social darwinism if they get the cash and other people are left holding the bag.
You are right that the products that have emerged from the AI boom have real value, but it's not clear that anyone can capture the value from consumers. LLMs are more or less commodity items. Listen, for sure, for serious, if you gave me $20m I could build a tier 3 LLM in six months. Fella, I am not boasting, I am a small fry old AI researcher and there are 100 like me in every bar in my town (London, near enough) but I know I could do that. I also know that the tricks to move from tier 3 to tier 1 are increasingly available *FROM THE FRONTIER MODELS THEMSELVES* . The number 1 use case at OpenAI for AI is... managing the clusters. And managing the clusters has been the hard bit since about 2017. This is not the case of a rare product that everyone wants, it's basically the same as Florida condos - yes a view over the ocean is great, yes a nice condo is good to live in, but also there is a lot of beach front in Florida and building condos is not rocket science (I am bearish on SpaceX too but for other reasons).
No one will give me $20M sadly, and if they did I'd probably abscond to somewhere I hoped was safe with it and spend the rest of my life raising litters of kittens. This is definitely a good hobby and is actually quite like managing big clusters, but with a better emotional balance.
Anyway, the next point is profitability.
These companies are not profitable. OpenAI is not profitable, Anthropic is not profitable. In fact they are burning cash and losing money hand over hand. They are subsidising subscribers and enterprises to use their models because if they don't, and they force market costs, then they won't have market share. Look to openrouter's stats if you don't believe me : https://openrouter.ai/rankings
The path for Amazon to be profitable was to use investor cash to build a modern last mile distribution and supply chain across the US and then the globe. The AI gamble was to create a capability to serve AI that could effectively monopolise the market and that they could raise the drawbridge like Google did with search. But Google created a market out of you and me for advertisers, where as OAI and Anthropic are asking you and me to buy their products. Brother, I will, but only if they are cheapest and best, which means that this will be a competition, and in a competition I do not care if you go bust and the data centre has to be auctioned to the lowest bidder because if that happens I will then see a cheap service come into use that asset to replace the leavered up investors who sadly lost their pants. If you have to sell off an Amazon distribution center you've got a big problem, an Amazon distribution center only has real value because of the last mile fulfillment and the global supply chain that's attached to the store. A data center for LLMs is not the same, tokens are tokens. I can buy them from Slough or Texas, the Texas ones might cost be less because gas is cheap there, but we're talking $1.40 per million vs $1.00.
That's it.
A $3Trn commodity service.
In 2008 the USA managed to export the shit assets generated by the mortgage boom , mostly to Europe. The consequence for the European economy and political setting have been quite sharp. For example it's hard to imagine a Brexit vote if the economic conditions of 2006 had persisted in the UK.
If the AI boom unwinds it's quite hard to see how the USA will export the pain this time. The issue is that the boom is tied to physical infrastructure in the USA and these assets will be stranded. Corporate bonds used to finance it are mostly owned by US pensions and 401k. We are likely to see many US insurance companies liquidated... and that will kill the annuities for many retirees.
The grid expansions that are being created in the USA will mean significant debts on US utility providers as well, if the data centres profitably come on line then this will get paid back. If not then American households are going to have to pay. Chip producers (Tiawan SK) will also get burned.
The USA will forfeit tech leadership, the US bond market will not permit Keynesian expansion. Basically the USA will be looking at a great depression. US hackernews friends need to find a cover story that stops their neighbours realising that they were part of the shit storm, and they also need to sharpen their camping skills and general outdoor hardiness. Alternatively -> try and get a French passport?
My revelation on this was when my daughter got type 1 diabetes. If the world goes south, even if I manage to do everything and "win", she's dead in six months. Of course, since then I've realised that the "do everything and "win"" thing is also stupid, no one is going to be able to "make it" a handful will luck out and mangage somehow.. but it won't be because of prepping.
On the other hand, if there's a blip - like a cyber attack, or a regional war, a solar flare, bad volcano, or a mega storm. then preps might make things more comfortable until the state gets back up and running.
- Traditional: a generator. Problem is that you need a fuel tank, but if you are aiming to get through a couple of weeks then that's possible.
- Grid attached battery backup: good because in some places (like the UK) electricity at night is much cheaper than electricity during the day... so you can charge the battery and then save money and get payback on your installation. Bonus point is that if there is a grid outage then you have power, for a day or so if you are careful.
- Grid attached with solar/wind: as above, but you can charge independently from the sun/wind... obviously in some places (like the UK) this has limited utility because the sun don't shine (like today), and the wind can be annoying and difficult as a power source (gearboxes, noise, aesthetics). Can cost in though - because of summer power my panels pay back in 11 years. Small wind turbines seem to be getting more practical but I am no expert.
- Non grid battery backup. These also come with solar now, so you can recharge if it's sunny. These are cheap (<~£1000), hold maybe 2Kw and so can power some devices while the grid is off for a little while. Definitely you can run your phones and computers for a few extra cycles, but people are often looking to run freezers or fridges with medicine with these.
Another thing that folks like to have is grid independent heating / cooking via a woodstove. This is frowned on in urban areas and by eco people but I live in the country and have done my reading and while other people will pop up and decry particulates to be honest I'm keeping my burner so my family will be warm and fed for as long as our food lasts or we don't get looted by the neighbours.
"Anthropic employee John Smith [killed the children with the gun||launched a cyber attack] because he was ordered to by his superior and [has all the blame because such orders are null || we agree that Anthropic can order children to be killed]"
Who knows what Altman wants? It's moot what individual motivations are as he is definitely fronting for investors who have significant power in the business.
Public money comes with legal fiduciary duties.
The reason to IPO is to get private money out, materialise the whole valuation.
https://www.rameznaam.com/p/471bbae4-1163-4048-944b-18f8b0bf...
They can be brutal.
In one case (financial services) it's thought that expertise is valuable at V=S^2/b4 where V is value, S is skill and b capacity (the leverage available to the manager/expert. b erodes as it becomes harder to find examples of things that are not done well, so if you manage $1bn you might find lots of miss allocations that you can exploit with just that $1bn really effectively, but if you manage $10bn it's much harder to find good places for the extra $9bn. A low hanging fruit effect.
Anyway, that double hit - raw skill and the amount of times you can supply the skill makes the value of skill (V) convex, and it means that in a perfect market (heh heh heh) someone running $100bn is worth 1000's or maybe 10,000's of an average joe expert.
Now, if AI is trusted to run the top 0.1% of everything and has the skill to do it at human top level expertise, then your calc holds. If it's the case that it isn't then more than half of that value disappears. If it's not even top 1% then chop out another 25%.
That implies that we need a lot of trust and a lot of AI capability before these valuations stack up, and it also implies that all other competitors and incumbants are going away. I do not think that Citidal or Bridgewater are going to let Anthropic or OAI take them without a fight. They might lose - but there is a decent bet that they don't. I don't think that many professions like Lawyers or Doctors are just going to roll over and cede their monopoly rights to OAI or Anthropic either.
The correct response is for these two companies to be closed down and their executives imprisoned. Yet somehow they have a free pass and are pointing at people who have not done any of the things they have and asking for them to be penalised.
This is just bizarre.
A large number of people working together will be much more likely to find solutions than a few isolated individuals. The isolated individuals may have disproportionately large survival resources, but probably not for long. If you are in the caring-is-sharing group you will have a much better chance than being in the me-me-bang-oh-shit group.
But there are a lot of people who fear community solidarity because it might lead to people asking questions about private jets and beach condos.
No it wasn't. https://en.wikipedia.org/wiki/Tube_Alloys
Post WW2 the USA (for a bunch of quite interesting reasons) excluded the British. But, of course, the British had acquired a lot of knowledge from the program and were able to develop their own bomb.
I have feelings, it needs to be able to empathise with me, or another driver, or a client...
Does it experience?
Can it connect with other agents, understand them, come to empathise with them and find a way to work with them better?
The answer is no to all of these, and there are other problems as well. Yes, this model is trained to use a domain specific language to reason and plan over puzzle problems, and so it's programmers have cracked arc-agi-3 and that's a great achievement, but there is an asymmetry here. The arc team are well funded but are charged with providing a target for the vast ocean of funding, compute and talent everywhere else.
Most importantly, arc-agi-3 and the other benchmarks are all verifiable. The model can check if it's succeeded or not. They are not A* of course, but long horizon problems where you have to overcome minima to get the solution are not alien to AI either.
There will have been an A-B test with 9 clicks -> less sales, less revenue.
There will have been an A-B test with 11 clicks -> less sales, less revenue.
The people making these sites are not dumb. They are also sitting on thin margins nowadays, and mostly from the airlines and hotels rather than from the users.
I might host 3 or 4 models that I've downloaded recently, but I won't be hosting the 50 or so that I've tried in the last two years.