The funniest part is that the thing that could actually make AI useful at scale might be what wrecks the investment thesis: cheap, local, open weight models. Wall Street funded a trillion dollar server farm to discover that sometimes the answer is a smaller model running on your laptop. The technology might win while the investors lose. Nevertheless, companies such as Google, Amazon, and Microsoft – as well as Nvidia and AMD – are a very long way from simply going under.
I just can’t see things continuing like this, there has to be a plateau reached at some point. Higher or lower. Exponential growth isn’t sustainable in anything.
Nevertheless, companies such as Google, Amazon, and Microsoft – as well as Nvidia and AMD – are a very long way from simply going under.
Not really, once you look at the startups like OpenAI they have enormous expenses that depend on constant debt and investment funding, and the cost and risk of sustaining that debt can easily reach a point where they struggle to get new investors to foot the bill.
The whole market is based on a belief in a huge pot of gold some time in the future, and it is driven by unfathomable amounts of debt to keep the machinery running towards that goal. Once the belief in the goal getting reached gets broken, the change in momentum breaks the whole system.
That includes the big players, huge amounts of their balance sheets, including claims of revenue, are circular trades between themselves. Even google claims revenue from asset price growth in their AI subsidiaries.
Once it shifts from investment to repaying bad debts the numbers will look completely different for all the big companies involved. We’re talking potentially bail outs basically across the board
lol you’re kidding, right? Have you looked at component prices lately? Have you missed the part about how basically all consumer electronics that use LPDDR are getting price hikes, because the demand for high performance memory has skyrocketed by an order of magnitude in the last few years?
Edit: yeah I realized I was replying to a rhetorical question 🙃
He didn’t mean to question the premise that the consumer market is being starved, he was highlighting the reality of that and connecting it as being motivated by a fear of local models.
Admittedly, the question was ambiguous and could be taken either way, but the comment didn’t mention that consumer market was starved, his question brought it into the discussion.
Note that I don’t think that it is fear of local models personally, I think it’s fear of each other. I think cloud infrastructure providers already proved that even when people can locally host stuff, they mostly don’t. So many consumer electronics could meet their promises all locally, but still force the users to connect to their internet services. The tech market has already proven time and time again they are suckers for subscription eshitification, no need to panic over it being different for AI.
The funniest part is that the thing that could actually make AI useful at scale might be what wrecks the investment thesis: cheap, local, open weight models. Wall Street funded a trillion dollar server farm to discover that sometimes the answer is a smaller model running on your laptop. The technology might win while the investors lose. Nevertheless, companies such as Google, Amazon, and Microsoft – as well as Nvidia and AMD – are a very long way from simply going under.
Too big to fail? I think I heard that once.
I just can’t see things continuing like this, there has to be a plateau reached at some point. Higher or lower. Exponential growth isn’t sustainable in anything.
Not really, once you look at the startups like OpenAI they have enormous expenses that depend on constant debt and investment funding, and the cost and risk of sustaining that debt can easily reach a point where they struggle to get new investors to foot the bill.
The whole market is based on a belief in a huge pot of gold some time in the future, and it is driven by unfathomable amounts of debt to keep the machinery running towards that goal. Once the belief in the goal getting reached gets broken, the change in momentum breaks the whole system.
That includes the big players, huge amounts of their balance sheets, including claims of revenue, are circular trades between themselves. Even google claims revenue from asset price growth in their AI subsidiaries.
Once it shifts from investment to repaying bad debts the numbers will look completely different for all the big companies involved. We’re talking potentially bail outs basically across the board
The term bailout needs to stop being used and normalized. This is nothing like the housing market and audio industry crash.
These rich fucks don’t need socialism for the rich yet again, they need to eat their losses.
Why do you think they are starving consumer market for computer parts?
I think we are talking about the same thing. AI companies spend billions to monopolize compute, causing consumer hardware prices to go up.
lol you’re kidding, right? Have you looked at component prices lately? Have you missed the part about how basically all consumer electronics that use LPDDR are getting price hikes, because the demand for high performance memory has skyrocketed by an order of magnitude in the last few years?
Edit: yeah I realized I was replying to a rhetorical question 🙃
He didn’t mean to question the premise that the consumer market is being starved, he was highlighting the reality of that and connecting it as being motivated by a fear of local models.
Admittedly, the question was ambiguous and could be taken either way, but the comment didn’t mention that consumer market was starved, his question brought it into the discussion.
Note that I don’t think that it is fear of local models personally, I think it’s fear of each other. I think cloud infrastructure providers already proved that even when people can locally host stuff, they mostly don’t. So many consumer electronics could meet their promises all locally, but still force the users to connect to their internet services. The tech market has already proven time and time again they are suckers for subscription eshitification, no need to panic over it being different for AI.