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[–] 58 points 14 hours ago (2 children)

We lose money on every sale we make... but we make up for it in volume.

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  • [–] 2 points 3 hours ago

    I mean, that was the joke for Amazon for years, but....look where they are now.

    But I just don't understand the massive hype around LLMs. The cost per 1M tokens has dropped, significantly, since 2023 or so. And I don't think there is any reason to expect it not to continue. If you host it yourself, it's basically free other than hardware and electricity.

    Sure, with agents like claude code, you may use a bit more tokens or use it more often, etc, and the best models are more expensive. But not every task needs the best model or even a paid model at all. And people seem to be finding ways to fan out things to prefer local models for simple stuff, escalate to something paid, etc.

    I just don't get the business model at all, but maybe I'm just too stupid to understand. It's also possible we have an Enron-style situation, but spanning multiple companies and/or industries....

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  • [–] [S] 44 points 14 hours ago (1 child)

    OpenAI is starting to look like the world's most expensive experiment in proving that revenue and profitability are two very different things. The technology is impressive, but if every new customer brings another mountain of computing costs, scaling up might just mean losing money faster.

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  • [–] 21 points 13 hours ago (8 children)

    Where are they raking the money from? Who is giving them billions of dollar? Are all investors and CEOs dumb as a bucket?

    I'm so confused.

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  • [–] 6 points 11 hours ago (5 children)

    It’s a problem they’re running headlong into. Anthropic basically is going to suck all the money out of the market and their IPO suggests they’re going on a spending spree and will issue more debt, which makes it even tighter.

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  • [–] 1 point 5 hours ago (3 children)

    Bubble will be even more glorious when it bursts

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  • [–] 2 points 3 hours ago (2 children)

    It's going to be an absolute shitshow if it's anything at all like dot-com bubble. Having things lose 80% of their value or go to zero even may be something edgelords think is exciting and/or hilarious, but the fallout is something all of us will feel.

    I don't think it will be at all glorious.

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  • [–] 1 point 3 hours ago

    What I cannot understand is that the cost per 1M of tokens keeps going down.

    This stuff is converging on nearly free, especially if you don't use the most expensive model and even more especially if you opt to host your own infrastructure and run models yourself.

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  • [–] 17 points 10 hours ago (5 children)
  • [–] 1 point 8 hours ago* (4 children)

    None of that is going to be anything you'd actually want, at most its a game of pass the parcel where someone else leads the ai game meanwhile you are financially fucked for several years.

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  • [–] 8 points 7 hours ago (3 children)

    I don't think you understand the reality of our future. "Oh no! Stocks!" While literally everything is burning around us. Yes. Take it out. End the stock market and end the capitalist structure that's causing it. This is going to happen regardless. Might as well make it happen faster so it's more manageable than if we keep trying to prop it up.

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  • [–] -4 points 7 hours ago* (2 children)

    You aren't exactly painting yourself as an oracle here. Spouting doom will always leave you correct eventually, but being wrong for decades beforehand doesn't become insight just because something finally breaks.

    Why are you so confident that deliberately accelerating a collapse makes it "more manageable"? If the dot-com boom had lasted long enough for actual revenues to catch up with valuations, the eventual correction could've been far less severe. Buying time can give the underlying technology a chance to deliver. It's getting more efficient per token at an incredible rate, and there's enormous pressure to improve hardware efficiency too. At some point, falling costs and growing paid usage could make the economics sustainable, though neither of us knows when, or whether, that'll happen. You're assuming that time can only make things worse, then treating that assumption as a reason to burn it all down.

    Also worth noting the increase in power generation has pushed us to add 50% to our total global solar capacity in the last two years. That's fucking awesome and unlikely to stop increasing suddenly.

    I'm not saying nothing's wrong, or that all these companies are good guys, fuck no. But confidently predicting doom now is no more convincing than all the previous prophecies that predicted doom.

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  • [–] 5 points 6 hours ago (1 child)

    If the dot com boom... So we're just using hypotheticals to boost positivity?

    Often speeding up something, gives you more control. Think of riding a bike. Going long stretches and remaining upright is easy. But when your kid is in front and breaks unexpectedly, you have to slow and do that back and forth thing with the handle bars to remain upright. Now imagine letting the AI bubble pop now. Better for it to pop while there's still functioning governments, than when those governments are at the edge of breaking.

    Yeah solar is great, I agree. But we're still building fossil fuel power plants and solar has done nothing so far to stop that. It simply slows it. If the fall happens right now, everything collapses. We've stopped the acceleration of the climate crisis, and humanity has a chance to survive at 1.5C+. Humanity can rebuild. If we collapse at 3 or 4° C, we won't have any ability to rebuild, as there's a much larger collapse happening.

    The point is that society is going to collapse regardless. It's better for it to happen now because it gives humanity the best chance to survive. If we shut down civilization now, everything can come back. The earth can heal and we can survive. If it collapses in 2120, the earth is a much more formidable environment to try to nurture small cultures of people.

    And as of right now? AI is the #1 enemy to the environment. And for what? Fake videos? So if we can end AI right fucking now, it sets a much more livable future for human beings. And honestly, a much more humane one. So if capitalism has to go down with AI, and society has to go down with capitalism, it's the most humane option. At least people will have a chance. If we continue down the path we're on, there's really no hope for a future.

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  • [–] -3 points 6 hours ago* (last edited 6 hours ago)

    “So we're just using hypotheticals” meanwhile your entire argument depends on civilisation definitely collapsing, doing so later definitely being worse, and doing so now leaving humanity able to rebuild.

    I offered a possibility. You've built a whole prescription for humanity around your predictions.

    And your bike analogy involves slowing down and steering to avoid a crash. You're advocating deliberately crashing because you've decided a worse accident is inevitable further down the road.

    There's a lot wrapped up in that certainty, and its a sentiment that does personally annoy me for several reasons: You're assuming the problems you see won't be meaningfully understood or addressed by anyone else, and that because you can't see a workable solution, there isnt one. You're treating the limits of your own foresight as the limits of what's possible. Stop and consider whether you really consider yourself an unparalleled engineer and problem solver of the modern era. Dont tell me the answer, just ponder it.

    Then, when it comes to your preferred scenario, suddenly humanity can cooperate, adapt and rebuild after civilisation collapses. Why does human ingenuity get to do so much heavy lifting after the catastrophe, but count for so little in preventing it? There's a huge juxtaposition in that reasoning.

    You've scrutinised the future you dislike for everything that could go wrong, and waved through the future you prefer on everything that could go right. That's a very shaky basis for deciding everyone else would be better off enduring a collapse now.

    And “if we shut down civilisation now, everything can come back” is doing an extraordinary amount of work there. How are you keeping people fed, water clean, medicines available and nuclear facilities maintained? Who's coordinating any of that through the collapse you're welcoming? Those are fairly significant details to skip on the way to “the earth can heal”.

    You don't get to dismiss uncertainty in my argument while treating the most optimistic version of your own catastrophe scenario as a certainty, that's fucking nonsense.

    I get that you're concerned but this is irrational and you probably need to talk to someone serious if this is actually weighing heavily on you. If its just an idle rant, less so.

    AI isnt going to end, the big dog companies might go down, but you can run very good ones on your computer these days. Helps to look into stuff, the unknown is always scarier than the known.

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  • [–] 8 points 13 hours ago

    Thinking the whole industry is preticated on the assumption of a government bailout in exchange for unprecedented surveillance.

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  • [–] 7 points 9 hours ago (1 child)

    Bugatti oil changes ain’t cheap!

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  • [–] 6 points 7 hours ago

    $10b revenue for quarter ($40b annualized), with claim of $50b annualized for september (not october claimed in OP)

    It is also having massive fundraising problems, getting $11b-$15b out of targetted $30b, covering about 1 quarter of losses ($10.5b this quarter up despite about 50% revenue growth over last quarter). It's forced compute spending increasing a lot next quarter, and then it pays Oracle $15b/quarter extra for compute in 2027. It's optimistic gross margins on inference at the end of the year were 50% even as they cut prices.

    Industry growth is slowing overall. OpenAI would need to average 20.3% revenue growth/quarter to break even at end of 2029. That is higher than their projected 2029 revenue, which with $250b/year in forced compute purchases then, would still leave them burning $70b/year.

    There's no obvious escape for OpenAI.

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  • [–] 5 points 13 hours ago

    When you're building an ever higher building by excavating the foundation to keep stacking things on top .... eventually, you're going to run out of material.

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  • [–] 3 points 13 hours ago

    🫧🫧🫧

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  • [–] 3 points 12 hours ago

    OpenAI did not report earning $20B short of what it had reported a month earlier. It reported earnings $20B short of what one analyst had estimated, and the market had taken as broadly accepted reference point. Very different.

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  • [+] 1 point 10 hours ago