Comment by nibab | Hacker News Reader

Comment by nibab | Hacker News Reader

Several things to note here:

Amazon as a corporate investor - Of course a lot of this is a futures contract on cloud compute. This indicates how much the leadership here thinks the compute will be problem. Money comes way cheaper outside of the big cloud providers (they also know the importance of compute and pull their leverage). This is not a sure bet. While true AGI is probably sitting behind a huge amount of compute, the “products” that are catching on right now are very much on lower end of the spectrum for required model performance. Small models are cheaper and can run on commodity compute. It’s not entirely clear to me that this is a financially sound bet..

Timing - This is an interesting time to do so. That indicates that the company feels that it’s shown some of its best work and right now is the time to bank and on that (so as to make the leap to the next big breakthrough). Openai did so on the heels of ChatGPT. This is somewhat discouraging, because outside of the context length hackery, Anthropic doesn’t have much to show as a differentiator. At best they’re a me-too startup set on the path to be acqui-hired by Amazon when the VC money subsidizing the compute drains up.

Structure/Size - there was a lot of information about the structure of the openai deal. We’re not so clear on what’s happening here. One of the big questions is valuation. Making a similar promise to openai (ie 50% of profit until 100b) would put the valuation of the company in to 10s of billions. Note that this is a very different proposition than a year ago. In navigating the “product maze” we’ve realized that there aren’t that many killer products. Most enterprises are throwing spend in this direction because the board requires you to have an “ai strategy”. At best, we’re talking about capturing all the VC money that’s going into companies with a new angle on knowledge management/search. As I mentioned above, that’s something that’s getting severely commoditized at the bottom of the market. The prospects here are pretty grim .

> aren’t that many killer products

You've got to be kidding me. Maybe for text. But what about video training neural nets? I could list killer products for days.

Please do - not trying to be snarky, just legitimately interested.

each of these are known >$100m opportunities:

Generative Text for writing - Jasper AI going 0 to $75m ARR in 2 years

Generative Art for non-artists - Midjourney/Stable Diffusion

Copilot for knowledge workers - both GitHub’s Copilot X and “Copilot for X”

Conversational AI UX - ChatGPT / Bing Chat, with a long tail of Doc QA startups

(shameless plug from https://www.latent.space/p/agents)

> Generative Text for writing - Jasper AI going 0 to $75m ARR in 2 years

And laying off a ton of staff in July..... the latest ARR numbers are not nearly as good.

character.ai

I think there are some killer products, but the surface area here is not that big. I can definitely see how we can improve on all of the above, but at the rate things are developing right now, you're looking at smaller and specialized models as the underlying infrastructure. Keeping the conversation focused on Anthropic, unless there is promise of some specific functions outside this range that require big powerful models, they're in trouble.

There is a world in which the dust settles and the current "era" of AI doesn't actually result in a significant amount of productivity/value creation and capture thereof. Everything rests on the current assumption that emergent behaviors and some semblance of consciousness can extrapolate infinitely. You have to believe that in order to justify the investments we're currently seeing in some of the big players.

Do they have a moat though? When MS Office integrates a more powerful model than is even available to Jasper right into the word processor, what happens?

If you can train a machine using video, and get it to repeat what you have taught it...and then manufacture millions of them - you have an (almost)-zero-marginal-cost revolution just like you had for software development.

Plus, it's replacing $$$ humans. 4X the productivity while paying for itself in a few months.

>If you can train a machine using video, and get it to repeat what you have taught it

I might be wrong, but from what I know about Transformer models and neural nets in general, what you are describing sounds a lot closer to something like an AGI.

When you say “train a machine” here it sounds a lot closer to “teach a machine” rather than “finding weights and baises for an existing function”.

I think we are still a ways off from AGI.

I dont think AGI is required. But multimodality for sure and some piece to plan/execute actions. Prompting techniques now, would land you clear tasks, validations and such, given some objective "replace table leg". A unit to process this would be required.

There really isn’t a product in text or other modalities that shows me this is a $1T dollar market in 10 yrs (as the valuations would imply).

To play devils advocate, even if there were some killer products, value capture seems particularly tricky. There just aren’t any business models that could sustain a market mass of this size.

Lots of cool demos and productivity software (mind you with a very narrow definition of what productivity is).

Generative AI is very good at spewing bullshit.

Unfortunately, the upper echelons of society run on bullshit. And so that's exactly why generative AI is revolutionary. The killer app is in separating dumb billionaires from their billions, just like crypto's killer app was. And just like crypto eventually filtered down to separating dumb retail investors from their thousands, generative AI may eventually filter down to generating scams & spam that separate dumb retail consumers from their thousands. That's why the dumb billionaires are interested in it.

A more logical solution might be to not run society on bullshit, but that seems to be beyond the capabilities of most humans.

>A more logical solution might be to not run society on bullshit

And this is why you're poor. In fact, depending on your definition of bullshit, if you did not run society on bullshit there wouldn't be billionaires at all. Once you reach the level of technology that can provide for everyone, what need is there to make more?

>The reasonable man adapts himself to the world; the unreasonable one persists to adapt the world to himself. Therefore all progress depends on the unreasonable man.

> Once you reach the level of technology that can provide for everyone, what need is there to make more?

Because you can never reach that outcome no matter what your technology is.

Your premise is so vague as to be useless. Provide what for everyone? How much for everyone? Who decides how much for everyone? Based on what? Elected by whom?

If you actually dig into any of that what you'll find is that it's impossible. Unless you use a hyper violent authoritarian model that dictates every minute of every person's life. Otherwise, one person will always have different needs than another person, without exception (and that's so varied we could be here all day listing the differing ways, from freak health situations to genetics to activity choices).

And that's just on matters of basic needs. Then we get into luxuries, any and all things people want beyond basic needs. And then you have to debate the extent to which people require some manner of luxuries beyond basic needs in order to actually continue to exist in a healthy manner. And then you have to get into who decides on that, who dictates which people get which luxuries, if indeed it's decided people require some level of luxury in their life.

And that's just scratching the surface at a minimum for why the premise: once technology has provided for everyone - entirely implodes upon any inspection at all. It never can, it never will. Human desire is infinite up to the point of expiration. That includes the desire for new experiences (can people live without new experiences? doubtful, certainly they'll live horrific miserable lives without such), which is a gigantic envelope of things unto itself, beyond the basic needs category. Who decides what new experiences everyone has access to? How much allocation to that? And on and on and on it goes.

>Human desire is infinite up to the point of expiration.

No, the only thing infinite is human greed, the difference between greed and desire is desire can make concessions for the needs of others, greed will burn down the world to get exactly what it wants.

> And then you have to get into who decides on that

As technology concentrates power, it will be the authoritarian leader. Putin is a great example of this. Greed driving him and Russia to ruin.

What are you even talking about, of course it can. If humanoid robots become a viable means of production, a lot of human labor could be replaced. You continue to use the current economic system to allocate.

From personal experience, I’ve saved hundreds of hours with ChatGPT already. It can piece together large neural nets in PyTorch that would take me an hour or more to get right, or annoying pieces of code which I don’t feel like correlating the disparate pieces of online info for. Of course I will review it and unit test it to make sure it works, but I honestly make more mistakes integrating it in my larger project than ChatGPT does in the code itself. And this is on the free version.

There are limitations of course but I’ve been impressed more often than not.

This is my experience. What does it mean for the world when skilled programmers are 10x-ing their productivity?

Is it just more vacation?

Or do things change more profoundly?

It means that there will be higher productivity expectations based on using this. If you can't use it very well you won't be as rewarded, you probably won't be compensated as well.

We have a long human and also programming history that as we gain capabilities, the expectations of that being a standard thing grows.

ChatGPT is the killer product for text. It has rough edges, but in a lot of cases it is far better than Google. Maybe it won’t kill Google but it will hurt. If you think it hallucinates too much, well I have bad news for you about the future of content on the open internet too.

I’m pretty bearish on all of the other ChatGPT API call apps: I don’t see how limiting ChatGPT to a specific use case is adding value for me.

"Money comes way cheaper outside of the big cloud providers"

Say more about it this? It's not obvious to me why it should be true or what evidence there is for it.

I would think that AWS also offers a lot of distribution opportunities for Anthropic.

If you were to place all “available money” on a continuum, at one end of the spectrum you’d have the “dumb opportunistic money” and at the other end you have “strategic/partnership capital”. The money is very cheap if it comes from people that want to jump on the bandwagon of fomo. It’s more expensive when it comes from strategic partners that know they have something to offer (and when I say cheaper I mean literally how much $ you pay per preferred share).

I would consider most professional investors in AI somewhere in the middle of this continuum. The big clouds have the rare and coveted GPUs which are the lifeline to AI companies. That gives them way better terms than what a VC firm would get.

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