Hacker News Reader

Comment by InsideOutSanta | Hacker News Reader

I think I generally agree with this article, but I have some nitpicks:

"OpenAI (...) has yet to create a truly meaningful product"

Almost everybody I know uses ChatGPT at least semi-regularly for all kinds of things. I'm not sure if it's possible to look at this objectively and claim that ChatGPT isn't "a truly meaningful product."

"OpenAI loses money every single time that somebody uses their product"

I'm not sure if this is true. My understanding is that they (on average, including their free users) make money on usage, but lose money on training. But I could be wrong.

I also think OpenAI isn't yet serious about monetizing its products. You can just go to ChatGPT and use it for free. They have a ton of data about their users that their users give them freely. The free ChatGPT tier is a prime candidate for advertising.

View on HN

> My understanding is that they (on average, including their free users) make money on usage, but lose money on training.

Doesn't OpenAI need to continue training just to remain relevant? Not even just because there is a race between multiple AI companies, but because new information is regularly published. And if that's the case, it's just part of the cost, right?

There are a few successful game companies that have never turned a profit. Each game brings in more than it cost to make but the development of the following game dwarfs that.

I have never been quite sure if it is good practice. It does make you vulnerable to a flop.

OpenAI seems to be in a similar position.

As I understand it, OpenAI loses billions of dollars every year, and it receives preferential treatment for cloud credits. Does any gaming company make similar total losses year after year?

>As I understand it, OpenAI loses billions of dollars every year, and it receives preferential treatment for cloud credits.

The absolute values or the deals performed are irrelevant to the principle. The principle is that revenues and expenditure go up in a way that never results in a profit, but if you broke each generation of development into a separate company it would be a series of profitable investments requiring increasingly larger investment for the next company. If serving ChatGPT stays profitable enough to cover the training of the model that they are currently serving then they are financially secure. It will only become a problem if they cannot recover the cost of training each model by serving it. We don't yet know if that will happen.

There is insufficient data in this area, Without knowing the capital expenditure on hardware, the costs of running the hardware, and the breakdown between how much of that hardware is running inference and how much is training, we just don't have a reliable way to calculate potential profitability. It's been a long time since GPT4, and all releases since then have been improvements on that generation. Some of those improvements have significantly reduced the cost of inference. There is evidence that they are spending on the next two generations already. We don't yet know how capable the next generation model will be, in the absence of that data point, almost all of the speculation is relatively meaningless.

>but I don't see any indicator that OpenAI will not go the route of enshittifiaction if it gets the opportunity

There is a very significant indicator. We live in a world where it is commonplace to offer free services paid for by advertising. This is the model where the user is not the customer, it is the product. That is the most common path to enshitification, because pleasing your customer takes priority. OpenAI has not yet taken that path (and they have had the opportunity). Both the API and ChatGPT plus work on the old fashioned model of give us some money and we'll give you a service. That is a model that disincentivises screwing over your customers.

It may not stay this way, but they certainly have had opportunities for enshitification that they have chosen not to embrace.

> Almost everybody I know uses ChatGPT at least semi-regularly for all kinds of things.

I simply do not believe you. Most people I speak to attempt to use it periodically, find that for any promising use case it fails completely and then give up for another few weeks.

"I simply do not believe you."

Well, I can't exactly prove it to you. The thing I would offer as evidence, though, is that most of my friends have white-collar jobs. They spend most days sitting in offices writing stuff.

Let me give you an example. One of my friends works in a legal department at a bank. She often gets to review things like ads or promotions the bank runs. These often contain things that are illegal, because the marketing team is not made up of people who have a legal background, and many things that seem like reasonable ideas are illegal. So a lot of her work consists of explaining to people why they can't do the thing they want to do.

She's not particularly good at doing that in an empathetic way, so she's started using ChatGPT to outline these emails for her. "The marketing team at my bank wants to run a competition where people who open a new account get a chance of winning a prize. This is illegal, since it violates sweepstakes laws (see below, where I've pasted the applicable sections). They either have to provide a way to enter the contest freely, without opening an account, or they have to abandon the idea. Can you write an email that explains this in an empathetic, but clear way?"

Obviously, she then has to read the email ChatGPT writes and edit it, but it still saves her time and creates a better end result.

"for any promising use case it fails completely"

I simply do not believe you :-)

> "The marketing team at my bank wants to run a competition where people who open a new account get a chance of winning a prize. This is illegal, since it violates sweepstakes laws (see below, where I've pasted the applicable sections). They either have to provide a way to enter the contest freely, without opening an account, or they have to abandon the idea. Can you write an email that explains this in an empathetic, but clear way?"

Just this paragraph but without the instructions to ChatGPT is sufficient for this case. It's literally more work to get a useful output from ChatGPT than just to do the work yourself. And that's not even accounting for the careful review you need to give every morsel of output from it.

> It's literally more work to get a useful output from ChatGPT than just to do the work yourself.

This feels like opinion stated as fact.

I don't write business language well, but I am able to communicate much more effectively with business people if I run it through an LLM to "translate" for me. I do some editing on the output, and I've saved 10 minutes that I would have otherwise agonized over whether or not I've used the right tone while emailing another department.

"I've fixed the scrolling bug in the calendar component, and it should be published after lunch. Can you let Alex know I'll be around until 5 if he wants to go over it?"

becomes

"I have resolved the scrolling issue in the calendar component, and it is scheduled for publication this afternoon. Please let Alex know that I am available until 5 p.m. today if he would like to review it together."

"Just this paragraph but without the instructions to ChatGPT is sufficient for this case"

It depends on who you're talking to.

But either way, the point is that people do use LLMs, whether you agree with how they use them or not.

ChatGPT has ~200M weekly active users. There isn't really anything to believe here.

ChatGPT's numbers are unaudited and presented without context. OpenAI is not a publicly listed company. They can tell you anything they want to tell you about their business metrics.

It's weekly active users, There is literally no other context that needs to be presented. The worst you can assume without outright fraud is the number of users who send at least one query every week.

Open AI don't need to report any numbers to see it's incredibly widely used. The site has had over 1.5B visits every month since March 2023.

> Almost everybody I know uses ChatGPT at least semi-regularly for all kinds of things.

Count me in the camp that doesn't and wishes fewer people did. I just asked ChatGPT what it knows about me, and apparently I am known for my work in the field of AI. I've apparently contributed to multiple AI projects. I have a globally-unique name and have done absolutely nothing of the sort.

I don't dispute that there are good uses for it right now, but people taking this stuff at face value for anything important is terrifying.

> I just asked ChatGPT what it knows about me, and apparently I am known for my work in the field of AI. [..] people taking this stuff at face value for anything important is terrifying.

Yeah, I'd be more comfortable if it could say "I don't know" instead of generating bullshit.

Simon Willison's article Think of language models like ChatGPT as a “calculator for words”[1] helped me think about this topic better:

> If you ask an LLM a question, it will answer it—no matter what the question! Using them as an alternative to a search engine such as Google is one of the most obvious applications—and for a lot of queries this works just fine. It’s also going to quickly get you into trouble.

All of this is why I only every use LLMs for things that I can verify.

[1]: https://simonwillison.net/2023/Apr/2/calculator-for-words/

"You're holding it wrong."

You're likely to get more value out of it if you try to do something useful with it rather than asking it to answer a question you know ex ante it cannot know the answer for.

I expect it to provide information to me on topics I don’t already know. If it can’t do so accurately on topics I do know, what on earth would make me believe it’s any better on everything else?

I had absolutely zero reason to believe it would mischaracterize me in advance of asking that question. In fact I presumed that would be an easy gimme: simply Googling me is enough to provide a pretty accurate assessment even before following any of the links.

> I expect it to provide information to me on topics I don’t already know.

Presumably you already know about yourself, yet that was the example you chose to pick. It comes across as you basically leading the witness just to be able to say say "gotcha! I knew you'd suck".

It's not a search engine, although you can ask some models/chatbots to search the web. Again, you're holding it wrong.

Instead of trying to confirm your bias that LLMs are bad, try to find discomforming evidence.

“The human understanding when it has once adopted an opinion, draws all things else to support and agree with it. And though there be a greater number and weight of instances to be found on the other side, yet these it either neglects and despises, or else by some distinction sets aside and rejects.”

— Francis Bacon

> Presumably you already know about yourself, yet that was the example you chose to pick. It comes across as you basically leading the witness just to be able to say say "gotcha! I knew you'd suck".

With all due respect, how the hell else am I supposed to evaluate its ability to answer accurately on topics without testing it first on topics I know about?

> Instead of trying to confirm your bias that LLMs are bad, try to find discomforming evidence.

I wasn't trying to confirm my bias. I literally thought that with all the information OpenAI has collected throughout the web they can probably give me a pretty good summary of the publicly available information about me. They probably even have stuff that's a bit more obscure or difficult to find. This seemed like an extremely easy way for me to be impressed.

I was trying to find disconforming evidence. Yet again I was thoroughly disappointed.

If spot-checking AI with softball questions is considered a "gotcha", that is an extremely damning comment on the current state of things.

But that's not a softball question. You're asking your microwave oven to toast some bread and complaining it comes out hot but not toasted. It's not a toaster, just like an LLM is not meant to be used as a search tool although some integration exists.

Ask it some programming question, to draft an email, to create a marketing campaign, to help you dig deeper into a research topic, I don't know.. things an LLM was built for.

Summarizing the publicly-available information on a person or topic is what LLMs are supposedly built for.

No, summarizing information directly provided to them in their prompt is what LLMs are built for.

Tool-use frameworks with data retrieval tools add can be wrapped around an LLM to make the combined system try to do what you describe, but even the best of those is a lot less reliable than the underlying LLM is at its core functions like summarizing directly provided information.

The summarizing feature of LLMs requires that you provide the input you want to be summarized.

Did you literally read the first sentence and then reply without reading the next one?

> I expect it to provide information to me

Yeah, that's something language models are exceptionally bad at, and, yeah, ChatGPT is more than an LLM it is a UI around an LLM core that has some other facilities for data retrieval, but, still way out of its area of strength (unfortunately, that seems to be a lot of what people want LLM-centered products like ChatGPT to be.)

> make money on usage, but lose money on training. But I could be wrong.

You could be 100% right, and it still could be an unsustainable business. Depending on how much training and R&D costs.

The more you endure losing money the more of your opponents go bankrupt - or outsmart you

This typically works but the incumbent players - Meta, Google, Microsoft (ish) - are very rich, and are experts. They're no IBM.

“Advertising” is not a sure means of profitability. Yahoo was one of the most trafficked website for years and still not profitable.

> Almost everybody I know uses ChatGPT at least semi-regularly for all kinds of things.

Ed's perspective is from a nonengineering side, not the typical Hacker News user or LLM API consumer.

> My understanding is that they (on average, including their free users) make money on usage, but lose money on training.

The billion-dollar YoY losses can only be possible with negative marginal profits. Training is expensive but not that expensive.

> I also think OpenAI isn't yet serious about monetizing its products. You can just go to ChatGPT and use it for free

That's just modern software business: have the user try it for free (loss-leading) with an incentive to upsell to a paid product, notably ChatGPT+. And if OpenAI didn't do it, others will as is currently the case now. But in a post ZIRP world that doesn't work as well.

One would think that the difficulty of making a company profitable when it's training larger and larger LLMs, combined with the diminishing returns and model collapse phenomenon, would make it so that companies don't wish to stop training larger models. I assume that they continue training larger models because whichever company stops training larger models would fall behind in the race to win new rounds of funding, but if that is the case what is the ultimate valuation that these companies are trying to achieve being valued in the biliions already?

Diminishing returns means that the user gets less marginal benefit with each larger model, and the model collapse phenomenon means that models trained on new training data might be less good than older models. Have straightforward mitigations been put in place such as filtering out from the training data forums where users like to share AI generated content?

> but if that is the case what is the ultimate valuation that these companies are trying to achieve being valued in the biliions already?

That's why OpenAI/Sam Altman has been memeing AGI. None of this will work unless they make God.

>> Almost everybody I know uses ChatGPT at least semi-regularly for all kinds of things.

> Ed's perspective is from a nonengineering side, not the typical Hacker News user or LLM API consumer.

ChatGPT has 200M weekly active users.

I'm not saying I agree with him that ChatGPT has no practical use. https://x.com/minimaxir/status/1841549631085543850

I’m responding to the suggestion that being on the non-engineering side explains his opinion.

Reply on news.ycombinator.com