This hype will burst sooner than later and will trigger yet another global recession. This is untenable.
This lame HN trope of LLMs having no business model needs to die.
OpenAI is currently in an explicit non-profit seeking mode using a technology that we have demonstrated 10-100x or greater decreases in compute to achieve the same outcomes.
This is not a declaration that OpenAI will become wildly profitable. This is just me saying that these aren't comparable companies.
[0]: https://www.theregister.com/2025/01/06/altman_gpt_profits/
Of course, they are clearly cooking something or they wouldn't have just published a benchmark in which they do badly.
It’s losing more billions than what it’s generating. Revenue does not equate profit.
https://www.cnbc.com/2024/09/27/openai-sees-5-billion-loss-t...
That is only true is your primary concern in life is personal wealth and you’re burning other people’s money.
The bandwidth costs made it deeply loss making for a long time despite having loads of engagement and ad revenue. However over time they became more cost efficient at sending video over the internet and became profitable.
This strategy obviously doesn't always work, with WeWork being the canonical example. But it's not guaranteed to fail either.
There were LOTS of funded competitors to YouTube between 2006 and 2009, including Viddler (who paid Gary Vaynerchuk a small fortune to host his WineLibraryTV show there exclusively), DailyMotion (which is still alive today, although no longer a threatening contender), etc.
In 2009 I had a coaching business and was buying marketing courses and software which would deploy your videos across 40+ different video websites (including Google Video which was a separate thing until they acquired YouTube and merged those), and YouTube wasn't yet amounting to 50% of our video traffic.
I think you might be mistaken with the bold statement above.
The capabilities of LLMs are impressive, but none of them have published an idea I consider to have the same potential for a trillion $ monopoly that the current hype looks like.
There are far more similarities with the dot-com hype.
No critical first mover advantage in sight. All parts are replaceable for the cheapest variant with little to no down side to users.
All the LLM providers are - extremely useful - tools. Currently I can only see the 'non-monopoly' proportional improvement when their userbase grows from 100 to 1000.
But I might be wrong, and I wouldn't be surprised if in hindsight it will be obvious what the real disproportionate advantages there were to be found.
If started selling 5 dollar bills for 1 dollar, I could generate a lot of revenue with $150B. You wouldn't believe the demand we would see for $5 bills.
Are we really still doing this nonsense? If Open AI wanted to become profitable they could do it inside of 12 months - growing companies don't care about profitability (nor should they)
All currently known profitable use-cases are competing on price. All the unicorn examples you're biased for had in their pitch deck the network effect of being the largest.
OpenAI, Grok, etc, have shown no unique value prop or an idea with monopoly potential.
Remember when everyone on HN was sure Uber would never be profitable? Or Tesla? Or Amazon?
Google gives everyone free access to a good spreadsheet tool, even though Microsoft Office exists.
Web browsers are free, despite the value of the entire internet.
Compilers are free, despite the value of all software collectively.
LLMs being really valuable doesn't automatically mean anyone can get rich from them.
I think everyone last year parroting "moat!" was cringe (like Altman of all people wouldn't know about this already, c'mon), but you do actually need something that other people don't have. I expect Altman's already got stuff in mind, but he's hardly the only one, and that means it's a game of "which multibillionaire with lots of experience building companies will win?", and that's hard for non-skilled normies (in this case incluing me) to guess.
https://sacra.com/research/cursor-at-100m-arr/
Sounds legit.
Re: Dropbox, from a well known user. It didn't age well and we've been asked not to repeat it because it makes the author with connections to this site's operator look bad.
> 1. For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem. From Windows or Mac, this FTP account could be accessed through built-in software.
https://news.ycombinator.com/item?id=8863
the controversy: https://news.ycombinator.com/item?id=27067281
I assume you're referring to this:
https://sacra.com/research/cursor-at-100m-arr/
It went from 10M MRR to 100M
>This hype will burst sooner than later and will trigger yet another global recession.
It seems to small of bubble for global recession. I mean if it is a bubble at all, there is all the reasons to believe that the strategy will work with a significant probability.
What does the scenario look like where everyone else gets eaten alive?
OpenAI's business model was literally "we don't have one: we'll make AGI and we'll let AGI tell us how to make money". This is so idiotic it's not even a scam. xAI will compete on the same plane field. Not sure about Anthropic: they seem a bit more sane.
There’s a whole class of educational apps that could open up for people learning in the physical world. Whether it’s building physical things, sports or reading books or notes written in non-latin scripts... the impact will be enormous!
Sounds incredibly valuable, but in reality collapses into Butlerian Jihad fairly quickly when you have 90% unemployment.
Edit: if the claims are true, then this will be far more destabilizing than social media. What do elections mean when the AI-guided political parties are putting out AI press releases for the AI press summaries, which voters have read out to them through their AI? What happens when >50% of the voters ask the AI who they should vote for? You end up with an AI dictatorship where the levers of discontent are fake.
What AI and robotics does is actually create a machine that has no use for humans at all. Ñ
But nobody really knows if that happens or not as a consequence, let alone quickly, because the transition itself only happened at all so far in fiction.
Whatever does happen, I think it's going to be a surprise to at a minimum 80% of the population.
The dot com bubble also gave us the most valuable companies in history, like Google, Apple, Amazon, Facebook, etc.