Hacker News Reader

Comment by da_chicken | Hacker News Reader

> The reason why I partially note this as wrong is that even in the 70s people recognized that supersonic travel had real concrete issues with no solution in sight. I don't think LLMs share that characteristic today.

The fundamental problem has already been mentioned: Nobody can figure out how to SELL it. Because few people are buying it.

It's useful for aggregation and summarization of large amounts of text, but it's not trustworthy. A good summary decreases noise and amplifies signal. LLMs don't do that. Without the capability to validate the output, it's not really generating output of lasting value. It's just a slightly better search engine.

It feels like, fundamentally, the primary invention here is teaching computers that it's okay to be wrong as long as you're convincing. That's very useful for propaganda or less savory aspects of business, but it's less useful for actual communication.

View on HN

> Nobody can figure out how to SELL it. Because few people are buying it.

Just picking one company who basically just does AI, OpenAI. They reported it has 20 million PAID subscribers to ChatGPT. With revenue projected above $12b dollars (https://www.theverge.com/openai/640894/chatgpt-has-hit-20-mi...).

I think what you meant to say is that costs are high so they can't generate large profits. but saying that they can't figure out how to sell it seems absurd. Is it Netflix level of subscribers, no. But there can't be more than a couple of hundred products that have that type of subscription reach.

Ok but isn’t 20 million subscribers out of what, 800 million or 1 billion monthly users or whatever they’re claiming, an absolutely abysmal conversion rate? Especially given that the industry and media have been proclaiming this as somewhere between the internet and the industrial revolution in terms of impact and advancement? Why can they not get more than 3% of users to convert to paying subscribers for such a supposedly world changing technology, even with a massive subsidy?

Because they give too much of it away for free? Most casual use fits into the very generous free tier.

Ok so the argument is that all the model builders either suck at business or they are purposefully choosing to lose billions of dollars?

They are purposely losing billions, this is a growth phase where all of the big AI companies are racing to grow their userbase, later down the line they will monetize that captured userbase.

This is very similar to Uber which lost money for 14 years before becoming profitable, but with significantly more upside.

Investors see the growth, user stickiness and potential for the tech; and are throwing money to burn to be part of the winning team, which will turn on the money switch on that userbase down the line.

The biggest companies and investors in the planet aren't all bad at business.

I'd say the userbase has grown. You can't claim half a billion users and simultaneously say you're still trying to grow. This isn't a month-old technology now. And they still can't turn a profit. (edit: and by "you" i meant "they")

>You can't claim half a billion users and simultaneously say you're still trying to grow.

You can if you're still growing. ChatGPT is the 5th most visited site on the planet yes, but it is still growing hundreds of millions of visits with every passing month.

They aren't turning a profit because they aren't monetizing the vast majority of subscribers in any way (not even ads). LLM inference is cheap enough for ads to be viable.

As another commenter notes, because you get access to a lot of functionality for free. And other providers are also providing free alternatives. The ratio for their free/paid tier is about the same as YouTube's. And like YouTube, it's not that YouTube isn't providing great value, but rather that most people get what they need out of the free tier.

The better question is what if all LLM services stopped providing for free at all -- how many paid users would there then be?

You could say the same of Dropbox. Or Gmail.

True, although I don't think Dropbox or Gmail's operating costs to support those free users are anywhere near those of OpenAI.

A service like Gmail or Dropbox with low storage is close to free to operate. Same thing with iCloud - 50 gigs a month is what, 1 dollar? How is that possible?

Because 50 gigs is next to nothing, and you only need a rinky dink amount of compute to write files.

YouTube, on the other hand, is actually pretty expensive to operate. Takes a lot of storage to store videos, never mind handling uploads. But then streaming video? Man, the amount of bandwidth required for that makes file syncing look like nothing. I mean, how often does a single customer watch a YouTube video? And then, how often do people download files from Dropbox? It's orders of magnitude in difference.

But LLMs outshine both. They require stupid amounts of compute to run.

Close to free per user, maybe. But dropbox has 800 million users, only ~2% pay, and Gmail has billions. They spend a lot of money running those services.

In my companies, AI subscriptions and API access are now the biggest costs after salaries and taxes. Don't know what makes you think these services aren't attracting paid customers?

Reply on news.ycombinator.com