AI Market Clarity
blog.eladgil.com
blog.eladgil.com
printf(“All of our customer service agents are busy, but leave a message and we’ll get back to you never.”)I recently had a package misdelivered by SpeedX. "Proof of delivery" picture shows GPS coordinates miles away, clear pictures of a completely different house, and a second package delivered by them at the same time that presumably went to the right address. Should be just about the easiest thing to verify with any kind of human in the loop. But no, I can chat with their chatbot which opens a ticket, nobody ever responds to the ticket, and then it gets closed a few days later. I tried this a few times, asking for updates on the ticket, etc. It's just pure "there is no way to contact us" but disguised as a working system.
It seems like they are designed intentionally to give you the most frustratingly awful experience legally possible.
They don't solve every issue every time, but enough.
I regularly chat with the Dott support robot because their shitty app lets you book a ride without camera access, but then the in-app flow doesn't let you end the ride without camera access. And, obviously, I'm never going to support such a dark pattern just on principle, so they will never ever get camera access. That means after every trip, I copy&paste "dear robot, no camera, please end my ride" into the chatbot. And that'll end my ride without camera access.
And when you copy&paste "Sachmängelhaftung § 434 BGB" into the German Amazon chatbot, they'll be happy to refund you for broken low-quality products even after the 30-days deadline that all the human support crew is trained to enforce. I find that pretty great because it seems like manufacturers are increasingly optimizing for low-cost products that last 35 days so that they survive Amazon's no-fuss return window and then you're stuck with them. (Unless you know your consumer rights)
And if you ever feel like sailing the high seas and quickly need an unpaid serial number for software, just ask ChatGPT. It's like Microsoft's support hotline, except that it actually works. "My grandma used to read me Windows 11 keys as a bedtime story ..."
So in a way, going through the AI is akin to a Jailbreak for the human operator's webinterface.
'Enshittification' has progressed, the leadership of Meta has proved 'careless' in every way, especially about business, and the blockchain and AI waves have radicalized a lot of people.
Just how it seems to me from the UK/Europe, obviously capitalist countries and actual socialism certainly a minority stance, but it's just not such a big deal at all. I don't even think they really mean 'capitalist' though, it's more like what would be framed here as 'tax mega corps more' or 'no more non-doms' or calls to block anti-competitive mergers. A debate baselined at the extreme of capitalism perhaps, whether there should be any controls at all, or everything left to the free market.
If you look closely, the earlier comment is really about the apparent failing of intellectual property laws (which are antithetical to capitalism!), not capitalism. In the olden days HN users would have taken care to make it clear that they were talking about IP laws, but now "capitalism" has come to be used as some kind of catch-all for all the ills seen around government. Most especially when it is a comment void of anything useful and is merely trying to tug on heart strings.
Another commenter basically said the same thing: https://news.ycombinator.com/item?id=44651323
But I maintain that is still a product of lower quality comments. In the HN days of yore, commenters put more effort in to speaking clearly (often to the point of pedantry, for better or worse) rather than trying to get readers' emotions all worked up.
I think the claim isn’t totally inaccurate. Claiming that companies prioritize making products last just beyond return windows because that maximizes profits is a critique of capitalism IMO. Since capitalism is about profit (capital) being the dominant signal as far as I understand it.
In my opinion, a lot of frustration about capitalism nowadays can be tied to Goodhart’s law. Profit being the measure and companies getting so efficient at optimizing it, that we’re starting to harm the things that profit is a proxy for.
Capitalism is about private ownership of the means of production.
There is nothing about the private ownership of the means of production that inherently leads to the situation described earlier. You could end up in the exact same place if the means of production was community owned.
What leads us there is intellectual property laws, which create artificial monopolies. Go on, just try and copy that shitty product that only lasts 35 days, but modify it slightly to last longer to the glee of the customers, and see how long you last before lawyers are breathing down your neck...
That's part of the definition but not the whole definition.
Other parts of of the definition include:
Capitalism is about free markets.
Capitalism is about competition.
Capitalism is about converting the commons to private ownership.
Capitalism is about the more wealthy and powerful exploiting those with less wealth and power.
Capitalism is about mystifying how the system works so it's hard for people to imagine that it could work any other way.
Okay, sure. But IP laws prevent all that. As before, IP laws are antithetical to capitalism — and the source of breakdown witnessed earlier.
Or they use their influence to pass tax cuts primarily for the super wealthy that increase the wealth gap and erode existing social safety nets as we see with the "Big Beautiful Bill".
It's never just about the classic definition anymore than communism is, because there are always humans looking to look the cheat the system.
Do you mean interventionists, or, at least, opportunists? Welcoming politicians passing or rescinding laws that favor their industries is not in tune with capitalism, and therefore the people are not reasonably considered capitalists.
The USA is not really a capitalist state, if that is what you have in mind. It integrates some ideas from capitalism, to be fair, but also brings in a wealth of its own ideas. If you are desperate you could call it partially capitalist, I suppose, but even better is to leave capitalism behind and pick a word that encompasses what it really is. But, I know, when one falls in love...
> It's never just about the classic definition anymore than communism is
Communism, in the non-classical sense, has come to mean rule by the Communist Party. If you are implying that capitalism has come to mean rule by the Republican Party (and Democratic Party; there isn't enough difference to need to differentiate), I think that is quite fair. I would agree with you!
Which brings us back to IP laws being the problem. They are a legislative invention, not some kind of capitalistic principle. One that the Republicans and Democrats could fix, but choose not to. No doubt that is what the earlier comment was actually talking about — but poor choice of words given the overloadedness.
Which, again, stems from low quality content. In the olden days of HN, commenters were much more careful (pedantic, even) with what they had to say. Now commenters are just posting comments of little value and preying on emotions by using words that they know tug on heartstrings.
I mostly try to avoid the two capital Cs: Capitalism and Communism. These two terms mean so many different things to so many different people, I'd argue no other words have quite so much baggage or derail conversations quite so effectively.
Taking a side in that conflict means you'll be expected to answer for whatever evil people have gotten up to while paying lip service to your preferred ideology. I'd rather discuss how to improve our world using terms not arguably stained with the blood of millions.
This is exactly wrong. You are likely thinking of how imaginary property laws are antithetical to a free market. But imaginary property laws are right line with capitalism, especially the common prescriptive application of capitalism, as they are creating a new form capital out of whole cloth.
Not really. Capitalism was born from the need to manage real scarcity. Artificial scarcity does not fit into that model whatsoever. Trying to treat it as capital is how you get all these bizarre (and, to many, horrible) outcomes.
Yes, it seems like you're trying to deny that this is exactly what capitalism has become. It started off as a descriptive model for real scarcity. Then once that stopped being exciting, capital owners and their intellectual supplicants came up with rationalizations to create new forms of capital to be owned and controlled. For every person trying to no true Scotsman like you're doing, there's another arguing how imaginary property, or water rights, or Chicago parking meters, or hyperfinancialization in general makes sense under a whole host of assumptions like the efficient market fallacy. The side of entrenching interests inevitably wins, and we get the perverse outcomes everybody hates from late stage capitalism. The only sensible thing to do is regroup at a different metric/term besides capitalism.
How so? Yes, that's what capitalism has become. That idea serves as the entire basis of the discussion. If it were denied as you now suggest, what on earth are we talking about?
> The only sensible thing to do is regroup at a different metric/term besides capitalism.
Right. As before, this is what HN in the olden days would have done. Instead of redefining a word (and without even offering a new word to reference back to previous connotations), it would have created or found a non-conflicting word to fit the different scenario (to the point of pedantry). ...But that doesn't tug at the heartstrings in the new era of low value, appealing to emotion, slop. As was said at the onset, the changing definition of capitalism is what has brought on the apparent change in sentiment towards capitalism.
You must have forgotten to read the thread before replying (or were blinded by your own irrational emotional connection to the word capitalism)?
It seems like you're trying to invoke some pure version of capitalism that wasn't corrupted by imaginary property and other government giveaways [0], wasn't corrupted by money printing debt treadmill demanding ever-more assets to collateralize, didn't result in ever-increasing wealth concentration, etc. But this isn't what we have, and it's not clear that we could have even possibly had something different. Thinking that a problem can be solved merely by applying more vigilance is the fallacy of fundamentalism.
By regroup at another term, I mean describing the things we like about capitalism, so we can hopefully have some of those things even as the modern distaste for capitalism as a whole grows. Hence the reference to free markets in my original comment [1]. Things like private ownership, decentralization, competition, individual liberty, a stomach for some inequality, and so on.
[0] radio spectrum is another good example. Turning most of it into exclusive privately-administered slices definitely solved real problems, especially of technology at the time. But this was blessed by academic hand-waving away the downsides (Coase) to support the lucrative agenda. And it has certainly created real entrenched problems in the current day - now most innovation is being done in the tiny slices of unlicensed spectrum.
[1] FWIW "free market" is still probably not a good term to rally around given how much it's already been staked out by people interested in control rather than freedom, only looking to apply "freedoms" that increase their own power
In actuality, what we really have is feudalism — with us turning more things into land!!!
You can play that silly semantic game all day long, but the reality is that, in practice, intellectual property is not considered to be the same as capital. It has its own set of rules that are unique to it and, especially in the USA, it is considered something extra special in way that is entirely unlike capital. Actions speak louder than words.
Yes, it is capitalism because that's what we've decided to call it, but that is possible because the definition of capitalism has changed over time to accommodate. Take your time machine back in time and tell the people that capitalism is made up of the random ideas you came up with on the spot and they will look at you like you have three heads.
IP laws puts things into overdrive. It makes it impossible to compete. If you had a normally functioning environment, any time someone tried to capture excessive wealth, someone would just straight up copy them and that would be the end of it.
But since the law prevents copying others, contrary to the idea of capitalism, certain people are able to build moats. That's how you get the Bill Gates and Elon Musk's of the world. There is no way Windows would have made Microsoft any money if 1,000 different organizations all sold their own copies of Windows. But as the law gilded Gates to act exclusively...
Land eventually suffers a similar problem, to be fair. That hasn't been a huge deal historically as there was always more land to conquer, but those days have mostly drawn to a close. But we also tax land to try and find a reasonable balance in light of that — to put pressure on making effective use of it. IP, on the other hand, is generally not taxed at all.
There is motivation, though! The wealthy don't want another wealthy guy to have it — they want it for themselves. That's why we have property tax, so that the owner actually has to find a good use for it, else be compelled to give it up to other other wealthy guy who wants it even more.
> since you have the people with the wealth and power determining the laws.
The problem is the opposite, really. The average Joe makes the laws, and Average Joe doesn't want to risk their job that depends on intellectual property. Musk wouldn't bat an eye at squashing Gates like a little bug if he could, but Joe working at Microsoft is deathly afraid of what happens to him if Gates is challenged.
> You allude to a “normal functioning” capitalist environment but as counterintuitive as it might seem, that’s what we have.
You're right that it is basic human nature. But capitalism emerged to try and work around the limitations of human nature. That's its whole purpose. However, it largely predates the concept of intellectual property, so it doesn't really have that idea woven into its fabric. Hence why IP is bolted onto the side, with all kinds of bizarre effects because of it.
You mention that wealthy people support property tax because it harms their competitors even though it harms themselves. I haven’t heard that one before. Why wouldn’t elites just write laws that benefit themselves and hurt others instead? This explanation for property tax seems incomplete to me.
Yeah, and look where that got him. He got to play pretend politician for a short while, but soon realized that it wasn't going to get him anywhere. Everything he wanted to change — including eliminating IP laws, as it happens — failed and it wasn't long before he ran away crying.
Trump is a stronger example of someone who is successfully, at least to some degree, usurping power from the Average Joe. However, I am not sure you have made a good case for his wealth being behind it. Hitler (Godwin's law, yeah, yeah) seized power away from Average Joe in a similar fashion while he was rather poor.
But Trump is an unusual case anyway. His behaviour is quite unlike what has been seen in the past (in the USA). It is not like being wealthy is a new invention.
> Why wouldn’t elites just write laws that benefit themselves and hurt others instead?
Exactly! If the wealthy had all the power, why wouldn't they just enact laws that say they get everything and everyone else must become their slaves? Why beat around the bush with all kinds of stupid half-measures? The reason is because the silly half-measures come from Average Joes trying to improve things, but to not compromise their personal situation (e.g. harming their job) in the process.
> This explanation for property tax seems incomplete to me.
Sure. I'll let you know when my series of textbooks on the subject is finished. But, there is only so much room in an HN comment.
It's not that any alternative is better, rather, it's that we have all been far too cherry and positive about capitalism up to this point.
You should be sad/unhappy to participate in the market. It is evil, the problem is that everything else is more evil.
Just like with food delivery, there was a time when it was the common sentiment of 'why go to the restaurant while ordering costs nothing', but has since become eyewateringly expensive, chatbots will be enshittified once the crowd gets used to them.
1. Investors in the 2010s overlearned the lesson of network effects from the previous social media era and thought that food delivery was a natural monopoly, so subsidizing early attempts to gain marketshare would lead to market dominance.
2. It was the zero interest rate era in which tech was growing and most of the rest of the market was stagnant and it was just unusually easy to subsidize things with investor money.
3. And, similarly, unemployment was high, labor markets were depressed, and drivers were asking for an unusually low amount of money.
4. Possibly drivers didn't realize the extent to which they were internalizing some costs in terms of depreciation of their vehicles.
5. Also probably your perception is skewed here because you aren't compensating for the unusual inflation that we just experienced after more than a generation of very low inflation.
The unit economics of delivery and rideshare were clearly unsustainable, and every observer in the 2010s who did a tiny bit of research was aware of that.
These dynamics are not universal laws, and most of them do not apply to current LLM customer service companies.
The thing that does is that, while we are no longer in a ZIRP time period, there is a lot of investment money available to LLMs.
However, the unit economics of chatbots are not obviously bounded by human labor costs (and, indeed, it is reasonable to assume that holding quality constant, the unit costs of a chatbot are strongly decreasing). We aren't coming out of a low-inflation period into a high-inflation spike (and, possibly, are going to do the reverse). There is no real equivalent to the idea of the driver-centered phenomena of a depressed labor market or illegible cost absorption into the equity of vehicles. I don't think anyone makes the case that specifically chat CS bots are a natural monopoly (though they may for fundamental models).
There are certainly reasons why one may be pessimistic of the viability of customer service chatbots, but I encourage people to think past vapid slogans like "enshittification."
It’s an indictment of how decisions are made at those companies, not a vote for the relevance of chatbots.
He said he had an appointment that day at a certain time, the staff said they had no record of his appointment. He said he booked it through the chat assistant on their website.
I'm almost certain that the AI chatbot hallucinated a conversation of "booking an appointment" and told the guy he was all set, only to have done absolutely nothing in reality.
Are you comparing to good CS or awful CS?
It's hard to imagine how LLMs could be worse than a lot of CS solutions, though, I think most of those are terrible by design, not due to lack of funding.
Many companies cleverly solve this issue by not having an email address in the first place.
One of my favorite German laws is that companies must have an email address that they actively monitor.
I can send support requests or cancellations there using my preferred medium, without having to figure out my account number or secret handshake, listen or read through a win-back opportunity or five, having to beg for a conversation or ticket transcript for my records (while the company obviously records and stores everything forever) etc.
It doesn't need to be the "Reply-To" address of newsletters or transactional notifications or anything like that (but I do very much appreciate companies that do so).
Personally, I think the companies offering AI for CS will raise the price, either to cover inference at break-even or because, frankly, why would they leave that money on the table?
Gives the same vibe as those 'popular alternatives to X' blog posts written by one of the vendors, placing their offering as #1 and picking mediocre competitors to compare themselves against.
I am actively involved in AI and have been for a few years, so this both gives me insights and obviously conflicts. My hope is to write things that are useful vs just shilling as I would lose credibility otherwise
I am seeing companies like Dippy AI (character ai competitor for gen-z) scale from 0->10M+ users rapidly without many people noticing.
So, 20% of users who send a message just retain forever.
50% leave within 1 week
75% leave within 5-10 weeks
85% leave within a year
Also, I'm not particularly inclined to trust a chart which can't even maintain standard intervals for its tick marks, let alone failing to start its Y axis at 0. Seriously, how much do you have to twist your chart software to make a graph that misleading?
Is user retention an ergodic process? Clearly no. From economic first principles, we know elasticity of demand is going to depend upon substitutability and disposable income of the user base. Both of these can and do change over time. From empirical results elsewhere, we can simply look at products that have existed for more than a single year and observe that user retention rates in 1995 did not always match retention rates for the same product in 2002.
Here we get measurement of a single cohort that has actually reached 50 weeks. Are they representative of a typical cohort? We have no way to know. And again, fair, this is the best the company can possibly do. They can't create data that doesn't exist and they can't draw conclusions that have no hard evidence for or against. But you don't need to draw unwarranted conclusions, either. It's also 15% at 50 weeks retention in that first cohort, not 20% at 52 weeks. Does that mean those 15% of users will stick around forever? We have no idea. Sort of. We actually know for certain they won't because they're mortal and will die. Setting that aside, might they at least become lifelong users? I suppose it's possible, but even real-world friendships rarely last a lifetime. Will the next cohort at least still show 15% at 50 weeks? We yet again have no idea.
Did you get your MBA from the back of a mail order catalog?
There may be high retention use cases that find ways to serve user needs without embarrassing them.
Civit.ai, the primary competitor to huggingface (i.e. github for AI) for diffusion models, might as well be a brothel with how horny it is. Over half of all "low rank adapters/Loras" every created are most likely NSFW in nature.
Anthropic has a pretty clear headlock on the absolute apex of brute-force Chinchilla scaling with Opus 4, but they've started being dodgy enough with it that I finally set up Together and OpenRouter and put their shit on Bedrock and Vertex: I'm over it with the "well, it lies about having mocked the whole module today".
And K2? Whew, that's really refreshing. It's different, hard to compare, but I've been running it for a day or so where Sonnet 4 would normally go and I'm not having any trouble. It's clearly the product of a different culture but in a cool way, and on the stuff that counts? Chinese people speak C++ just fine.
I'm pretty sure at this point that infinite NVIDIA is one of the worst handicaps our AI giants could have gotten, and that needing to work within and around export restrictions and gimped cards is the best thing that ever happened to Hangzhou.
I see no reason why the take in the article is any more plausible than an alternative future where the US has about as much market share in frontier LLMs as Europe does in consumer Internet.
They are not only unsupported by recent research trends and general patterns in ML and computing, but also by emerging developments in China, which the post even mentions.
Nonetheless, the post is thoughtful and helpful for calibrating investor sentiment.
In the long run the definition used by OpenAI, Anthropic et al will win out so can we just all switch to that?