Comment by libraryofbabel | Hacker News Reader

Comment by libraryofbabel | Hacker News Reader

All of these things can be simultaneously true (and I would say, are true):

1) We are in a huge investment bubble right now and it's going to burst.

2) LLMs are extremely useful right now for certain niche tasks, especially software engineering.

3) LLMs have the potential to transform our world long-term (~10 yr horizon), on the order of the transformations wrought by the internet and mobile.

4) LLM's don't lead directly to AGI (no continuous learning), and we're not getting AGI any time soon.

This is an extremely obvious point, but bears repeating. I feel the assumption of an implicit link (in both truth or falsehood) between these fairly independent assertions can cause people to talk past each other about the really important questions in play here.

Regarding The Great Bubble, I am very very bearish about OpenAI in particular. They've had a good run for three years with consumer mindshare due to their first-mover advantage, but they have no moat, trouble monetizing most of their users, not much luck building out products that stick among consumers that aren't chatbots, and their models are no better than Anthropic's, Google's, or even the best Chinese open weight models 6 months later.

My bet would be on Google and Apple together (with Gemini powering Siri, for now) destroying OpenAI in the consumer AI market over the next 2-3 years. Google has first-rate models... but more than that, both Google and Apple have the enormous advantage of owning underlying platforms that they can use to put their own AI chat in front of consumers. Google has a mobile OS, the leading browser, and search. Apple has the premium hardware and the other, premium, mobile OS. They also have the advantage of the current regulatory climate being less antitrust than it was. And they don't have to monetize their AI offerings (no ads in gemini; ChatGPT is adding them) and can run them at a loss for as long as it takes to eat up OpenAI's market share. If they partner up, as they seem to be doing, OpenAI should very very afraid.

>2) LLMs are extremely useful right now for certain niche tasks, especially software engineering.

Don't get lost in the tech scene sauce, programming is a small sliver of what people are using LLMs for. OpenAI's report in September pegged it at ~4% of tokens being for software generation. Sure Anthropic is probably 80% or something, but only a small sliver of LLM users are using Anthropic. The reality is probably even less if you count Google's AI overviews. We hate it, but I have never seen a regular person skip over it.

The question is if regular people will pay cell phone level subscription costs ($70-$100/mo) for LLMs. If so, then we are probably not in a bubble, and the ROI will have a 5-10 yr horizon, which is totally tenable.

500,000,000 people paying $75/mo is $450B/yr. Inference is cheap too, it's training that is ludicrously expensive. Don't be fooled by the introductory pricing we have today either, that's just to get you dependent.

And yeah, chinese models, but look at what they did to tiktok. No way they are going to let the Chinese government be peoples confidants and no way is more than 0.01% of people gonna home lab.

> 500,000,000 people paying $75/mo is $450B/yr.

Majority of people use ChatGPT for free, that's why they are introducing ads. Normal people will not pay 70-100$ per month for LLM subscription. Your numbers are way off.

I'm sure if cell phones were free, the majority would be free users too.

But beside that, OpenAI is pricing ads at $60/1000 views. That is 3x what Meta charges, which is around $20/1000. Meta pulls about $20/user/month in ad revenue. Triple that and we land at....$60/mo.

> I'm sure if cell phones were free, the majority would be free users too.

LLMs will be a commodity for the majority of people around the world and will be available for free for most tasks on Meta platforms or via Google.

> But beside that, OpenAI is pricing ads at $60/1000 views

Good luck with that CPM.

Do you use cursor personally? the product is so good, i don't know why people aren't looking at the "companies will complain and pony up $20k a seat" isn't seen as a possibility here

You’re right to call out consumer use is what’s eating all the tokens. I suppose what was behind my way of putting it is: I haven’t seen much in the way of truly transformative products with LLMs in the consumer space. Sure, there’s a few power users doing some cool things, and lots of promises along the lines of “AI will plan and book you a whole vacation!”, but basically for the median consumer we have an “improved search”, and “fun image generation”, with people using it a couple times a week. So what is the product that changes the world and makes 500M people pay $100 a month? I don’t think it’s really here yet. This feels a bit like we’re in 1996 where people are still trying to figure out what the internet is for, and we don’t know if OpenAI will be 1996’s Amazon, or its AOL.

None of this is to deny how remarkable the underling LLM tech is. I never expected to see something like this in my lifetime; it feels far far more strange and new than when the iPhone came along. I use a coding agent daily and it’s dramatically changed how I work. But I still think we’re in a bubble here.

Ironically the MIT study that was touted for weeks, the one that found corporate AI pilots were almost all failures, also found that virtually every single person was using LLMs almost daily for their work.

The finding of that study was that people are using their personal AI accounts rather than corporate integrated accounts. Hence the pilots failing.

But LLMs are definitely being used to get work done. Hell Jerome Powell just said live on air that he uses it for it's productivity boost.

> And yeah, chinese models, but look at what they did to tiktok. No way they are going to let the Chinese government be peoples confidants

You're playing wack-a-mole with a paper mallet against a tank brigade. It's not only China, the EU is going to compete too in the "5-10 yr horizon".

The Chinese manage to compete while deprived of top semiconductor gear, which happens to be made only in the EU.

The Chinese models don't have to stay in China, they can be fine-tuned and used by many other countries, named differently, etc. Even if you try to block them all, others won't which would put the US in a sever competitive disadvantage, inflated and isolated, the dollar will be in the sewer, who cares how much openAI would make.

You forgot to mention the case where the US economy craters because of political missteps leading to Google and Apple being distracted leaving it open for Chinese or other models to surge ahead.

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