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Comment by dangus | Hacker News Reader

This is absolutely how it’s going work. AI loses way too much money to not be enshittified.

It’s a way less transformational technology when put in context of the real price tag.

Deepseek has demonstrated that there is no reason for it to actually lose money. The awful business practices and monopoly tactics of the frontier model labs in the US are the problem.

It'll be interesting to see what happens when OpenAI goes public. I'm expecting the executives to run away with bags of money once they offload their insane risk to the public... or maybe there's a bailout / money printer scenario in the works. I guarantee some insider adjacents are going to make a killing in a way that will never be investigated.

How would they make money in a way that should be investigated? Favored insider-adjacent folk would have been able to invest in pre-IPO SPVs or whatever that will have outsized returns, assuming the IPO goes well. It's unfair, but above board (accredited investor etc) according to the SEC, so what would they investigate? Unless there's other malfeasance you're alleging.

No chance unless open weight models out of China discontinue. The gap right now is practically nonexistent.

When the consolidation phase starts, you bet your ass open weight models are going to stop.

I don't think consolidation will ever happen, the AI space is already dominated by a few whales.

Seems most of the open weight models are from outside the USA (shocker), going to be interesting to see how THAT shakes out.

The firms training those models have costs; without monetization they are even more unsustainable than subsidized commercial models. (Effectively, they are just a heavy form of subsidy ro overcome being commercially behind.)

The CCP wants to lead the world in AI. Market forces don't apply to the Chinese models.

Market forces won't apply to American models either if the American government bans Chinese-created models due to "national security".

AI loses money for two reasons: (1) certain uses where owning the market is expected to be a high long-term value are currently heavily subsidized (the top-level story here is about the increasing efforts of model providers to prevent exploits where people convert subsidized services to uses outside the target of the subsidy), and (2) development costs of new models to keep up with competition.

I mean obviously. Why would the companies that control this technology NOT charge the absolute maximum amount their customers are willing to pay?

This doesn't even have anything to do with if it loses money or not. Obviously they are going to charge as much as possible.

Ideally? Competition.

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