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Comment by procgen | Hacker News Reader

Demand is high and will remain so. Supply just needs to catch up.

Demand for a magic box that solves your problems at a low cost will always remain extraordinarily high. Supply is the hard part, because it will never catch up.

Some people believed LLMs were that magic box for a time, and that time is coming to an end if the parent poster is correct.

Just had to deal with this with a company that had outsourced its support to "AI". Probably saved them a ton of money not having to employ those annoying humans. Problem is that for this particular company once you get to the point where you have to contact support you're almost certainly in a situation that no stochastic parrot has any hope of comprehending, let alone solving. I spend about an hour going round in circles with the parrot until I finally figured out what to tell it to get it to give up and connect me to a human, who fixed the problem in about five minutes.

The scary thing here is that I know how the parrots work, what they can't do, and how to get around them. The typical person calling will assume they've been helped by the parrot, which is just going through the motions without comprehending anything or fixing anything.

Well, the history of cloud computing shows that infrastructure usually becomes cheaper over time. But it’s still unclear whether this rule applies to reasoning models.

Honestly that’s the trap that’s increasingly looking like it will blow up this whole thing. Nobody can point to any viable revenue pathway that justifies the amount of capital investment underway, all while folks are increasingly slamming the brakes on things.

Theres an extremely ugly financial picture developing that those with full blown AI psychosis appear unable, or simply are unwilling, to see.

Of course they can. They're going to sell ads and subscriptions. Both of which are going to make bank. That their service is wildly oversubscribed and hence expensive is not an indication that they're in economic trouble.

No.

Ads are a zero sum game where there’s only so much ad money to go around. AI doesn’t grow the pot. Google isn’t going to lose the ad game, it would destroy them. Google got scooped early on with AI search but is roaring back now.

Also consumers won’t pay high amounts for subscriptions, that’s enterprise territory which doesn’t tolerate ads. And these are the folks now slamming the brakes on spending.

Net, “ad revenue” is not even close to a viable plan to save the present train from spectacularly flying off the tracks.

ChatGPT has like a billion weekly users that are giving them a massive amount of data. Everyone is going to want to advertise with them.

Enterprise isn't slamming the breaks on spending. At worst they've transitioned from spending like drunken sailors to spending like mildly inebriated sailors. Every single white collar worker is still going to have an AI subscription. And for people like programmers they'll still spend $1k on them.

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