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Comment by noduerme | Hacker News Reader

So LLM profiteers have bought up all the consumer RAM for the next several years in order to deliver more of a service we're already oversaturated with that doesn't turn a profit..? I guess by then there'll be no consumers left with jobs to afford a PlayStation 6, so no problem. Except how will the AI trainers find revenue? If maximum potential is reached by laying off 90% of workers at companies that sell stuff... help me with the logic here... who's gonna buy the stuff those companies sell?

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Not sure there is much actual profit in LLMs. It will be interesting to see promise meet reality, indeed.

I mean, it's obviously that they think they're going way beyond LLMs to get to something that is profitable, like some ultimate goldmine of intelligence. But if they miss that target by a hair or two, can we buy some of that RAM? I'd like my next MacBook not to cost $10,000.

I'm going to be very pumped when this comes crashing down.

It's going to look a bit like oligarchs subsidizing consumer tech as they try to offload more ram than God could own.

Everybody from OpenAI to Micron to the US Government is actively colluding to keep things going. I would love for you to be right, but I'm cynical from the decades that have been spent insulating these companies from consequences.

It really does feel like this. But it can't go indefinitely. What may seem bleak today could look very different a year out. The velocity of this whole thing won't just apply to the upwards direction.

But velocity down probably will mean a meaningful recession, so there's that.

you're right ... but china hahaha

It's once again a market where there's morbillions of money being invested but no money is being made yet. The next few years will show whether AI becomes established in e.g. large enterprises who use it as part of their daily business. But there's a lot of competition and wishes to cut costs as well so profit margins will dwindle.

I also think most hardware expenditures done today will lose their value quickly; as we saw with crypto, hardware manufacturers will make specialized hardware so the cost/performance ratio will go down by at least 90% within a few years, possibly more.

The profit is in the stock price rising, not the actual revenue. They need stories to keep the stocks going up.

Medium term it could lower the price of memory and compute.

Who is holding the hands of RAM fabs and stopping them from making more? Its not the first time they have been caught doing collusion and price fixing tactics.

A more benevolent interpretation might be that they, too, see that this AI bubble will crash on the near future, and they'd be sitting on expensively built-out capacity that they don't need.

Someone less cynical might recognize prioritization of technological advancement over video games as a good thing.

But it is not for prosumer. I don't want my PC to be terminal to 4-5 providers of compute who could ban me or raise prices tenfold overnight.

I don't see any advances for me, only for my employer, maybe, but it is not sure thing too.

Someone less cynical might recognize that people use RAM in a home machine for more than just gaming. Also hobbies are just as important to the human condition as technical advancement.

Prioritizing art over machines that generate mediocre code is not cynical

>doesn't turn a profit.

This isn't the condemnation of AI that you think it is.

When you are building an industry, you don't want to be in a "cash cow" phase. Because the person who is willing to reinvest profits (and further: seek and sink investments) into growth and innovation is going to eat your lunch.

~8 years ago my BIL condemned Tesla with "they aren't profitable" and I explained this to him. Now they're a trillion dollar company.

You are basically describing predatory pricing or dumping, where the goal is not to be the best but to starve your competitors to build a monopoly and gouge customers later.

Uber tried that and failed. Now they cost as much as normal taxis if not more. Airbnb tried that and now cost as much as hotels if not more.

And tesla is a trillion dollar company on paper only. It can vanish into thin air in a day.

>You are basically describing predatory pricing

I'm describing business. Period. It's incredibly rare to encounter products above a fairly small revenue level (niche products), that haven't come from a company that spent significant time reinvesting profits and therefore being unprofitable. Same for using outside investment.

Yes, there are companies who have burned outside investment on things that didn't pan out.

Love them or hate them, the AI companies are doing a huge amount of research. And research companies have always cost more than they've generated in revenue.

Thing is, we don’t have strong reason to believe the AI companies are just reinvesting profits. There’s a lot of credible analysis saying inference COGS also exceeds the prices they charge. In which case they’re just burning the candle at both ends.

huh. I remember a time not that long ago when companies had to have a plan to actually, you know, make money in order to attract investors.

Betting massively on onion futures is also "business" period air quotes, and yet it is widely accepted as a bad idea and banned.

https://en.wikipedia.org/wiki/Onion_Futures_Act

And it is just one of several "business" methods that are widely regarded as abusing the rules/manipulation and regulated or outright banned.

Your AI companies are not just reinvesting profit, they are burning a fuckton of predatory investors'money to try to drive adoption, but also competitors to bankruptcy.

Reinvesting doesn’t impact profits they are making. That’s not how it works

Tesla is a trillion dollar company because it's a meme stock. It has a 300 P/E

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