If it wasn’t economically feasible without VC/Nvidia money 3 years ago, how is it possibly economically feasible now at 10x prices for things like memory?
https://www.tomshardware.com/pc-components/dram/openais-star...
If I had to guess they’re just buying up ram to keep others from having it same way meta, Google, etc hired up engineers to keep others from having them
According to them, demand for tokens already exceeds supply. Coding agents are very popular but burn through millions of tokens per hour.
The reasoning models that have powered breakthroughs in AI for math, coding, etc require substantially more compute than base LLMs.
But we cant have that, as the big guys are hoarding everything for themselves, so that you have to pay them instead.
However, I do feel like this is the type of conspiracy that unfiltered Claude would come up with.
Ballpark that they need to make around 110 billion a year, each, to break even on these investments. Let's estimate 550 billion a year in necessary profit required for the major frontier companies. That means there needs to be 550 billion of money, available to customers today, that isn't being spent on anything else, that they will now spend on AI. Maybe some of that comes from increased value, efficiency, or layoffs. But 550 billion is not a small amount of money.
Spread over the whole globe, the cash is there. But it is a hunt for cash, combined with a battle to successfully complete their buildouts, keep them running, and make bank, before the bookie comes knocking.
The railroad panics of the 19th century (and subsequent depressions) happened because they over-leveraged private capital without the ability to profit from it quick enough. So it really is a question of 1) can they really build it all, and 2) will people really pay for it all. If either answer is No, we are looking at economic catastrophe.