cmiles8

Except businesses are going the opposite direction here. The lack of stickiness makes the “premium” argument hard to play. Oracle won because swapping databases is a giant PITA. Swapping models requires almost no effort for most uses. And because of that enterprises are all building model marketplaces where providers have to compete on price performance.

Most folks I know can choose from any of the big labs or open weight models and they get billed internally for tokens against their budget. There’s little incentive to no switch to the lower cost closers.

This setup is a nightmare scenario for the big labs trying to execute the traditional enterprise sales plays. Those only work if your product is sticky and AI models are one of the least sticky things in the history of tech.

Then Anthropic should stop saying it. So long as they try to play victim here folks are going to call out their BS.

I get that angle but it’s a weak argument as Anthropic is doing the same to others. Also while there’s certainly a lot of computing power needed to do what Anthropic does, it’s increasingly clear there isn’t much secret sauce involved. Everyone knows how do to the core work it’s just a question of who wants to burn billions on compute to do it.

Anthropic’s anger here seems mostly rooted in their annoyance that this exposes they don’t really have core IP that’s not just easily replicated. And that’s clearly a problem for a deeply unprofitable company trying to convince people they’re worth $2 trillion.

Why is it a problem that the Chinese labs are just distilling down Anthropic’s models? Aren’t Anthropic’s models not just distilling down other people’s work?

Feels like Anthropic crying do as I say not as I do.

The only real question that matters at this point is what do the economics look like for OpenAI. If they make good money on this with sane accounting principles then great. If this is just throwing more gasoline on the pile of burning cash to avoid losing more inference business then this bubble can’t pop soon enough.

Less “too big to fail” and more the ecosystem is too circular. OpenAI could blow up and it wouldn’t take out the economy in the way the banks would have in 2008. It would create a world of hurt for VCs and their LPs but that’s a fairly isolated ecosystem in terms of the whole economy. Theres a lot of thinking saying better they impose now and wipe out on the private market than letting them go public and this is a public market problem.

Criminal negligence is a thing too

What started as great marketing on how powerful the models are is rapidly spiraling into a train crash PR nightmare highlighting how inept Open AI was in this whole thing, causing nearly every big enterprise customer to rethink trusting them.

All right in the middle of corporate budget season when every C-Suite is looking a a spreadsheet saying “remind me why we’re sending money to these guys again?”

The law already works like that. You can’t write some computer code and automation, set it loose, and then go “oops the computer did it.” It’s not a defense. While it may be hard to nail down which specific engineers to lock up, the corporation as a whole absolutely can be charged criminally.

As Mitt Romney once said “corporations are people.”

This seems like as a good an opportunity as any to break out the Computer Fraud and Abuse Act.

They want “regulation” but we already have it. Hacking is illegal. Start locking up those responsible for this mess and I assure you they’ll “have a handle on it” quite quickly.

People still use MongoDB?

Agree it’s crazy, but it’s the least worst thing for them right now when considering they have completely failed to deliver all the promised impacts of AI. Remember when the same AI bros were saying there’d be mass unemployment by now because of these models?

The growth of these companies is massively impressive as is the tech, but they are an order of magnitude or more off where they need to be to justify anything like the valuations they need to stay alive.

It’s budget season in the corporate world and from what folks are saying things are not going well for the big labs. Token budgets are being slashed and companies are switching to open weight models. That coupled with the lack of demonstrable business impact at scale is setting the big labs up for a world of hurt. Something they can more easily explain if they have to “slow down” for safety. Unfortunately for them most folks don’t seem to be falling for that trick.

Anything to take attention off the fact that these companies are burnings piles of cash and questionable future spend commitments with no sign of that stopping any time soon.

They’re extremely expensive to repair for one, which drives up the rates since many are just written off after relatively minor accidents.

Because driving includes a lot more costs than just fuel. And as others are calling out, nobody wants a used EV so deprecation is a real cost to every day regardless of if the car is driven or not.

Headline is misleading. Cheaper on per-mile operating costs but typically more expensive to purchase and insure. There’s also a nasty depreciation curve to contend with. Nobody wants a 10 year old Tesla, but a 10 year old well mentioned petrol car still has a ton of life left in it.

It still often ends up a bit cheaper across comparable vehicles but not a slam dunk and nowhere near as good as the headline suggests.

The more of these that come out the more incompetent OpenAI looks. It would appear there was a total lack of basic controls in place for running these tests.

With all the regulations nobody in their right mind would build a fab in Europe.

Europe is increasingly relying on the rest of the world to supply it with critical things. It’s FAFOed with regulations that have driven these things elsewhere and now is heading into a “FO” world of hurt as the tables are turned and they desperately need things and have to pay the price. This will likely define the next 20 years in Europe.

Yes. But even with these SPVs is was largely about keeping the liabilities off the hyperscalers balance sheets. GAAP has some rules being exploited there on keeping commitments off the balance sheets until they’re delivered. But the big players are still very exposed. The WSJ recently reported there’s are 3 trillion in these little gems hiding “off the books” that will start popping up as real liability soon. It’s a huge mess.

The point is it has value and can be resold later to get your capital back. Housing tends to be a mediocre investment at best but folks do generally expect to be able to get their capital back when selling.

By your logic buying a house is a Ponzi scheme too.

In an actual Ponzi scheme yes. The AI bubble isn’t a Ponzi scheme. Infra investment ahead of revenue is fairly standard in tech and not inherently bad. However if the revenue to pay for all that infra doesn’t materialize then you have a bubble implosion. Right now while the revenue and growth numbers for AI revenue would be incredibly impressive by most standards, there’re still a drop in the bucket relative to what’s needed to stop this whole house of cards from crashing down.

The AI bubble has built a giant interconnected web of commitments backed by a debt bomb. It all flows back to the ability of net new cash to flow in to pay for all this, not just VC funding and circular vendor financing. We’re seeing the early signs of that starting to all implode.

A hurricane wipes out your data center and someone sues you for it not being finished on time. Thats what force majeure is for.

You made a series of bad business decisions != force majeure.

As the AI bubble starts to pop we’re going to see a lot of creative claims as everyone rushes for the exits and the debt bomb behind all this infra lights off.

Because there’s usually nobody to sue. When a company claiming to be worth trillions is behind the attack it’s a very different situation. That’s a litigation goldmine.

Well when these AI bros are yelling from the top of the hill “hey guys look how dangerous my stuff is” then anything they do from this point forward looks quite full of demonstrable intent.

It’s only a matter of time until one of these causes real damage to the wrong party and OpenAI finds itself drowning in years of litigation for settlement amounts they can’t possibly ever pay in their current financial state.

On the present trajectory we’re 24-36 months away from another company inheriting the smoking wreckage of OpenAI as scraps handed over as compensation for damages.

It will be very interesting to see how the AI labs will try to hand wave away liability issues in their S1. This is looking like the next tobacco settlement gearing up.

If the big labs ever manage to not just financially implode on their own, then they’ll need to navigate wave after wave of class action lawsuits until there’s nothing left for plaintiffs to go after. And none of the labs have offered any viable plan to date on how they’ll navigate either of those impending and real existential crises on the horizon.

Yes, poorly worded on my part. Wasn’t intending to suggest it was ok to do that to a warehouse workers either, just that this is how physicians are being treated today (but neither is OK).

You need to consider the economic cost of delayed earnings, which is massive for the physician, and the higher pay later typically doesn’t make up for the massive debt and low pay early on. It’s not just about a point in time salary sizing contest. Earning little to nothing early in one’s career creates a massive net worth void to fill.