smokefoot

This has probably been posted before. As interest in hardware acceleration for AI intensifies, I started to think about whether analog circuits would make more sense. You can imagine actually modeling neural network architecture in the circuits and using circuit response functions as the activations. In theory you could make this super fast.

I'm sure people smarter and more knowledgeable than me have thought this through...

Yes. Each industry has developed accounting standards that reflect the nature of their business. You couldn't run a bank or a payments company with a simple sales - COGS = gross profit model, it just wouldn't make sense.

In health insurance specifically, profitability is somewhat regulated and this gets at the accounting issue here. Insurance companies should maintain a medical loss ratio of 80-85% meaning that fraction of the premiums should be paid to providers. The remaining 15-20% is split between administrative costs and profit. Most of the article's forensic arguments around this are weak and circular and represent a misunderstanding of the accounting itself.

Yeah but the smoking gun is that volumes didn’t really go down much. I would buy higher unit margins on a shrinking volume, but for total profits to materially increase that means prices went up without a significant impact to volume. That smells rotten.

Woodworking taught me a lot about planning and design. As a young person, I was like the authors brother. I just wanted to do the thing, not draw a diagram and figure out how much wood I need, or build a fixture to mark the stair lines.

Woodworking (the more constructive, furniture-making kind), rewards a deliberate, controlled process and it savagely penalizes mistakes. Those lessons transfer well to other disciplines. I’d have been a much better student if I’d learned wood working in high school.

Yes but what about AI? (Perhaps the most annoying words written in the last few years mostly on LinkedIn).

But actually in the years since this was written, I do think the world has shifted. Doing things on a computer used to be really hard. Even just installing a framework or getting >python to call the right python on windows. Then install Django and get Django to work with nginx etc. It was just a lot of thankless, frustrating work to get from zero to 1%.

Aside from AI, the tools and packages and culture of computing has gotten better. But AI means you just get all the trivial but difficult stuff for free. And I think a lot of people who would have given up now make it through to see something work and they’ll feel the thrill of building something. It’s just better and easier now.

Doubt it. Consulting firms run 30% gross margin and operating margins in The single digits or teens. I’d bet IBMs legacy portfolio is 40%+ operating margins.

Sometimes you might hear private partnerships quote gross margins in the 40s or 50s but that’s implicitly gross of partner labor and comp so it’s not apples to apples.

I mean no. The LIBOR analogy is appropriate. Large, long-term egg supply contracts are fixed to an index and that index was manipulated. That's criminal conspiracy and price fixing, not just a liquid market.

That's notably different from say the current scrum for HBM where the demand truly came as a surprise and scarce supply gets bid up.

Micron's windfall is justified and natural as these things go. The egg windfall was manufactured and criminal.

Maybe fair. I think my point was the author emphasizes how strange the software is. The further you are from the training data, the less well a model will perform. I haven't looked at the project, but it seems like it could maybe be written more conventionally. Or maybe not! In which case AI is bad at creativity and thinking outside the training data and that's a genuine insight.

The author admits that the logic of the language and the design of the parser are idiosyncratic. Even the solution the author likes is an extension of an existing hacky trap door. He could be more open-minded about the solutions the AI proposed and in fact, I think AI could potentially rearchitect this in a more structured, sustainable, and legible way.

Many developer criticism of AI coders could be easily directed at 95%+ of human developers. Much coding is monkey see, monkey do and keep trying until it does the things we want it to do. AI can certainly do that cheaper and faster and really this is why automated testing became such an important software discipline with or without AI.

Which is so weird, right? Like what is IBM now and how does a research lab make sense with the rest of their business?

The money-making parts of IBM are: legacy software and hardware (declining), consulting (low margin, low leverage), enterprise software (mostly redhat, not really growing). It's hard to explain how IBM research is accretive to any of that.

Um, did i just get mansplained compound interest by Paul f*ing Graham? I feel like this has been the subject of condescending advice since the beginning of time.

"But now you at least understand, from having done the math yourselves, that you don't have to cheat to become a billionaire. You've seen for yourselves that there are only two numbers in the calculation, the growth rate and how long it continues."

What could possibly be false in a two-parameter model of reality?

Or intel … but I think Samsung comes considerably closer. I’m not close to it.

I mean, I don’t know how long the NVIDIA moats can hold. With this much money at stake, others will challenge their dominance especially in a market as diverse and fragmented as advanced semiconductors.

That’s not to say I’m brave enough to short NVDA.

Chinese semiconductor dominance is not imminent and US containment has been somewhat effective. I don’t think that will hold on a generational timeline, but it will be hard to overcome.

It’s pretty hard to quantify. Reading the tone of NYT headlines over the last 20 years, I observe a steady increase in side-taking on both sides of the newsroom. Those headlines and stories are empirically more engaging and the market values engagement above all else.

Yeah, I mean I’m being negative but I enjoyed the video. I just found Ben’s whole line of questioning to be pandering and not a dialog (“why not MIT?”)

I had a similar experience with BBSs and I remember the romance of using a modem. I actually grew up in Champaign and recall dialing into “prairienet.” I also remember using AOL, but mostly to find and download games.

What a circle jerk. I guess there aren’t successful people with any humility. But seriously, he just used his own podcast to feature himself!

The industry moved to 300mm 25 years ago. It’s going to take a lot to get off that standard.

Also, round chambers for etch and deposition are good for homogeneity. I can imagine square chambers would result in lots of process challenges.

The cost of silicon is less than insignificant in an advanced semiconductor product.

It’s interesting to see the give and take between google sheets and excel. Google sheets came on the scene shooting for total backwards compatibility and then proceeded to develop some really interesting innovations. Now we see new features emerging on both sides that are quickly replicated by the other player. Notably off the top of my mind:

* spill formulas - google first, now supported in MSFT

* # notation - MSFT enhancement to spill formulas not yet adopted in google

* regular expressions - google first, now in Excel

* check boxes - google first, now supported in excel

There must be others. I would expect competitive dynamics where each side tries to build extensions that can’t be replicated on the other side

Right, good point. We will see if regulators take up that cause.

The secrecy is ick, but this is the future and there’s no stopping it.

There’s ample evidence that consumers won’t pay for privacy and as most consumers opt in to data sharing programs, the non-data-sharing cohort will get seriously adverse further raising the price of privacy. The equilibrium state is that only bad actors and a handful of privacy zealots will inhabit that pool and mainstream carriers won’t even bid it.

This is not how capitalism works. However, if insurance were priced perfectly, it would cease to be useful!

There used to be opt-in insurance programs with many carriers. They used to send you a device, but I guess that was mooted by secret mass surveillance?

Some serious ADHD apparent in this interview. Like what was that digression about North African countries writing in French? That really should have been edited out.

Most carriers operate both Airbus and Boeing. Low cost carriers have less diversity and operate either 737s or A300s. Southwest is the only airline I can think of that would have their hand forced in this way.

Also there’s less downside risk for OpenAI. Google has layers of approvals and risk committees because they don’t want to put the money machine at risk through litigation, reputation or regulation. OpenAI has nothing to lose—this is their only game. That allows them to toe the line of what’s acceptable like Uber in its early years. With all the copyright risk involved, that’s a big deal.

Yes! And aggressively enforce your software license agreements with frequent audits.

Anything to make money other than innovating and actually building better products.

It’s not that different from software focused private equity shops like Thoma Bravo. Buy a software company, starve it of resources, and price just below each clients BATNA. Revenue may decline over time, but costs fall faster and the buyer harvests that premium. There’s no synergies, just a willingness to be more ruthless and give fewer shits.

Edit: clarity

Sorry that was probably an overly snarky response on my part. Stripes product is actually aimed at merchants so two steps removed anyway.