Whatsapp messages are incredibly cheap, while AI queries are expensive to the point nobody wants to pay the actual price of it.
And where is that new industrial revolution? AI revenues are abysmal, costs are astronomical, the integration into our way of working is massively unprofitable, conversion rates are microscopic both in the consumer and enterprise spaces, while even paid users cost a lot of money to companies.
My point is, OpenAI has been around for a decade, the original LLM papers for 8 years, ChatGPT for three years. There is no evidence it’s going to even break even, much less be a “new industrial revolution”. Research shows using AI does not speed up, and in some cases actually slows down work.
And the problem is, the VC money that can fund the kind of loss leaders you are speaking of is going to run out in six quarters. I don’t mean that OpenAI has a six quarter runway, I mean the whole of the US venture capital sector has that. There is literally no time left for anything that is only “going to be”. This is it. All of it.
That industrial revolution should have come already, at this point this thing is a flop like the Metaverse, only difference it’s a much bigger crater.
I use AI daily for work and my usage is growing steadily. I partially automated some stuff and it completely changed how we search knowledge. In a year I may flip it from me driving AI to AI notifying me when my input is needed.
I saw people wiring an LLM to chat with their shell. It sounds a silly exercise but it allows anyone to work with a terminal.
According to some reports AI also dramatically lowered the entry barrier to perform classic cyberattacks and there are the first cases of AI fishing.
It’s pretty wild already and much more advanced than one year ago.
That industrial revolution should have come already
I use AI daily for work and my usage is growing steadily. I partially automated some stuff and it completely changed how we search knowledge. In a year I may flip it from me driving AI to AI notifying me when my input is needed.
Okay, but since subscriptions for foundation models will have to go up at least ten to fiftyfold since it’s not profitable, how much money have you made with it? Is your convenience worth a few grand per month? Are there enough people like that to pay for this? And it’s not a hypothetical, the United States is running out of money to give OpenAI to fuck around in like 6 financial quarters.
I saw people wiring an LLM to chat with their shell. It sounds a silly exercise but it allows anyone to work with a terminal.
Yeah that works until it doesn’t and it breaks the computer. Still, how much money have people made with this?
Do you ever think that maybe you are missing it?
It really doesn’t matter what I do. I got a subscription for a year for one of the chatbots as a freebie with my credit card. I’ve used it a lot for internet search. It’s useful. I would pay maybe 2-5 EUR a month for it if the company was decent and would provide first class support for my use cases, like a Linux app, which it doesn’t. I got a local model running, which is useful, I might keep it.
But that’s beside the point. An industrial revolution means that a company using this thing is significantly more efficient than one that doesn’t. So where is that one company that this is true for? And please, spare me the CEOs bullshitting, I’m asking for numbers. Who is going to make a trillion with this next year? Because otherwise OpenAI and Anthropic is dead, and FAANG stocks are going to go down like 30%, taking the market with them.
And I’m still going to run my little local model, which does not mean that AI is going to be bigger business in a few years than selling microwaves. They are also useful, even ubiquitous, but they are not “an industrial revolution” and nobody is claiming “you are missing the microwave revolution” or that “every company is a microwave company”.
You seem pretty sure of your position and nothing I can say will change your mind. Maybe you’re right and lots of people like me are wrong. Quite frankly it would be massively surprising if all these investments, research, and product development ended in nothing especially with this rate of adoption, but hey… it’s not impossible, just very unlikely (IMHO ofc) 👋
Of course it won’t end up with nothing. Me and you will still use LLMs on our desktops, and make stuff with it.
All I’m saying is that Jen from accounts receivable won’t be using LLMs in Excel sheets, because on the one hand it’s stupid and on the other hand it’s not economical. And if that’s true, then the current hype will result in an equivalently sized crater in the US economy.
And I’m saying this especially because the rate of adoption is unsustainable, we can’t pay for so many people to use this tech for so little, it either has to do much, much more or be adopted much, much less. I only expect that gap to close, and the fear is that it will close with a lot of force.
Yeah but if Jen’s work does not change, then where is the revolution? All previous revolutions moved Jen around, from the fields to the assembly line, then from the assembly line to the office, then from the office to a computer and arguably home.
How does Jen using Excel and using an LLM to calculate something in the books a “revolution”? And where is it happening then? Whose work has gotten “revolutionized”? What is actually going to happen if it hasn’t already? Like precisely?
And yeah, cost per token is dropping, but since all progress in the past year at least has increased tokens per query, cost per query is actually going up. And we can’t even be sure that the actual cost per token is going down, since OpenAI can set any price at this point, since it is losing money either way. We don’t know the cost per token, only the price per token.
Again, how is this different to the invention of the microwave? What makes it “revolution”-scaled, other than the money sunk into it?
Jen’s job will change. In some cases it will disappear just like technology replaced Jen’s grandma who was a centralist.
Okay, but when? Studies show that Jen’s job has not changed yet at all so far. What’s needed for it to change?
It’s in terms of impact. The microwave made it possible to heat food in an office. AI may make the same office obsolete.
How specifically?
The combined total yearly revenue of the AI industry is by a generous estimate around five billion. That is less money that Mario Kart 8 made in revenue. And we didn’t need to restart nuclear reactors to run Mario Kart 8.
And that revenue is mostly made by OpenAI, mostly by selling to Microsoft, which basically owns it, so one might ask, how does that even count.
Whatsapp messages are incredibly cheap, while AI queries are expensive to the point nobody wants to pay the actual price of it.
And where is that new industrial revolution? AI revenues are abysmal, costs are astronomical, the integration into our way of working is massively unprofitable, conversion rates are microscopic both in the consumer and enterprise spaces, while even paid users cost a lot of money to companies.
My point is, OpenAI has been around for a decade, the original LLM papers for 8 years, ChatGPT for three years. There is no evidence it’s going to even break even, much less be a “new industrial revolution”. Research shows using AI does not speed up, and in some cases actually slows down work.
And the problem is, the VC money that can fund the kind of loss leaders you are speaking of is going to run out in six quarters. I don’t mean that OpenAI has a six quarter runway, I mean the whole of the US venture capital sector has that. There is literally no time left for anything that is only “going to be”. This is it. All of it.
That industrial revolution should have come already, at this point this thing is a flop like the Metaverse, only difference it’s a much bigger crater.
I use AI daily for work and my usage is growing steadily. I partially automated some stuff and it completely changed how we search knowledge. In a year I may flip it from me driving AI to AI notifying me when my input is needed.
I saw people wiring an LLM to chat with their shell. It sounds a silly exercise but it allows anyone to work with a terminal.
According to some reports AI also dramatically lowered the entry barrier to perform classic cyberattacks and there are the first cases of AI fishing.
It’s pretty wild already and much more advanced than one year ago.
Do you ever think that maybe you are missing it?
Okay, but since subscriptions for foundation models will have to go up at least ten to fiftyfold since it’s not profitable, how much money have you made with it? Is your convenience worth a few grand per month? Are there enough people like that to pay for this? And it’s not a hypothetical, the United States is running out of money to give OpenAI to fuck around in like 6 financial quarters.
Yeah that works until it doesn’t and it breaks the computer. Still, how much money have people made with this?
It really doesn’t matter what I do. I got a subscription for a year for one of the chatbots as a freebie with my credit card. I’ve used it a lot for internet search. It’s useful. I would pay maybe 2-5 EUR a month for it if the company was decent and would provide first class support for my use cases, like a Linux app, which it doesn’t. I got a local model running, which is useful, I might keep it.
But that’s beside the point. An industrial revolution means that a company using this thing is significantly more efficient than one that doesn’t. So where is that one company that this is true for? And please, spare me the CEOs bullshitting, I’m asking for numbers. Who is going to make a trillion with this next year? Because otherwise OpenAI and Anthropic is dead, and FAANG stocks are going to go down like 30%, taking the market with them.
And I’m still going to run my little local model, which does not mean that AI is going to be bigger business in a few years than selling microwaves. They are also useful, even ubiquitous, but they are not “an industrial revolution” and nobody is claiming “you are missing the microwave revolution” or that “every company is a microwave company”.
You seem pretty sure of your position and nothing I can say will change your mind. Maybe you’re right and lots of people like me are wrong. Quite frankly it would be massively surprising if all these investments, research, and product development ended in nothing especially with this rate of adoption, but hey… it’s not impossible, just very unlikely (IMHO ofc) 👋
Of course it won’t end up with nothing. Me and you will still use LLMs on our desktops, and make stuff with it.
All I’m saying is that Jen from accounts receivable won’t be using LLMs in Excel sheets, because on the one hand it’s stupid and on the other hand it’s not economical. And if that’s true, then the current hype will result in an equivalently sized crater in the US economy.
And I’m saying this especially because the rate of adoption is unsustainable, we can’t pay for so many people to use this tech for so little, it either has to do much, much more or be adopted much, much less. I only expect that gap to close, and the fear is that it will close with a lot of force.
Jen from accounts will not know she’s using an LLM. This is the part you don’t get.
Also the cost per token is dropping. Just like any technology, it’s being optimised.
Yeah but if Jen’s work does not change, then where is the revolution? All previous revolutions moved Jen around, from the fields to the assembly line, then from the assembly line to the office, then from the office to a computer and arguably home.
How does Jen using Excel and using an LLM to calculate something in the books a “revolution”? And where is it happening then? Whose work has gotten “revolutionized”? What is actually going to happen if it hasn’t already? Like precisely?
And yeah, cost per token is dropping, but since all progress in the past year at least has increased tokens per query, cost per query is actually going up. And we can’t even be sure that the actual cost per token is going down, since OpenAI can set any price at this point, since it is losing money either way. We don’t know the cost per token, only the price per token.
Again, how is this different to the invention of the microwave? What makes it “revolution”-scaled, other than the money sunk into it?
Jen’s job will change. In some cases it will disappear just like technology replaced Jen’s grandma who was a centralist.
It’s in terms of impact. The microwave made it possible to heat food in an office. AI may make the same office obsolete.
Okay, but when? Studies show that Jen’s job has not changed yet at all so far. What’s needed for it to change?
How specifically?
The combined total yearly revenue of the AI industry is by a generous estimate around five billion. That is less money that Mario Kart 8 made in revenue. And we didn’t need to restart nuclear reactors to run Mario Kart 8.
And that revenue is mostly made by OpenAI, mostly by selling to Microsoft, which basically owns it, so one might ask, how does that even count.