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I enjoyed Sabine’s analysis in another video that continuing to make increasingly larger models with more compute is about as effective as continuing to make larger and larger particle accelerators. Come on, bro, this million km Gigantic Hadron Collider will finally get us to the TOE. Just one more trillion, bro.
Every particle accelerator that has been built has paid for itself in research value. There’s basically nothing that comes out of AI research except the need for a bigger model.
The comparison is poor. Particle accelerators are science, LLMs do not produce science.
That’s not to say that we couldn’t build LLMS that would be useful for scientific purposes but we’re not. That is not the function or the goal of the people building these things.
Not really my area of expertise, but this article lays out her perspective on this for anyone who isn’t aware: https://www.scientificamerican.com/article/the-world-doesnt-need-a-new-gigantic-particle-collider/
TL;DR - Many times the cost of the LHC and unlike the LHC, the gains are likely to be incremental instead of revolutionary. The same funding could do much more good elsewhere.
To your point, agreed that even small, incremental gains for science are more valuable than what we are likely to get from AI.
And then AI will just go away and everything will go back to normal again, yes? It’ll suddenly stop working and so people will stop using it for all the things they’re currently using it for.
consider the Dot Com Bubble: the internet obviously didn’t disappear but that doesn’t mean there weren’t serious economic consequences.
ELI5. Because I was actually 5 when that happened.
The dot-com bubble? A whole bunch of investment money was poured into businesses operating over the Internet from around the time dial-up became widely available. A few years later, investors realized that “on the Internet” wasn’t necessarily the key to making a crapton of money and the stock market crashed. A bunch of companies (many of which never made it to profitability) went under, and a fair number of people lost their jobs. Pets.com was one of the more notable victims.
This doesn’t, however, mean that no business is done over the Internet today.
people will stop using it for all the things they’re currently using it for
They will when AI companies can no longer afford to eat their own costs and start charging users a non-subsidized price. How many people would keep using AI if it cost $1 per query? $5? $20?
OpenAI lost $5 billion last year. Billion, with a B. Even their premium customers lose them money on every query, and eventually the faucet of VC cash propping this whole thing up is gonna run dry when investors inevitably realize that there’s no profitable business model to justify this technology. At that point, AI firms will have no choice but to pass their costs on to the customer, and there’s no way the customer is going to stick around when they realize how expensive this technology actually is in practice.
I remember this happening with Uber too. All that VC money dried up, their prices skyrocketed, people stopped using them, and they went bankrupt. A tale as old as time.
A lot of those things have a business model that relies on putting the competition out of business so you can jack up the price.
Uber broke taxis in a lot of places. It completely broke that industry by simply ignoring the laws. Uber had a thing that it could actually sell that people would buy.
It took years before it started making money, in an industry that already made money.
LLMs Don’t even have a path to profitability unless they can either functionally replace a human job or at least reliably perform a useful task without human intervention.
They’ve burned all these billions and they still don’t even have something that can function as well as the search engines that proceeded them no matter how much they want to force you to use it.
There are free open models you can go and download right now, that are better than SOTA 12-18 months ago, and that cost you less to run on a gaming PC than playing COD does. Even if openai, anthropic et al disappeared without a trace tomorrow AI wouldnt go away.
And those are useful tools, which will always be around. The current “AI” industry bubble is predicated on total world domination by an AGI, which is not technically possible given the underpinnings of the LLM methodology. Sooner or later, the people with the money will realize this. They’re stupid, so it may take a while.
I run local LLMs and they cost me $0 per query. I don’t plan to charge myself more than that at any point, even if the AI bubble bursts.
Realy? I get what you want to say, but at least the power consumption of the machine you need the model to run on will be yours forever. Depending on your energy price it is not 0 per query.
It’s so near zero it makes no difference. It is not a noticeable factor in my decision on whether to use it or not for any given task.
The training of a brand new model is expensive, but once the model has been created it’s cheap to run. If OpenAI went bankrupt tomorrow and shut down the models it had trained would just be sold off to other companies and they’d run them instead, free from the debt burden that OpenAI accrued from the research and training costs that went into producing them. That’s actually a fairly common pattern for first-movers like that, they spend a lot of money blazing the trail and then other companies follow along afterwards and eat their lunch.
It’s cheap to run for one person. Any service running it isn’t cheap when it has a good number of users.
That’s great if they actually work. But my experience with the big, corporate-funded models has been pretty freaking abysmal after more than a year of trying to adopt them into my daily workflow. I can’t imagine the performance of local models is better when they’re running on much, much smaller datasets and with much, much less computing power.
I’m happy to be proven wrong, of course, but I just don’t see how it’s possible for local models to compete with the Big Boys in terms of quality… and the quality of the largest models is only middling at best.
You’re free to not use them. Seems like an awful lot of people are using them, though, including myself. They must be getting something out of using them or they’d stop too.
Just because a lot of people are using them does not necessarily mean they are actually valuable. You’re claim assumes that people are acting rationally regarding them. But that’s an erroneous assumption to make.
People are falling in “love” with them. Asking them for advice about mental health. Treating them like they are some kind of all-knowing oracle (or even having any intelligence whatsoever), when in reality they know nothing and cannot reason at all.
Ultimately they are immensely effective at creating a feedback loop that preys on human psychology and reinforces a dependency on it. It’s a bit like addiction in that way.
Yes, just like the internet died after the dotcom bust.
I highly doubt it will, but I would not be sad if it did.
If the last 5 years has taught me anything, it is that stock prices are completely divorced from the realities of the fundamentals of business. It is a clown economy and more like a casino then an honest measure of what a stock is worth. Especially with tech.
AI is way overhyped, to a level we perhaps have never seen before, but I would not expect the stock prices too reflect that.
Look at Tesla. The intrinsic value was no more than 10 billion before he started sieg heiling on national TV and alienated half of the western world.
What will continue to drive the stock prices is the support or acquiescence of governments to it. Do you the United States and the rest that follow.
Look at Tesla. The intrinsic value was no more than 10 billion before he started sieg heiling on national TV and alienated half of the western world.
My conspiracy theory is that Musk gave multiple investors billions of his personal cash to invest in Tesla stock at key moments. He tells his straw purchasers when to buy hundreds of millions worth of stock in order to pump the price and kill those who short the stock. This scares the shorters out of the market and ultimately removes a natural source of downward pressure on the price. They sell off what they purchase all at once relatively slowly so they can then do it again.
I had a similar sort of thought but figured it was an automated thing, where they would buy or sell to manipulate the market price with the fund removed from the owners of stock.
Something like that could have made a fortune as the stock price was gaining and as such been able to manipulate the shit out of the stock price and fuck short Sellers and everything.
but I would not expect the stock prices too reflect that.
Agreed. One rule of the stock market is that while it might theoretically rely on sound fundamentals, it can stay irrational longer than you (or anyone) can stay solvent. It will inevitably fall screaming towards reality eventually, but there’s no guarantee it will happen within any reasonable timeframe and expecting it to is dangerous. It’s a rigged casino, the house always wins, and when they don’t their goons will grab you when you try to leave. At this point the billionaires own pretty much the entire house, and their goons are running the world’s largest military and police state. “Invest” at your own risk.
I think there is a fundamental difference now, the government has bailed out stocks twice in 2008 and 2020. Moved Heaven and Earth with the fed and indirect injections of capital to prevent the rich from losing money. So these stock prices reflect tax dollars billing them out in the downturn.
Why bother worrying about the downturn if the world bends over backwards to stop you hitting the ground?
It is basically impossible for Visa to go bankrupt, for example. The moment the threat looms, governments are going to leap in and save them. They’re too big to fail.
Serious question. With inflation absolutely exploding everywhere, stock market being what you just described here, and property ownership being virtually impossible due to big corpos gulping everything up: how is anyone supposed to prevent their money from melting away nowadays?
I’m actually wondering if we’re headed towards a deflationary event. I don’t think the underlying customer base can support a lot of the prices now as wages have stayed well below inflation, plus I believe some of the inflation is artificial profit taking. Oil is half the price it was a few years ago, so transportation of goods should be a lot cheaper. Energy as a whole has been getting cheaper too as new renewable generation comes online, so those costs come down too.
The economists would think some deflation would be the worst thing ever, but the inflation spike of the last few years doesn’t seem to have a solid foundation.
I moved all my 401k monies into international funds several months back. I’m killing it on my returns. I am not a financial advisor, however. (Not that I think most of them aren’t buffoons)
I offshored about half of my holdings, maybe Europe won’t go down with the ship.
Planner wasn’t happy the money left her firm but I got a real, “I get it” vibe. It did cost me some value in fees but I managed to do it right before I hurt my back and can’t work so what’s done is done.
May I ask what kind of returns percentage you are seeing?
The price isn’t based on what the company is worth, it’s based on what people think the company will be worth in the future. Clearly, a lot of people believe that truly autonomous vehicles are just around the corner, and AI is going to revolutionise everything.
They’re most likely wrong, but it will take a long time for the market to accept that.
No rational person would think that Tesla would command the majority of that market of autonomous vehicles, robots, or whatever. Especially not after their Flagship truck turned out to suck in like 20 different ways.
As someone on r/Wallstreetbets once said, I can stay irrational longer than you can stay solvent.
it’s based on what people think the company will be worth in the future
Not a single person in their right mind thinks that Tesla will ever be worth its current $1.3T market cap. Stock price is based on whether the market movers (not you or I) think that the price will be higher or lower a few weeks/months from now, that’s it. The actual intrinsic value/worth of the company makes no difference.
As someone on r/Wallstreetbets once said, I can stay irrational longer than you can stay solvent.
There’s enough people who genuinely believe the company is worth that to keep the value high for a very long time.
There’s enough people who genuinely believe the company is worth that to keep the value high for a very long time.
I don’t think there are. I just think there are a lot of people who believe they’re going to be able to get in and out before the Tesla bubble pops. Actual, realistic value of the company has nothing to do with it.
“greater fool” theory. Just gotta get out and leave someone else holding the bag. Easy to see with crypto rugpulls.
That’s also a possibility.
You’re correct about how the stock price works, but I’d go even further to add that it’s also based on what a small percentage of very wealthy people/funds want it to be at the time. The markets are so insanely easy to manipulate by them.
As for the rest, it’s almost certain that you’re the one that’s wrong - autonomous vehicles are absolutely the future. They could essentially end road fatalities, as well as allow commute time to be included as work hours as people could work while being driven to work, passive income via auto-taxi etc.
AI/LLM/etc, there’s zero doubt here that it is going to - if it hasn’t already, which I’d argue it already has - revolutionise the world. It’s already completely changing many industries beyond belief, and its uses and “intelligence” is already growing exponentially. It’s just the cool thing to hate by anti-capitalists/lefties because of various reasons, and make no mistake - the anti-AI people, and the people who think it’s just a fad or that it’s overrated, will be looked at like the people who thought of cars in the same way.
What we have now is like the DOS of AI and self driving cars compared to the Windows XP/7/11 versions that are coming, but the detractors are acting like it’s the finished product and will never improve. It’s here to stay, and what we have now is only scratching the surface.
For those of us who have been around the block a few times, AI is going to just be invisible in a few years, replaced by the new marketing buzzword, probably “Quantum”.
Source: Seen it before when the word was “Cloud”. Oh, it’s all in the Cloud! Cloud, cloud, cloud.
Before that it was “Virtualization”. It’s going to make everything more efficient!
Man, I need to make an AI powered quantum cloud virtualization.
Quantum entangled communications that are impossible to evesdrop on exist now, cloud computing is the money machine that allows Amazon to keep expanding, virtualisation is used by effectively every company using computers at scale. (blockchain, I’ll admit, was pretty much all hype and vapourware other than laundering drug money and allowing speculation)
Just because there is marketing hype around a term doesnt mean there isnt anything of value there.
With Shiller PE at 40x, only fools are investing into the market right now. History will be the judge again in due time. It’s a repeat of the 1920s.
Where do you invest then? Because keeping all cash sounds bad at the moment too.
I’ve committed a substantial amount into copper in my retirement account.
As far as spare cash, I’m just investing it into my 2 houses.
Yeah, but how much higher will it go before it falls. Also, what are you doing with $$ you would otherwise be investing?
I don’t know what to feel about “AI is gonna burst” is the new clickbait title for… like a few months now.
The “what” is inevitable, the “when” is the real unknown. Governments and financiers can delay things for an impressive amount of time but the other shoe must inevitably drop, and often it’s all the worse for the amount of time it was held off.
It’s what lots of people really want to have happen, so headlines that say it’s going to happen are going to be extremely popular.
Man… I don’t know if want is the right word here. I want AI to go away, but I’m not sure I want the bubble to burst. I’ve heard estimates that something like 20% of all VC money went to AI in 2024. That’s a shitload of cash, and if the bubble bursts (which I believe it eventually will) and all that invested money vanishes, the economy is going to crater. Maybe a few rich assholes will be ruined in the aftermath, but the ensuing recession is going to hurt the people at the bottom the most… just like it always does.
It’s hard to look forward to that, even when you hate AI with a searing passion.
all that invested money vanishes
Well it’s mostly going directly to the hardware vendors (Nvidia) and infrastructure providers (Amazon AWS, Microsoft Azure, Google Cloud et al.).
