I found the OP insightful and worth a read. Thank you for sharing it on HN.
The only aspect that is poorly analyzed by the OP is business model viability. All players are investing insane amounts of money in infrastructure with the expectation that their future profits will justify all that investment. The winner or winners in the AGI race, they believe, will find the proverbial "pot of gold at the end of the rainbow."
The OP glosses over questions of business model viability with a brief qualitative discussion and very little hard data. For example, to earn an annual return > 10% on every trillion dollars of capital sunk into infrastructure, the owners of that infrastructure must earn free cash flow (operating profit less investment) in excess of $100 billion per year in perpetuity. Is that feasible? Why? How?
I think the article's analysis is basically right in a vacuum. That is, I think it's clear that inference is a viable business model. But what isn't clear is whether it will be such a profitable business model for any given company that it will justify the investment that company has taken. I kind of think the winners might be a follow-on generation of companies that focus on this commodity inference business model instead of the invent-machine-god-first "business model" and thus are wiser about their level of investment and capital costs.
> I think it's clear that inference is a viable business model.
You may be right. I'm not so sure. Inference looks like a viable business model for those operators that have SOTA infrastructure in place, but the investment required to have it is enormous, and appears to be never-ending, because if an operator stops investing aggressively, its infrastructure quickly becomes non-competitive, and customers will quickly leave for alternatives. SOTA infrastructure is a moving target.
Renting out compute is a viable business model. That's part of what the big and the small cloud providers do. It's just (on its own) not a "get rich quick" business model anymore.
Why would it be any different for inference? If we believe OP, it'll just become part of regular compute infra, and thus part of the renting-out-compute business model.
I think it's an open question if the current generation of inference investment will pan out, but in the long term, there'll be a balance between investment cost and margin, just as in every other industry.
cs702 · · focus · HN ↗
The only aspect that is poorly analyzed by the OP is business model viability. All players are investing insane amounts of money in infrastructure with the expectation that their future profits will justify all that investment. The winner or winners in the AGI race, they believe, will find the proverbial "pot of gold at the end of the rainbow."
The OP glosses over questions of business model viability with a brief qualitative discussion and very little hard data. For example, to earn an annual return > 10% on every trillion dollars of capital sunk into infrastructure, the owners of that infrastructure must earn free cash flow (operating profit less investment) in excess of $100 billion per year in perpetuity. Is that feasible? Why? How?
The OP does not really consider such questions.
sanderjd · · focus · HN ↗
cs702 · · focus · HN ↗
You may be right. I'm not so sure. Inference looks like a viable business model for those operators that have SOTA infrastructure in place, but the investment required to have it is enormous, and appears to be never-ending, because if an operator stops investing aggressively, its infrastructure quickly becomes non-competitive, and customers will quickly leave for alternatives. SOTA infrastructure is a moving target.
perlgeek · · focus · HN ↗
Why would it be any different for inference? If we believe OP, it'll just become part of regular compute infra, and thus part of the renting-out-compute business model.
I think it's an open question if the current generation of inference investment will pan out, but in the long term, there'll be a balance between investment cost and margin, just as in every other industry.