Thread

1. ryanschaefer · 1790190580 · focus · HN ↗

   I’m confused why AI companies are using agents in-house for this type of research instead of partnering externally.

   I guess the improvement loop is tighter and they have more control over how discoveries can be used for marketing?

   But, in my mind, it begins to feel like they are setting themselves up to be “everything” companies instead of focusing on their core product…

   1. Insanity · 1790190735 · focus · HN ↗

      Because their core product is not a long-term sustainable business strategy. Local hardware and models will continue to improve to the point of not needing the hosted solutions. And if you do need a hosted solution, remember that the big cloud providers already offer these solutions, so signing up for OpenAI/Anthropic _and_ AWS/GCP/Azure is not a sound business decision compared to just signing up with 1 of them that offers your cloud infra + GenAI infra. (Which is why the long-term benefits for cloud companies will probably be for the likes of AWS and not the likes of OpenAI).

      They'll continue to burn money for marginal model improvements in the next few years all the while having no moat _and_ having Open-Weight / Local models eat their lunch.

      The only way for them to stay relevant as a company is to expand beyond simply providing the models.

      1. beachy · 1790191102 · focus · HN ↗

         I'm old enough to remember the arrival of RDBMS, once IBM primed the space with DB2.

         There was a pitched battle over features like row-level locking as competitors like Sybase, Ingress and Oracle scrapped it out. New features arrived on a monthly cadence, with immense engineering effort behind them. The winners (Oracle mostly) won a great moat which led to them to where they are today.

         The fact that so many AI companies can produce amazing coding tools so quickly shows there is no moat, supporting your theory.

         1. dormento · 1790192035 · focus · HN ↗

            The AI companies moat, if any, is hoarding all the hardware so local solutions are no longer cost-effective.

            1. PowerElectronix · 1790192263 · focus · HN ↗

               That is impossible to fund. At some point someone will decide to stop throwing money on the firepit that's the current business model and then hardware prices crash back to earth as 60-70% of the global demand disappears overnight.

               1. Joel_Mckay · 1790192763 · focus · HN ↗

                  There is also the energy constraints, as people are already not happy paying 50% more to subsidize some data center wonks demands. =3
            2. Joel_Mckay · 1790192649 · focus · HN ↗

               It is more of a regulatory capture byproduct to prop up an artificial token driven Ponzi scheme.

               There is a serious alternative to NVIDIA "AI" hardware dropping out of China in February 2027. There is no moat, but a whole lot of unpaid debts in the near future.

               Popcorn ready =3

               1. Insanity · 1790193698 · focus · HN ↗

                  Which Chinese alternative is that?

                  1. Joel_Mckay · 1790194572 · focus · HN ↗

                     Huawei is upgrading its Ascend 950PR (2.8 times an Nvidia H20 performance.)

                     <a href="https:&#x2F;&#x2F;apnews.com&#x2F;article&#x2F;huawei-ai-chips-nvidia-superpod-technology-26ab418df1339c518483918218ffbe57" rel="nofollow">https:&#x2F;&#x2F;apnews.com&#x2F;article&#x2F;huawei-ai-chips-nvidia-superpod-t...

                     Take it lightly until the benchmarks drop. ymmv =3

                     1. munksbeer · 1790198128 · focus · HN ↗

                        I honestly have no expert knowledge about this stuff. What I say is based only on intuition.

                          - China is heavily, heavily incentivised to enhance their own chip making
                          - Looking at the rate Chinas has expanded into just about every single other
                            space, and from quantity to quality, I just think it is impossible that they
                            don't compete on equal grounds pretty soon.
                          - I don't buy the insurmountable moat of TSMC

                        1. Joel_Mckay · 1790203641 · focus · HN ↗

                           &gt;I don&#x27;t buy the insurmountable moat of TSMC

                           Very wise, energy constraints are already feeding the hyper-scale gamblers their own hubris. =3

                     2. beachy · 1790198485 · focus · HN ↗

                        Reminiscent of tank warfare in WW2. The soviet T-34 was not remarkable in any particular way, but the sheer volumes it was produced in made it a very serious enemy to German tanks. As Stalin said &quot;quantity has a quality all of its own&quot;.
            3. xdertz · 1790194385 · focus · HN ↗

               This is not really sustainable when there is a constant supply of increasingly powerful and efficient hardware.

               1. twoodfin · 1790198686 · focus · HN ↗

                  Right: Capital markets know how to efficiently turn dollars into tokens, even if it means tens of billions invested in new DRAM fabs.
               2. HappMacDonald · 1790208235 · focus · HN ↗

                  The hardware miniaturization gains have finally dried up, though.

                  I am pretty certain that the current state of the art silicon feature size won&#x27;t shrink again for at least another decade or two.

                  It normally takes about a decade to mature a tech which can create a smaller feature size into something commercially viable for mass production scale, and no further improvements have been in the pipeline for that long now.

                  So it&#x27;s like the &quot;next piece&quot; indicator while playing Tetris is just blank.

Unofficial Hacker News client; not affiliated with Y Combinator.