Thread

1. ocd · 1790861971 · focus · HN ↗

   I'm not a business guy, but I think I would be very worried if I created any opening (even on the very long term) for competition to justify itself being built up to meet demand (or national security requirements of other countries) on an industry I mostly control, because I prioritized extremely high prices for a few years that might have the effect of changing the arithmetic for potential competitors that wouldn't have done it before.

   It makes me consider whether there would be retaliation in later years against the US intellectual property system in countries other than China. While RAM is a tangible product, the areas it serves aren't really.

   1. segmondy · 1790863958 · focus · HN ↗

      Or it just be that demand really does seriously exceed supply. It's not fast to bring supply online, it's costly and risky to do so if the demand will not be sustained for a long time. IMO, there's no conspiracy. I have been telling folks for the last 3 years that the price of AI compute is not coming down for a good 5+ years. Possibly 10 years too. Every human in the world will need AI, the same way we all got on the internet and then mobile. However, outside of humans, for every human there's going to be ten or hundreds of agents also all demanding compute.

      1. HarHarVeryFunny · 1790869392 · focus · HN ↗

         > I have been telling folks for the last 3 years that the price of AI compute

         What does that even mean ?

         The cost of AI itself (tokens/$ for a given level of intelligence) has been falling rapidly, and shows no sign of stopping.

         1. ShinyLeftPad · 1790871154 · focus · HN ↗

            they operate at a loss (they pretend to profit by excluding key costs in financial reports). they won't do it forever.
         2. segmondy · 1790873117 · focus · HN ↗

            What is the cost of AI tokens? You can't just calculate cost of inference. There is a cost to train, there is a cost for staff to build it all, the money investors provided for it all. When you run a business, all those costs must be recovered. Sure, it takes $2 in material cost to make a pizza, but what's the cost of pizza? You have to take into account, energy, rent, staff, insurance, and profit too. Tokens/$ is subsidized if you are talking about APIs

            1. HarHarVeryFunny · 1790875341 · focus · HN ↗

               The big AI companies like OpenAI and Anthropic may have rushed into it too fast, and in effect wasted a lot of money on early model generations that never paid for themselves, early model architectures that were not cost-efficient, experiments that never panned out, etc.

               The AI pure-play companies like OpenAI and Anthropic are presumably in worst financial position, since others like Google, Microsoft, Amazon and Meta (also Alibaba, Baidu, Bytedance, Tencent, Xiaomi) have generally been more conservative and are treating AI as an incremental revenue source not a highly leveraged all-in bet.

      2. pjc50 · 1790869620 · focus · HN ↗

         > Or it just be that demand really does seriously exceed supply. It's not fast to bring supply online, it's costly and risky to do so if the demand will not be sustained for a long time

         This is exactly it. There's a lot of conspiracy theory in this thread without realizing that it's just what happens when an insanely large amount of capital is deployed: market distortion.

         It's not just RAM, it's things like gas turbines and power transformers. I've seen suggestions that it's even affecting housing starts because the construction effort is pulling in workers, especially electricians.

         However unlike you I'm not of the opinion that all that can be built, in that short timeframe. Even less so that it can be operated without pushing us over the 2C global warming threshold.

         1. fragmede · 1790885814 · focus · HN ↗

            Aren't we already at 2.5 C?

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