Every bubble goes through this phase just before it pops. Pre-implosion Twitter had tons of folks doing useless “research” projects, WeWork had folks studying furniture design’s impact on wellbeing, and so on.
When you’re more worried about this sort of stuff vs generating profit then the history books strongly indicate that’s usually not a good omen of what’s coming next.
Not OP but I think the most obvious change will be rapid price increases as investors begin to demand profits - no more subsidised $20p/m plans for example.
So far I know, service providers hosting open-weight models are not in such a financial conundrum and can continue serving at the current price levels.
Also, even if the 20 dollar subs disappear, that just means regular folks can't afford AI. API pricing is still a great bargain for businesses replacing generic office workers.
Probably not. They aren't paying sustainable prices for their supply chain.
1. Datacenter builders are all up to their eyeballs in debt. The companies serving open weight models are getting their GPUs and power from somewhere, and we can infer that some of that is coming from the new build datacenters. But are those financially sustainable?
2. They are relying on subsidized giveaways of the underlying models by Chinese firms. But it's hard to see how that can be sustainable: it's being done for a reason and that reason is probably not commercial. If and when China stops doing this the open weight serving companies will get steadily less competitive with every passing month as the knowledge in the weights becomes obsolete.
Labs are innovating to bring token prices down. You can already see the focus shifting from frontier intelligence to frontier efficiency. Not to say models aren't improving, but improvement is slowing while token efficiency is increasing rapidly.
Commodified products competing on price does not bode well for valuations.
cmiles8 · · focus · HN ↗
When you’re more worried about this sort of stuff vs generating profit then the history books strongly indicate that’s usually not a good omen of what’s coming next.
bonoboTP · · focus · HN ↗
ymhr · · focus · HN ↗
bonoboTP · · focus · HN ↗
Also, even if the 20 dollar subs disappear, that just means regular folks can't afford AI. API pricing is still a great bargain for businesses replacing generic office workers.
mike_hearn · · focus · HN ↗
1. Datacenter builders are all up to their eyeballs in debt. The companies serving open weight models are getting their GPUs and power from somewhere, and we can infer that some of that is coming from the new build datacenters. But are those financially sustainable?
2. They are relying on subsidized giveaways of the underlying models by Chinese firms. But it's hard to see how that can be sustainable: it's being done for a reason and that reason is probably not commercial. If and when China stops doing this the open weight serving companies will get steadily less competitive with every passing month as the knowledge in the weights becomes obsolete.
Opinions are my own, etc.
gradus_ad · · focus · HN ↗
Commodified products competing on price does not bode well for valuations.