There is another factor in this which often gets overlooked. A LOT of the money invested right now is for the Nvidia chips and products based around them. As many gamers are painfully aware, these chips devalue very quickly. With the progress of technology moving so fast, what was once a top of the line unit gets outclassed by mid tier hardware within a couple of years. After 5 years it’s usefulness is severely diminished and after 10 years it is hardly worth the energy to run them.
This means the window for return on investment is a lot shorter than usual in tech. For example when creating a software service, there would be an upfront investment for buying the startup that created the sofrware. Then some scaling investment in infrastructure and such. But after that it turns into a steady state where the input of money is a lot lower than revenue from the customer base that was grown. This allows to get returns on investment for many years after that initial investment and growth phase.
With this Ai shit it works a bit different. If you want to train and run the latest models in order to remain competitive in the market, you would need to continually buy the latest hardware from Nvidia. As soon as you start running on older hardware, your product would be left behind and with all the competition out there users would be lost very quickly. It’s very hard to see how the trillions of dollars invested now are ever going to be recovered within the span of five years. Especially in a time where so much companies are dumping their products for very low prices and sometimes even for free.
This bubble has to burst and it is going to be bad. For the people who were around when the dotcom bubble burst, this is going to be much worse than that ever was.
skisnow@lemmy.ca 14 hours ago
A lot of startups whose entire business model relies on OpenAI’s small model API calls costing under $1/Mtok, are going to go bust when OpenAI finally runs out of money and ramps the cost up tenfold.
mojofrododojo@lemmy.world 14 hours ago
good point, it’s all been artificially priced to get users onboard then dedicated.
pfizer_dose@lemmy.world 14 hours ago
Yep it’s blitzscaling. Run it at a loss until it’s a necessity, then charge whatever the hell you want. They’re blitzscaling our right to intellectual property and our right to work.
Korhaka@sopuli.xyz 12 hours ago
How does it impact your right to work?
mojofrododojo@lemmy.world 12 hours ago
TIL there’s a word for it. Thanks
Tollana1234567@lemmy.today 10 hours ago
ive seen a ton of billboards of startup AI comp in west coast, i assume every new one that appears on these billboards, the old ones go under.
Mika@sopuli.xyz 7 hours ago
It would be just cheaper to self-host something for the whole company then? Open-source AIs are there and they are very much competitive with proprietary solutions.
skisnow@lemmy.ca 6 hours ago
If you want OpenAI level response times you might be surprised how expensive self-hosting gets.