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 3 weeks ago
when this bubble pops it’s gonna be horrific.
google, meta, ms, so many more leveraged out huge investments in datacenters. nvidia is propping up whole segments of the fucking economy.
www.wheresyoured.at/ai-is-a-money-trap/
it’d be fun to watch if I could isolate myself from the chaos that will ensue, but we’re all gonna get fucked by the aibros, it’s only a question of which segment of the economy blows up first.
skisnow@lemmy.ca 3 weeks ago
mojofrododojo@lemmy.world 3 weeks ago
good point, it’s all been artificially priced to get users onboard then dedicated.
pfizer_dose@lemmy.world 3 weeks 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.
mojofrododojo@lemmy.world 3 weeks ago
blitzscaling
TIL there’s a word for it. Thanks
Korhaka@sopuli.xyz 3 weeks ago
How does it impact your right to work?
Tollana1234567@lemmy.today 3 weeks 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 3 weeks 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 3 weeks ago
If you want OpenAI level response times you might be surprised how expensive self-hosting gets.
SpaceCowboy@lemmy.ca 3 weeks ago
Yeah I’m getting real dot com bubble vibes from all of this.
mojofrododojo@lemmy.world 3 weeks ago
I think the fallout is going to be much larger.
SpaceCowboy@lemmy.ca 3 weeks ago
It would probably be fine if there was someone competent in Whitehouse to manage the fallout.
But since there isn’t, you are very likely correct.
krashmo@lemmy.world 3 weeks ago
Yep, the only thing I’m 100% confident about in this whole mess is that Trump will find some heretofore unimagined way to make it worse.
bigfondue@lemmy.world 3 weeks ago
They will manage the fallout just like the sub-prime crash and PPP program, with huge cash transfers straight to the wealthy.
mojofrododojo@lemmy.world 3 weeks ago
fuck. and that idiot is all in on cryptocoin and other idiocy. fuck.
vector42@programming.dev 3 weeks ago
Came here to see if someone had mentioned Ed Zitron’s blog. His last two pieces on the AI bubble are fantastic reads.
mojofrododojo@lemmy.world 3 weeks ago
pretty sure someone here linked it, it’s a long read and worth it.
electricyarn@lemmy.world 3 weeks ago
The electrical industry is going to have a real bad time.
mojofrododojo@lemmy.world 3 weeks ago
yeah secondary knockon effects - once nvidia realizes it’s not going to actually sell 5 gpus per human being, the datacenters for them evaporate, then the power production to feed those datacenters becomes pointless…
an effective administration would mandate all renewable energy for this purpose, so when it implodes they could at least derive a benefit from the expanded production… but no, trump will have them build coal plants for it all. or like grok, methane powered generators fml
Tollana1234567@lemmy.today 3 weeks ago
and they are even considering extremely expensive nuclear plants to power them.
mojofrododojo@lemmy.world 3 weeks ago
bringing old reactors online may end up an overall positive but I’m dubious about smr’s still. it just seems like more chances for radionucleotides to get smeared everywhere if they become ubiquitous.
BetaBlake@lemmy.world 3 weeks ago
Hopefully sooner rather than later, and maybe Elon can stop poisoning a neighborhood in Memphis with Grok
mojofrododojo@lemmy.world 3 weeks ago
yeah that’s one of the more egregious examples, basically a methane factory that eats prodigious amounts of water and power, all in process of giving us MECHAHITLER.
what’s not to love?
Thorry84@feddit.nl 3 weeks ago
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.
mojofrododojo@lemmy.world 3 weeks ago
yeah datacenters never really aged well, and making the gpu dependent is going to make them age like hot piss. and since they’re ai-dedicated gpus, they can’t even resell them lol.
all this investment, for what? so some chud can have a picture of taylor swift with 4 tits?
fucking idiots
howrar@lemmy.ca 3 weeks ago
I don’t see why they can’t be resold. As long as there’s a market for new AI hardware, there will continue to be a market for the older stuff. You don’t need the latest and greatest for development purposes, or things that scale horizontally.
mojofrododojo@lemmy.world 3 weeks ago
I didn’t say they couldn’t be resold, they simply won’t have as wide a potential user market like an generic GPU would. But think about it for a sec, you’ve got thousands of AI dedicated gpu’s going stale whenever a datacenter gets overhauled or a datacenter goes bust.
that’s gonna put a lot more product on the market that other datacenters aren’t going to touch - no one puts used hardware in their racks - so who’s gonna gobble up all this stuff?
not the gamers. who else needs this kind of stuff?
panda_abyss@lemmy.ca 3 weeks ago
They’ll write this off as a loss and offset their corporate taxes
Also china is a great example that you do not need all the latest hardware, but it does help
Tollana1234567@lemmy.today 3 weeks ago
no wonder the ceo of nivida was so jovial and happy and has been in the news recently.