Tech companies are expected to be run at a loss for quite some time before they start being profitable.
They were founded in 2015 and “officially” launched GPT in 2022 to the public. If they make profits by 2032, that would be in line with how other tech companies established themselves.
For example, Spotify wasn’t profitable until 2024. They launched in 2008.
So, I don’t know why them not being profitable is what everyone is talking about. They’re not expected to be profitable until 2030 at the earliest. And every serious investor know this.
Yes I’m very fun at parties. But it seems that a lot of people just do not understand the expected timelines of tech companies.
Okay but the world had enough money to bankroll Spotify for 20 years. It doesn’t have the kind of money OpenAI needs.
Proprietary frontier LLMs in companies riddled with highly suspect business practices.
My local LLM setup has absolutely been making the equivalence of positive cashflow for me since gemma 4 and qwen 3.8: I need less total time for several groups of annoying (but necessary) tasks, which means my productivity is up and I can use the rest as my own free time.
I need less total time for several groups of annoying (but necessary) tasks
Such as? Just curious what people use LLMs for.
I handle so many text files in my job and LLMs help make the scripts for me to handle these text files. I know it is important to at least know stuff like regex but I am not a superhuman. It is difficult for me to heavily specialize in scripting while also specialize in the technicalities of my job. To help show why it is difficult to specialize scripting, I work with hardware description languages which have a different syntax from scripting languages. Handling different languages causes confusion on the proper syntax even with a basic if else statement because the syntax is different between languages.
Aside from this, it can also help me automate describing what the sequences I created in the file for easy documentation. I just have to instruct the “patterns” it needs to look for. I just need to proofread the output and do minor fixes.
at this rate Winamp might get more profitable than OpenAI and it is free.
But isn’t OpenAI just burning billions of moneys already? In that case Winamp is already more profitable
believe it or not but there was a time when Winamp used to be AOL’s money drain
My crooked spotted cock is more profitable than OpenAI
Your local grocery store is more profitable than OpenAI. In fact you are more profitable than OpenAI.
OpenAI owes hundreds of billions of dollars, with a revenue a fraction of that. They will never become profitable.
They will never become profitable.
If you look at OpenAI as a single, independent, private company then they appear unprofitable. But when you look at them as a means of laundering Pentagon money and other federal contracts into straw purchases for NVIDIA and Oracle, they are immensely profitable.
AI is a Loss Leader. It props up the production and sale of hardware, which has been fruitful for its partners, its investors, and the economy as a whole. It is a digital form of induced demand in so far as new construction creates a “virtuous” cycle of increasing consumption, as more and more of the business and public sector is dragged into its orbit.
The end-game for OpenAI is to have a captured market of businesses and government institutions. Whole sectors of the economy devoid of human knowledge workers who are hopelessly addicted to AI Agent processes, because nobody managing the companies actually know what these agents are doing anymore. At this point, Altman and Amodei can charge whatever they damned well please for token traffic, because there’s no bureaucracy capable of competing with them.
Most of the money getting funneled to Nvidia came from them in the first place. That’s why they’re one of the chatbot’s biggest cheerleaders.
Most of the money getting funneled to Nvidia came from them in the first place.
NVIDIA’s not getting most of its money from OpenAI. OpenAI doesn’t really buy anything from NVIDIA. They buy rack space from Oracle, which then builds out new datacenters with NVIDIA chipsets. And Oracle’s primary revenue stream is from its business Cloud Services, of which OpenAI is a small fraction.
This would make sense if they were the only game in town , but they very much…aren’t.
Keeping foreign technology out of the reach of US consumers has been a big part of Trump/Biden/Trump-Era tech policy.
And as hardware prices skyrocket, access to compute approaches a monopoly position.
The Weimar Republic was more profitable… well no, maybe not. But you get the sentiment.
They made trillions of marks, so yes they were extremely profitable.
I like that they never lost their gusto with the designs of the bills lol
Like they had to know that their currency was basically dead, yet they still made sure that those 100 billion Mark notes looked classy as fuck.
If/when the modern US makes it to this point, I can’t imagine them putting all that much effort into making our $100 billion dollar bills look cool.
They’ll probably have fucking Steve Bannon’s face on them.
Like they had to know that their currency was basically dead, yet they still made sure that those 100 billion Mark notes looked classy as fuck.
The person designing them had to make them pretty because they knew they were going to be paid in them
I mean, you joke. But Germany pivoted out of the Great Depression far faster than its European peers precisely because they weren’t afraid to print a bunch of money and pay people to do things.
The Fascists inherited one of the only recovering economies in Europe by the time they took power in 1932. And when they assumed office, they brought investment from the Americans overseas (who were having their own fascist turn), because they were willing to purge or enslave local populations, tear down neighborhoods, and build up whatever capital Standard Oil, IBM, and Ford Motor Company asked of them.
On the opposite side of the Atlantic and on the other side of the Urals, progressive liberals and Soviet communists were trying out a leftist mirror of this strategy. They were using the levers of the state to mobilize the masses of unemployed labor into productive capital improvements for the benefit of the public at-large. So the US, Germany, Japan, and the USSR all rapidly emerged out of the '29 crash into a booming 1930s economy. Meanwhile, England and France and much of Latin America and North Africa languished under artificial constraints of state-capitalism.
Why does that feel forebodingly familiar
I mean, we’ll jump to 1930s on reflex. But this is a pattern that’s repeated itself internationally, from Apartheid South Africa to the juntas in the Pacific Rim to Fascists in Argentina and Chile.
Economy shits itself. Social Democrats come in to deliver milquetoast reforms. The economy recovers somewhat, but never enough to actually relieve the social pressures of the moment. And then the democratic system starts vomiting up radical candidates of all stripes, while bourgeois capital attempts to ride the tiger into the next full recovery and/or national emergency.
The wheel of fortune doesn’t always land on Fascism. But it’s definitely a possibility.
History doesn’t repeat, but it rhymes.
It seems like we’re plunging into fascism, but maybe this upcoming midterms will (not be rigged and) prove to be an effective backlash to the US’ reactionary coup. What do you figure the odds are we pull out of this and say, “huh actually let’s try that FDR thing instead of this Nazi shit”?
Considering the overwhelming support among Democratic politicians and party insiders for fascist collaboration, the odds are probably low.
Revenue? ಠ_ಠ
you are more profitable than OpenAI
I’ve got mortgage debt though.
Waaaaaay less than OpwnAI though
See, you’d think people would do more research when lending billions for LLMs than when lending a dollar for a cardboard box.
They’re hoping it pays off in the long run, or at least long enough for them to go public and sell their shares at a profit while pension funds and mutual funds buy a crashing asset.
you won’t generate a 1,000x return on investment, AI could if it becomes AGI somehow. It’s like gambling but nobody knows the odds and the payout is big enough that it’s almost worth it to try without knowing the odds.
I’ve been familiar with the Singularity for a long time now and this “recent” perspective by AI investors bewilders me. There’s no profit to be had there - you can’t enslave a god. 💀
they don’t know that
I like LLMs and also the research but I think we’re at a point where one could make a pause, turn the models into silicon and sell them as hardware for people who are actually interested.
That would solve all privacy problems, eliminate many data centers, subscription fees, internet dependencies and allow for slower and more thoughtful upgrades (hardware isn’t updated as often as software). That would be a pretty sovereign solution.
However, from a company perspective they can’t force it on everyone anymore, don’t get all the juicy data from all the users and can’t sell subscriptions any more and change everything on their side.
turn the models into silicone
The models are data, and silicone is rubber. So… I don’t know what you’re proposing here.
I believe he is suggesting we turn them into very large breasts, or in some cases big booties, depending on your preference and what part of the world you’re in.
That is correct. Very comforting
Fixed it. We don’t use this silly silicon word here. I picked the wrong one. We call it Silicium Sodium is Natrium, Potassium is Kalium, Aluminum is Aluminum etc.
Interesting, your words match the periodic table better.
But, even with that, I’m not sure what you’re proposing. The models (data) are already stored in silicon. They’re on SSDs or HDDs inside data centers. But, to use those models you need to do inference which (at least for the big American models) requires a data center. It’s not like you could do it on some gadget you carry in your pocket.
There are much smaller models that allow you to do that. But, because they’re smaller models they aren’t as accurate at the word generation game.
Might mean “silicon”, but might want to bang the LLM. Hard to know.
Words have meaning…
Even with “silicon” doesn’t really make sense. The models already live on silicon, they’re stored in the datacenters needed to run them. It’s not like you can make them into some chip and magically not have to use the datacenter.
Gonna take GPS example to explain general processors vs specific ones.
GPS works by doing some simple math around triangulation from satalites. When they first came out there were no GPS chips. It was done by a general processors.
Now they can do it, but because they can do Amy Hong they’re not as fast as newer GPS chips.
How they work is the silicon can only handle the GPS calculations. But because of that, it can do it way faster.
LLMs run on matrix math and probabilities. We can 100% come up with specialised silicon to handle this math. Intact, thats what a lot of AI specialised chips are.
LLMs run on matrix math and probabilities
Yes, and the silicon to handle that math already exists. It’s the “GPUs” being pumped out by nVidia. Those are basically now highly specialized matrix math machines.
Then why do NPUs exist?
What I’m talking about exists on the smaller scale. Just a matter of time before its done on a larger.
A general purpose GPU still contains silicon for display, and video en/decoding. Those don’t contribute in any meainiful way.
Not to mention it doesn’t cover all of matrix math for LLM needs…
They aren’t comparable. GPS is deterministic and simple so as you said it could be reduced to an FPGA or ASIC.
LLMs are partially matrix math and probabilities but they’re also more complex than that and require a large amount of RAM to run even the first time. Each query added to the context increases the RAM needed further.
I dont believe the memory, both ram and storage combine, are what’s causing data centres to gobble up power and associated resources (electricity, cooling,…).
Its the GPUs.
I’m not counting on a future with LLMs by any means, but there’s tons of efficiencies we can do to make the cost go down. Were just not doing it.
We saw the same thing with crypto mining. It started on GPUs but then speficially designed silicon (asyc miners) were vastly more efficient than a GPU rig.
It still needed memory yes, but again, thats not the constraint.
For crypto mining, the speed of computation before the next block was mined was the constraint so GPUs were being used for parallel computation before ASIC miners were built. This is a great example of where ASICs shine: deterministic simple algorithms that don’t require much if any I/O.
LLMs have a minimum RAM requirement in order to even load the model so even if you built a dedicated LLM card with an ASIC, you would still need at least that amount of RAM on the card. You’d probably want more RAM in order to store context because that takes RAM as well. At that point you pretty much have a GPU with an ASIC instead of more general compute units and no video outputs.
You might get some improvements by using an ASIC for LLMs but not nearly as much as when ASICs started being used for mining.
LLMs are also deterministic and the weights for a model could be ‘hard-coded’ into a chip, no?
They’re actually not because they have randomness built in. Since we are working with probabilities, it won’t always pick the next token that has the highest probability and the randomness can be tuned via a “temperature” setting to make it more or less likely that it will choose the most probable token.
The weights for the model could be stored in a firmware chip but you still need RAM because it pulls all the weights into RAM in order to perform the calculations.
NPUs are already a thing, specialized cpus for nerual networks. The problem is the models are just databases, and you need lots of fast memory in order to feed the NPUs data, and thats the current bottleneck.
I’m not denying they still gobble those up, but those components are not what’s drawing all the power.
That would be lovely
So you’re saying we should be pumping all our savings and pension money in WinRar?
It has more potential.
If they can get their sales into double digits, the sky’s the limit!
Those numbers may actually kill the CEO.
“I remember once my father and I were walking down Fifth Avenue and there was a homeless person sitting right outside of Trump Tower and I remember my father pointing to him and saying, ‘You know, that guy has $8 billion more than me,’ because he was in such extreme debt at that point, you know?”
~ Ivanka Trump
I refuse to believe that Trump is capable of such introspection.
Believe it or not, Trump’s become dumber with age.
While I believe he is dumber, he has slid further down from a room temp IQ.
Capitalists: Noo its bad, see, it doesn’t make profit
Communists: Free AI for everyone
looking forward to looting RAM and GPUs for our community library organized communist LLM
Yay, free pollution for everyone!
They’ll reclassify it as a necessary utility like water or power and tax more subsidies for paying billionaires even more from public coffers before admitting it’s mostly just search engines & corporate social media eating their own tail.
This is why I think the bubble will last a lot longer than some people think. The heads of the tech firms have such a tight relationship with the GOP, and even a somewhat tight relationship with the Democrats that it’s almost certainly going to be declared “too big to fail” or “too critical to fail”.
The fact that it’s being used by the military just makes that even more likely. The firms will declare that if they go bankrupt, the military will be crippled – despite the fact that the military ran just fine without “AI” just 5 years ago.
So, when the economics of the situation show how absurd this bubble is, the collapse won’t happen because the firms will be propped up by the US government. That will put every taxpayer on the hook for the billions and billions of debt these firms took on. So, Andreessen Horowitz and the Saudis will be bailed out by the taxpayers who have been fighting datacenters.
Chatbot labs don’t employee enough people for too big to fail to be a concern. There isn’t enough currency in existence to make them profitable.
It’s not about how many people they employ. That wasn’t an issue during the 2007/08 banking crisis either. It’s about how much capital is tied up with them. Most voters would probably say “just let them fail”, but the people whose money it is are the ones who have easy access to the politicians, and they’re saying “this is too big to fail”.
I was finally starting to save up money in a 401k for retirement. Then I got fired. Now the AI bubble is going to burst and nuke what little money is in my 401k. FML.
I’m trying to stick with it, and not pull a bunch of money out. If this is all just insider trading back and forth, my hope is it will recover over time and level out. (As that will be in the interest of the manipulators too.)
If it’s just a big crash, like 1929 style, then I figure we’re all fucked whether you have stocks or dollar bills or CDs or doubloons.
As that will be in the interest of the manipulators too.
Nope, crashes are when they buy the poors assets at cents on the dollar.
Until it’s bad enough that the poors decide they have had it with the owner class,
Some of the big S&P500 ETFs (like VOO) have shockingly little exposure to AI relative to the rest of the market
Source? Interested
https://www.bogleheads.org/forum/viewtopic.php?t=472817
Also somewhat relevant: https://beatthecouch.com/
“Source: AI” is kinda wild for this purpose
I don’t understand your comment - bogleheads is a forum of real people? I included a silly example illustrative of my point, but the forum is decidedly not AI. Did you miss the first link, which was the point of my comment?
Literally the first sentence of the post you linked to says:
I asked AI for advice on how to reduce our risk of the various AI stocks in our portfolio
Couldn’t make it past the first comment, or are forums a new thing for you?
Yes that’s how the thread started - what else did you learn?
The first post in that thread had a guy using AI to figure out how much of his portfolio was in AI.
How do forums work?
You should roll over your 401K to investments you believe in.
Waiter, please bring me 1,000 of your finest shares of WinRAR! I’m going to be rich, I tell you! Quite!
I wonder what will happen in 2027 when those repayments come due.
They will get an extension based on lies about ai genocide or something.
From who? Not really an option. If OpenAI can’t pay it’s bills in 2027-28, it will end Oracle & Softbank.
Softbank is so over-leveraged, it should be illegal.
They’ll pay off the old loans with new loans disguised as investments between all the major AI players.
The government will bail them out: “Too big to fail”
But who bails out the goverment when they list everyone below billionaire status as a non-citizen?
Squeeze the working class.
That won’t pay off the several hundred billion they owe.
That’s for governments to figure out.
LLMs aren’t important & don’t employee many people. There is also no amount of free money that can make them profitable. I will happily bet you money right now this doesn’t happen before OpenAI and/or Anthropic are sold for scrap.
The government will buy a stake to both pay billionaires more from collected taxes and control what information can be generated and making the spy apparatus backdoors tracking every question or command part of the official platforms.
I’ll bet you $$$ right now that won’t happen. First of all, they still won’t be profitable. Second of all it’s easy to just completely avoid interacting with LLMs.
it’s easy to just completely avoid interacting with LLMs.
I wish that were true. Have you seen reddit lately? Lemmy isn’t immune but I haven’t encountered any obvious bot posts here yet.
I don’t fucking use reddit. You seem to be missing the point.
That is so true, bringing $40 Billion a year with about $80 Billion as expenses makes OpenAI indeed in a red zone. They should consider shutting down so that we can have some level of relief from AI slop.
And a more reliable product that returns the expected results every time.
So does children working in Palestinian brick furnaces, this argument makes no sense.
So you support eating kittens is that it!!1?
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