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If a lab goes pop and has to sell off its assets, training costs are not a problem. Inference costs can be covered with a reasonably priced subscription. If we're stuck with current SOTA models for the next 50 years, software dev will still be changed forever.
[Citation needed]
This is currently not true. Maybe if you freeze the models and wait for silicon to improve for a few years it will be. But the LLM companies are constantly increasing their inference costs as FLOPs go down in price.
At least according to Ed Zitron's analysis. Maybe you just don't believe his numbers.
Link?
I've been trying to figure out AI-as-a-business since last fall, and the numbers make me feel like I'm taking crazy pills.
https://www.wheresyoured.at/ is his blog. He also has a podcast https://www.betteroffline.com/ but the AI industry analysis there is essentially him reading/summarizing his blog posts.
I'm reading through his latest piece where he basically says AI companies are all in complete shambles and he just seems flatly wrong? https://www.wheresyoured.at/data-center-crisis/
There's a warning sign here, it's like he's implying that post-training is done after the training process, post-training is part of the training process. I don't think he has a proper grasp on what he's talking about.
What does he think an AI model is? Deepseek R1 0528 is sitting on people's (big!) PCs somewhere, cloud providers are just providing it. It's a complete product. It still gets about 2 billion tokens per month on openrouter which is pretty good for an obsolete model. It doesn't need more 'post-training' to maintain it...
Seems like a deceptive line of argument to say that training costs are not R&D.
It would be reasonable to say 'because of competition, these AI companies cannot stop making new models like how car companies must always release new cars - this is especially true given rapid performance improvements and low costs of switching provider which reduce retention making the business model precarious and expensive' but he isn't saying that, he's making an altogether more ambitious argument that 'training costs are impossible to avoid' which is just wrong?
He has this overly emotional tone too:
What is this, Chomsky? I don't find this guy trustworthy when he conjures up figures based on 'just trust me':
The idea that the biggest companies in the world have mysteriously decided to invest hundreds of billions in an obviously, openly unprofitable business sector is interesting but it needs to be justified in detail. Who could know more about data centre economics than Amazon, Facebook, Microsoft, Google? Who would be more diligent in checking the financials than the companies spending hundreds of billions of their own money on this, this year alone?
Not saying you’re wrong but a few explanations:
Some firms may believe its existential and therefore even if costs are high and odds of success are low the cost of losing is too high.
Right now, the market is rewarding them for the spending. So even if they internally question the wisdom, stock price goes up and the decision makers get bonuses.
One tech company has somewhat called bullshit. They sit in Cupertino. Maybe they’ve since changed but my understanding is they still call bullshit.
It's less that they've called bullshit and more that they don't have the chops to build a good model themselves so they will simply license one.
Apple clearly could if they wanted to spend the money to have the chops.
It's not clear to me that they could.
Friends I know at apple, even on important projects, find it difficult to get promoted or get a raise. The corporate culture is extremely focused on siloing people so that they don't find out too much about what's going on.
Simply throwing cash at people in the hopes of getting a good model out of it leads to the Facebook path. Not a single incumbent tech company has produced a frontier model except Google, but really it came from DeepMind which was an acquisition and retains a somewhat separate culture from the rest of the company.
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