ez, just do some more hyperinflation. That’ll be about enough to buy a bag of rice

Waiting for the bubble to pop. I need a new GPU and maybe a SSD.

I assure you, if you are a brokie like the rest of us, you will not have the money to spare in the ensuing recession. Honestly I expect personal computing is dead, likely for a decade or more, if it ever comes back.

With the amount of integration it achieved to facilitate services and transactions? I am very skeptical of that. I expect to happen a serious market feagmentation and a great number of bankrupties but the void will be filled by new presences.

It wont be like dead dead, but just stagnant. Companies like nvidia will just sell the barely passable hardware with even less reason to upgrade because the prices will rise and the performance jumps will decrease. The good thing is that even the entry level hardware was already good enough for 95% of use cases and what justified upgrades anyway was mostly AAA gaming graphics slop or heavy 3d renders for professionals.

The bad news is that entry level hardware will cost more than high end hardware did last year

and they already bought years worth of chips, so no computing for a long time.

afaik they havent, they committed to buying them, so they will be built, and when they dont buy them because they are insolvent, we should be able to get them at good prices

thedeepdive.ca/openai-locked-up-40-of-global-ram-…

From one brokie to another, drowning in debt is indistinguishable from drowning in debt with a GPU and SSD.

Last night, my friends and I were talking about how we’re trying to spend more time at home to save money. Instead of going out to a bar, we’re starting to plan more hangouts at home. Why spend $2k/month on rent if we aren’t going to be there? It feels like anytime I leave the house, I’m spending $100 or more. We all were at a bar last weekend watching college football, and after spending $10/drink, we dipped out, bought $50 in beer and pizza, and played Mario Kart at a friend’s house. Much cheaper to just play games at home and hangout.

Well, the downside of that is that it’s insular, you lose the opportunity of meeting new people

And sure, not everyone cares about doing that a lot of the time, but for me personally that’s a great loss at least. I love meeting new people, and everyone being priced out of existing in social meeting places… sucks. A lot

If I already had a solid group of friends, I wouldn’t really care for meeting new people. If someone cool comes along, awesome. Welcome to the group.

But why would I actively go out and try to sift through the 95%+ of people at bars who are either A) shitty, B) don’t give a fuck about me, or C) both; just to try to find one or two new people that I might exchange a couple texts with over the next two weeks before we proceed to forget about each other entirely?

If I already have friends at home who just wanna hang out and play Mario Kart or Magic: The Gathering or Catan or something? Why would I need to talk to strangers, most of whom would just tell me to get bent anyway…

That’s awesome. You guys should stockpile a few good boardgames while you’re at it, for when you want to switch things up

Yeah, there is also speculation that part of this build out is intended to force a shortage to get everyone to shift to thin client “cloud PCs” where everyone can be monitored and ad blockers can be avoided.

That shift has already happened.

People on this forum trend to use personal computers but most people now only use phones. They might have a laptop provided by work but many don’t own one at all.

The push to “the cloud” happened ten years ago. The people around here are the exception.

A phone is not “the cloud”

For most people it is. If you removed Internet access from the device what do you think people would say?

9 out of 10 apps are just web apps with a launcher and stop working the moment you disable data.

And how is that any different than a desktop tower?

I can run LLMs locally on my desktop tower. I can run CAD Software and create things. There is a large number of tasks my desktop can do that a phone can’t for a number of reasons not the least that using a phone without their app stores is becoming increasing difficult.

Just because you might just use yours as a thin client for Chrome doesn’t make me wrong.

There is nothing preventing you from running local apps on a phone, including local Ai or CAD, it’s just not necessarily practical or cost efficient to do so, nor is the software there the same way as say AutoCAD.

Nice try with the ad hominem attack, but I use my phone for a lot of different local apps, including gaming, photo editing, office suite, local music that I have purchased and collect instead of streaming primarily. Android even supports desktop mode so the workflow is very similar, and a phone is a good solution if you can afford but one device. I still have a desktop, but hating on phones for being cloud hosted makes no sense… because they’re not.

You may personally dislike app stores, and I don’t really disagree, but it is completely irrelevant to the discussion.

You ARE wrong, not because the population at large does or does not use a lot of web hosted apps. That’s irrelevant. Obviously, the internet is popular for a reason, and you are not inherently superior because you run more local apps then the ever-elusive “them”.

You are wrong because phones are fundamentally not cloud based. They are not thin clients, they do not remote in to a virtual desktop on someone else’s computer to do every task. Phone OSs run on bare metal. End of story.

You could say “electron/web apps sucks” or “we need to use more than 5 websites that are all owned by billionaires” and everyone here will agree with you. There is no need to make up problems that don’t exist just you you can say “you thought THAT was bad?”

Yeah, you’re right. Tones of people set up their phones without an apple or Google account and then only use the baked in browser and calculator.

yes that’s exactly the plan and the reason these companies are paying profound premiums back to nVidia. If they don’t pay up nVidia will just announce another spark roll out and scare the crap out of them. They know as soon as newer computer hits the consumer market they are dead in the water.

The main thing will be the value of the dollar becoming next to null.

Putting some of your savings in foreign currencies can help dampen the blow a bit. That is, if you have savings to spare…

Unfortunately the bubble popping will not provide you with better or cheaper access to those. At this point it is artificially created scarcity because they don’t want consumers to own hardware anymore. Even with the AI bubble popping, the tech oligarchs (with NVIDA at the helm) will still be pursuing their wet dreams of consumers having to subscribe to their cloudbased computers for everything.

Other manufactures will arise then. Won’t be quick, won’t be painless, but the US is not the whole world.

You seem pretty sure about that. But where was the competition when they forced the switch to CD’s? The manufacturers are engaged in a shit-trust, and other anti-competitive behavior.

No one will step up.

Thats not… I feel like you weren’t alive yet when that transition happened.

Because CDs are objectively better in basically every way than VHS and cassette, especially for consumers. No more tapes stuck in the player, no more rewinding, no more randomly unspooled tapes, no more twisted ribbons, no more seeking static, no more heat warping, etc. plus cds take up less space overall, and you can easily use many-disc cd changers.

The market absolutely drove that transition, not manufacturers. VHS and cassette were still supported and produced for a LONG time after cds came about, because not everyone was willing to drop a ton of money to get their collection in a new format.

CD’s are not better. They scratch easily, and the players break. Like right away. I have vhs that still work, no cd player still works outside of a laptop or game consul, and the disks scratch and get ruined.

That you think they are better, ruins your credibility with me personally on this. You clearly don’t fucking get it.

Wow. Ok have fun with that personality… eesh.

Oh, the personality of not believing the oligarchs in the face of some credulous half wit? I will, thanks.

😂🤣

K

Wow, only assholes use those emojis in that context. In my experience. Good to know, now piss off. We can spar elsewhere perhaps, not now.

I’m going to have to agree with the other guy. I have working VHS tapes and working CDs/DVDs that are both over 30 years old. That just means that you didn’t abuse them and kept them away from bad temperature and humidity ranges. CDs were so much better than cassettes that it wasn’t even funny. If you were abusing your CDs so much that they were getting scratched to hell, I can’t imagine you weren’t running into similar issues with your tapes. DVD were vastly better than VHS in much the same way. And the “better” wasn’t even about durability which was probably a wash as they failed in different ways. CDs had better audio quality and better quality of life for the user. You had no need to rewind/fast-forward. The audio didn’t get continually more staticy as time went on. They took up less storage space, especially if you used a CD wallet/book. You didn’t need to clean the heads on a CD player. All these same issues applied to DVD vs VHS other than skipping around a DVD is less common than a CD as movies and shows tend to be viewed sequentially.

Also just to add that the transition from tapes to CDs and DVDs took decades, by the time tapes finally were fazed out blueray was a thing. I have a copy of Harry Potter and the Prisoner of Azkeban on VHS that’s what 04 I also have a copy of Sabatons Great War album on cassette because fuck it why not. Even now cassette still kinda alive.

I will quit the internet before I become a renter of everything I used to just use free.

Free or with one time purchase and possible payments for once in a while big updates.

I am not paying google shit. Or any of them. I will join a privateering crew first.

You sort of can with solutions like MeshLLM

I love computers but never enough to participate in their plans.

I know how to read. Write. Draw. Go on walks. Play sports. Basically sit and watch paint dry than give a shit about not using a computer again

You might, I think I would (at least personally, professionally I may not have a choice) but the vast majority of people will gladly go with this plan I suspect.

Look at car purchasing, most people don’t look at the sticker price or the total cost of ownership, they stop paying attention as long as their income can (and in a lot of cases it technically can but really shouldn’t) support the monthly payment.

Similar thing with new phones, most people buy a service plan that includes a lease or loan on a device. Very few people buy their sevice outright, because that’s a bug purchase vs a smaller monthly payment.

If there was a market for this for laptops, regular folks would eat it up.

That’s all opinion, so take it for what it’s worth. I hope I’m wrong. I’m fearful I’m not.

An entirely reasonable sum.

I’ll get my big wallet, I better give them $7tn those poor billionaires.

Revenue is not profit. How are they going to pay their debts, for example? 6T in (fantasised) ARR is already about a third of US Fortune 500 total revenue over 2025, 21T. Good luck with that lol.

Their argument is going to be that AI is so good, it’ll just replace half of the Fortune 500 with their own agentic AI.

It’s so delusional.

Like fuck everything AI creates is so generic and bland even generic and bland corporate output looks nice.

That’s the consumer side. The boring bland generic is pretty decent for code if the operator isn’t a slop zombie

I don’t know.

There is a ton of corporate email pushers and power point makers which could be replaced by an AI model I think.

The current issue they are struggling with is figuring out who they can blame when it fucks up. At some point they will land on an answer that to that. We are literally in the age of people copy pasting AI output into emails. At some point that’s gotta give.

I mean, yes, but they can’t be replaced by AI because AI does the job better, they can be replaced by AI because they produce nothing of actual value.

We are beyond even that. It will read, write the reply, and send. There doesn’t even need to be someone to copy and paste anything.

I guess the $6tn is also including wages not being paid. They think they can just pocket the pros of AI and leave the rest of the world population with the cons. A small analogy. If nobody does large agriculture, there won’t be many tractors and tools sold and maintained. There won’t be cheap grain to be processed into convenience food, animal feed, booze. With those there won’t be food, meat, dairy and eggs for the masses which again needs specialised tools and machinery. You can keep going with this into increasingly miniscule economic sectors.

The point I want to reach is drawing the picture of a propellerheaded youth sawing into the branch on which he is sitting - and with him the whole family of H.Sapiens.

Just another food for thought. Scientists expect the next ice age in 10 millennia but we are about to loose our advanced and highly specialised society to a manmade global warming. We surely won’t be dying out anytime soon I believe, but neither will we be to go into that ice age as an advanced society.

Off topic, I know, but I’m curious what you’re reading about the next ice age. Always found that history interesting, but never thought to look toward the next one.

I frequent museums quite a lot and natural history is part of a lot of exhibits. They agree that we are on top of a warm cycle that keeps warming up because of man made factors.
Since we are disturbing the natural cycle in a way that is detrimental to the fundaments of our society, agriculture, it’s argued this will affect us during our lifetime - like it currently does, but worse is to come.

For the ice ages of the past my understanding is that many many humanoids migrating from africa and evolving into different branches of homo have gone extinct during the ice ages.

My opinion is, we could see waves of refugees that brought down ancient and advanced societies like the hithites. Might be the hithites went down because they had to abandon their home because of drought. Ancient egypt, being forced into its knees, barely surviving, is a better studied era. Basically, bad times that has a global effect, people who can’t cope seek refuge in less affected or richet places, overburdening them and creating a domino effect of refuge seeking. This creates an armed cycle spiralling the world into chaos and taking away from and effectively disabling history writing and sciences, plunging the world deeper into the pit since the skills, tools and institutions needed for education and science are cultivated over many generations of itterations. Once shut down and anybody - able to use and create those tools, the knowledge to educate and do science, understand and derive knowledge from books and data - died off you can’t just boot it up again but have to create it from scratch.

Even then. Let’s say that Ed Zitron has all the numbers wrong here and they’re actually double, just for the sake of the argument: that would mean OpenAI and Anthropic would have a current yearly revenue of 164.4b$. (And as said, they don’t!). Even if you double the Meta, Microsoft, Google revenue you’d still be at a mere 260b$. Even hilariously exaggerating the numbers doesn’t even come close to the completely insane 6T!

That’s just like my opinion. They think it’s worth that because their customers won’t need a single employee or very few. In many sectors manpower is the largest recurring position that can’t just sit there and be resold like land or a building. Manpower goes “stale” if it isn’t productive. A factory with bots can be shut down if needed and rebooted anytime goods or orders accumulate. Creativity can’t really be forced and with ai and enough input an “ideal model” of how the product should look like can just be remodeled and repainted to fit the newest trend.

That’s what every company might try, ditch their human employees for some ai agent and ai tokens, that might be where the $6tn comes from. A very big bubble blowing up and exploding right after the masses missed their third meal facing food anxiety, desperation, anger and going after anybody that looks vaguely rich to shatter their bones to suck their bone marrow. I hope Elmo gets it first.

I actually explain exactly the plan here. I wrote an article explaining it. They intend to use several channels to socialize losses. The big ones are the front door. Literal bail outs and subsidies on multiple levels. The back door is passing it on to passive investors. At the beginning of next year we will see a near total economic collapse as this bubble bursts. Once it does passive investors will be wiped out. A whole generation of retirement savings and pension plans wiped out while simultaneously the fed will bail out the major players. Here is the article themildtake.com/…/2026-06-05-priced-for-rescue/. Most people picked up on this when SpaceX went public. What they didn’t mention was even if your in the S&P that only shields you from a single bad player and a minor one at that. Microsoft, oracle, google all these big hyperscalers and service providers renting that compute are all going to take a dive.

If they do get bailed out, people better make sure they’re armed when they’re protesting because they’re almost certainly going to use illegal force to quash dissent of their theft.

So where do we move the retirement account investments to to avoid the bubble? I think most of mine are in stuff like mid-cap and large-cap funds

Move a slice of the large-cap into ex-US: VEU or VXUS if you can pick ETFs, or your plan’s international index fund. Mid-caps are already the less exposed half; you can’t dodge the bubble, only cut the concentration.

Great article. Thanks.

All of those DRAMs you can’t buy are in that number.

AWS: 128B Alphabet : 402B Microsoft: 281B Meta: 201B

Total : 1T

So watch out for everything they charge for to double/treble in a couple of years

Edit: I see that some text is huge. I don’t understand why putting in hyphens seems to be doing that

But those are full revenue, including say MS Office subscriptions etc. If AI revenue needs to be 6T, then we need to talk AI revenue.

Yeah the management would add AI features to MS Office subscription, call it an AI product, treble the price and justify their AI investment

True that, but even then the dark magic of the street of walls will not save them

Imagine if this was invested in arresting climate change.

Instead of literally investing in accelerating climate change.

And arresting dissents and innocent bystanders

And homelessness, and actual education for people.

Yeah, “and”.

You could probably actually solve a lot of problems in the world with this money.

We always have money for other stuff.

Yeah, the party of “fiscal responsibility” is always like “WHERE WOULD WE GET THE MONEY FOR THAT?!!?!?” whenever it comes to a cause that’s actually important or would help people.

“The same place you always get the money for your greedy money-grubbing ventures that exclusively benefits you and your cronies” is what I would tell them.

If we just stop sending billions and trillions of dollars to the already rich, then maybe we could fix society and save the planet?

But no, there’s never “money for that”…

How much is the cure/treatment for Parkinson’s worth? Or other intractable medical problems?

What about a device able to manipulate the containment field of a fusion reactor?

These are the reasons why everyone is buying the compute services - there are dozens of moonshot-grade problems that are suddenly possible to attempt. Many will fail, but whoever gets that one success will gain astronomical benefit.

LLMs aren’t gonna give us any of those things. Thats just snake oil.

I believe at most, coding, scripting, and text processing.

Exactly, there’s a few specific use cases that the current generative AI is good at. Reading medical imagingand medication development are things I’d add to your list.

However, outside of those specific tasks AI is not particularly useful. An incremental improvement in productivity in some cases.

Medical imaging and medication development would be bespoke models no? Not standard LLMs?

Probably. I mis-spoke.

You can add transcription to your list though, it’s saving providers a lot of time on charting

Generally speaking, yes, but standard LLMs now have their own built-in image recognition so we might not be too far off from LLMs being able to describe to the doctor what they should look at on an image that’s been flagged. Take a capable LLM of a few hundred billion parameters, train it on tons of medical images and such, and it might actually be helpful. Or it might not, no way to find out until tested.

AI is not just LLMs. Much of AI is machine control, and bioinformatics.llms are the foam on top of the ocean.

Yeah, but the current hype is around LLM, the other kinda of AI are the same as they were before this started.

Alphafold almost certainly benefited from genAI research, since 2 and 3 are somewhat genAI inspired architectures, they use their own versions of transformers and also diffusion

I’m aware, and I wish people were more clear about the difference, but its LLMs that are driving these insane buildouts, not the other disciplines. This article is clearly talking about the LLM “AI”, not bioinformatics or anything that may actually be fruitful.

The LLM companies like to claim they’ll solve cancer, but its all snake oil hedged on a mythical AGI popping up and fixing everything.

I’ll believe that these things are possible when there’s some empirical evidence that they are.

Why don’t you buy my amazing car. Yes it looks like that car that your nan drives to the shops but actually it can fly and time travel as well.

Those results are still tightly controlled by NDAs. They need time for FDA approval, patents, etc. Then time to get to market. These are not released in scientific papers anymore. It’s protected because it cost so much up front.

Surely in the age of self-promoting narcissists we would hear about these break-throughs in all the media?.. Not just “it can potentially cure cancer if you give us another $tn”, the real results under review by relevant authorities/academics. Moreover, these breakthroughs do require a shitload of compute, but I do not see how a chatbot could be helpful with it. Other than, of course, stealing the preprinted work of some academic and claiming it their own, as recently with OpenAI Navier–Stokes equations conundrum. Can you imagine how many problems like that would already be solved if all these billions were spent on it, rather than chatbots drawing glossy pics?..

You may be missing my point. THEY aren’t being kept in the dark. YOU are. Anyone involved in the project signs an NDA. Then the relevant experts can’t talk about it.

This is big with legislators too. They are taken on tours under NDA. They see there is no water use, they listen to the noise levels, they see the new substation provided to the community. But they cannot tell the constituents those specifics. Only “it’s not like the news is claiming”.

And the news is not the customer. No one in the industry cares about bad press. Customers won’t stop buying. So the build out accelerates.

AI has been mainstream for what, 4 years now?

if AI had such powerful results for developing novel solutions to problems such as medicine or material science, why have we not seen major improvements in those sectors?

the way AI is spoken about is that it’s “world impacting” and “sector disrupting”. the only disruption and impacts I’m seeing are in human rights violations, price gouging, privacy negation, and corruption.

if these are the results after only 4 years, I can only logically assume it will only get worse with more time and support.

The PC became mainstream in 1981. Why didn’t the Internet become big for another 10 years?

bullshit. you’re talking about two different technologies.

the PC didn’t promise to cure cancer. it promised to help you run your business more efficiently.

Takes years to get new drugs to market. AI is speeding up drug discovery by predicting protein folding ridiculously fast, but there’s a lot of other work that needs to be done. Perhaps there will be models to speed up some of those processes too, but the real bottleneck is approvals and while AI might be used to speed up the paperwork part of it, I can’t think of any way it’ll be able to speed up actual trials. What I suspect will happen is we’ll get an even faster response time with the next global pandemic that requires a vaccine, and we’ll start getting more and more mRNA vaccines, including some for some types of cancers.

This paper details 9 processes in which AI is already helping or is predicted to be able to help in material development. Material development also takes time to get anything to market, for various reasons. But there’s a nonzero chance that the recent battery tech boom from China has been aided by AI. They just tested a very high density solid state cell not long ago.

if it wasn’t maliciously designed it’s absurdly negligent. both of which are reason enough to not use AI at all.

wouldn’t it make more sense to streamline the existing processes first before creating a traffic jam of “potential” cures? where at least the models could be trained on existing cutting edge medical research instead of flying blind and developing novel treatments and cures.

the more I think about it the more is seems plausible that the actions AI implementation takes is malicious negligence. incompetence derived from a malicious intent to do harm on someone or something.

is this the disruption AI execs were talking about?

Ok so this is interesting. I am not sure this number is accurate I haven’t fully vetted it. I do this same type of forecasting. Morgan Stanley said for current capex commitments by 2027 4th quarter they needed to be 700 billion in profit. The problem is to meet that number they would need full market saturation and another 3 trillion in capex for build out. That means the entire accessible market would be using AI. They have another problem that more than half the world cannot access AI in its current form. The tooling these companies are using are wasteful and don’t meet the bandwidth needs of mobile first countries. So until the industry adopts things like codecai.net half the world’s markets are inaccessible. Finally they are under attack from all sides even if they had the money they may not have the ability to build out the AI infrastructure because that build out is becoming untenable for most communities. Even more the open source models and low cost AI are already in someways encroaching quickly on frontier systems. If you look at it right now the only reason you don’t have home AI as a commonplace solution is because the manufacturer has chosen not to sell it to you.

If you look at it right now the only reason you don’t have home AI as a commonplace solution is because the manufacturer has chosen not to sell it to you.

And memory shortage. By buying up all RAM they ensured that you can’t run much more than lobotomized models.

Still much cheaper to run an open source model on a rented gpu from the cloud.

up all RAM they ensured that you can’t run much more than lobotomized models. this is what I mean they’ve chosen to target a different consumer and rightfully so in that they are paying a premium for that product but they are also being subsidized by the same vendor so it’s not clear that they are paying more due to the bizarre circular funding pattern.

The local models thing is the real threat. For what 90% of the world who actually cares and wants AI, a local model is probably already “good enough”. Or would be if they could get the hardware, or maybe they don’t know how to set one up.

Got a 27b model running on my gaming GPU. Its a bit slow but good enough to look someing up, causual coding, and stupid questions. China is really kicking ass with the open source models.

Same, a 35B model is running on my gaming rig. It’s good enough for most things, even coding.

Just wish I had more VRAM and could load it faster.

Light web searching suggests that neither the automobile industry as a whole nor the health insurance industry as a whole exceed $3 trillion in annual global revenue. Which means the plagiarism-to-slop pipeline just needs to make a little bit more than the automobile and health insurance industries combined to justify itself.

Easy. AI cloud controlled vehicle fleet with government support to make it mandatory, AI health centers as default healthcare, supplement the rest with premium AI generated nudies.

Wow you just described something that would make me go full IRA good job. Fucken caused a physical recoil in absolute horror.

This isn’t the same thing as making VCRs cheap enough that every home has one. There is no FOMO wirh AI at the consumer level, no one knows what to do with it. The only people who want it are the ones who male it!!

I’m just waiting for some breakthrough in the hardware and suddenly all of those data centers become outdated.

With the stories of AI being used to break into secure systems I wouldn’t be surprised if other nations also start throwing up walls to block them.

Same, but for the software. Backpropagation based software is a known limitation to current GenAI LLMs.

Also note Apple’s, AMD’s and NVIDIA’s (Spark) unified memory solutions for local LLMs/agents. AMD advertises 300B and NVIDIA advertises 200B models running locally. The question is whether Anthropic/OpenAI are going to be relevant at all in the future, with local models becoming increasingly capable and affordable. However: There are rumors the Chinese government wants to restrict access to its models. Not set in stone and also not sure whether this is true. Could this entail no more access to new open-source models? Who knows. But even then, energy and resources are going to be a bottleneck. I have not looked into the concrete numbers and this is not my field of expertise, but I find it highly unlikely that they are going to be able to capture the entire market.

The fact that semiconductor fab construction isn’t being fast-tracked tells me that, although central banks are willing to throw trillions of USD at LLM scale-up, they aren’t willing to make this spending a habit.

I don’t know if I have $6T in product recommendation questions

I can check my wallet but I’m pretty sure I can’t swing that

Anthropic is claiming its total addressable market is over $30tn, so it’s all good, right? (No, that’s obviously crazy)

AI lab Anthropic, reportedly on the verge of a $2 trillion IPO, is preparing to tell investors that its total addressable market is worth more than $30 trillion, according to a report in the Wall Street Journal.

To put that figure in perspective, it eclipses the total GDP of China, is roughly equal to the entire GDP of the U.S., and represents about a quarter of the total world GDP of $120 trillion.

The catch is that’s the amount of money it’ll be after inflations boom ;)

Eh total addressable market is such a meaningless figure anyway. Total addressable market is everyone who has a device that they can use AI from, multiplied by the average annual cost of using them. Plus every company that exists in the world, multiplied by how much the AI spend is for the average company. Plus every government in the world. Etc. Boom, 30 trillion. It’s like a super optimistic “this is the maximum that any AI company could ever earn per year if they controlled the whole market and everyone who could use AI is a paying customer”.

That 2 trillion valuation they seek is hella bogus either way. For 30 trillion actual revenue with any real profit margin, it would be low, but we all know they’re not bringing in trillions in revenue.

I wonder much of that proclaimed TAM will be addressed with open models. I’m running Qwen 3.8 27B on my 7900 XTX and have no need to give Anthropic or OpenAI any of my money or data.

“Mercedes claims they have a total addressable market of $30 trillion by demonstrating that everyone has sold their vehicles and switched to driving a Mercedes on the new $20/month leasing program. Mercedes has not provided a response when asked how much their cars actually cost to own.”

Eff Bain. They say whatever suits the moment. They did over a company I used to work for. The company went bankrupt and laid off employees.

I’m pretty sure Ed Zitron has been keeping pretty good accounting numbers. Whether you think his predictions are right or wrong (the hype has outlived even my expectations), I think he’s right about how much debt has been generated vs how much cash will be needed to service that debt and it seems highly unlikely that we aren’t letting these companies pretend there’s a pot of gold under every blade of grass to our own detriment.

If it didn’t make sense, that’s because it’s early and I just woke up.

That’s government money.

It’s proof of unsustainable AI bubble. Can’t hit those numbers. lemmy.ca/post/71626228/25584891

Fantastic. That’s USD 750 per Earth inhabitant. You could feed all of humanity for this, with is what is essentially needed.

Now all that is pissed away. We had our chance and threw it away.

You can still feed humanity with it… to Skynet.

how could you feed anyone for that little (per year, let alone permanently)?

In the global south, lots of people already spend less than that on food. $750 is more than double the average Ethiopian yearly expenditure on food.

Not going to happen. Meanwhile, models are becoming insanely capable and efficient, such as Opus 5.5.

The world economy is about $126US trillion this year and $6tn if close to 5% of that total. Given that this is mainly US investment, the US economy is about $26tn so $6tn is about 23%. Huge numbers and I assume that there will be winnowing as the industry shakes out so most of that investment will evaporate as companies go under.

oh is that all?

jfc…

Resist, resist, resist.
Boycott, boycott, boycott.

To put that in context, Alphabet (Google’s parent) is the biggest software company in the world. It’s the 3rd biggest company in the world after nVidia and Apple, but they’re mostly hardware companies.

Google’s annual revenues are creeping up towards $500b/year. So, the AI companies (Google included I suppose) would need 12x Google’s annual revenue just to break even.

There are 2 companies that have over $1b in annual revenue, Amazon and Wal*Mart. But, those are companies that sell goods to consumers, they’re not just digital services businesses. But, even then, you’d need 3x the revenue of Amazon and Wal*Mart combined to hit $6t.

Google, Apple, nVidia, Wal*Mart and Amazon each took decades to grow enough to capture hundreds of millions of dollars in revenue. So, somehow OpenAI and Anthropic are going to need to grow faster than any other company on earth to hit these trillion dollar targets.

Also putting this number into scale, there are about 8.3 billion people on the Earth. But, most of them are poor goat herders, subsistence farmers, sweatshop employees, and AI model trainers / reviewers living in Asia and Africa. These aren’t the kinds of people who are going to be buying a subscription to ChatGPT. There are maybe 1 billion people globally who have disposable cash they can spend on AI. So, to hit 6 trillion annually, each person living in a developed country would need to personally hit $6000 in AI spending on a yearly basis. Note, that includes children and the elderly. If you limit it to working-age people, that’s more like $10k per person per year.

Now, it doesn’t have to be that this is down to consumers. Maybe this is so valuable that Wal*Mart, the US government, and every other large employer pays for a ChatGPT subscription for each of their millions of employees. But, really, despite the fact that there have been very few actual successful AI deployments that saved companies money, or generated more profits, they’re suddenly going to be spending a significant fraction of each worker’s wage on AI subscriptions?

I think it’s pretty obvious that the AI companies thought that they were about to invent AI jesus. They thought they were just a few datacentres away from the machine god coming to life. They thought that AGI would change the world to such a degree that it might make the entire economy obsolete, so there was no limit on how much they should spend so either they would get there first (and maybe be seen as the god’s parents?) or out of some kind of altruism-type-feeling so that they could make a machine god which would align with their beliefs. But, that didn’t happen.

I saw a comment the other day about AI firms and CapEx vs OpEx. CapEx is Capital Expenditures – basically one-time costs for setting up a business. OpEx is Operational Expenses, basically ongoing costs for running a business. A good way to generate money from a business is to have a high CapEx and low OpEx. It’s hard for someone to set up a competing business because of the high initial costs, but once it’s up and running you can provide services for a low ongoing cost, and you can make a high profit on each customer. If CapEx is low but OpEx is high, sometimes it can work as a luxury business. Think an artist who hand-carves furniture. If both CapEx and OpEx are low, it’s basically a commodity business, think something like a nail salon. Cheap to set up, cheap to run, hard to fight off competitors.

The AI companies are stuck in a world where they have incredibly high CapEx (building DCs and training new models), and incredibly high OpEx (inference queries – basically talking to the chatbot, is also very expensive). Right now to try to hook customers they’re subsidizing the OpEx side of things, so each new customer costs them more money. Their paid tiers are even worse because people actually start really using the chatbots once they pay for them, and the money lost per customer goes way up for the paid tiers.

The only thing that would work is if the companies can somehow manage to get customers to pay incredibly high costs per token, so that not only are the OpEx costs covered, but the companies can start to pay down the initial CapEx. But, there’s just no justification for that yet. And the ruthless competition between all the AI companies means that if one of them starts trying to jack up costs to cover their OpEx, the others will keep theirs low to grab market share.

This is why the AI companies are doing all the things they’re doing. They’re talking about their models “escaping containment” and “hacking” other companies. Why? Because that makes it sound like these things are so powerful that they can’t be contained, rather than it being that the AI companies are incompetent and building a locked-down test environment, and how they are just running dumb scripts that they’re not even looking at before the execute. They’re boosting stories about the AIs being so powerful that they’ll destroy the world so that CEOs think they need to buy subscriptions to this powerful machine god for their companies. They’re inviting regulations and laws so that no new AI companies can enter the business, and so that they’re all forbidden from building new models, which is a massive CapEx (sorta) cost.

They can’t admit that the attempt to build a machine god has failed, because that will cause the bubble to pop. What they want to do is survive long enough to go public so that the costs they’ve spent can be foisted on the dumb retail investors – and at this point on pension funds and anybody holding index funds, because these companies are so huge that index fund managers would be obligated to buy them. So, they need to keep scaring people about how incredibly powerful and unstoppable their word-guessing-machines are until their investors have safely grabbed their profits and everything can be allowed to explode.

Well put. This is just another version of the same old game. Over-leverage on hype, cash out, push the losses on the public, and the government cleans up the mess. 😡

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IOW, the plan is proceeding as “intended”. See: Airbnb, Uber, etc.

That’s where I disagree. Uber maybe has a viable business as long as they keep finding gullible or desperate people to drive for them. Their OpEx costs are tiny, it’s nothing more than a system that receives a message that someone wants a ride and sends out a bid to take that customer. Then it’s a pricing algorithm that drops the price that they pay to drivers as low as possible, while driving the cost of the ride as high as possible. They get whatever slim margin is left.

AirBnB is similar, virtually no OpEx costs, a very simple set of algorithms to match places for rent with people wanting to rent them, then fiddle with the prices and extract a middle-man fee. As long as they keep staying ahead of government regulations, there’s a business there.

But, nobody had to go out and explain to drivers why they might want to drive for Uber. “You drive people, we pay you money”, it’s a simple sales pitch. Same with AirBnB. Hotels and taxis were annoying enough that it was easy for consumers too. But, nobody has yet found a long-term justification for chatbots.

Sure, some companies are trying to use them. But, not successfully. Air Canada replaced customer service reps (presumably in a call centre in India or something) with a chatbot. But, when that chatbot hallucinated a policy when talking to a customer, the courts found that Air Canada had to honour that policy. That’s a massive risk long term, especially once people get good at figuring out how to talk to them.

People are using them to generate vast amounts of code… but code is a liability, not an asset. The things code can do might be an asset, but you have to be able to understand and maintain the code for it to work. If people are using AI to generate the code, and other people are using AI to review it, nobody actually understands it. This is just a time bomb waiting to blow up.

If there really were some kind of guaranteed money making thing that chatbots could do (other than online scams), the AI companies wouldn’t be out there trying to sell AI in general, they’d be buying companies and/or starting divisions that did that one thing.

IMO, the AI companies intended to hit AGI, and hand everything over to the machine god. Now they realize that it really just is a clever word-guessing machine with some vague capabilities that niche users might want (but not at the price they can meet), and they’re scrambling to find a seat before the music stops.

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I think part of that is because Uber’s version of “AI companies chasing AGI” was self-driving cars. They were pretty obviously just relying on human drivers until they could replace them with self-driving cars. When it turned out that was going to take too long, that was when they really started raising prices and lowering pay. They also had to get into delivering food, competing with Doordash etc. I think the AI companies will try to follow this model: raise prices, lower services, and pivot to an alternative market that uses similar tech. I don’t know what that would be for AI, though. Ultimately, the real difference between Uber/Airbnb and the newer AI companies is that Uber and Airbnb worked on a technical level. This AI shit does not.

Another comparison, they’ll need to make token cost 100x to get those numbers. That’s because almost anyone who’s the target demographic of these AI tools is already using it. I don’t see what market is even left to cover. But let’s say their user base is 2 billion ( open AI has 1 billion, I’m extrapolating the rest based on market share) and they’re trying to get almost everyone on the planet with an internet connection to use these products, which is 6 billion, that still means at current prices, they’re only 3-4℅ of the way there.

Yeah this is going to be a freaking disaster.

open AI has 1 billion

I don’t really believe that. Have 1 billion people used it at least once? Maybe? Maybe part of that 1 billion is the same people on different accounts. I definitely don’t think there are 1 billion regular users.

Bain is a fucking moron

Great, now a phonetic Batman villain has a say in the economy. Good. It’s just a joy to see, really.

So wild to see the mainstream media slowly accepting what I have been screaming to anyone who will listen for 4+ years now.

Better late than never?

I’m never letting anyone get over this. When I first heard about AI I was like, “oh, it might be interesting, but since it costs more to keep on than it makes in revenue it’s economically useless, right? Right, Anakin??” I now know how I would react during the Emperor’s New Clothes. That makes me feel good. Unfortunately, I also now know how most other people would react, too (“My, your grace, what a beautiful set of clothes you have! I can’t see your balls at all!”). That makes me feel scared for the future.

Basically, this is a money pump to bleed out small and mid-sized corporations, they fire all their workers, pay out all their wages to AI, but their customers can no longer afford to use them, they run until they’re dry leaving Nvidia, X and Oracle as the only remaining companies, who can afford to (and are designed to) run mostly by AI

So there will be trillions spent on land and energy wasting data centers to get a dressed up ELIZA that will not solve a single world problem (like hunger, homelessness, poverty, ecological collapse). Simply great! Why not end capitalism right now? It is the only reasonable path at this point.

Someone asked me a couple of weeks ago why the New Zealand Green Party’s answer to all of our problems seemed to be taxes on rich people and big corporations. I said that it was because 40 years of neoliberalism had given us an economy that balanced a rise for the 1% with a fall for the 99%, and we should start trying to address that gently and legally before the 99% remember that a guillotine is 18th Century technology and can be easily constructed in a garage.

The end of capitalism isn’t too far off, the way things are going. And it’s going to be messy as hell.

Finally a way to get endless Just Dance Vance videos combined with every type of kitten and alligator interaction video!

Get the sheriff of Nottingham to take care of it!