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by StevenWaterman 37 days ago
The problem is, people see "they're not profitable once you account for training" and equate that to "AI will go away soon"

But if all the AI companies stopped training new models, they would all instantly become profitable (and stick around)

The thing that makes them unprofitable, is having to compete (which means training models). If / when enough companies exit the market, the cost to compete goes down and you end up in an equilibrium
3 comments
notahacker 37 days ago
Sure, but if companies don't exit the market and FOSS alternatives don't end up being unable to get near them in quality, they have to keep spending on training. And conversely, if the market becomes uncompetitive and FOSS sucks, the winners of the AI arms race are very strongly incentivised to stick their prices up anyway...
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JumpCrisscross 37 days ago
> if companies don't exit the market and FOSS alternatives don't end up being unable to get near them in quality, they have to keep spending on training

Eh, the AI companies still have lots of datacentres. For the guys who funded with equity, they could collapse down to just running those as utilities. (For the guys who funded with debt, they'd have to restructure.)

From the customer's perspective, this situation shouldn't result in a cost spike. (Consolidation, on the other hand, would. But that's a separate argument from the one the article attemptes to make.)

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notahacker 37 days ago
How often do VC funded unicorns collectively decide to stop scaling up, shut down all their departments targeting growth and reach breakeven point by becoming low margin utilities that will never justify their valuation?
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InsideOutSanta 37 days ago
That's all true, but that ends badly for us either way. If there's competition, training must continue, which must eventually be reflected in pricing.

But if there's no more competition, there's no more incentive to keep prices low, which will also be reflected in pricing.

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lefty2 37 days ago
> If / when enough companies exit the market

That will only happen when the bubble bursts and those companies will exit by going bankrupt

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