[JSR_FDED]

Why would revenue continue to grow at this rate?

Enterprises are becoming increasingly aware that the best models can be used for planning and then cheaper models for execution - all the way to local models for some tasks.

Add in increasing competition from Chinese models… I’m not convinced this revenue growth is guaranteed.

[ted_dunning]

Add in the fact that they claim 900 million weekly uniques. Pretending the growth and cost rates compound as described in the article, they will need to generate about 100x current revenue to growth out of their current hole. That sort of implies that they will have 10x the entire world's population as weekly uniques at that time.

That seems unlikely.

[pu_pe]

It's not like their 10x revenue growth year-to-year was based on expanding their customer base 10x though. The vast majority of weekly users are not paying, so they are actually a cost right now, but could be converted into paying users or audience for ads in the future.

[necovek]

They could have 2x customers spend 50x as much money too.

I think it's more about contrasting it with world economy as a whole for a reality check.

[ZaoLahma]

> all the way to local models for some tasks.

I think this is the key takeaway for the future of AI. Give tech a few years to catch up and we will likely have the functionally equivalent to today's models running on consumer grade hardware. From there it will explode, where "it" is how we use and interact with computers. AI will be integrated into just about every workflow.

The business case in this future would be to sell the trained models to end users. The investment would be shifted towards the training of models and delivering updates, with revenue coming from model licenses, upgrades and cloud services for tasks that exceed the local capabilities.

[danielmarkbruce]

global gdp is over 100 trillion. Something like 50-60% is paid to labor. If you assume AI takes a good chunk of labor, the market is gigantic. Really really really gigantic.

[dofm]

AI bots don’t buy consumer goods and other services.

If people don’t get work they stop buying things. If people don’t buy things, companies don’t make money. If companies don’t make money they won’t buy — or have a reason to buy —- AI companies’ services.

You cannot eliminate a significant chunk of labour cost without causing demand collapse. People saying that there is money in eliminating labour costs at that scale are not doing the whole of the calculation.

[danielmarkbruce]

I'm not suggesting the people then sit idle. The economy can grow, services can be added, the % done by AI drops, but the raw value of it doesn't. It's just to show that the market is extremely large.

Like agriculture. That market has grown significantly through time, even though it's shrunk dramatically as a % of GDP.

[dofm]

How can people be economically active if their jobs are eliminated from the economy? At best they job-share, and demand still collapses, just in slightly different ways.

AI cannot make money as an alternative to large scale employment, because essentially all the clients of those AI businesses will see demand for their products and services collapse. AI bots don’t go to In-N-Out Burger or Disneyland.

Anything else is fantasy maths, albeit commonplace fantasy in the AI industry at the moment.

[margalabargala]

Most labor by any measurement is not knowledge work like software engineering.

[danielmarkbruce]

If by most, you literally mean > 50%, sure. But I've heard it quoted that knowledge work in advanced economies is something like 40%. So, we are still talking extremely large numbers.

[dofm]

They are also the higher earners who buy more of the things.

Henry Ford said he needed to pay his workers enough that they could afford his cars.

[bayarearefugee]

> If you assume AI takes a good chunk of labor, the market is gigantic. Really really really gigantic.

But without labor the entire economy also collapses into a singularity beyond which nothing really makes sense anymore, so there's that.

[dofm]

And it possibly does not take eliminating much of the labour over the span of less than a lifetime to fundamentally break economic signalling.

Much smaller rates of unemployment have worsened stagflation cycles due to various policy traps we are certainly not immune to repeating.

[spongebobstoes]

because they have more research and better models coming

building a Rube Goldberg machine on Chinese models might work okay, but it will be brittle, and is unlikely to work as well as the latest and greatest model from OpenAI

the demand for intelligence is nearly limitless

[niemandhier]

Did you read the code dump Anthropic involuntary gifted us?