You know when you’re playing a game and you think this is kinda dumb sure my gun now does 100 more damage but the baddies have 100 more health so really nothing has changed? But it still makes you feel better because well, it’s 100 more.
I think that’s how these valuations work.
Fuck no it should never be normal. Its against true business. If there wasn’t so much money in the system then a business would have to actually run like a real business.
Yes and it should be worse. OpenAI should be forced to take on the cost of compensating every copyright holder it exploited. If that means OpenAI doesn’t exist I’m absolutely okay with that.
Spotify hasn’t made a profit at all since its inception afaik.
No way with their user base being so massive they are net loss. Can’t be true
Spotify on Tuesday said it anticipates reaching profitability for the full year in 2024, which would mark the company’s first full profitable year since it launched 18 years ago.
https://www.axios.com/2024/11/13/spotify-projects-first-full-year-of-profitability-ever
Wild. You would think they would have restructured somehow rather than banking on investor money in hopes that doesn’t dry up and to be net loss for 18 years just goes to show there is too much dumb money in the system at play.
Labels take %70 of royalties, leaving Spotify %30. Also they dropped a lot of momey into podcasts. https://www.businessofapps.com/data/spotify-statistics/
Totally normal. Just keep throwing stupid amounts of money at it so it can find a way to undercut some existing business structure by operating at a loss until that business is dead and then enshittify. Profit! /s
removing the cost of R&D I would assume its profitable right? Once the model is trained running it takes significantly less computing. OpenAI has a fuck ton of customers so I would assume they are making back the cost of running their model API.
With these kinds of models you can’t ever stop training them, otherwise you reach a point where the data becomes dated and thus the model is dated.
Think world events. Say another bird flu became a pandemic. The model can only know about that if it’s trained on those events.
There are systems (Rag) that can answer questions based on additional content, but that would only work on a subset of problems/situations.
I should fucking hope OpenAI isn’t profitable.
valued at $157 billion
Isn’t profitable
Pick one.
Profitable means your revenue is higher than your expenses. Valuation is whatever someone is willing to buy your business for (i.e. what they think the company could earn in the future). They are completely separate concepts, and a highly profitable company could have a low valuation while an unprofitable company can have a high valuation based purely on the future potential of the company.
So now we are actually to the point where we can ask if a corporation or more widely anything at all has any value if it makes no profit.
There are people in the world who by luck of birth or circumstance have amassed obscene wealth and they after the fact are trying to convince everyone that profit is the only thing of value. These are the real public enemies.
Altman has since said the company is losing money on its $200-per-month Pro subscriptions, which offer limitless access to its most recent model, OpenAI o1, and to its video generator, Sora AI. “People use it much more than we expected,” he wrote in a post on X.
It’s ridiculous. More people use the product, so they’re losing money? What. That’s the complete opposite of what a business is.
Not to mention the environmental damage they’ve been doing for close to no positive results.
It’s not more people using the product, it’s the limited population who are paying $200/month use it way more than they thought they would. So the costs per person paying that are going way over $200/month. Basically, they made the mistake of setting a fuck off price that was too low and a bunch of people did the math and took them up on the offer.
If the product costs that much to run, and most users aren’t abusing their access, it’s possible the product isn’t profitable at any price that enough users are willing to pay.
This is dumb. Moore’s law may be mostly dead, but chips are still progressing at an absurd pace. In 6 years you’ll be able to run the o1 model on a raspberry Pi with no internet access.
Maybe, but i never mentioned years into the future. Of course technology will improve. The hardware will get better and more effcient, and the algorithms and techniques will improve.
But as it stands now, i still think what i said is true. We obviously don’t have exact numbers, so i can only speculate.
Having lots of memory is a big part of inference, so I was going to reply to you that prices of memory stopped going down at a similar historical rate, but i found this, which is interesting
https://ourworldindata.org/grapher/historical-cost-of-computer-memory-and-storage?time=2020..latest
The cost when down by about 0.1x from 2000 to 2010. 2010-2020 it was only about 0.23x. 2020-2023 shows roughly another halving of the price, which is still a pretty good rate.
The available memory is still only one part. The speed of the memory and the compute connected to it also plays a big part in how these current systems work.
There’s absolutely no doubt that lower-end models are going to keep improving and that inference will keep getting cheaper. It won’t be on a Raspberry but my money’s with you. In 6 years you’ll be able to buy some cheap-ish specialized hardware to run open models on and they’re gonna be at least as capable as today’s frontier models while burning a fraction of the energy.
In fact i wouldn’t be surprised if frontier models were somehow overtaken by vastly cheaper models in the long run. The whole “trillion parameter count” paradigm feels very hacky and ripe for radical simplification. And wouldn’t it be hilarious ? All those suckers spending billions building a moat only to see it swept under their feet.
I almost shat myself in half when I saw how much water is needed for cooling for every prompt
needed? no, water cooling was a choice
Used was probably a better term there.
Why is the water consumed? Can it not be cooled and recirculated?
Same goes for Tesla, it’s severely over bloated even if it’s bubble has shrunk a bit.
These sort of bubbles should be stopped by the government but why stop that if the politicians themselves are the ones having pumped millions into these bubbles?
First you gotta make a law prohibiting politicians from having stocks, then watch how fast this problem gets resolved
Why should they be stopped by the government? That assumes the stock market should be logical and predictable but why should that be true? It’s all speculation, just a step above gambling, and people should be allowed to.
Tesla is a great example. Its stock has never been at an expected level for their revenue or profit. It’s all speculation about their potential to disrupt the car market (which they have), and predictions like 50% growth per year. Even now, self-driving and artificial intelligence seem a bit far fetched to most of us, but if they happen will be very disruptive.
But yes , politicians should have required ethics standards, including banning insider training. The rest of us have to: how does it make sense for our leaders to have lower ethical standards than everyone else?
It should be forced to be logical and predictable because Capitalists have made it so the stock market is the only way to really save for retirement.
Our society and economy shouldn’t be a fun game for the whales to win at the expense of the rest of us.
people should be allowed to
uh no they shouldn’t
Why should they be stopped by the government?
Maybe, but hopefully the existing controls will prevent that from happening again …. Unless overzealous attempts at “reducing regulations” break those. There were quite a few factors around the Great Depression but consider controls like:
- “circuit breakers”, automatically halt trading when a stock or the overall market drops too quickly
- “qualified investors” are criteria you must meet for the riskiest investments, basically that you can handle the loss
- bank requirements for capital, risk, so less likely to collapse
- bank rescues - Lemmy likes to complain about rescuing banks instead of people, but bank collapses during a crisis are what can push the crash off the deep end
Also the overall size and complexity of the modern investment industry should make it much less likely for any one type of investment to drive a general crash.
None of them have come close to the severity of the Great Depression. We’ll never control all instabilities, the important part is limiting their severity
Yes, I’ve been affected by several of these. I’ve gotten laid off during downturns. I’ve been affected by high interest rates. I’ve been affected by unattainable housing. But at least it wasn’t worse
And yet this is a place where centrism is the goal.
- We know that trying to tightly control economies does not work. At all. We shouldnt even try.
- We also know that corporate-anarchy serves only robber barons. That’s not acceptable.
So yes, the best answer is to give the market freedom but not complete freedom. To let it do its ups and downs … within limits. To combine the strengths of capitalism with the guardrails of a guided market. Where the capitalist driven market does not serve society, it’s a failure to guide the market so capitalism fulfills desirable goals
- “qualified investors” are criteria you must meet for the riskiest investments, basically that you can handle the loss
I’m surprised you’re not calling that a government overreach considering your previous comment.
Do you think the current government controls are working and shouldn’t be changed at all?
Isn’t it a private company? They could say it’s worth infinity trillion dollars…
No, not quite. They’re funded by venture capitalists, who put money into investment rounds on the understanding (speculative gamble?) that the company will have a given future value. The last funding round was $6.6bn on the basis that the company will be worth $157bn when it is floated on the stock market. Ed Zitron has quite a good analysis on his page, and also why their business is a complete pile of shite:
No.
Aka why not to have headlines in the form of a question.
AKA Betteridge’s law of headlines.
Finance bros who run wall street are all idiots, so they designed a system where no matter how stupid they are, they’re always right. If you get a bunch of finance bros in a room and give a really good sales pitch, your valuation can triple despite nothing real actually happening.
In the case of AI, even the foremost experts are uncertain about how useful AI is. Qualified people disagree and no AI based tool has really proved itself to be robust, but it is amazing at fooling people who are either dumb or willfully ignorant, so it’s like crack cocaine to anyone who works on Wall Street.
There are multiple multiple useful implementations. They might not be ethical and cost people jobs but there are loads of smaller projects in use. We use it to analyse pictures of completed work to ensure it is to standard, has been working great and passed all audits.
Are you talking about machine inspection? Cause that’s been around for decades. Why is that impacted by AI? You usually want the opposite of ai, a traceable way of verifying a part was made right every time.
Possibly? Its how things are installed in the field, if it as spec or not. We trained it on thousands of examples of right and wrong and now its reliable
It shouldn’t be, but it is. 20 years ago, in the far-off year of 2005, a lot of tech companies more or less followed the same path, where it took decades for them to actually be profitable, if they were at all.
YouTube ran at a deficit for something close to 15 years. AI companies are likely following this trend, and running mostly on investment money, rather than being self-sufficient.
I don’t know about now, but Amazon ran a deficit for pretty much its entire existence. Amazon is a bit different though since it was part of an R&D strategy and they could’ve stepped off the gas at almost any point and been profitable.
That’s a long established myth. Amazon started out in 94, and became profitable in like 10 years. Most of their hardcore R&D is self-financed cause they generate just that much free cash.
Right. They spend their free cash (and sometimes more) on R&D and infrastructure, which by definition means they’re unprofitable. Profit is what’s left after expenses, so if you have nothing left, you’re unprofitable.
Thanks for clarifying that profit is calculated using a subtraction, but you’re missing the core of my comment. Amazon self-finance their R&D and STILL make a fuck load of profit. They made like 30B$ of free cash last year alone. In the last 15 years they’ve made >100B$ in overall profit and only been in the red twice.
They’re not just profitable they’re an insane money printing machine that doesn’t show any sign of slowing down.
They’re a money printing machine, but they’re usually unprofitable because they spend it all.
If you made $1M/year and spent $1M/year, your household would be less profitable than one that made $100k and spent $90k. That’s what profit means, it’s the amount you keep after all expenses are paid (assets - liabilities). It’s obviously more complex since there are other measures (e.g. EBIT), but that’s generally how profitability is calculated.
Their R&D tends to go to things that will make more money, so it’s not wasted, but it’s only profit if they don’t spend it.
Oh thanks for clarifying in even more excruciating details how a subtraction works that is really helpful.
Why would you repeat the lie that they’re “usually unprofitable” when the information is publically available in a million places on the internet ? In 2023 Amazon made :
- 575B$ in sales
- If you remove costs of goods that’s 270B$ in gross profit
- If you remove operating expenses (including R&D) that’s 30B$ in net income
Amazon is factually not “usually unprofitable”, they have in fact made profit (as in money which actually goes into your pocket after discounting all expenses) every year for the last 15 years except in 2022 and some tiny losses in 2014 and 2012.
The company started in 1994, posted it’s first profitable year in 2001, and had little or no profit through 2014. So for the first 20 years or 2/3 of the entire history of the company, they were unprofitable or barely profitable.
That’s my point, Amazon has historically been hugely unprofitable, so looking only at profit doesn’t tell the full story.
OpenAI was founded ~9 years ago, which isn’t all that different from the timeline for Amazon. They are in very different markets (ironically more similar now with AWS getting huge), with Amazon starting as a logistics company and OpenAI being a pure tech company, so the financials of both will look quite different.
Pretty sure youtube still runs on deficit. Storage costs alone would probably bankrupt some small countries.
People don’t realise how much the storage and bandwidth costs are for a site as big as YouTube, and it keeps going up due to the huge number of videos being uploaded. People think that Google are making huge amounts of money from YouTube. In reality, they’re not breaking even and rely on other, profitable business units (like their Workspace and cloud services) to subsidize it.
There’s no way the ads fully cover the cost, and more and more people are blocking ads. Advertisers don’t pay for blocked ads, and YouTubers don’t make any ad money from your views if you use an ad blocker. (this is the main reason YouTubers say they make less money from ads than they used to - ad blockers)
I guess the cost is worth it to Google just to entrench themselves and their products even further into the lives of most people.
Yeah it’s part of their overall strategy to be seen as a core part of the internet / the web. Same as Yahoo in the 90s and early 2000s.
The more people that use their free services, the more appealing they are to advertisers compared to competing ad platforms (broader reach), and the more paid subscribers they get.
Products like Visual Studio, some Jetbrains IDEs, VMware ESXi, and a lot of SaaS products, are (or used to be) free for individuals or for open source usage for a similar reason - people get familiar with them at home, and end up recommending them and buying them at work. A few individuals liking the product can result in large companies signing paid contracts for tens of thousands of users.
Tech companies were in that boat in the late 90s as well.
The dot com bust deflated it somewhat, but somehow the industry got right back to it within a couple of years.
Gotta keep in mind, profit can always be distorted based on how much employees are getting paid.
Someone is making money. In fact, a lot of people are.
