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The Time Bomb Went Off: AI's All-You-Can-Eat Era Just Ended in Real Time
(www.thestateofbrand.com)
"We did it, Patrick! We made a technological breakthrough!"
A place for all those who loathe AI to discuss things, post articles, and ridicule the AI hype. Proud supporter of working people. And proud booer of SXSW 2024.
AI, in this case, refers to LLMs, GPT technology, and anything listed as "AI" meant to increase market valuations.
Didn't Amazon sail on while losing money for years as a public company? Why would super-hyped businesses like these have issues?
Adding more context to what phcorcoran said, AWS was something that actually had an "end goal". A new company offering cloud servers where you can host your stuff to be reached by the internet at large, which was already a proven necessity even back in 2003.
AI is still trying to sell itself as something useful. Not only that, the fixed monthly cost makes zero sense, because tokens have an actual monetary value - there is a cost in processing, cooling, network, etc, which can be attached to it. You'd need an army of low-usage users to pay for the power users^[you know those f2p games where the players who use their credit cards are above all others? The free players' value is in being the punching bag of the paying players. Now imagine the reverse: you need to recruit 20 paying players, who are ok to take a beating, to keep one unprofitable whale in the game. It makes no business sense, but it's exactly what's going on at the moment with their monthly rates. It's no wonder every other week, AI users are reaching their monthly limit faster and faster] to have it make any sense. The alternative is actually charging per token, like pay 10 dollars and get 1k tokens or whatever.
According to Ed Zitron, AWS cost about $52 billion between 2003 and 2017 (adjusted for inflation), and became profitable after that. OpenAI did 13 funding rounds at a total of $180 billion and the signs are that they are burning through that capital at an accelerated pace and nowhere near profitable. The scale isn't quite the same
https://www.wheresyoured.at/premium-ai-isnt-too-big-to-fail/