alt Hacker NewsI'm not taking a side here - I don't know enough - but it's an interesting line of reasoning.
So I'll ask, how is that any different than fabs? From what I understand R&D is absurd and upgrading to a new node is even more absurd. The resulting chips sell for chump change on a per unit basis (analogous to tokens). But somehow it all works out.
Well, sort of. The bleeding edge companies kept dropping out until you could count them on one hand at this point.
At first glance it seems like the analogy might fit?
Someone else mentioned it elsewhere in this thread, and I believe this is the crux of the issue: this is all predicated in the actual end users finding enough benefit in LLM services to keep the gravy train going. It's irrelevant how scalable and profitable the shovel makes are, to keep this business afloat long term, the shovelers - ie the end users - have to make money using the shovesl. Those expectations are currently ridiculously inflated. Far beyond anything in the past.
Invariably, there's going to be a collapse in the hype, the bubble will burst, and an investment deleveraging will remove a lot of money from the space in a short period of time. The bigger the bubble, the more painful and less survivable this event will be.