alt Hacker News> The "let's make money by selling/renting out TPUs" faction has won and the "let's make money by training and selling a frontier model" faction has lost.
Citation needed.
also, why can't a massive company do two things?
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aix1 • today at 6:37 PM
With all due respect, did you read my comment beyond the first paragraph? It addresses both points, TPU economics/pivot to sales + internal shortages making it hard to train models, to the extent they can be addressed based on public sources.
There are other factors at play, but they're more recent/second-order.
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"why can't a massive company do two things?"
It's a variation of opportunity cost. A company that has an opportunity to take $1 and make $1.50 on it can't justify an opportunity to spend $1 and make $1.25, even though a less profitable company may make a good living on that. When considering capital allocation, Google has to consider the opportunity cost of investing more into their highly lucrative ads business. Another company that has no access to such a lucrative business uses different opportunity cost when it comes to allocating capital. It can easily be the case that Google could end up justify being in the business of renting out shovels and end up chased out of the business of using the shovels to create AIs entirely because that turns out not to be where the money is. I'm not saying that's obviously inevitable; I'm saying it's a possible and reasonable outcome.
That's why even though the industry produces giants, these giants can never just eat everything. Even though it seems like they have all the money, it isn't practical for them to try to do everything and in fact limits get hit very quickly for anything other than the primary, lucrative business.
Apparently there is no snappy term for this in the business space, according to such AI searches as I have run.