alt Hacker NewsWhy? Do you think frontier AI will never generate enough profit to justify its costs? The market seems to move on vibes rather than logic. I can imagine one of those company failing and the other seizing the market.
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Tangentially: The costs could be justified even if it doesn't turn into profit, no? Because if the price of good, robust software plummets, then that itself would be a a solid return on investment for the world.
> Do you think frontier AI will never generate enough profit to justify its costs?
I don't know, but I'm not sure it matters. Anthropic and OpenAI still have such large market shares only because their services are heavily subsidized. This can't go on forever.
At some point, they will have to stop burning investor money and start hiking prices. At that point, all of their competitors will look even better than they do now. So I don't see how these two companies in particular can generate enough profit to justify their costs.
They and their partners can’t pay off the debt to buy top-of-the-line inference hardware before it becomes obsolete and requires more debt to buy the next generation of top-of-the-line inference hardware.
This cycle will continue every 3-5 years. Given the supply for this hardware can’t keep up with the demand, they’ll be expected to pay more with each cycle.
while what you say is true, trillions of dollars and thousands of people invested in something that ultimately leads to a few companies from china doing the same 10x cheaper is a vibe that can go so far