Technology

They also know not to spend trillions making the product.

You're thinking too long term. IPOs are the C suite cashing out.

Once you get into things with useful generation and large context windows, or things like video generation, suddenly you need one or more $10,000+ pieces of hardware to run it.

A Blackwell server with 72 GPUs costs about $3 million, plus requires 130 kW of power (about 3 residential homes' max rated power through a residential 200A circuit box, for about $600-$1000/day in electricity cost).

You're gonna need to sell a lot of $20/month subscriptions to get that paid for, assuming that the server is good for 5 years. If it's only good for 3 years, the economics are basically impossible.

I am no AI fan, but I do not see this going away. I think if you can get enough people addicted, they will pay costs if the costs seem nominal at first.

If someone can’t write well and has an upcoming deadline for an essay or needs to write an important document, they might use a one-time fee. If someone uses it for day-to-day decision making, they will certainly do a subscription if it seems cheap at first. And once you have those people expecting to pay, the price keeps increasing every couple of years.

Example a - Facebook. Rolled out as an entirely free service and enrolled billions of members. Now enough people pay for extras in things as stupid as Candy Crush that they can tack millions onto their revenue for nearly no benefit provider. If enough people pay $1 for something stupid, it pays off

Example b - Prime streaming services. It was a free tack-on to people with Prime memberships. So people bought Fire sticks and use it as a home base. And now they are so cemented into the system and don’t know how to use an alternative so they will pay for 1) extra apps that will show the program they want, which will pay Amazon a fee and 2) pay extra for no ads now that they are addicted

I also have no doubt that advertising can be baked into AI. Just wait until it writes a pathology report and recommends a certain brand name medication, or gives someone a to-do list for hosting a Christmas party with specific brands and desired trends listed.

As for video generation, I think you have a small enough pool that does this anyway, and this will increasingly be consolidated by price towards a handful of powerful individuals who want to sway public influence.

You and I may not pay for it, but have no doubt you can get similar adoption to streaming services and you can get people to pay for anything if it feels cheap enough to be nothing money. I’ve become a cynical old fart and I’ve watched this song and dance too many times.

People will pay $10 a month for chat GPT to write their emails.

They won't even pay that in many cases but instead rely on the free offerings. Expect those to go away altogether, to be heavily hamstring, or to become absolutely riddled with advertisements.

On the code development front it's even worse as now you have an unpredictable cost based on token consumption rather than the predictable cost of a salary and have no leverage to negotiate the cost.

Oh you mean the Tesla with a PE Ratio of 382 (20 times the industry average), a PEG of 16, P/B to 18, massive insider stock dumps, and is still down YTD? Tesla still has power because of their stranglehold on charging. AI companies have insane costs and people souring on them as they either lose their jobs or see their companies’ costs go up as a result, all without solid ROIs and strong buyers remorse.

And Trump/Hegseth keep giving them contracts because they’re idiots

If I wasn’t convinced the entire financial system was fraudulent I would be shorting the fuck out of all of them

The arc of technology progress since the crash in the early 2000s has been pump and dump scams perpetrated on the entire market.

That sounds like something The Wolf of Wall Street would say

This is capitalism working exactly as intended. People with capital are using it to guide businesses to make them more money.

The mistake is thinking that capitalism is motivated by a healthy economy, when the theory is that if everyone is aggressively selfish then the economy will naturally become healthy and efficient.

The people making money are counting on making their money as investors keep pumping more in. The investors are all aiming to be the last one to sell before the crash. Russian roulette venture capitalism. (In some cases they think the economy will tolerate 1-2 companies and they're aiming to buy a controlling interest in a company worth 2% current value after the correction, and in others they just have so much money that a few billion is a minor bet - BlackRock comes to mind, with more than $10 trillion to invest)

If you look at 2008, we had a similar-ish situation with a major portion of the economy being invested in mortgage based investments.

ERROR: Capitalism has no idea how to deal with this situation.

Au contraire, it actually does! The same way the last four or five economic crises were handled - massive government bailouts for the affected sector.

It'll soften the blow for the common people's 401ks so they don't completely revolt, but the c-suite execs will get their big payoff and the asset buyup (datacenters, hardware, etc) in the aftermath will transfer an unimaginable amount of wealth into the hands of yet fewer people and dramatically increase inequality.

It's a shitty solution, and one that is not viable long term, but since it has worked so many times in the past, I doubt the government is going to change up their winning strategy. Especially not with the current clown cadre at the helm.

• replacing human workers is their fondest dream so they want to believe so hard
• they have FOMO "everyone else is doing it and I don't want to lose out"
• everyone else is doing it and if they didn't do it and were wrong, it would be worse for their reputation than following the pack and being wrong
• c suite types talk to each other and they've formed an echo chamber

In summary, CEOs (of large public companies anyway - your mom and pop plumber could also be a CEO) are not smarter than the average person. Just more amoral and having the connections to be CEOs

technology is incredibly useful and probably beneficial to society

For what? It's not reliable enough to actually automate anything and people that use it regularly inevitably stop checking the output and start falling victim to hallucinations. It's pretty good at rifling through social media posts which I don't think is good for society and it's OK as a frontline support system but even that they normally go too far and just make it infuriating

This isn’t directed at you specifically, but just the broad sentiment that people are coming now OK with AI even though people kinda I guess forgot that like AI stole and ripped all of our information books. Music works of art all of it’s stolen ya know. But I’ll digress it doesn’t matter anymore.

Yeah, Nvidia invests in Open AI, Open AI uses that money to buy Nvidia chips. More people invest in Nvidia because it's revenue keeps growing.

Charles Ponzi would be proud.