"LLMs can do anything" except make positive cashflow.

20 days ago by abbadon420 to c/funny

Rothe 91 points 20 days ago

Your local grocery store is more profitable than OpenAI. In fact you are more profitable than OpenAI.

OpenAI owes hundreds of billions of dollars, with a revenue a fraction of that. They will never become profitable.

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UnderpantsWeevil 28 points 20 days ago

They will never become profitable.

If you look at OpenAI as a single, independent, private company then they appear unprofitable. But when you look at them as a means of laundering Pentagon money and other federal contracts into straw purchases for NVIDIA and Oracle, they are immensely profitable.

AI is a Loss Leader. It props up the production and sale of hardware, which has been fruitful for its partners, its investors, and the economy as a whole. It is a digital form of induced demand in so far as new construction creates a "virtuous" cycle of increasing consumption, as more and more of the business and public sector is dragged into its orbit.

The end-game for OpenAI is to have a captured market of businesses and government institutions. Whole sectors of the economy devoid of human knowledge workers who are hopelessly addicted to AI Agent processes, because nobody managing the companies actually know what these agents are doing anymore. At this point, Altman and Amodei can charge whatever they damned well please for token traffic, because there's no bureaucracy capable of competing with them.

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JcbAzPx 16 points 20 days ago

Most of the money getting funneled to Nvidia came from them in the first place. That's why they're one of the chatbot's biggest cheerleaders.

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UnderpantsWeevil 5 points 20 days ago

Most of the money getting funneled to Nvidia came from them in the first place.

NVIDIA's not getting most of its money from OpenAI. OpenAI doesn't really buy anything from NVIDIA. They buy rack space from Oracle, which then builds out new datacenters with NVIDIA chipsets. And Oracle's primary revenue stream is from its business Cloud Services, of which OpenAI is a small fraction.

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ayyy 8 points 20 days ago

This would make sense if they were the only game in town , but they very much…aren’t.

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UnderpantsWeevil 9 points 20 days ago

Keeping foreign technology out of the reach of US consumers has been a big part of Trump/Biden/Trump-Era tech policy.

And as hardware prices skyrocket, access to compute approaches a monopoly position.

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abbadon420 13 points 20 days ago

The Weimar Republic was more profitable... well no, maybe not. But you get the sentiment.

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brotundspiele 19 points 20 days ago

They made trillions of marks, so yes they were extremely profitable.

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prole 20 points 20 days ago

I like that they never lost their gusto with the designs of the bills lol

Like they had to know that their currency was basically dead, yet they still made sure that those 100 billion Mark notes looked classy as fuck.

If/when the modern US makes it to this point, I can't imagine them putting all that much effort into making our $100 billion dollar bills look cool.

They'll probably have fucking Steve Bannon's face on them.

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naught101 17 points 20 days ago

The person designing them had to make them pretty because they knew they were going to be paid in them

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StillAlive 2 points 19 days ago

Like they had to know that their currency was basically dead, yet they still made sure that those 100 billion Mark notes looked classy as fuck.

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UnderpantsWeevil 14 points 20 days ago

I mean, you joke. But Germany pivoted out of the Great Depression far faster than its European peers precisely because they weren't afraid to print a bunch of money and pay people to do things.

The Fascists inherited one of the only recovering economies in Europe by the time they took power in 1932. And when they assumed office, they brought investment from the Americans overseas (who were having their own fascist turn), because they were willing to purge or enslave local populations, tear down neighborhoods, and build up whatever capital Standard Oil, IBM, and Ford Motor Company asked of them.

On the opposite side of the Atlantic and on the other side of the Urals, progressive liberals and Soviet communists were trying out a leftist mirror of this strategy. They were using the levers of the state to mobilize the masses of unemployed labor into productive capital improvements for the benefit of the public at-large. So the US, Germany, Japan, and the USSR all rapidly emerged out of the '29 crash into a booming 1930s economy. Meanwhile, England and France and much of Latin America and North Africa languished under artificial constraints of state-capitalism.

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captainlezbian 7 points 20 days ago

Why does that feel forebodingly familiar

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UnderpantsWeevil 8 points 20 days ago

I mean, we'll jump to 1930s on reflex. But this is a pattern that's repeated itself internationally, from Apartheid South Africa to the juntas in the Pacific Rim to Fascists in Argentina and Chile.

Economy shits itself. Social Democrats come in to deliver milquetoast reforms. The economy recovers somewhat, but never enough to actually relieve the social pressures of the moment. And then the democratic system starts vomiting up radical candidates of all stripes, while bourgeois capital attempts to ride the tiger into the next full recovery and/or national emergency.

The wheel of fortune doesn't always land on Fascism. But it's definitely a possibility.

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straussbelial 1 point 20 days ago

Revenue? ಠ_ಠ

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cRazi_man -1 points 20 days ago

you are more profitable than OpenAI

I've got mortgage debt though.

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ProfessorPeregrine 12 points 20 days ago

Waaaaaay less than OpwnAI though

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explodicle 4 points 20 days ago

See, you'd think people would do more research when lending billions for LLMs than when lending a dollar for a cardboard box.

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trebach 3 points 19 days ago

They're hoping it pays off in the long run, or at least long enough for them to go public and sell their shares at a profit while pension funds and mutual funds buy a crashing asset.

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jumping_redditor 2 points 19 days ago

you won't generate a 1,000x return on investment, AI could if it becomes AGI somehow. It's like gambling but nobody knows the odds and the payout is big enough that it's almost worth it to try without knowing the odds.

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explodicle 1 point 19 days ago

I've been familiar with the Singularity for a long time now and this "recent" perspective by AI investors bewilders me. There's no profit to be had there - you can't enslave a god. 💀

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kurt_vonnegut2 89 points 20 days ago

So you're saying we should be pumping all our savings and pension money in WinRar?

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MolochHorridus 37 points 20 days ago

It has more potential.

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yermaw 12 points 20 days ago

If they can get their sales into double digits, the sky's the limit!

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a_non_monotonic_function 7 points 20 days ago

Those numbers may actually kill the CEO.

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zarkanian 28 points 20 days ago

I was finally starting to save up money in a 401k for retirement. Then I got fired. Now the AI bubble is going to burst and nuke what little money is in my 401k. FML.

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jaybone 14 points 20 days ago

I’m trying to stick with it, and not pull a bunch of money out. If this is all just insider trading back and forth, my hope is it will recover over time and level out. (As that will be in the interest of the manipulators too.)

If it’s just a big crash, like 1929 style, then I figure we’re all fucked whether you have stocks or dollar bills or CDs or doubloons.

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MalReynolds 1 point 20 days ago

As that will be in the interest of the manipulators too.

Nope, crashes are when they buy the poors assets at cents on the dollar.

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28RipeBananas 3 points 20 days ago

Until it's bad enough that the poors decide they have had it with the owner class,

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lIlIlIlIlIlIl 5 points 20 days ago

Some of the big S&P500 ETFs (like VOO) have shockingly little exposure to AI relative to the rest of the market

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naught101 1 point 20 days ago

Source? Interested

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lIlIlIlIlIlIl 4 points 20 days ago

https://www.bogleheads.org/...

Also somewhat relevant: https://beatthecouch.com/

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naught101 0 points 20 days ago

"Source: AI" is kinda wild for this purpose

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explodicle 3 points 20 days ago

You should roll over your 401K to investments you believe in.

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whaleross 22 points 20 days ago

And a more reliable product that returns the expected results every time.

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NCSK -27 points 20 days ago

So does children working in Palestinian brick furnaces, this argument makes no sense.

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whaleross 12 points 20 days ago

So you support eating kittens is that it!!1?

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forbiddencherry 21 points 20 days ago

I'm one of the seeming few who paid to register it back in the Win9x days. Turned out that the key also works for the non-free Linux version (think I only ever bothered to set that up once). These days gzipped tarballs or squashfs with zstd are my go-tos. The former for speed with source trees or such, and the latter for filesystem backups or larger directories, because loop mounting it is so fast and convenient.

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SpruceBringsteen 32 points 20 days ago

These days gzipped tarballs or squashfs with zstd are my go-tos.

What the fuck did you just call me?

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TARgz 19 points 20 days ago

git gud

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jaybone 11 points 20 days ago

your mom gave me zstd in my tarballs

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forbiddencherry 4 points 20 days ago

And Jia Tan xz'd in your back door?

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katze 1 point 20 days ago

The former for speed with source trees or such

xz -0 is faster than gzip and has a higher compression ratio.

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stoy 1 point 20 days ago

That can't be right, all reports I have read about comparing xz with gzip tells me that xz will have better compression but at a slower speed than gzip.

Have you run a test of gzip at the same compression level with the same data?

I don't doubt that xz will be smaller, I doubt it will be quicker.

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katze 1 point 19 days ago

This is actually stated in the xz man page: -0 is sometimes faster than gzip -9 while compressing much better.

With a random test file on my system, xz -0 was 3 times as fast while achieving the same compression as gzip -6.

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UnderpantsWeevil 20 points 20 days ago

“I remember once my father and I were walking down Fifth Avenue and there was a homeless person sitting right outside of Trump Tower and I remember my father pointing to him and saying, ‘You know, that guy has $8 billion more than me,’ because he was in such extreme debt at that point, you know?”

~ Ivanka Trump

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stoy 27 points 20 days ago

I refuse to believe that Trump is capable of such introspection.

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UnderpantsWeevil 16 points 20 days ago

Believe it or not, Trump's become dumber with age.

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snooggums 2 points 20 days ago

While I believe he is dumber, he has slid further down from a room temp IQ.

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affenlehrer 14 points 20 days ago

I like LLMs and also the research but I think we're at a point where one could make a pause, turn the models into silicon and sell them as hardware for people who are actually interested.

That would solve all privacy problems, eliminate many data centers, subscription fees, internet dependencies and allow for slower and more thoughtful upgrades (hardware isn't updated as often as software). That would be a pretty sovereign solution.

However, from a company perspective they can't force it on everyone anymore, don't get all the juicy data from all the users and can't sell subscriptions any more and change everything on their side.

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merc 7 points 20 days ago

turn the models into silicone

The models are data, and silicone is rubber. So... I don't know what you're proposing here.

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cantstopthesignal 6 points 19 days ago

I believe he is suggesting we turn them into very large breasts, or in some cases big booties, depending on your preference and what part of the world you're in.

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affenlehrer 1 point 19 days ago

That is correct. Very comforting

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MNByChoice 3 points 20 days ago

Might mean "silicon", but might want to bang the LLM. Hard to know.

Words have meaning...

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merc -1 points 20 days ago

Even with "silicon" doesn't really make sense. The models already live on silicon, they're stored in the datacenters needed to run them. It's not like you can make them into some chip and magically not have to use the datacenter.

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wholookshere 4 points 19 days ago

Gonna take GPS example to explain general processors vs specific ones.

GPS works by doing some simple math around triangulation from satalites. When they first came out there were no GPS chips. It was done by a general processors.

Now they can do it, but because they can do Amy Hong they're not as fast as newer GPS chips.

How they work is the silicon can only handle the GPS calculations. But because of that, it can do it way faster.

LLMs run on matrix math and probabilities. We can 100% come up with specialised silicon to handle this math. Intact, thats what a lot of AI specialised chips are.

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affenlehrer 1 point 19 days ago

Fixed it. We don't use this silly silicon word here. I picked the wrong one. We call it Silicium Sodium is Natrium, Potassium is Kalium, Aluminum is Aluminum etc.

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merc 1 point 19 days ago

Interesting, your words match the periodic table better.

But, even with that, I'm not sure what you're proposing. The models (data) are already stored in silicon. They're on SSDs or HDDs inside data centers. But, to use those models you need to do inference which (at least for the big American models) requires a data center. It's not like you could do it on some gadget you carry in your pocket.

There are much smaller models that allow you to do that. But, because they're smaller models they aren't as accurate at the word generation game.

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affenlehrer 1 point 19 days ago

I mean this: https://en.wikipedia.org/...

There are companies working in this direction already. And regarding model size the Chinese models aren't as large as the American ones. Not on the same level but still usablzand if I had one in a little box in my office I could run it 24/7 with lightning speed which would probably make up for the model performance difference.

It's already possible with GDX Spark and similar hardware but it's relatively slow, can't run the full size models and pretty expensive.

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abbadon420 1 point 20 days ago

That would be lovely

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Jaysyn 13 points 20 days ago

I wonder what will happen in 2027 when those repayments come due.

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snooggums 17 points 20 days ago

They will get an extension based on lies about ai genocide or something.

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Jaysyn 1 point 20 days ago

From who? Not really an option. If OpenAI can't pay it's bills in 2027-28, it will end Oracle & Softbank.

Softbank is so over-leveraged, it should be illegal.

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BradleyUffner 6 points 20 days ago

They'll pay off the old loans with new loans disguised as investments between all the major AI players.

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whotookkarl 2 points 20 days ago

The government will buy a stake to both pay billionaires more from collected taxes and control what information can be generated and making the spy apparatus backdoors tracking every question or command part of the official platforms.

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Jaysyn 2 points 20 days ago

I'll bet you $$$ right now that won't happen. First of all, they still won't be profitable. Second of all it's easy to just completely avoid interacting with LLMs.

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adjectivenoun 1 point 20 days ago

it's easy to just completely avoid interacting with LLMs.

I wish that were true. Have you seen reddit lately? Lemmy isn't immune but I haven't encountered any obvious bot posts here yet.

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Jaysyn 2 points 19 days ago

I don't fucking use reddit. You seem to be missing the point.

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ILikeBoobies 2 points 20 days ago

Squeeze the working class.

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Jaysyn 1 point 20 days ago

That won't pay off the several hundred billion they owe.

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ILikeBoobies 2 points 20 days ago

That's for governments to figure out.

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Jaysyn 1 point 19 days ago

LLMs aren't important & don't employee many people. There is also no amount of free money that can make them profitable. I will happily bet you money right now this doesn't happen before OpenAI and/or Anthropic are sold for scrap.

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dubs 1 point 20 days ago

The government will bail them out: "Too big to fail"

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Napster153 1 point 20 days ago

But who bails out the goverment when they list everyone below billionaire status as a non-citizen?

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greygore 11 points 20 days ago

Actually, I’m pretty sure WeWork was more profitable than OpenAI, both in absolute dollars and percentage.

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Atomic 10 points 19 days ago

Tech companies are expected to be run at a loss for quite some time before they start being profitable.

They were founded in 2015 and "officially" launched GPT in 2022 to the public. If they make profits by 2032, that would be in line with how other tech companies established themselves.

For example, Spotify wasn't profitable until 2024. They launched in 2008.

So, I don't know why them not being profitable is what everyone is talking about. They're not expected to be profitable until 2030 at the earliest. And every serious investor know this.

Yes I'm very fun at parties. But it seems that a lot of people just do not understand the expected timelines of tech companies.

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HK65 20 points 19 days ago

Okay but the world had enough money to bankroll Spotify for 20 years. It doesn't have the kind of money OpenAI needs.

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LodeMike 4 points 19 days ago

And Spotify was barely making a loss AND had a lot of revenue. They were just putting more capital into infrastructure, etc. instead of profits.

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Atomic 1 point 18 days ago

Excuse me? From 2017 to 2022. Spotify lost an average of ~430 million euro per year. And they weren't profitable from 2008 to 2016 either... -0.43 billion per year is not "barely making a loss". But investors saw potential and they kept funding.

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Atomic 1 point 18 days ago

When it comes to technology that nations consider existential to their existence. There is always enough money.

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uen3 2 points 18 days ago

They have to at least have a plausible path to profitability. The serious investors have known for some time there isn't one with AI. Just because the AI companies will never be profitable long term doesn't mean there is no reason to invest in them short term. That's what a speculative bubble is. Everyone believes the line will keep going up long enough for them to turn around and sell to a greater fool in the near future. And for the most part they're right. The ultimate bag-holder ends up being the middle class worker and their auto-assigned 401k portfolio.

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Atomic 1 point 17 days ago

They have multiple plausible paths to profitability. To claims there's none is just stupid. If they succeed or not is another question. But it's absolutely plausible.

The product and profitability towards the average citizen of the world, is such a microscopic part of their goals. People using their product is nothing more than data to feed their model. When they're done. Their profits are not going to come from people. It's going to come from the US government and companies. The investments being poured into OpenAI isn't just disappearing into a black hole, lots of it remains in the hardware and digital infrastructure required for the project.

Even if their public worth drops to 0. They will still keep being funded. Because the research is too important to let go of.

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m532 9 points 20 days ago

Capitalists: Noo its bad, see, it doesn't make profit

Communists: Free AI for everyone

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mattyroses 2 points 20 days ago

looking forward to looting RAM and GPUs for our community library organized communist LLM

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merc 0 points 20 days ago

Yay, free pollution for everyone!

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whotookkarl 8 points 20 days ago

They'll reclassify it as a necessary utility like water or power and tax more subsidies for paying billionaires even more from public coffers before admitting it's mostly just search engines & corporate social media eating their own tail.

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merc 2 points 20 days ago

This is why I think the bubble will last a lot longer than some people think. The heads of the tech firms have such a tight relationship with the GOP, and even a somewhat tight relationship with the Democrats that it's almost certainly going to be declared "too big to fail" or "too critical to fail".

The fact that it's being used by the military just makes that even more likely. The firms will declare that if they go bankrupt, the military will be crippled -- despite the fact that the military ran just fine without "AI" just 5 years ago.

So, when the economics of the situation show how absurd this bubble is, the collapse won't happen because the firms will be propped up by the US government. That will put every taxpayer on the hook for the billions and billions of debt these firms took on. So, Andreessen Horowitz and the Saudis will be bailed out by the taxpayers who have been fighting datacenters.

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Jaysyn 0 points 19 days ago

Chatbot labs don't employee enough people for too big to fail to be a concern. There isn't enough currency in existence to make them profitable.

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merc 1 point 19 days ago

It's not about how many people they employ. That wasn't an issue during the 2007/08 banking crisis either. It's about how much capital is tied up with them. Most voters would probably say "just let them fail", but the people whose money it is are the ones who have easy access to the politicians, and they're saying "this is too big to fail".

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Jaysyn 1 point 18 days ago

Doesn't matter. There isn't enough currency in existence to make them profitable because they fundamentally cannot do the things they claim they will be able to do.

It doesn't matter how fast you breed your horses, they will never give birth a locomotive.

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ExtraJudgement 7 points 19 days ago

Proprietary frontier LLMs in companies riddled with highly suspect business practices.

My local LLM setup has absolutely been making the equivalence of positive cashflow for me since gemma 4 and qwen 3.8: I need less total time for several groups of annoying (but necessary) tasks, which means my productivity is up and I can use the rest as my own free time.

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late_pessimistic 4 points 19 days ago

I need less total time for several groups of annoying (but necessary) tasks

Such as? Just curious what people use LLMs for.

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ExtraJudgement 4 points 19 days ago

Answer questions (with references) about source code and documentation
Add clear-bounded features to a pre-existing codebase
Transpile between programming languages

Stuff I can do myself perfectly well, but the results - after postprocessing - are indistinguishable from me having done so. Even when accounting for everything (including hallucinations) the time savings are real: Renewables-powered electricity is cheaper than my attention. By a lot.

Caveat: This only works if you're already a domain expert and if you do it exclusively for too long, you might be at risk of ceasing to be such an expert. Don't use it to try and do the thinking for you.

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antiR 2 points 19 days ago

I handle so many text files in my job and LLMs help make the scripts for me to handle these text files. I know it is important to at least know stuff like regex but I am not a superhuman. It is difficult for me to heavily specialize in scripting while also specialize in the technicalities of my job. To help show why it is difficult to specialize scripting, I work with hardware description languages which have a different syntax from scripting languages. Handling different languages causes confusion on the proper syntax even with a basic if else statement because the syntax is different between languages.

Aside from this, it can also help me automate describing what the sequences I created in the file for easy documentation. I just have to instruct the "patterns" it needs to look for. I just need to proofread the output and do minor fixes.

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raven55six 7 points 20 days ago

That is so true, bringing $40 Billion a year with about $80 Billion as expenses makes OpenAI indeed in a red zone. They should consider shutting down so that we can have some level of relief from AI slop.

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bad1080 6 points 20 days ago

at this point a granny selling eggs is more profitable

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W98BSoD 2 points 20 days ago

At this point Stinky Whizzleteets teaching my grandmother to suck eggs (on OnlyGrans) is more profitable.

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BilSabab 6 points 19 days ago

at this rate Winamp might get more profitable than OpenAI and it is free.

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Jumi 3 points 19 days ago

But isn't OpenAI just burning billions of moneys already? In that case Winamp is already more profitable

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BilSabab 1 point 19 days ago

believe it or not but there was a time when Winamp used to be AOL's money drain

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SethTaylor 4 points 20 days ago

Waiter, please bring me 1,000 of your finest shares of WinRAR! I'm going to be rich, I tell you! Quite!

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bstix 4 points 20 days ago

If AI could really make your business so much more efficient that it makes up for the cost of paying for AI... Why doesn't Google just run your business themselves? They could make even more money than you do.

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chrisashtear 2 points 20 days ago

Theyd probably try to use gemini, and it would either spin in circles or delete their production databases

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makeshift0546 3 points 20 days ago

They could if investors were happy with good enough and didn’t need to release a mediocre update every 8 weeks. Plenty of folks would be happy with opus 4.8 for the next few years and a $20 a month sub.

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just_an_average_joe 12 points 20 days ago

You seem to misunderstand "opus 4.8 and $20 a month" IS the reason why they are unprofitable.

They already got the data and GPUs and lots of researchers doing research. In fact, since gpt-4o they have been trying to make these models smaller and more profitable.

But at the present moment, they just can't beat chinese models on efficiency cuz that's what those companies were focusing on from the begining due to gpu export law US put.

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chiliedogg 1 point 20 days ago

The Chinese models were also developed later and allegedly didn't have to focus so hard on the initial acquisition of training data, so were able to build their models completely differently.

Think of it like developing dictionary technology. For the first dictionary, the hardest part is finding all the words that need to be defined. After that it's just a matter of adding new words occasionally as they're found.

That's the "theft" the Western AI companies accused the Chinese companies of doing. By starting with the initial training data from Western devs, the Chinese AIs (allegedly) skipped over the hard part, which means they are able to focus more of their processing on the end product.

And that's not necessarily a bad thing, depending on your perspective (ignoring all the ethical questions around AI data acquisition). Duplicating work someone else has already done is wasteful.

But it's also disingenuous to say that the guy who takes an existing dictionary and changes all the definitions did a "better job" than the guy who wrote the first one, even if the end product is, in fact, better.

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Tollana1234567 1 point 18 days ago

they are very adept at doing a negative cash flow.

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spacegoat -1 points 19 days ago

My crooked spotted cock is more profitable than OpenAI

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Daft_ish -8 points 19 days ago

Seems like you guys dont know how the tech game is played.

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abbadon420 4 points 19 days ago

Doesn't matter. Had a laugh at OpenAi's expense

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crypt0cler1c 4 points 19 days ago

Yeah, and I bet you've got it all figured out 🤣🤣🤣

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Daft_ish 0 points 19 days ago

Erm... its just how it works. Facebook. Google. Netflix... On and on.

What ever tech company you can think of started out building a user base then pulling the rug. Its whatever.

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