But new models to date have cost more than the previous ones to create, often by an order of magnitude, so the shoe metaphor falls apart.

A better metaphor would be oil and gas production, where existing oil and gas fields are either already finished (i.e. model is no longer SOTA -- no longer making a return on investment) or currently producing (SOTA inference -- making a return on investment). The key similarity with AI is new oil and gas fields are increasingly expensive to bring online because they are harder to make economical than the first ones we stumbled across bubbling up in the desert, and that's even with technological innovation. That is to say, the low hanging fruit is long gone.

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runako 5 days ago | parent | next [-]

> new models to date have cost more than the previous ones to create

This largely was the case in software in the '80s-'10s (when versions largely disappeared) and still is the case in hardware. iPhone 17 will certainly cost far more to develop than did iPhone 10 or 5. iPhone 5 cost far more than 3G, etc.

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Romario77 5 days ago | parent [-]

I don't think it's the case if you take inflation into account.

You could see here: https://www.reddit.com/r/dataisbeautiful/comments/16dr1kb/oc...

new ones are generally cheaper if adjusted for inflation. This is a sale price, but assuming that margins stay the same it should reflect the manufacturing price. And from what I remember about apple earnings their margins increased over time, so it means the new phones are even cheaper. Which kind of makes sense.

	▲	runako 5 days ago \| parent [-]
		I should have addressed this. This thread is about the capital costs of getting to the first sale, so that's model training for an LLM vs all the R&D in an iPhone. Recent iPhones use Apple's own custom silicon for a number of components, and are generally vastly more complex. The estimates I have seen for iPhone 1 development range from $150 million to $2.5 billion. Even adjusting for inflation, a current iPhone generation costs more than the older versions. And it absolutely makes sense for Apple to spend more in total to develop successive generations, because they have less overall product risk and larger scale to recoup.

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meshugaas 5 days ago | parent | prev [-]

exactly: it’s like making shoes if you’re really bad at making shoes :)