| ▲ | gizmodo59 11 hours ago |
| Even as criticism targets major model providers, his inability to answer clearly about revenue & dismissing it as a future concern reveals a great deal about today's market. It's remarkable how effortlessly he, Mira, and others secure billions, confident they can thrive in such an intensely competitive field. Without a moat defined by massive user bases, computing resources, or data, any breakthrough your researchers achieve quickly becomes fair game for replication. May be there will be new class of products, may be there is a big lock-in these companies can come up with. No one really knows! |
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| ▲ | luke5441 11 hours ago | parent | next [-] |
| He's just doing research with some grant money? Why would you ask a researcher for a path to profitability? I just hope the people funding his company are aware that they gave some grant money to some researchers. |
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| ▲ | newyankee 11 hours ago | parent | prev | next [-] |
| Sometimes I wonder who the rational individuals at the other end of these deals are and what makes them so confident. I always assume they have something that general public cannot deduce from public statements |
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| ▲ | Nextgrid 11 hours ago | parent | next [-] | | If the whole market goes to bet at the roulette, you go bet as well. Best case scenario you win. Worst case scenario you’re no worse off than anyone else. From that perspective I think it makes sense. The issue is that investment is still chasing the oversized returns of the startup economy during ZIRP, all while the real world is coasting off what’s been built already. There will be one day where all the real stuff starts crumbling at which point it will become rational to invest in real-world things again instead of speculation. (writing this while playing at the roulette in a casino. Best case I get the entertainment value of winning and some money on the side, worst case my initial bet wouldn’t make a difference in my life at all. Investors are the same, but they’re playing with billions instead of hundreds) | |
| ▲ | yen223 11 hours ago | parent | prev | next [-] | | This looks like the classic VC model: 1. Most AI ventures will fail 2. The ones that succeed will be incredibly large. Larger than anything we've seen before 3. No investor wants to be the schmuck who didn't bet on the winners, so they bet on everything. | | |
| ▲ | Nextgrid 10 hours ago | parent | next [-] | | Aka gambling. The difference is that while gambling has always been a thing on the sidelines, nowadays the whole market is gambling. | |
| ▲ | almostdeadguy 10 hours ago | parent | prev [-] | | Most of the money flowing to the big players is from tech giant capex, originally from net cash flow and lately its financed by debt. A lot of these investors seem to now essentially be making the case that AI is "too big to fail". This doesn't at all resemble VC firms taking a lot of small bets across a sector. |
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| ▲ | 827a 10 hours ago | parent | prev | next [-] | | There isn't necessarily rationality behind venture deals; its just a numbers game combined with the rising tide of the sector. These firms are not Berkshire. If the tide stops rising, some of the companies they invested in might actually be ok, but the venture boat sinks; the math of throwing millions at everyone hoping for one to 200x on exit does not work if the rising tide stops. They'll say things like "we invest in people", which is true to some degree, being able to read people is roughly the only skill VCs actually need. You could probably put Sam Altman in any company on the planet and he'd grow the crap out of that company. But A16z would not give him ten billion to go grow Pepsi. This is the revealed preference intrinsic to venture; they'll say its about the people, but their choices are utterly predominated by the sector, because the sector is the predominate driver of the multiples. "Not investing" is not an option for capital firms. Their limited partners gave them money and expect super-market returns. To those ends, there is no rationality to be found; there's just doing the best you can of a bad market. AI infrastructure investments have represented like half of all US GDP growth this year. | |
| ▲ | wrs 11 hours ago | parent | prev [-] | | "Rational [citation needed] individuals at the other end of these deals" Your assumption is questionable. This is the biggest FOMO party in history. |
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| ▲ | mrandish 11 hours ago | parent | prev | next [-] |
| > confident they can thrive in such an intensely competitive field. I agree these AI startups are extremely unlikely to achieve meaningful returns for their investors. However, based on recent valley history, it's likely high-profile 'hot startup' founders who are this well-known will do very well financially regardless - and that enables them to not lose sleep over whether their startup becomes a unicorn or not. They are almost certainly already multi-millionaires (not counting ill-liquid startup equity) just from private placements, signing bonuses and banking very high salaries+bonus for several years. They may not emerge from the wreckage with hundreds of millions in personal net worth but the chances are very good they'll probably be well into the tens of millions. |
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| ▲ | markus_zhang 11 hours ago | parent | prev | next [-] |
| TBH if you truly believe you are in the frontier of AI you probably don’t need to care too much about those numbers. Yes corporations need those numbers, but those few humans are way more valuable than any numbers out there. Of course, only when others believe that they are in the frontier too. |
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| ▲ | impossiblefork 11 hours ago | parent | prev | next [-] |
| I think software patents in AI are a possibility. The transformer was patented after all, with way it was bypassed being the decoder-only models. Secrecy is also possible, and I'm sure there's a whole lot of that. |
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| ▲ | SilverElfin 11 hours ago | parent | prev | next [-] |
| Mira was a PM who somehow was at the right place at the right time. She isn’t actually an AI expert. Ilya however, is. I find him to be more credible and deserving in terms of research investment. That said, I agree that revenue is important and he will need a good partner (another company maybe) to turn ideas into revenue at some point. But maybe the big players like Google will just acquire them on no revenue to get access to the best research, which they can then turn into revenue. |
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| ▲ | fragmede 11 hours ago | parent [-] | | That’s kind of a shitty way to put it. Mira wasn’t a PM at OpenAI. She was CTO and before that VP of Engineering. Prior to OpenAI she was an engineer at Tesla on the Model X and Leap Motion.
You’re right that she’s not a published ML researcher like Ilya, but "right place, right time" undersells leading the team that shipped ChatGPT, DALL-E, and GPT-4. | | |
| ▲ | Nextgrid 10 hours ago | parent [-] | | “CTO” during ZIRP means nothing to be fair. You could put a monkey in front of a typewriter in that environment and still get a 50% chance of success, by the success metric of the time which was just “engagement” instead of profits. If you’re playing with infinite money it’s hard to lose. |
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| ▲ | alyxya 11 hours ago | parent | prev | next [-] |
| They have a moat defined by being well known in the AI industry, so they have credibility and it wouldn't be hard for anything they make to gain traction. Some unknown player who replicates it, even if it was just as good as what SSI does, will struggle a lot more with gaining attention. |
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| ▲ | baxtr 11 hours ago | parent [-] | | Being well known doesn’t qualify as a moat. | | |
| ▲ | mrandish 11 hours ago | parent [-] | | Agreed. But it can be a significant growth boost. Senior partners at high-profile VCs will meet with them. Early key hires they are trying to recruit will be favorably influenced by their reputation. The media will probably cover whatever they launch, accelerating early user adoption. Of course, the product still has to generate meaningful value - but all these 'buffs' do make several early startup challenges significantly easier to overcome. (Source: someone who did multiple tech startups without those buffs and ultimately reached success. Spending 50% of founder time for six months to raise first funding is a significant burden (working through junior partners and early skepticism) vs 20% of founder time for three weeks.) | | |
| ▲ | baxtr 10 hours ago | parent [-] | | Yes, I am not debating that it gets you a significant boost. I’m personally not aware of a strong correlation with real business value created after the initial boost phase. But surely there must be examples. |
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| ▲ | outside1234 11 hours ago | parent | prev [-] |
| He has no answer for it so the only thing he can do is deflect and turn on the $2T reality distortion field. |
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| ▲ | signatoremo 11 hours ago | parent [-] | | Nobody knows the answer. He would be lying if he gave any number. His startup is able to secure funding solely based on his credential. The investors know very well but they hope for a big payday. Do you think OpenAI could project their revenue in 2022, before ChatGPT came out? |
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