Well there certainly is at least some kind of viable business running large AI models for a fee.

These are useful and too big to run locally.

The ultimate size of that business in terms of revenues and profits may not match current expectations, but it's also not 0

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krona an hour ago | parent [-]

> Well there certainly is at least some kind of viable business running large AI models for a fee.

ok, where are:

- The economies of scale?

- The network effects?

- The switching costs?

- The intangible assets (e.g. brand?)

Running AI models for a fee has none of these. At best, there are some economies of scale for running a datacenter, but OpenAI and Anthropic have none.

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pianopatrick 3 minutes ago | parent | next [-]

There are not as many network effects, intangible assets, or switching costs as other businesses. I believe there are economies of scale in terms of power and cooling and network bandwidth and the people who plug in cables and other such things.

The business logic is similar to the general transition to cloud. Corporations and individuals are better off paying someone else to manage physical hardware that they just access over the network. That is even more true of large, expensive, fancy AI GPUs than regular web servers.

OpenAI and Anthropic may both fail, or may not, I don't know. But I'm sure there is some kind of viable business running some kind of AI in the cloud.

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wiredfool an hour ago | parent | prev [-]

Amazon will be able to run large models for a fee, and make money on it. It's not a trillion dollar business, it may not even be a good business, but they'll be able to do it.

	▲	krona 24 minutes ago \| parent [-]
		Sure, a supermarket will sell avocados if they make a profit, and won't sell them if they don't. That's a very different business model; the product is the infrastructure, not the AI.