These times seem to be long gone. No problem in setting stage out in the open, with everyone able to see what's going on. This is peak money-extracion efficiency. A sight to behold.

My understanding is that the blocks of older GPUs tend to draw value conscious consumers running older models. So their time is still sellable, but at a huge discount.

The older ones are almost certainly the best value for end users because the newest ones can demand price in excess of current value from enthusiasts.

A company like Google also has such a gigantic surveillance and analytics machine that I imagine a lot of their usage comes from internal demand related to the core businesses, and most of that is daily batch processing, so the lower response time of farming it out to older processors isn't as bad as a live chatbot.

If I was S&P analyst, I would request audit of remaining compute capability...

...Between Anthropic and Google buying compute from #XAi there can't be much left to run #Grok ...which makes mockery of the claim of #SpaceX being an AI company.

Without a doubt in the world of AI there is a lot "financial engineering" going on, which at some point will shake out, ala 2000s web.

Huh, my friend's team self hosts them so there's no back channel.

And they're not using them to produce code listings, they're writing their own code that uses the llm to do a good enough job of quickly providing a decently optimized weighted match.

Their goal is to have something that very reliably and predictably does a mid job of solving a tough-ish problem in a very constrained space.

That's actually kinda cool, and it's absolutely nothing like blowing out huge billowing clouds of subsidized mid generic chatbot extrusion and waiting for someone else to figure out how to make it make money.

I think our difference of analysis really comes down to how we see purchasing hundreds of billions of dollars of GPUs.

They clatter when dropped, go into buildings, consume energy and water, and produce lists of tokens. In some senses I do agree with you that they are infrastructure.

I'm hung up on the fact that GPUs whose economic value expires in two years is not _durable_ infrastructure.

Treating consumables/operations/marketing as assets with artificially long depreciation times is an absolutely classic way for companies to goose the books, and given all the personal incentives for the people running these companies, I just think it's the most likely explanation for what's going on here.

The effect on the balance sheet is similar to AOL printing a billion install CDs and calling it CapEx in the 90s.

They are admittedly a bit behind, but not far enough to be non-competitive or not useful for real work.

Yeah my friend who runs an eng team that uses Qwen with a non-chatbot interface says that pretty much nobody he considers to be serious is using one of the American models, because China has established credibility that they will release a free version that's just as good and far more efficient with a three month delay.

So, no moat. These AI service IPOs are money pits.

I honestly think a major reason that chatbots took over the world is that they flatter men made lonely by age and power.

That being, I do think over time number of engineers needed will only increase not decrease.

Seems like that when fees line up with costs, it's more expensive than the alternative (a recently-fired engineer with kids and a mortgage). At least for program listing generation.

For the real use cases of claim denial, automating racist policing, domestic surveillance and purges, bombing children, AI provides a useful culpability sink that may be worth a trillion dollars to the Epstein class.

All AI services operate at a massive negative margin. Every time they generate revenue they lose money. Amazon and Uber had obvious paths to positive margin, AI has none.

When Amazon buys a warehouse it lasts decades. When an AI service stocks a datacenter, the GPUs become useless in a couple of years.

The CapEx that Amazon was spending was largely in actual durable things, the "CapEx" for AI services is mostly consumables.

If these were bakeries, Amazon issued stock to buy more ovens, while the AI services are issuing stock to buy flour for the week.

Paradoxically, Musk and SpaceX were once on the good side of this; reusable rockets are more like tools than consumables, so you get recurring value from their construction.

I don't see recurring value for expenditure, I don't see a moat, I don't see a path to positive margin, these are money pits up and down.

We are watching a tech/AI-bubble come crashing down in real time.

Proof that the "market" N.E.V.E.R. learns.

Absolutely thievery. I need to be off Google services ASAP.

(Edit: I long ago tapered off my use of their services to a minimum, but I'm still using Gmail. Time to end that too.)

Profitability is often sacrificed for growth, for example Amazon was unprofitable for 6 years after going IPO, uber 4 years, I am sure there many other similar examples

With them losing $15 to $160 Billion a year, $11 Billion a year is hardly going to bail them out. Even going public does not bail them out in any way that fools the index.