I.e., you get a locked down device with access to their AI and maybe a way to run third party apps. Of course the developers of those apps will have to pay a percentage of their revenue.
Sound familiar?
It may turn out that demand for SOTA frontier models isn’t so limitless after all.
Maybe I'd be willing to pay $10 for product A if I had other options. But if there's a product B for $3 that's not quite as nice but still ticks all my boxes, then product instantly becomes a lot less attractive.
Why? You can't just assert it. There are very good reasons to think it won't happen soon, and you've given no reasons to think it will happen soon.
We're not seeing the progress in those "frontier models" that we have previously seen. There's certainly still gas left in tank tank, but we're way into the diminishing returns by now.
Cloud inference still beats hardware investments by orders of magnitude of course, but that's only if your data doesn't really matter to you.
I agree that datacenters are not going to go away, but I have doubts that the buildup that has happened is really going to pay off for most operators.
But I suspect returns may have already diminished into negative territory for at least some other use cases. One of my least favorite job responsibilities in this brave new era is figuring out how to avoid performance and behavior regressions when an older model were using for some application reaches end of life. It’s getting uncommon for me to look at our benchmark results and say, “Oh, good, it does better on one of the newer models!”
Part of the reason harnesses work well is you can run a lot of agents in parallel. That doesn't slow down demand.
LLMs are amazing tech, but they're terrible without oversight. More agents faster just makes reality collapse on them quicker.
But yeah, you're right, temporarily, this will still push demand. But the topic was about "diminishing returns" as in "tech getting better". Not as in "customer spending".
New models keep being able to use more and more agents on longer time frames. Your hypothesis doesn't look like what we're measuring.
Is it just that the providers are generating tons of synthetic datasets on coding tasks so that the models get more exposure to the right thing to do? Every time someone points out an LLM stupidity they add some training data to patch over the weakness (trivial to generate "there are two 'l's in llama")?
Before that, we had 0. After that, we had more than 1.
A leap as far as that is hard to recreate.
But that wasn't my point. That's just trolling.
The actual point is that LLMs aren't gaining new capabilities anymore. They just get more reliable at the ones they already have; turning what was a coin flip to some higher probability.
That's (intuitively speaking, not strictly mathematically speaking) kinda the mathematical definition of diminishing returns.
Who is so emotionally invested into random comment sections being purely positive about their pet.. uuuuuuuh.. tech?
Very weird.
Long-term contracts, not building new fabs - they're in full on hedging mode right now.
Their choice, their consequences.
I expect something similar for AI. It's useful tech... just not very profitable tech, and certainly not to the tune of trillions of dollars worth of public demand. The promises of superintelligence, replacing everyone, and the rest of the hype will die with the companies who made the promises, but the tech will survive and thrive.
The hype will die but there are many reasons why super intelligence and robots are a separate entity from said hype.
Look, back a few decades and tell someone our gdp would be in the trillions and it's likely they'd have a hard time believing you. A huge portion of our products that we use day to day would be complete science fiction to them.
All we're negotiating at this point is the timescale it will take.
But in my mind robots and superintelligence are inevitable unless there is a massive setback in humanity before then. Nature already did it once. We're not inventing something totally new. Add in every new invention and bit of intelligence we build on and actualize pushes us that much closer to the goal. Information technology allows this to speed up even further with easy sharing of information and testing.
Superintelligence is not like faster than light travel. We have many frameworks that show us FTL is impossible. I don't believe there is a single widely accepted framework that shows there is some limit to intelligence and we're near it. Intelligence isn't even a singular thing. My calculator is a super intelligent adder compared to me. It would seem highly improbable that somehow nature random walked into making brains the most efficient general intelligence device in all dimensions and scales.