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AI companies are trying to ride a growth wave where the income curve lags the expense curve by 1-2 years, and at the same time investing 10x their historical income on next year's projected demand.

Everyone is selling their API calls at a loss, because to capture the investment required to scale the business up and the costs down, you need to grow your market now (in relative and absolute terms). And history shows, that in big tech you often have winner-takes-all situations, or, at least a couple of big firms will dominate, and the others will die. That's where market share becomes a key strategic goal.

But to secure that, they also need to be building next year's compute now. And if their anticipated compute needs are 10x this year, they've got a serious funding problem, one that can only be filled by capital with an appropriate risk appetite. You can only get this high-risk capital when the potential payoff is even more enormous, or, when it's a smaller bite of a much bigger pie. Hence, MS putting into OpenAI and so on. But the investment needs are getting so big we are starting to see some pullback from more conservative sources, but also record deals from others.

Now say an AI company does get the capital they need to grow. Well, they've still got a very serious supply problem. RAM, GPUs, water, electricity etc. Hence why there's a lot of deals and cross-investment going on - everyone is trying to secure resources and lower their overall risk exposure while keeping a foot in every possible door, so they can switch alliances whenever it's expedient, and because collaboration also helps the overall market to grow.

This all explains to me why the industry _needs_ the hype. These companies can't exist without it, because the money they need to sink in, in order to even be around in 18 months, far outstrips all reasonable financial practices. So it's capitalism on steroids or nothing. If you believe the AI story, then to that extent, it's rational.

But note that nowhere in this scenario does it suggest the actual consumers will be getting a consistent product at a consistent price!!!

yes, single gpu open models exist. Now show me the one that can keep up with a SOTA api model on more than short code block evals.

[1]: https://cdn.deepseek.com/policies/en-US/deepseek-privacy-pol...

- Every competitor is planning for the demand to be much higher in a few years than it is now, and aiming to capture as much of that as they can, which starts by getting companies hooked on their models now

- The data center capacity will get used no matter who captures the most demand

US tech companies voluntarily give their data to the US government. Don't you remember PRISM? You think they stopped doing that?

> Internal NSA presentation slides included in the various media disclosures show that the NSA could unilaterally access data and perform "extensive, in-depth surveillance on live communications and stored information" with examples including email, video and voice chat, videos, photos, voice-over-IP chats (such as Skype), file transfers, and social networking details.[2] Snowden summarized that "in general, the reality is this: if an NSA, FBI, CIA, DIA, etc. analyst has access to query raw SIGINT [signals intelligence] databases, they can enter and get results for anything they want."[13]

Thing is, either way your data is getting hoovered up. If not today then eventually. It's just a matter of where. If you work in an industry where nation states might want to do you irreparable harm then yea don't let your data leave the country.

US companies are required by law to hand over your data if given a warrant by USG. They don't need a warrant if they have a subpoena for less invasive data, or a FISA request. They can also ask without any justification, and see if the company will cough it up anyway (they often do). Any AI company with government contracts will want to give up data quicker so as not to threaten deals worth hundreds of millions.

Why? You dont think that 5 eyes cyber peeps use every advantage they can get? And on the way out leave a dusting of evidence pointing at the russkies or chinese?