The long-term is considerably easier because in the short-term there are limits on supply so prices aren't really able to move in a way where balance will be found.
In the long-term, the marginal cost of a request is zero so prices will plunge and a lot of the fixed investment will get stuck. The difference between the cost of training a model/infra and serving a request from that model is a clear problem for economics.
What happens with Anthropic specifically is less clear because they, as every company in the same position in the last 150 years has done, are going to push for regulation. A lot of the risk has also been shifted onto neoclouds. The value of the customer relationship is, however, effectively zero. A core part of their strategy has been to build stuff out like CC to differentiate that but, ultimately, that won't work.
The other strategy they have employed is trying to get other companies to stop training new models. Again, seems unlikely to work.
There is no scenario in which they become Google search outside of government intervention. Obviously this is a key part of their strategy now but at best, this will only work in the US and Europe (I would actually say they are much further along in Europe where there is a strong tendency towards corporatism and centralisation of power, they could be "Europe's AI").
The only thing regulatory capture in the USA will do is to improve the situation for the rest of the world to compete. I wonder how long it will take them to figure that one out, for all their smarts they seem to be incapable of reading a history book.
This "regulatory capture" stuff mostly just exists in the imaginations of HN users anyway. This is just one reason why it never made sense as a strategy.
> improve the situation for the rest of the world to compete
The risk is that USA and China will come together on a joint "AI non-proliferation" agreement in the same way that nuclear technology became restricted by the countries that already had the capability. This will lead to a de facto techno-colonization of the rest of the world just between themselves.
This was a topic of discussion at Trump and Xi's AI summit just last month.
Nobody cares about hobby models running on a 5 year old GPU cluster in the basement. This is about industrial-scale AI which, to date, only USA and China have accomplished.
If you think that these are hobby models you are simply saying you haven't used them.
One of the largest legal services partnerships here in NL just launched their local DC so they can maintain confidentiality. Do you think they are 'running hobby models on 5 year old GPU clusters in the basement'? Or does a couple of racks of GB300's sound like maybe they know what they're doing after all?
That is microscopic scale compared to what we are talking about. From an investor and "market" perspective, the only AI that matters is the one that's built into every iPhone and Google Android phone, every car, every TV, every smart appliance. The AI models that power ships, planes, and all kinds of robotics. The frontier AI that services the energy grid, and even the smart homes and very structures that we dwell in.
This is all on the horizon. We are only barely scratching the surface and right now it is largely hobbyist having fun with it, but we already see the potential of the AI revolution and where it is going.
It matters from the perspective of tech dependency.
If a medium/small country deemed it a threat to rely on US/China for AI capabilities, they can get 95% of the utility by banning all American and Chinese models and just using local ones.
This contrasts to something like oil or nukes, where if you're not one of the countries blessed with them, you have a serious power imbalance.
Seems to me that from an investor perspective, the AI models built into the cars and TVs and other things are likely to be open source. I think long term, due to the high cost of training these models, there is going to be a "Linux of AI". I.e. some model that lots of companies collaborate on and then use for free.
The economic logic is the same as that of operating systems. AI models are very expensive for one company to make, but lots of companies need them. So companies are better off collaborating on that side of things and competing on something else.
Economically, the AI models that require big servers with lots of GPUs in data centers should likely be more interesting to investors than the AI models that can run on local hardware.
It just doesn't really make much sense. It's way harder to stop a company in a country which hasn't signed it (not that the congress ever would sign a random document Trump and Xi come up with regardless...) from developing a model than from building nukes. Also if American and Chinese labs stop development it would make it cheaper and easier for others to catch up.
Although I agree inference will become cheap (probably not zero), it's quite possible that there is a moat they can build around understanding customer context.
With each query OpenAI and Anthropic get more context about their users. When I compare answers between AIs the ChatGPT answer often includes useful things it inferred from earlier conversations. Losing that context could be a meaningful barrier for a customer to switch to a cheaper service.
> With each query OpenAI and Anthropic get more context about their users.
Not unless they break their own TOS. The temptation must be very large to do so and is probably why those settings keep mysteriously shifting back to 'yes, I give all my data to you to do with as you please'.
I don't think that's what GP meant. I think the point is maybe they could build a moat by "knowing you" in a way that makes you care about using Claude rather than, say, Gemini.
This isn't the case. People assume this is the case because only one side is reported for various reasons.
Just to be clear though: the Communist Party of China is not a massive fan of far-right parties, there are certain ideological barriers there.
Russia employed the former left-wing German Chancellor as part of their strategy making an invasion of Ukraine economically viable for them (it is worth pointing out that when right-wing politicians pointed this out, it was received as a crazy conspiracy theory..."liberal voters" distinguish themselves as people who believe themselves particularly unlikely to believe in "misinformation" whilst simultaneously believing in things that make no sense, most people who have a knowledge of politics are required to believe things that aren't true...if they were in touch with reality, they wouldn't vote).
My casual read is that the CCP can tolerate both the far left and right in the US, but only the far right is near the levers of power, and the far right is apt to leave them alone entirely(America first).
To call Scholz left-wing is quite a stretch. But what can one expect of someone that believes that not voting is the natural consequence of "being in touch with reality".
This article, possibly deliberately because you can read the subtext of exactly what happened with this story, conflates several things knowing that readers won't know the difference.
Transferring assets from Cyprus to BVI? Legal, there is no issue with doing this. What the journalist did, likely upon discovering this was legal, suggested that it was for tax purposes knowing that readers would assume this was illegal in some way...when it is not relevant.
An opinion was then acquired from a KC which, to a normal person, would read as confirmation that something suspect was going on but, if you have experience with this thing, says that in a completely different, unrelated context this would be illegal (it is a bit sad that we live in a world where a journalist will get an opinion from a KC and they will both conspire to produce something that is obviously intended to be misleading to readers).
Backdating asset transfer from Cyprus to BVI? Again, legal. The role of an auditor is not to provide advice on the legality of the transfer. All that happens is that they get some paperwork saying the assets were transferred two years ago, they go...yes, the paperwork is correct. If you think they should be doing anything else, you don't understand what an auditor is supposed to do.
What would be more questionable is if the transfer didn't actually happen two years ago but the auditor would have no way to know if that was the case. This would be easy to determine in other cases but in the case of personal property, there is no way to know.
What likely happened with the story though is that the journalist put in a lot of time, realised at some point that they didn't actually have any evidence (implicating the people they wished to implicate) so wrote the story that Deloitte were to blame. Will be quite interesting to see what happens next because at several points in the article the journalist uses words that do not describe the role of an auditor i.e. Deloitte was "advising on the falsification of records"...when they show an email which clearly shows that Deloitte did not do this (and again, generally, this is not what an auditor is supposed to be doing).
i remember trading a us stock twenty years ago, i don't live in the us, i used a discount broker, the flat commission was something like $20+percentage of trade. this was significantly after there had apparently a massive drop in costs.
there is some kind of amnesia that exists with things that used to cost massive amounts but are now close to free. it is just not possible to explain to someone that in the recent past, most people were just unable to own stocks because of costs.
HFT isn't necessary for cheap online trading. You can have bulk transactions execute once per day for very low cost and that's good enough for an efficient market. Companies spending billions to beat other bidders by milliseconds is just rent extraction with computers.
it isn't good enough for an efficient market. this is a common idea amongst people who have never traded. if it was possible to trade this way, it would happen already. this is how some non-equity markets trade. equities do not trade this way because people do not want it. the system we already have has ludicrously low costs.
No, it's because people who stand to make money off it want it.
Society is full of examples of things that people want and that would save money and make a lot of sense that are blocked by people rent seeking off the status quo. Free tax filing provided by the government is one particularly obvious example.
"Do it better" doesn't work for monopolies. A company offering trades at lower intervals doesn't work when the NYSE etc. controls the actual platform, the minimum fees, the granularity of transactions, etc.
Because the decision to leave the company is largely based upon their sudden, newfound financial security. They may give another explanation but the only thing that has actually changed is the identification of bagholders ready to cash them out.
The other issue is that the narrative about safety within these companies is largely a function of the extreme financial incentive.
As an example, Anthropic was an "ai safety" company that has now produced an AI that fails to listen to basic instructions. If you were concerned about safety, would you produce an AI that was unable to follow instructions? You ask a question, it begins executing commands and doing things.
Safety is product to sell to politicians, not consumers.
In the long-term, the marginal cost of a request is zero so prices will plunge and a lot of the fixed investment will get stuck. The difference between the cost of training a model/infra and serving a request from that model is a clear problem for economics.
What happens with Anthropic specifically is less clear because they, as every company in the same position in the last 150 years has done, are going to push for regulation. A lot of the risk has also been shifted onto neoclouds. The value of the customer relationship is, however, effectively zero. A core part of their strategy has been to build stuff out like CC to differentiate that but, ultimately, that won't work.
The other strategy they have employed is trying to get other companies to stop training new models. Again, seems unlikely to work.
There is no scenario in which they become Google search outside of government intervention. Obviously this is a key part of their strategy now but at best, this will only work in the US and Europe (I would actually say they are much further along in Europe where there is a strong tendency towards corporatism and centralisation of power, they could be "Europe's AI").
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