alt Hacker NewsIt’s incredible how polarizing the AI rush is. I keep the perspective that the technology is an absolute step change but I have no idea where the cards will fall. I take a lot of issue with these style of articles. I get a sense that the authors are being overly defensive.
The cost to serve tokens is absolutely profitable today and that’s been true for at least a year. What’s unclear is how R&D and capex fit into the picture. I am not that pessimistic on this front either though. For the data center build outs, demand for tokens is still exceeding supply. On the R&D front, well most of us here on HN have benefited from decades of overinflated engineering salaries being paid by often companies that were not profitable and not only unprofitable, usually without a plan for success. In this current rush, companies cannot keep up with supply, it’s a much easier math problem when you have something that people want (tokens) and you need to figure out profitability when including R&D.
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> The cost to serve tokens is absolutely profitable today and that’s been true for at least a year.
> For the data center build outs, demand for tokens is still exceeding supply.
Can you provide any numbers for this?
According to open router token demand is growing at something like 10% a week
It’s insane
> "decades of overinflated engineering salaries"
'Overinflated' relative to what? You make some good points but I don't accept this as a premise.
> The cost to serve tokens is absolutely profitable today
How can you possibly say that? Everyone knows that's not the case, these companies are losing money every day selling tokens. Revenue is not the same thing as profit.
My main worry is - once this is all over, the market consolidates and using LLMs will become a requirement in job listings, what's the highest price per million tokens companies will be able to charge us?
Currently on a given day I'm chewing through approximately the equivalent of my lunch money, but where there's opportunity to extract wealth, someone will find a way to do it.
> The cost to serve tokens is absolutely profitable
Can you explain why you know better than the analyst at Cursor cited in this article?
This is a classic HN mistaking the map for the territory. R&D and capex absolutely figure into de-facto profitability and sustainability for AI labs, despite their separate treatment in accounting.
> well most of us here on HN have benefited from decades of overinflated engineering salaries being paid by often companies that were not profitable and not only unprofitable
This is a really concerning perspective: people were paid what they were worth. Software is or was one of the few remaining arenas wherein a person can find a middle or upper middle class lifestyle consistently.
I will also note: a startup raising an 8 MM series A and eventually fizzling out is not the same at the hundreds of billions invested in these AI companies without a path to profitability. It is utterly absurd to pretend these are the same thing: any company ingesting that much cash needs to justify its capacity to survive.
The article is just helpfully illustrating how artisanal you can make your slop if you really try!
step change? how? profitable? where did you read that? people want tokens? really? who are these people?
Demand of tokens is absolutely skyrocketing.
And unlike the traditional "this will replace humans right away", I think what this introduce is a lot of incentive to spread those token in places where there was never any incentive to hire a software engineer for previously. In turn, that will drive a lot of business activity in those area that will potentially fail given the current quality of the output.
This feels like a boom before bust scenario, and I'm not even sure if it will bust.