alt Hacker News> That also doesn't preclude LLM services from being massively successful, they'll just have to justify the pricing and complexity that comes with their adoption, just like any other product.
What is completely different from every other product is how much they’re spending, and how much they’re obligating themselves to spend going forward. I think there’s a very good chance that the existing providers could be miles underwater coming out of this. Even if the business is not the everything to everybody that they’re banking on it being, they still owe all of that money back to the people they borrowed it from, and they will be a lot less likely to float them cash to get them back to a normal operating mode if they burned the last ocean of cash promising the universe and winding up with “oh yeah, that’s pretty useful sometimes.”
Yeah that's a good callout for sure, the spending here is nuts so agree that it's not "just another business that has to price itself right to be competitive".
I guess if the time horizons is long, like 20 years, then maybe the spending, as it begins to amortize, gets more in line?
I was thinking that a comparison could be to cloud providers, each of which had to spend a lot of money to build out datacenter before making money. Difference there is AWS proved the product first, so when Microsoft and Google came along, they knew it would work and be profitable. With AI, nobody has proven it will work and be profitable, they're all competing for that at the same time which is a potentially dangerous mix for the reasons you cited.