alt Hacker NewsI'm sure they'll do well, but I just can't get behind the investment thesis. Eventually the LLMs will plateau. Specialized expert models will dominate each knowledge area, because they can handle specific tasks without as much overhead. Then the swarm of agents will be burned onto silicon to reduce interference costs. Every X time intervals both the models and silicon will evolve, but less frequently than in the wild-west environment of today. Instead of new models every 3 days, we'll see a new set of models on a hardware release cadence. You'll be able to customize your model by mixing and matching expert model chips.
Software > hardware is a hell of a pivot, and Alphabet and Meta already do hardware. Unless they are building a huge IP moat and have proven themselves competitive with hardware, I don't see the rosy future.
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You can make that argument for just about any field, pre and post LLM. A lot of investing is point-in-time.
I'm sure there was a point in time when everyone thought horses had a great moat.
It sure feels like the obvious target for increasing revenue is to charge the software engineers more. Most other users that I see are either using the tech as a novelty, which will wear out really quick once the thumb screws come out, or users who cannot explain to me to save their life what the ROI is beyond "disruption".
The software engineers are also the most likely to pivot to local inference. I know several engineers playing around with local as a hobby. After the first bill comes in that means nobody gets the Christmas bonus this year, they'll resolve the issue and start figuring out how to adapt their workflow.
And somehow I doubt that they'll need frontier for the majority of customers who just need crud and libraries hooked up. Yeah it won't be as easy as with frontier but it just means the party is over and it's time to get back to work.
So ... Maybe security audits need frontier ... And they can pass the price increase onto their customers, I presume, easily enough.
I'm not convinced thats sufficient to pay off the bill that it took to get frontier in the first place.
[And so far, I haven't met a single software engineering customer, although surely they have to exist somewhere, who was actually comfortable vibe coding their crown jewels or even anything vaguely auxiliary. Please engineer ask the magic box to generate code for us. I think they'll be just as happy checking a box they says 'save money by using agentic development' if they box is hooked up to some future price gouging frontier or hypothetically cheaper local setup]
They'll be fine. They just need to prompt a swarm of Claudes to pivot to hardware /s
The bet behind Anthropic is whether they will be the first to reach recursive self-improvement (RSI). Some experts thinks that if anyone achieve RSI, then it would be easy for them to reach superintelligence.
That's my understanding of things at least.