spyckie2

I wonder if they waited for the new TPU generation to train a larger base model.

Google seems to have anorexia when it comes to model intelligence. They have an internal hard constraint on price per token it seems, and they are trying to squeeze out intelligence with limited compute.

I wonder if there is something with their TPU cycles that makes them want to postpone training a new model. My guess is that they have been on the same base model for 6 months and they may have waited for the next gen TPUs to train Gemini 4, which greatly limits how much intelligence they can increase and forces them to do cost efficiency increases.

Competition is a good thing for consumers.

Thanks corrected it.

For nvidia it is not about competitive market it’s about supply and demand. A different subset of microeconomics.

It’s important that none of these entities can collude to price fix. Having China be the competitor ensures that.

Basic microeconomics is still the easiest way to understand token economies. How is it not a competitive market (where profits go to zero?).

Anything A or O does to keep more margin, any competitor can copy or choose to undercut, and undercutting has the benefit of collecting training data. So what is going to stop gross profit of tokens going to zero except for collusion/price fixing?

PE has two definitions, the first is its structure as a private business investment.

Pensions did not create this business structure, it has existed forever.

The second definition is the subset of PE that is systemically buying businesses and extracting wealth from consumer and worker to asset and shareholder.

The article is not talking about the first definition and neither am I.

To regulate private businesses equity is not what I’m going for either, it’s regulating the large PE firms doing this specific business model en masse.

Slavery is profitable. People only stopped doing it when it was perceived as immoral.

Lots of things are profitable but immoral. People will do crazy immoral and illegal stuff for money, but we outlaw and slander the more abusive stuff, like monopolies and such.

If it wasn't pensions that were funding PE, I'm sure PEs would get a lot more criticism and would not be allowed to do what they do.

To clarify the main point is it is wrong but because it affects old people no one wants to crusade against it. It has the perfect moral excuse to hide behind.

I think, if you were to say there is a way where you can take $10b and have that money make more ROI with less risk than $1000 can, people would look at it and scream this is broken let’s policy this out of our economy. It defies all laws of a balanced economy (not a capitalistic one, a balanced one). It’s just like monopolies and we have strong laws against that.

But… if you were to say hey we need to pay our old people and we desperately need some way we can deploy massive amounts of money at higher rates of return, people will say… hmm well it’s broken but the alternative is worse so we’ll ignore it.

But now imagine you have a way to deploy large amounts of money and get large returns off that money. Every large amount of money (endowments basically) will jump on it because why not? That’s literally an endowment dream scenario.

So pension funds are the moral reason these other huge chunks of money to get large returns. PE firms have become a streamlined business model because they continue to improve what they are good at doing, and it’s insane that we haven’t passed laws against it yet. Except of course we can’t mess with it because it touches government workers.

So yeah even if we wanted to policy it out of our society it’s practically impossible from a social point of view.

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks.

Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone would scream bloody murder. But with the higher returns from PE they have 40-50 year runways and people can pretend everything is fine.

So PE firms exist to extract value from basically all high quality goods and services to show a high ROI to prop up pensions. They extract wealth by buying up companies and gutting the “extra” things in them - for luxury goods, it’s quality, customer service and warranties (like my venta humidifier or reformation dresses), for services it’s stripping the underlying excess risk management and quality control. One can argue that PEs make the business more efficient but in my opinion they just turn worker or consumer related benefits into profits (stakeholder and business benefits). It’s a transfer of value from worker and consumer to business and asset holders at a massive scale.

But sadly it’s not some evil dudes at the top doing this transfer, the market force behind it is because we promised old people way too aggressive paychecks when they retired. Pensions need to invest massive amounts of money into higher rates of return and PEs just happened to be the medium that is the most successful. Sure the people running the PE firm extract a ton of value drying up all luxury quality and robust services from the daily lives of working families, but their take home is a tiny fraction of the wealth they extract (but yes they take home a massive amount of wealth for an individual). Instead the wealth extracted shows up on a 1400$/m for some old person probably living in a retirement home somewhere.

So if you wanna fix or ban PE, solve pensions.

Its probably that in 1 or 2 years local (free) models will completely take the place of cheap models so cheap models need to move up the quality chain.

You have free local models for most tasks, $20 subscriptions for near-frontier intelligence, and API per token costs for frontier intelligence.

Flash seems to be targeting the near-frontier category.

I think this is a valid point, but if the talent pool shrinkage was truly a threat to your academic institution are you really going to just watch?

And the argument is that research funding is coming back but just not to MIT. So I think it is a serious long term issue that they have to consider going forward, and not something that they can just hope goes away.

Respectfully, comparing a janitor's 401k to a $27.4 billion endowment is (very) tone deaf.

But yes, the tax goes against "keeping sacred systems sacred" principles and is an opinionated policy against rich entities that the current administration dislikes.

Any other institutions outside of academia that has a 20+ billion endowment that earns 4 billion a year?

And 500 grad students at what 50k per year for funding is what 25 million?

They really couldn’t hedge the risk with their own money if talent was truly that important?

Take away the hype and OpenAI / Anthropic are covering themselves with money and lighting themselves on fire to see who can make the bigger bonfire...

It is officially the 2010 Google era at Anthropic (the era where Google released tons of new products and spread themselves too thin).

Anyone remember Google's social media platform??? Google Plus?

This is a good era to be in! Its the era of product experimentation.

As long as you realize that 90% of the products will not be supported long term if it doesn't contribute to bottom line revenue, then just appreciate it for what it is, a bunch of smart people trying to create useful products.

Just don't be surprised if Anthropic goes the Google route, which is shutting down the majority of the products that are too small / not successful enough to impact their revenue.

Hard to say, but the fact is the intelligence was there and now it's not.

Maybe they are giving Sonnet, or maybe a distilled Opus, or maybe Opus but with lower context, not quite sure but intelligence costs compute so less intelligence means cheaper compute.

The thing that inspires my writing is that the best sentences are self evident. Meaning you declare it without evidence and it feels so intuitively right to most people. It resonates, either being their lived experience, or being the inevitable conclusion of a line of thinking.

Making a sentence like requires deeply understanding a problem space to the point where these sentences emerge, rather than any "craft" of writing.

So the craft is thinking through a topic, usually by writing about it, and then deleting everything you've written because you arrived at the self evident position, and then writing from the vantage point of that self evident statement.

I feel that writing is a personal craft and you must dig it out of yourself through the practice of it, rather than learn it from others. The usage of AI as a resource makes this much clearer to me. You must be confident in your own writing not because it is following best practices or techniques of others but because it is the best version of your own voice at the time of being written.

haha it is poorly written, its one of my pieces with the fewest drafts, i just wrote it and clicked submit to get the thoughts out of my head.

I think he is referring to the art of refining an idea though, which I do have something to say on his comment.

It's been funny watching my own attitude to Anthropic change, from being an enthusiastic Claude user to pure frustration.

You were enthusiastic because it was a great product at an unsustainable price.

Its clear that Claude is now harnessing their model because giving access to their full model is too expensive for the $20/m that consumers have settled on as the price point they want to pay.

I wrote a more in depth analysis here, there's probably too much to meaningfully summarize in a comment: https://sustainableviews.substack.com/p/the-era-of-models-is...

dang why did I click, they are gorgeous...

Writing is on the wall that orders of magnitude fewer people will be going to [product] or using [product] in the next 5 years though.

counterpoint: which service or product is immune to this statement?

I mean their ads business just broke $80b per quarter, not sure where this idea is coming from...

Well, would you have a better standard of living with $0 or $1000 when you retire?

Even if that $1000 used to be worth $10000, that $0 is still worth $0.

I think there is a pattern it will always be nerfed the few weeks before launching a new model. Probably because they are throwing a bunch of compute at the new model.

You mean the US, right? Especially with the part 2?

I know this may sound like a shock because you are privileged but 7% yoy return on capital is NOT the norm for the rest of the world. Just look at any other index not called the S&P or the Dow. Look up US exceptionalism.

The US policy for retirement savings shackles the younger generation with a ticking time bomb. Forcing your own citizens to save money for themselves is a lot better than forcing your own citizens to pay for others. Which one is more morally cruel?

HK has a similar forced savings, but that ROI is like 1 or 2% and the options to invest are paltry.

Some perspective is necessary. Yes it’s not great but compared to the rest of the world it’s stellar.

Its just law of the jungle all over again. Might makes right. Outcomes over means.

Game theory wise there is no solution except to declare (and enforce) spaces where leeching / degrading the environment is punished, and sharing, building, and giving back to the environment is rewarded.

Not financially, because it doesn't work that way, usually through social cred or mutual values.

But yeah the internet can no longer be that space where people mutually agree to be nice to each other. Rather utility extraction dominates—influencers, hype traders, social thought manipulators-and the rest of the world quietly leaves if they know what's good for them.

Lovely times, eh?

Anthropic was the first to spam reddit with fake users and posts, flooding and controlling their subreddit to be a giant sycophant.

They nuked the internet by themselves. Basically they are the willing and happy instigators of the dead internet as long as they profit from it.

They are by no means ethical, they are a for-profit company.

This is why you are not the finance guy.

My finance people care about the cents, a ROI of 7% is average but at 8.5% and now you are a world class asset of that inventory type. That’s sometimes the difference of a few hundred k out of 20m but they would not take the deal if it is slightly over due to their risk appetite.

The 3b external either matters a ton to fit their risk models OR they are doing a favor to an outside party. Probably a bit of both.

What's the point honestly.

Given the pace of current ai, in 2 months dark factories will peak hype and then in another 6 months it will be fully identified in its cost/benefit drawbacks, and the wisdom of the crowds will have a relatively accurate understanding of its general usefulness, and the internet will move on to other things.

The next generation of ai coding will make dark factories legit due to their ability to architect decently. Then generation after will make dark factories obsolete due to their ability to make it right the first time. That's about 8 months out for SOTA, and 14 months out for Sonnet/Flash/Pro users.

No need for them to come out of stealth, just imagine 1000s of junior/mid engineers crammed into an office given vague instructions to build an app and spit out code. Imagine a cctv in the room overlooking the hundreds of desks, and then press fast forward 100x speed.

That's literally what they built, because that's what's possible with Opus.