I don't understand why they would even disclose this, maybe it's useful for PR purposes so they can tell regulators "oh we are so safe", but people (including HN posters) can and will draw the wrong conclusion that Anthropic was backdoored and that their data is unsafe.
Ok great, people tried to use your AI to do bad things, and your safety rails mostly stopped them. There are 10 other providers with different safety rails, there are open models out there with no rails at all. If AI can be used to do bad things, it will be used to do bad things.
Let's say you own and operate a small independent hotel, some techies from San Francisco offer to perma-book every room for the next three years solid for some fraction of your normal room rate. You keep operating your hotel, the techies send you regular guests (and handle all payments), and at the end of the month you get the same guaranteed income whether business was bad or good.
All goes well for a while but the techies start slipping on payments. First it's a few days, but sometimes they miss by a few weeks, so you schedule a call with the VP to straighten things out. Eventually they get a few months behind, you're fed up and demand immediate payment or you will stop lodging their guests (who have paid the techies, but somehow the money has not made it to you). CEO calls to straighten things out, promises to wire the money by Friday, just please please please don't evict any guests. You agree, but Friday comes and goes with crickets, and on Saturday morning you kick everyone out.
The techies are insolvent but not yet bankrupt. They have been running their business off accounts receivable (which rightfully belong to you) for months. There is no way to work things out, the money isn't there. You have been hosting their guests and you will get back pennies on the dollars you are owed, years later. Time to pull the plug.
If you've had Silicon Valley techies book all your rooms for several years, and it's their logo on the side of the building, and all your customers have booked with them? You don't have a reputation.
Props to the author for the well-researched original article.
I disagree with the conclusion. In the current environment, OpenAI can raise money as if were water pouring from a faucet. If SoftBank can't meet its agreements then there are 50 others waiting to take their place. In the current environment, OpenAI's revenue and capital requirements are not meaningful given their ability to raise.
The environment can change quickly, look at early year 2000 vs late year 2000 funding for .com for example - money went from on-faucet to you're-not-getting-a-dime in a few months. So if the funding environment for AI suddenly shifts, yes, OpenAI is cooked, but so is the entire AI industrial complex, from the smallest barely-billion-dollar startup all the way up to Nvidia.
My conclusion is that OpenAI is not a systemic risk, it's not going to fall or take down a large portion of the tech industry on its own, it will fall if investors sour on the entire AI industry for some reason.
I agree that OpenAI is not technically a single point of failure because if it were to disappear, then all the companies that depend on it could simply switch to Gemini or Deepseek or Llama, etc. It's been well established that they have no moat and there are no significant barriers to switching.
I think the author is essentially using OpenAI as a synechdoche for the entire AI industry. Essentially every AI company is reliant on frequent, massive cash infusions to stay alive, and if the money starts drying up for OAI, it will dry up for everyone else as well. The author persuasively argues that OAI will need ~40B per year to stay alive through the end of the decade. Let's assume that the whole industry combined will need something closer to 100B. Assuming that faucet will stay open that long is seems pretty crazy to me.
So AI is in this interesting place because while it seems obvious that it's an amazing, powerful, transformative technology... that actually hasn't materialized at an economic level, yet. Arguably the only place where it has a proven positive impact on productivity is in software development, and even there it's pretty obvious it's not a silver bullet.
I'm not interested so much if or when it will materialize economic value (that gets discussed here ad nauseum) but... how long a runway do you think we have where investors are going to continue to invest based on the promise, before the funding environment does shift? Because it will, eventually. And the LLM industry better have something to show that justifies current valuations or things are going to get very messy.
My fear is that we've entered "too big to fail" territory in which too much of the tech sector has too much to lose to be the first ones to start backing out. But that only means the bubble is going to get that much bigger before it detonates (and takes down half the economy with it.)
> Arguably the only place where it has a proven positive impact on productivity is in software development
There are no studies demonstrating this. Having to double check this randomly hallucinating pair programmer AI colleague, is not helping with productivity.
Absence of Evidence is not Evidence of Absence. Software developer productivity is very hard to measure, so we may never get a "good" study of this. Might be like IDEs, where at first no one was using them and people would complain that they don't actually help developer productivity. Fast forward 10 years and almost everyone is using them.
There is probably a difference here in a few different market segments. You have the AI tooling companies (foundation models, tooling frameworks, vector dbs, etcs...), AI product companies (Agents for Foo), Companies with existing business investing in AI projects, and also existing tooling/compute companies, especially the hyperscalers.
The AI tooling companies could loose a lot of hype and valuation, why the hyperscalers and companies just building incremental automation using llms/agents continue, albeit with less internal investment. How much would that take down the industry? How many existing tech players have fully bet on AI? Even a company like salesforce that has pivoted their marketing to all AI probably only has a small fraction of their revenue tied to it.
I think it's not clear that AI is driving significant revenue _anywhere_ outside its own ecosystem. The only companies with real AI-driven revenue are selling to people investing in the hype, not their own realized revenue.
Have you considered the monetary interactions of the full environment?
For instance the fact that that the only way to do this is through money printing, which non-reserve debt under Basel 3 modified (objective value) qualifies, and which itself creates artificial distortions that self-sustain throughout until something breaks?
This effectively drives inflation forward, while at the same time being in a negative GDP growth trend, which only further exacerbates a stagflationary environment.
Imagine the interest rate exposure risk in terms of an environment of uncontrollable higher interest from the petrodollar withdrawal where all production stalls because tech integration has been going on without anyone rational at the helm to mitigate systemic risk?
There really can be no part where OpenAI will become profitable because the profit is taken from jobs that would normally pay a wage.
A mechanical sieve if you will solely on the factor markets, that absorbs liquidity, creating and sustaining various forms of whipsaw distortions, an economic calculation problem that grows until something breaks.
The price of things generally speaking is the ratio of the amount in circulation to that which is available to the general worker. The less workers capable of using it, and there eventually is a point where a critical stall occurs and people stop transacting in the currency.
I agree - and I don't think investors will sour. Considering that AI and accelerationism is becoming close to a religion, and that there are many wealthy people who are tied to it, I think that the money will go somewhere. Even if it doesn't go into OpenAI, it'll go into one of the competitors.
I wish people would understand ChatGPT is a toy for consumers, and the real prize of AI is handling the mountains of data tech has been leeching for years.
Sam puts out vague worries of AGI Armageddon so CNBC anchors, who can't even turn their computer on, can argue about that all day because it's juicy. These are the same people that thought the Metaverse was a huge deal, and not just unfinished plans for VR Second Life.
Meanwhile, any company with good AI tech and enough data can classify, minimize, eradicate, and automate as much of our lives as possible. There's going to be no regulation on it, because we have never been about to keep up with text regulation.
And we are told we signed up for it when we were 15, trying to log into an app store on the new device all of our friends had.
customer support automation - "Sorry, I didn’t understand your request. Please type your issue again…" is the fastest way to make someone hate your brand.
marketing copy -> Not paying my marketing team to put out obliviously AI generated texts. People will notice and will hurt the company reputation.
sales automation - As in? Perfect place for random hallucinations?
internal knowledge base - Search in pretty good in full text. Training a model with all company data will be too expensive to justify the benefits of finding the correct technote one second faster? Plus do we want to hallucinate while doing airplane maintenance?
analytics - Not enough to justify current valuations.
Please provide a reference for this outrageous claim. Unless you are just looking for an argument? I am ok with it, but it will cost you: https://youtu.be/uLlv_aZjHXc
Second of all, your bar for "essentially pro-Trump" being 1/3rd of the vote is ridiculous, by your standard almost every county in America is "essentially pro-Trump".
Give me a break, that’s fine for rounding and a huge gap between SCC and San Francisco and Santa Cruz. SCC is the outlier in the region, and a good percentage of HN is very pro-Trump because a good percentage of HN is pro-greed.
And the point about Chinese being among the most pro-Trump is South Bay stands - I have had several conversations and most people from mainland (RIP HK) see zero problem with authoritarian rule.
Maybe Altman has no idea about the realities of semiconductor manufacturing, or maybe he does. Sometimes it takes an outsider to shake things up and produce the impossible. Probably some Verizon execs called Steve Jobs a "computer bro" when he walked in with a pre-production iPhone and asked for "half".
This BOD went out and shot their own company. Sam & friends can now cherry-pick whoever they want from OpenAI and recreate most of the value in a few months under their own governance.
Firing Sam is absolutely one of the dumbest things a BOD has ever done in history. He's the founding CEO of the company that is insanely successful, he is the company. If you wanted him gone for some trivial reason you needed to get him onboard first, "here's a billion dollars, now spend more time with friends and family for the next 18 months".
idk maybe wait to find out what the official reason was before predicting the rest of the season. Large corporations don't shit the bed on a momentary whim.
Not the OP, but Fishscapes, Bierhaus, Milk Pail, Sprouts, LazerQuest all gone, couldn't afford the rent. And that's just Mountain View. Retail that residents loved has been replaced by establishments exclusively for tech bros.
Edit: Forgot about Game Kastle and Lee's Comics. Really I could go on all day. These community establishments are gone and never coming back ever, as long as Google lives.
Such pathways require global cooperation and will fail unless all major nations are on board. In particular, Russia is making no effort, and has no incentive or motivation to make any effort due to their vast tundra landscape. Step 1 is to get Russia on board by some means, without Russia any of these goals are senseless.
This is an absurd take... Russia emits 4.65% of world output and has been decreasing last year the most out of the top 10 [0]. Could you base your arguments? I'd like to understand where this is coming from.
More generally, if Russia (or any party) has incentive, means, motivation to create climate change, do not be surprised if they actively work to make it happen. Russia can literally light things on fire and come out way ahead.
We have a lot of experience in the global system of cajoling outlier countries into a common agreement, it's just stick and carrot. Diplomacy, negotiations over interests, trade deals, etc.
If your solution involves Russia getting on board then you've already failed. Russia is actually encouraging climate change because it opens up more shipping in the arctic circle. This is to illustrate that in the short term climate change leads to winners and losers. In the long term we probably all lose, but we're not known for our long term thinking.
Not sure why it is downvoted, but Russia is massively on the benefiting side of global warming. It reduces the amount of useless land, and massively increases crops yields throughout its territory.
Geopolitically, it benefits from additional pressure on Europe to accommodate the migrations caused by climate change, and all the instability it causes.
I'm sorry, but Russia, just like Canada, will not have increased crop yields from warming. It will (and does) have massive forest fires, drought, and erratic winters which swing from warm/hot to extreme cold within days.
You know what is even worse for farmers than a cold climate? An unpredictable one. It's damn hard to pull a profit farming if you can't rely on any kind of 'normal' growing conditions from year to year.
An increase in mean temperature isn't a neat and tidy "oh, we'll just move north"; it's on the whole an increase in variance.
I'm seeing it happen here in Canada, and I'm certain we'll see it in Siberia as well.
In the end, petro-regimes like Russia, Venezuela, Saudi Arabia, Alberta, whatever... they'll become more and more paranoid and erratic and dysfunctional as the broader crisis around 'energy' deepens. We're right now seeing our first war triggered by a cornered petro-regime on the cusp of climate catastrophe. I suspect we'll see more.
I'm not convinced Russia would get much benefit from from warmer tundra.
It takes more than a change in temperature to make land useful. I don't think recently-defrosted tundra is going to suddenly be profitable farmland. You need the right soil type, weather, irrigation, transport links, workers, energy sources, etc.
$1.7M is approximately the construction cost for a ~2000 sq ft rebuild in the suburbs. So that does seem a bit high to construct a single 150 sq ft bathroom.
Probably the mistake is undertaking such a small project to begin with. It sounds like there are many fixed overhead costs (such as environmental review) that must be paid regardless of project size. Maybe you could have a 1,000 sq. ft. bathroom for $2 million, or an entire 10,000 sq. ft. park for $4 million.
100% factually incorrect. In addition to NOT being part of the City of Palo Alto, The Town of Atherton shares no land border with Palo Alto and is not even in the same COUNTY as Palo Alto. Maybe it's a good idea to learn about other cities, towns and people before you try to dictate land use policies from afar.
> 100% factually incorrect. In addition to NOT being part of the City of Palo Alto, The Town of Atherton shares no land border with Palo Alto and is not even in the same COUNTY as Palo Alto.
So what? There are parts of New York in several different states. What's relevant about the county boundary?
Ok great, people tried to use your AI to do bad things, and your safety rails mostly stopped them. There are 10 other providers with different safety rails, there are open models out there with no rails at all. If AI can be used to do bad things, it will be used to do bad things.