Zos_Kia

So for the first 20 years or 2/3 of the entire history of the company, they were unprofitable or barely profitable.

We must have a wildly different definition of “barely profitable”. Half a billion in 2004 money is a lot of profit, a billion back to back in 2009 and 2010 is a lot of profit.

I think you’re confusing Amazon with the next generation of loss-leader companies. Let’s talk Uber, let’s talk Twitter, if we want to point at “hugely unprofitable” companies. But Amazon is a beast of its own, they have a very coherent financial story. Even during their money-losing decade they posted insane results, frequently multiplying revenue while barely increasing operating costs.

Oh thanks for clarifying in even more excruciating details how a subtraction works that is really helpful.

Why would you repeat the lie that they’re “usually unprofitable” when the information is publically available in a million places on the internet ? In 2023 Amazon made :

• 575B$ in sales
• If you remove costs of goods that’s 270B$ in gross profit
• If you remove operating expenses (including R&D) that’s 30B$ in net income

Amazon is factually not “usually unprofitable”, they have in fact made profit (as in money which actually goes into your pocket after discounting all expenses) every year for the last 15 years except in 2022 and some tiny losses in 2014 and 2012.

Thanks for clarifying that profit is calculated using a subtraction, but you’re missing the core of my comment. Amazon self-finance their R&D and STILL make a fuck load of profit. They made like 30B$ of free cash last year alone. In the last 15 years they’ve made >100B$ in overall profit and only been in the red twice.

They’re not just profitable they’re an insane money printing machine that doesn’t show any sign of slowing down.

There’s absolutely no doubt that lower-end models are going to keep improving and that inference will keep getting cheaper. It won’t be on a Raspberry but my money’s with you. In 6 years you’ll be able to buy some cheap-ish specialized hardware to run open models on and they’re gonna be at least as capable as today’s frontier models while burning a fraction of the energy.

In fact i wouldn’t be surprised if frontier models were somehow overtaken by vastly cheaper models in the long run. The whole “trillion parameter count” paradigm feels very hacky and ripe for radical simplification. And wouldn’t it be hilarious ? All those suckers spending billions building a moat only to see it swept under their feet.

That’s a long established myth. Amazon started out in 94, and became profitable in like 10 years. Most of their hardcore R&D is self-financed cause they generate just that much free cash.

What is tiring about this conversation is that you have to balance real historically documented dangers of tolerating fascists, versus the theoretical dangers of whatever some internet person thinks might happen in an imaginary future.

I mean, it’s a tough call, right? “Regulating food sounds nice in theory but what if it gives some future government the power to ban pizza haha gotcha”.

For the level of investment in and hype around this company? Yes, those enterprise sales are abysmal

I don’t see the connection. How are enterprise sales specifically relevant here ? Are enterprise customers known for jumping on top of early stage products where you’re from ? Cause where i’m from they’re known for being the last ones to board.

They have demonstrated zero ability at actually “hyperscale”.

How would you define hyperscale ? They have one of the biggest GPU fleets around and are likely serving trillions of tokens monthly. That falls well within the range of my personal definition.

They have no path to getting those costs down. Their conversion rate from free to paid users is atrocious, and they’re already raising prices on their plans which is only going to worsen those conversion rates

That’s just stuff you say. Atrocious (in your opinion), no path to getting those costs down (in your opinion). Alright, we get it, that’s not a company you’d invest in, but then again your investment thesis seems pretty conservative. If a company has to make billions of enterprise sales in its 2nd year, and have double digits conversion early on, then there’s not that many successful companies you would have invested in. You certainly wouldn’t have put a dime in Uber at 48B valuation 7 years ago - well those who did made a nice return on their investment.

Is it possible that they could be successful? Yes. But a lottery ticket would probably be a sounder investment.

Isn’t that the definition of VC-backed startups ? The alternative would be to build a time machine, travel back to the 18th century, and invest in the British textile industry. Sadly they don’t make this kind of predictible, risk-free and quickly profitable enterprises nowadays.

Absolutely oozing confidence there

Oh i won’t be the one to contradict you here. Sama is one sleazy motherfucker, that’s just written on his face. Sadly it doesn’t preclude him from building a historical hyperscaler with OpenAI.

Because they spend $2.35 billion in operating costs for every $1 billion in revenue

This is entirely true but also completely normal for a hyperscaler in its first years. At this stage demonstrating a huge demand and your capacity to capture a lot of it is much more important than profitability. You don’t exactly bootstrap a company at this level of CapEx.

Their revenue is still growing at a staggering rate, showing no signs of slowing down, and enterprise sales are pretty respectable. I don’t know that i’d call 3/4 of a billion in enterprise sales abysmal for a startup in its 2nd year. YMMV i guess.

Sure there is some uncertainty about their model but that’s what VC backing is for, right ? They’re not building tin can factories with known and predictable business trends, and being valued at 40x your yearly revenue (not profit !) is pretty banal for a successful early stage Deep Tech. We may personally think it’s bullshit and choose not to invest in it but it’s still far from outrageous and very far from the definition of a bubble.

I don’t think it’s just Lemmy, i had similar conversations on Reddit. People don’t realize that the companies they claim are over-valued actually have very strong business fundamentals. That’s why in articles like OP’s they will never mention any names or figures. I guess it’s very convincing for outsiders but it doesn’t stand any amount of scrutiny.

If you take OpenAI for example, they went from 0 to 3.6B$ annual revenue in just two fucking years. How is that not worth a boatload of money ? Even Uber didn’t have that kind of growth and they burned a LOT more cash than OpenAI is burning right now.

As for the “AI quantum computing blockchain reeeee” projects… well they have a very hard time raising money right now and when they do, it’s at pretty modest valuations. The market is not as dumb as it is portrayed.

To have a bubble you need companies with no clear path to monetization, being over-valued to an extreme degree. This leaves me wondering : what company specifically ? Are they talking about nVidia ? OpenAI ? MidJourney ? Or the slew of LLM-powered SaaS products that have started appearing ? How exactly are we defining “over-valuation” here ? Are we talking about the tech industry as a whole ?

We often invite the comparison to the DotCom bubble but that’s apples to oranges. You had companies making social networks for dogs or similar bullshit, valued in the billions and getting a ticker at the stock market before making a single dime. Or companies with outlandish promises such as delivering to any home in the US, in <1 hour, for a low price, and building warehouses by the hundreds before having a storefront. What would be the 2024 equivalent ? If a bubble is about to deflate then there should be dozens of comparable examples.

They wanted you to go back to work, not in X months if and when a vaccine was available, but tomorrow, taking some bullshit drug if you needed reassurance. While they were happy working from home, triple vaxxed and double masked.

I don’t know what the intent was, only what it achieved. It is now political suicide to enforce public health mandates, so when the next pandemic hits, your boss will be able to force you to go to work in unsafe sanitary conditions and a lot of people will be cheering for it.

That’s a room temp take at best

But then how am I supposed to use your “research” to make imaginary claims on generational attention spans ?

“i have collected some soil samples from the mesolithic age near the Amazon basin which have high sulfur and phosphorus content compared to my other samples. What factors could contribute to this distribution?”

Haha yeah the top execs were tripping balls if they thought some off-the-shelf product would be able to answer this kind of expert questions. That’s like trying to replace an expert craftsman with a 3D printer.

What kind of use-cases was it, where you didn’t find suitable local models to work with ? I’ve found that general “chatbot” things are hit and miss but more domain-constrained tasks (such as extracting structured entities from unstructured text) are pretty reliable even on smaller models. I’m not counting my chickens yet as my dataset is still somewhat small but preliminary testing has been very promising in that regard.

Most projects I’ve been in contact with are very aware of that fact. That’s why telemetry is so big right now. Everybody is building datasets in the hopes of fine tuning smaller, cheaper models once they have enough good quality data.

That’s the problem with imaginary enemies. They have to be both ridiculously incompetent, and on the verge of controlling the whole world. Sounds familiar doesn’t it?

Yeah it certainly depends on the teacher. If you’re into that kind of history, Pacome from Blast made a gigantic episode about this in his “L’empire n’a jamais pris fin” series. One of the best youtube essays i’ve ever seen in French.

where was that ? My hometown is like 20km from a city that was entirely burned down and had its population eradicated during the first Albigense crusade - i swear to God it was never mentioned to me. My parents hadn’t ever heard of it either.

From reading your post it seems like you could be interested by the Jesus movement (that is the jewish followers of Jesus, before catholicism was codified and adopted by the Romans as state religion). Everything that wasn’t authoritarian fear-based catholic was branded as “gnostic heresy” and purged from the canon, but there’s some real good shit that is very close to the core message of Christ.

A recent(-ish) example of gnostic christianity is catharism, which was a heresy that lasted for a few centuries in the South of France. They had no clergy, just a caste of ascetic wise men and women who would walk the land and dispense wisdom and judgement. Very egalitarian, very spiritual, very christ-like. As you can imagine, they got crushed in one of the rare “self-crusades” in history (meaning the King of France sent his own armies to burn down cities in his own country and murder thousands upon thousands of his own subjects). As you can imagine there is not one history teacher in France who will tell you about this episode.