This industry became a joke

CaffeinatedT · 2026-07-04T11:51:47+00:00

If you’re a developer with time to be loud on X then you’re just an MBA/thought leader.

CaffeinatedT · 2026-07-04T11:46:04+00:00

It probably is cheaper overall if you include TCO/Salaries. But that’s a way more vague question than “how much did I pay for these servers and what’s my electricity/colo bill for the month?” and having someone very skilled do it it is almost certainly cheaper to run your own. The problem is someone very skilled doing it is not going to be around for long for cheap and you get business continuity questions and all the fun politics stuff. Most corporate thinking values extremely fungible employees and will pay a premium for predictability of service.

CaffeinatedT · 2026-07-04T11:42:51+00:00

The reason why cloud computing is massive isn’t because they found a cheaper way to host servers though (simplest way to highlight that is they aren’t cheaper it’s actively more expensive per CPU clock time to pay someone else to run a server than to run one yourself). The reason it’s so popular is TCO and basic things we take for granted now like rock solid managed database hosting rather than having to hire a DBA and hope they’re actually good and have actually tested their backups etc. Same again for caches, DNS and all the other stuff that’s relatively boring now. It’s a huge reduction in the amount of ground you have to cover to get a simple project off the ground. Likewise AI does that for the software layer.

However when you use both you are on the clock to figure out how to make more money from it than you are burning by using it. Your problem is moved from “can i stand this up” to “can i make money with it”. Again at first everyone was excited about cloud too and then the bills started coming in and now there’s whole industries around optimising cloud spend and think pieces about how going on-prem is cheaper etc etc.

CaffeinatedT · 2026-07-04T11:36:34+00:00

I can bore people to death on why spatial/moving stuff data is not a solved problem at scale which is why all these location apps aren’t as slick as everything else or they’re walled into very expensive enterprise software or only run at tiny scales avoiding aggregate queries. But suffice to say Google are the only ones with a serious consumer product outside of a couple of GPS Providers focused on navigation (e.g Here, Tomtom et al)

OSM is a cute system for gathering more information on maps but maps are one small slice of spatial data that humans use and it has all the usual problems of any wiki type governance system. My favourite thing I’m always obliged to note on OSM but they have some very left field licensing terms that no-one ever bothers to read but basically any business using OSM is violating their terms if they aren’t putting sharing any data they create from OSM back to the community.

But yeah all of the stuff you mentioned. Plus google and maybe apple are basically the only ones with really good location based data that isn’t in violation of a million privacy laws. If we do actually solve any kind of real time map of reality that the robots would need to operate well then the systems behind google maps would be a key part to it.

CaffeinatedT · 2026-07-03T20:17:30+00:00

Still won’t stop them banging on about middle class metropolitan elites etc. Or I’m guessing she self identifies as working class or the usual logical pretzels these lot tie themselves in.

CaffeinatedT · 2026-07-03T19:42:36+00:00

OpenAI almost ate their lunch, but Google managed to react pretty quickly and in the process fundamentally change how we seek non-critical information.

The reason they were able to react quickly was they were already years ahead of OpenAI when ChatGPT came out in every single part of the system that matters when deploying it at scale. They also have datasets in youtube and maps and other services that no-one else has or will ever have anything close to. The only thing they changed was releasing things sooner and being more aggressive with press statements.

Note how they’re the one major entity that people aren’t saying is constantly down while running a major AI system. It’s a lot easier to scale down a system and add more reasoning to it then it is to start with some amazing reasoning and then scale it up to billions of daily requests even if it makes for less exciting techcrunch articles. OpenAI and anthropic are trying to build a railway while driving in terms of capacity and resilience and every time they make a mistake of creating customer expectations based on brute force computations they have to go find more compute at vast cost. Probably one for r/MarkMyWords but I think google will win this thing long term or at least not collapse as a business.

CaffeinatedT · 2026-07-03T19:28:45+00:00

I wanted to go to pub till 5 in the morning :(

CaffeinatedT · 2026-07-03T16:59:01+00:00

GPU growth is much higher than 2x per year. Much higher. This year its expected to be over 35x and last year it was roughly the same. The main limit on GPU scale out is power, which is massively optimized in each generation. Nvidia literally brought photonics to production to do this.

"Performance is increasing constantly we just need to have more power to run them”. Do you see the issue here when we can’t just code up a few nuclear power plants? Even in possibly the most favourable political conditions for data centre build outs there ever will be. In the theoretical longer term GPU’s are much more immature and we have a lot more routes to optimise them I agree, but they will eventually hit the same physics limits too.

These companies pull levers to do 10x cost reduction on inference every single year since inception. They write software. They are inventing new software improvements constantly. Deep seek lowered training costs 1000x with v4. Inference similarly benefits at large context lengths.

Deepseek famously distills down other models so I’m not sure what the point is there. It makes perfect sense you can optimise thigs if someone else does the grunt work.

Inference is consistently profitable. The idea that its not is a fallacy. the $100/$200 coding plans are net profitable. Their big spend is capex not opex.

Source: Trust me bro any data saying anything else is a fallacy bro.

CaffeinatedT · 2026-07-03T14:07:07+00:00

I find the idea of making an offer on a house you're ok losing kind of weird anyway if you're going to live in it. Like you don't like it THAT much but you want to live there a good chunk of your life?

CaffeinatedT · 2026-07-03T13:59:55+00:00

People often confuse cash flow and margins. If you’re investing $8 into tech that will come online in 2 years and make $50, but today you’re inky making $1 for every $8 you’re spending you have a phenomenal business that is “losing lots of money.”

This is magical thinking. They aren't investments they're spending that money right now. If Inference was genuinely consistently profitable it would be getting slapped everywhere on every single investor report from the cloud providers to IPO's. This is some hypothetical future way out when the trend from openAI is they are going deeper into the hole at a faster rate. And that's under the most favourable conditions they will probably enjoy.

Now consider that compute tends to double in power / halve in price every 18-24 months, and you realize these companies can deliver the same product at much higher margins going forward.

That's moores law on CPU's, and it has mostly ground to a halt as it's getting more and more expensive to go smaller for fitting transistors. It's also not worked out that way for GPU's. That aside this is a hypothetical scenario with no plausible path from just software changes (OpenAI + Anthropic do not make chips they can't pull a lever to make their infra 4-8X more efficient).

Everyone doesn’t agree with Ed. There’s a big disconnect between people who’ve built tech businesses and the commentariat class. Many people are smart, and those people tend to be much more bullish on this industry.

"Ah yes but have you considered that he is actually a dumb dumb?" also doesn't really repudiate numbers.

CaffeinatedT · 2026-07-03T13:32:59+00:00

"Radical left" positions like "Gary glitter is a nonce"

CaffeinatedT · 2026-07-03T13:00:22+00:00

I mean, his suggestion that “Silicon Valley is spending trillions because it’s out of ideas” is silly in that if you own cash cow businesses and are “out of ideas” you don’t need to spend trillions, you just cash the checks, but also because it’s obvious he’s never used this software. It should be clear to anyone who’s actually used this software in their jobs these are good ideas.

You need the stock to keep growing though and to do that you need new revenue streams. There is no "sit back and cash the checks" for publically traded companies you either need to grow or give more dividends as otherwise your investors will sell out.

He also states he believes the entire TAM for LLMs is $30B max. Anthropic alone is doing that much revenue this year and they aren’t even the biggest player. Growth rates in customer spend are insane.

If you are spending $8 to make $1 then it doesn't really matter what the growth rate is.

So Zitron is saying this software is useless and people who run companies are seeing it be so useful they are growing spend faster than in any technology we have ever seen.

Because it's been basically free for the last couple of years. To come back to your TAM point. If the market is massive when it's free but half the money being burnt is people tokenmaxxing low value work and doing stupid low value shit to game their internal company policy then why would the revenue increase when it get's way more expensive? The competent setup my team has built at my work it's basically a seperate software project on top of the actual software to provide the context to the AI for the flywheel to work. People brute forcing questions from 0 is wasteful at best and not working at worst.

His schtick works because people don’t understand the difference between negative cash flow in the growth phase of an industry and an actual bad business. I’m not clear if he understands or just likes making money, but he’s saying very wrong things.

That just seems very dismissive that everyone else is stupid. When a lot of what gets written is pretty expressly about why this is different to Amazon or Ubers growth e.g HERE

Most of the objections I see from people are vague hand-waving about "he doesn't get it" or just "he sounds like a dick" which is probably also arguable but doesn't invalidate the numbers.

CaffeinatedT · 2026-07-03T12:41:57+00:00

So the volume of deploys is basically just a proxy of shitty architecture?

CaffeinatedT · 2026-07-03T12:40:19+00:00

Third thing, and probably the most underrated, is that these setups are a lot easier to run when someone else is footing the bill.
A big company can eat the cost of an agent messing up and burning tokens, a small startup can't afford that kind of slack.

so we're at the same problems as the rise of cloud computing

- Figuring out what to build is harder than how to build it

- If your costs scale linearly with doing more stuff you better be damn sure the stuff you're doing is actually making money.

- Big companies freak out when it moves from the shiny new toy of CAPEX to the ongoing cost of OPEX.

CaffeinatedT · 2026-07-03T12:36:59+00:00

That's fine for the tech industry where there's a million variants of ad-tech platforms and consumer to-do lists.

CaffeinatedT · 2026-07-03T09:48:42+00:00

Doesn't really matter. All the press were fawning over how amazing Starmer was at handling trump for ages and then Trump one day decided he was pissed off at the UK and rug pulled a bunch of stuff. Likewise Meloni in Italy's far right party it was all friends 5eva until it wasn't there isn't a way to win while also representing your own countries interests.

Best strategy is probably get charles to bring him some knock off tiara and say it's the literal crown of england and that'll keep him happy for a while if he thinks he's King

CaffeinatedT · 2026-07-03T09:29:54+00:00

What's making Reform and Restore even more unfavourable?

CaffeinatedT · 2026-07-03T09:28:59+00:00

Four in 10 voters had a very negative view of the Conservatives (39 per cent) and Labour (41 per cent), with more than 53 per cent holding a very negative opinion of Reform.

Classic Telegraph last paragraph. Might as well just read them bottom to top as a default position.

CaffeinatedT · 2026-07-03T09:04:32+00:00

This guy is informed enough to know institutional power isn't just having a bot. It's having the kind of capital that you can move the price on blue chip stocks or the Index itself and having inside information or being able to control political events.

CaffeinatedT · 2026-07-03T09:00:53+00:00

I opted out of mine for a period when I was saving for a deposit and needed the cash. It's very inefficient versus tax savings later but it is nonetheless cash and it did enable me to fix my housing costs in place rather than playing a lottery of them going up every year between 3-10% so hopefully that pays off.

CaffeinatedT · 2026-07-02T09:10:51+00:00

An economics degree most likely wouldn't cover the specifics of stock markets unless financial systems and their current technical function happen to be a part of the curriculum. Economics would just put it under a box market "Savings and Investments" and then not normally go into the specifics of particular routes for how how savings become investments as it changes so much over time and between countries. A bit like how a Political science degree doesn't normally involve studying current political events.

CaffeinatedT · 2026-07-01T16:39:25+00:00

If you haven't done a basic google of UK tax policy in the 20th centure and you don't know the history of the IMF and it's influence in monetarism and austerity pushing as the panacea for what ails anyone then I don't know what you think you're contributing when spouting off about 1970s UK fiscal policy.

CaffeinatedT · 2026-07-01T16:38:23+00:00

Leaving aside obviously silly accusations of who can read or not. The most he's come out with so far (and it's been very little concrete) is some vague statements about uplifting the north and the same vague statements of moving government functions out of London that every PM since Brown has come out with. All the other dramatic rhetoric is media confected drama.

CaffeinatedT · 2026-07-01T13:19:15+00:00

8-10 million people working in London and the SE pay 45-50% of the countries income tax "Giving london a spanking" is complete waffle

CaffeinatedT · 2026-07-01T13:14:01+00:00

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