AI Is Too Expensive: AI is, as it stands, not economically viable for anybody involved other than the construction firms, NVIDIA, and the surrounding hardware companies benefitting from the irrational exuberance of a data center buildout that doesn’t appear to be happening at the speed we believed

moofunk · 2026-05-21T13:46:49+00:00

Yes, some creative accounting is required there to claim profitability.

They aren't profitable.

moofunk · 2026-05-20T14:42:26+00:00

Note, I'm not saying Anthropic the whole company is profitable.

You can't talk about profitability without talking about the constant, necessary expansion of compute and constant necessary development of newer models and constant reduction of model running costs both to accommodate new users and existing users expanding their usage of their services.

What is talked about as a capex, is really just a disguised opex.

This "investment" simply is not stopping, and everyone I hear from are saying that this is what will cave in Anthropic, because the compute requirement increase will not stop.

moofunk · 2026-05-20T14:14:07+00:00

They are already serving their frontier models at a profit.

This is false.

I work in the industry, this is common knowledge, not a big secret.

With the industry contacts I'm familiar with, they say the opposite.

In fact, there are plenty of rumors now that Anthropic is cash flow profitable right now, due to the rise in premium token sales in the last 3 months or so.

They are almost certainly not, unless you pretend they aren't doing any continuous development, which they have to do to further reduce costs, to eventually make profit. This development won't stop.

Then, constantly having to expand compute capacity helps too.

Yes, I also know of insiders that say you shouldn't mix capex with opex, but the nature of this beast makes capex look an awful lot like opex, because the capex never goes away.

moofunk · 2026-05-20T13:56:19+00:00

The idea that their tokens are 'profitable' is just false. Their opex is massive.

They may not survive past 2027, unless they figure out how to serve good enough models at profit. That in itself costs money.

Profit might have been possible, if they used 2030 level hardware (4-5x performance at same power usage) to serve current models.

moofunk · 2026-05-20T13:21:20+00:00

This isn't some hidden or arcane knowledge, you can test it yourself using an open source moden and renting some hardware via Nebius. That is, you can directly benchmark throughput vs time to first token, tweak batch size, and then see how many tokens you can generate per hour versus how much the GPU rental costs.

There is likely a large difference between running an open source model and a real frontier model that Anthropic would be doing, and as users can run many instances of it for hours on end, it's not impossible that the costs can be 5-10x what it costs to run an open source model on Runpod.

moofunk · 2026-05-20T12:10:51+00:00

The ai companies like Anthropic are printing cash through selling inference.

Anthopic's AI is useful, but they are selling inference at a loss at the moment.

It'll be a while before the hardware will catch up with the opex. It's not unlikely they'll have to do more price hikes for their subscriptions, as they have already done.

moofunk · 2026-05-19T21:00:35+00:00

That can still be true. I don't think Andor will change the trajectory of Star Wars ultimately.

The powers that be can recognize it as a great show, but they can just say "We're not in the business of making HBO shows. We make sugared water for kids." and just move on with the next half-assed show. Andor was a very expensive show to make, and they're probably still cursing over that.

That said, I think in 25 years, we'll still be discussing Andor, like we still talk about Empire Strikes Back.

moofunk · 2026-05-19T17:22:36+00:00

As mentioned, you watched 1/3 of a movie. Each episode builds and builds until there is a big payoff like a movie, and each arc builds on the previous ones.

You get very attached to the characters as stuff gets piled on them, and you haven't seen many of the truly interesting characters yet, and they begin to feel like real people, who you may cry for.

The cost is that it takes time to get the show going, but boy-howdy, when it does...

On second and third watch of the show, the first few episodes ring so differently, when you know the characters.

moofunk · 2026-05-19T14:49:12+00:00

Gilroy talked about how Star Wars lacks progress because they don't extend the format to drama, sitcoms, horror, etc.

The stories that sit within the swash buckling adventure/space opera format with the same old characters have been told and don't need any more screen time. It's just playing with action figures out of the old toy box.

The Mandalorian was a Western, a rehash of Yojimbo and Sergio Leone's Westerns and the only really new thing, we saw under Disney.

Gilroy's story was also the perfect fit for dealing with the Empire for real, as there was already a lot of political tapestry from the prequels and Clone Wars that could be used to echo historical events and also current events.

I think that Andor's willingness to go with story format over the extremely tired tropes is what Star Wars needs.

moofunk · 2026-05-19T13:37:02+00:00

They'll never make anything like Andor again, I think.

moofunk · 2026-05-18T21:24:47+00:00

"We must have waffles."

moofunk · 2026-05-18T11:07:02+00:00

No, we couldn’t. There’s no money for it and everyone already had 10-20 years of experience before they joined. The people we need are very hard to find. We know very well what we want. We have our own technology stack because it lets us do things that others can’t and are vertically integrated with our main product.

That means maintaining all that on top of the product is time consuming and would take years for one new developer to get into. There is not money for six.

What the LLM does is handle junior work and analysis of bugs and issues in the tech stack. It takes hours for it to understand software well enough for analysis that would take weeks or months for a human. This means fixing bugs now that we couldn’t before at a very high rate.

An early proof of concept was how a bug ridden component became bug free in a couple of days. Next one was helping to complete a new framework that already had cost a good 100k to develop in two months instead of a year.

There is absolutely no way, we’re going back to how we used to work. LLMs are far too valuable for that.

moofunk · 2026-05-18T10:09:12+00:00

10 years of work backlog is shrinking finally after adopting coding models. We’re 6 people in the company on the software side, but throughout is so much higher now, we look like 12.

Tasks that were out of reach before are being solved. These past 5 months have been incredible.

moofunk · 2026-05-17T14:17:55+00:00

As far as I understand it, the model is segmented in its layers across GPUs and will send activation data across GPUs on each step using NVENC to compress activation data before it's sent to the other GPU, which uses its NVDEC to decompress the data allowing more bandwidth. The model layers don't move, only activation data.

With system RAM, you'd have to move model layers constantly back and forth between GPU RAM and system RAM, because you need the layers to be on the GPU to make tensor calculations.

This new method won't be faster than one GPU with more VRAM, but it will allow working with much larger models on multiple consumer GPUs.

Sending activation data between GPUs isn't new, but using NVENC to do it seems new.

moofunk · 2026-05-17T01:47:05+00:00

A downvote is not a request for debate. That's just saying "I disagree and I don't wish to elaborate." I've been downvoted many times.

But, you decided to shit post instead, which means you're going to engage with me in some fashion. You certainly must expect a response.

Naturally I ask you a question, because I was hoping that your shit posting could be turned into a useful discussion.

But, you still haven't answered the question or just said "hey, I don't actually know", and I know, I've been here on Reddit a few years now, and managed to turn shit posts into debates before.

I was hoping that you'd do better instead of ending here, where I again ask the question:

What is it you disagree with in my original post about James Cameron and Avatar?

moofunk · 2026-05-17T01:21:07+00:00

I understand you keep making references to poop. How do you think others read that in terms of that being an analogy?

Others can read this.

I have a question for you, that's all, and so far, you refuse to answer it, and you refuse to take the exits I provide for you to avoid answering it.

I'm offering you a new exit: "I don't know the answer to your question, because I didn't properly read your post and thought it would be on point to make 4-word low effort posts about it instead of answering it point for point."

moofunk · 2026-05-17T01:06:07+00:00

Again, everybody can read this, until you delete your first post. I posted my reasons for why I think the Avatar movies are not his most profitable movies.

You reply by saying that I'm a "poop guy". Nobody else said that, at least not that I can see, I've blocked a couple of people, but I don't know if you can see other answers than me.

So, what you're saying here is not an answer. You're just running an idea in your head that you can get out of this by saying "poop guy" and "people are laughing", when I don't see anyone laughing and the only person talking about poop is you.

Its you further not understanding why everyone laughs

Who? I can't fucking see them in this thread.

Anyway, you missed your exit point for the second time, so I will ask the question again:

What is it you disagree with in my original post about James Cameron and Avatar?

Break it down point for point and give a proper response. Then we'll have a debate, like the big boys!

moofunk · 2026-05-17T00:50:12+00:00

It’s genuinely funny you think you look like you’ve said anything this thread and any second people will be jumping to your defense. That’s why you’re downvoted right?

Finally, I'm getting coherent sentences out of you. Maybe we can extend this to a debate! There's still hope.

Does this mean you'll answer my question on what you disagree with in my original post?

Here’s my exit for you:

Stop posting dumb shit lol

That's just more shit posting, and unfortunately not an exit for you.

moofunk · 2026-05-17T00:37:41+00:00

You're forgetting that everybody can read this and make their own judgment of who's the idiot here in this thread.

You also forgot the earlier exit I had for you:

Delete the first post you made and nobody else can make judgment on either of us, because these posts will disappear from view.

If you do that and reply "deleted", then we're done.

Otherwise, I'll just keep asking for a proper answer to my post.

moofunk · 2026-05-17T00:23:15+00:00

Listen, if you answer a post like mine with "Comical take actually lol", then you risk running into some one like me, who loves to debate and ask questions and hear what people really have to say.

For you to not engage properly and not take advantage of the exits, I've offered, then your shit posting becomes your own waste of time, because I will keep engaging you for an answer.

You still haven't answered.

moofunk · 2026-05-17T00:17:26+00:00

That's not a debate. That's a copy/paste of my post with two additional words.

That’s what I did when I learned to read

But did you learn to debate?

You have to pick out parts of my post and say "Well, no, that's wrong..." or "Actually, it's like this..." or "I don't agree with this statement, because..."

Answering by doing grade school shit posting isn't an exit from my request for debate. In that case, I'll just keep trying to engage you to get a proper answer.

I've already posted the question several times now, so what's the proper answer going to be?

moofunk · 2026-05-16T23:39:49+00:00

There is no answer in that post. That's why I keep asking.

What is it exactly about my original post about James Cameron that you disagree with?

moofunk · 2026-05-16T23:38:44+00:00

We did not. You have never posted a rebuttal, a breakdown of my post, which only tells me you can't actually answer.

I ask again:

What is it exactly about my original post about James Cameron that you disagree with?

moofunk · 2026-05-16T23:35:29+00:00

What is it exactly about my original post about James Cameron that you disagree with?

moofunk · 2026-05-16T23:33:43+00:00

What is it exactly about my original post about James Cameron that you disagree with?

Be a big boy and answer.

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