They could lock them down legally which would prevent commercial use, but they choose not to, and they boast about how many tens of millions of times Gemma models have been downloaded by developers.
So there must be more to the rationale than just local model weights getting hacked out of devices.
Doesn't that passive process reverse at some point?
The trillions that mechanically and automatically flowed into index funds in pensions and 401k accounts must mechanically and automatically flow right back out after retirement, right?
Especially when younger generations are too poor to save for retirement and most companies don't offer pensions to younger workers any more, where will the inflows come from to offset the outflows?
As long as the money supply keeps increasing, excess money has few places to go (bank deposits, stocks, real estate, and physical goods). Most of it will go into the stock market, since it's quite liquid with and has good investment returns.
Also, a significant part of the stock market is driven by foreign investment. The US has few capital controls and is an easy market for foreigners to invest in. Around 1/3rd of US stocks are owned by foreigners.
Even if the older generation sells during retirement, foreign investment will be more than enough to replace it.
It's also interesting watching Alphabet buy back $100 billion of stock over the last two years, when the price was half what it is today, only to turn around and sell shares now at the higher price.
I know GAAP accounting won't recognize any capital gain on these treasury operations, but from an economic standpoint this financial judo creates a lot of value for existing shareholders.
this is the finance team doing a fantastic job. keep in mind they're raising this cash right before 3 major ipos in their sector which people will need to raise money for and will fight against htem in the narrative.
If i was a google cfo and was trading at a premium to my peers before that, i'd want to raise the cash now. Look at MSFT, they're trading at 25 forward p/e and were buying back shares at 40. If they have to issue equity over the next few years the spread between teh performance of the 2 cfos could be 40-50b on that alone.
If we're doing historical comparisons, there was so much hype for AOL and Yahoo that drove valuations far beyond the economics. In time, the hypesters were proved wrong.
In contrast, there was overwhelming doom and gloom for Google's IPO, in spite of their incredible growth and margin economics. In time, the doomers were proved wrong.
There's so much doom and gloom about Anthropic that directly contradicts their astounding growth and margins. For a long-term investor, Anthropic is looking a lot more like Google not AOL.
I can only hope the doomer narrative dominates until I can get a few shares at a reasonable valuation.
Vibes are almost always wrong. Ignore the vibes and focus on revenue growth rates and inference margins.
Google is an excellent example of the companies that followed after the initial batch of big dotcom companies. They ate Yahoo's lunch. The dotcom bust was in 2000, and Google went public in 2004.
I'm betting more on the successors to this initial group of AI companies. The ones that have to build actual profitable businesses.
Google was easily 10x better than any of their competition. It was effectively alone in the market.
Most of us were using 56k modems to access the internet back then, Google's search returned results within a couple of seconds. Yahoo, Lycos, Excite, Alta-Vista were still loading. Then the search results themselves were so good you could often just pick the first result. They eventually added a button which just took you directly to the first result. Which I used.
Your memory is faulty. AltaVista was always super fast--it never had the advertising bloat that the other ones had until the very end.
The problem AltaVista had was that it didn't scale when the Internet went exponential--so AltaVista would give you good search results until you asked current, topical questions. AltaVista relied on running a single, super-expensive stonking huge Alpha machine while Google ran on lots of commodity servers that spidered constantly.
This is inaccurate. When I was running AV operations around 2000, we were running on a couple dozen huge Alpha machines for the index layer and queries. We had a bunch of smaller machines for Web serving, and a high memory set of Alphas as a caching layer.
We also spidered constantly. A couple of those huge backend Alphas were dedicated to holding the constant spider index. AV had a well earned reputation for quick discovery, although I think Google wound up faster. We suffered a bit from maintaining separate indexes for the main corpus and recent pages, and I imagine Google handled that better.
But the period of time when our main index went to hell was the period of time when we failed to do a new main index crawl for several months. I won’t get into why that happened politically because my memory isn’t perfect and I don’t want to criticize anyone who won’t see this to stand up for themselves, but it’s absolutely the case that we let the index get stale.
And I will say that I think the execs were distracted by the idea of challenging Yahoo by buying a shopping site and a local news site of sorts and, unlike the Google of the time, they lacked the wisdom to focus on our primary product.
And now I fade back into the hedges, until the next time AV comes up… I suspect a high percentage of my HN comments are on this exact topic. It makes me sad.
And I still miss the AltaVista illustrated diagram (Java Applet) that would allow you to drill down and specialize the search results. No modern search has ever matched that, again.
That feature sounds amazing! I tried searching wayback etc but wasn't able to find any more details. Do you happen to know of any screenshots / deeper descriptions for it?
Perhaps we could nerd snipe Marginalia Search to add it :)
I was not a software engineer but yeah, I think so. Every now and then we’d have to go get Mike Burrows to do some consulting work to rewrite a bit more of the code in assembly.
Thanks for replying, now I remember why I used to spend all day on this site :-) A lot of the political changes and my exposure to some of the VC people outside of public view have soured tech for me. That and the current cult-like behaviour and clear fraud from the crypto and now AI waves... anyhow, I digress.
We were big AV users initially, I think for 2 years? This was 94-97 so my memory of the time periods is fuzzy. When Google came along I have very vivid memory of it providing not only better search results but also faster loads times.
I wonder if Google was already geo-distributed at the time? Latency was real then, it wasn't uncommon to hit 350ms (compared to 20-50ms to Europe) and the difference would have been felt back then. It was a killer for Counter Strike.
I was a relatively early investor (2008), but I was very hesitant early on because Microsoft was building an integrated search function, which became Windows Live Search, which became Bing. I definitely remember it took me to the beginning of the financial crisis to finally decide that it was going nowhere. I suspect it was the development of Google Maps that changed my mind.
"Google" of today is really AdSense ($102M, 2003) -> Android ($50M+?, 2005) -> YouTube ($1.6B, 2006) -> Google Docs ($50M+?, 2006)
Without those prescient and lucky acquisitions, we'd be talking about a "Google" that looked much more like Yahoo.
It wasn't search proficiency that built the empire, it was leveraging a transient search quality advantage into cash flow, then plowing that cash into acquisitions to construct a durable moat.
Was on a team that was trying to sell AltaVista a social media presence (before facebook/myspace/etc). Our people were mostly using Google, but we still wanted the client. One of the "moderation experts" on our side (i.e. - not tech or busniess) who evidently didn't understand what AltaVista was about asked them "Why don't you just use Google? It's better".
There were many search engines around during that time. Yahoo, Excite, Microsoft Live Search, Lycos... I don't recall any of them improving enough to rival early 2000's Google.
AdSense wasn't a thing until 2003. Google didn't have much revenue before that. However, they still surpassed their competition in quality of search results long before...
Yes. My point is that Google had a temporary search quality advantage… then AdSense-fueled revenue allowed them to convert that to a durable moat by outspending their competitors.
That didn't happen because they were magically amazing at search forever.
It happened because Google had a good business plan and could afford to throw gobs of money at engineers and infrastructure, in quantities that even Microsoft was unwilling to match.
Erm 2008 isn't early, I had been using it for almost a decade by then. They had won by 2001. No-one who knew Microsoft thought that they had a chance with Bing. This was post-Gates and Microsoft were already a laughing stock in 2008 with respect to the web.
I couldn't even tell you when I used the Google search page. It's been years at least. I wouldn't be surprised if many other people also don't go there to search. I assume most search straight in the url bar.
100x is staggering. These companies are priced as though we are already chewing through the solar system to create AI computronium. I'll pass--I expect I'll get a UBI when that scenario happens anyway.
I don't think it's really doom and gloom, that's mostly on here.
The normies are all still excited/scared and the valuation based on secondary trading is going up and up.
Maybe not quite as crazy as the dot com boom but I'd say the current environment for AI and related equities is a lot closer to the mid/late 90s than 2004
I think both have a similar amount of people who know about it. But it might just be my circle which is mostly in finance and some in engineering/medicine. These are also the type of people who actually invest. There's little doom vibes among those who're older if anything they're the one who think we'll get to some agi type situation.
Exactly. Many people will choose the cheapest possible model that's smart enough for their use case. "Frontier" is a transient property; open models tend to catch up in 6 months or so.
The issue is that the way the rules have been changed, risky stocks have been added to a product that is meant to be stable.
A 401k, any retirement focused product, is not serving its purpose when it tags on risk.
Having people in the later part of their lives find they are broke, becuse despite them doing everything right, a loophole was created to extract their savings.
> focus on revenue growth rates and inference margins
And ignore debt you can't pay back? Fine during ZIRP era because there was always another $50M around the corner. There is no extra $50B around the corner.
They've all over-invested in AI, same as the railroads, and it will collapse the same way.
I'm not against a fundamentals-based argument. The revenue growth is wild and their margins are reported to be great. But the existential concern remains: what happens if models start plateauing?
I could be wrong, but the margins are so good because there isn't a "substitute" for the frontier models. The performance difference between the latest Opus and a more open model provider is large enough to justify the extra cost. If that difference shrinks, I think the cost people are willing to pay will go way down.
They've changed the rules that will force these companies into every ETF commonly held by people's 401ks. The doomer narrative doesnt matter, they're forcing the common man to be the exit liquidty for the elite before the bubble pops.
>I can only hope the doomer narrative dominates until I can get a few shares at a reasonable valuation.
I conjecture that some amount of the "doomer posting" is a consequence of other people realizing what you realized here and attempting to sway public sentiment for personal gain.
I doomer post because I see three basic possibilities:
* It's a bubble, it crashes (no moat etc.)
* It's not a bubble, we get superintelligence, it's not nice, it squishes us all like bugs
* It's not a bubble, we get superintelligence, it's nice, we all get UBI
From the perspective of your personal financial security, the range of scenarios where you want to invest in Anthropic seems rather narrow. And I don't like to fund the creation of something which might squish me like a bug.
I am really surprised that people are comparing dot com with AI. Atleast dot-com era was deterministic, comparatively AI is just a probabalistic unreliable slop
The growth of the Internet will slow drastically, as the flaw in “Metcalfe’s law”—which states that the number of potential connections in a network is proportional to the square of the number of participants—becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.
(Why do people try to criticise AI as "probabalistic" like this matters? Unreliable I get, but early Wikipedia and Geocities were as deterministically unreliable as the amateur and fiction sections respectively of a bookstore)
An economist exytrpolating tech trends is already a hard sell. And deterministic unreliability is atleast deterministic meaning you can choose to ignore, this is still better than probabilistic AI hubris
Anthropic is selling a commodity item that was just invented. It’s like investing in someone who is blowing lightbulb glass by hand.
We’ve already seen a startup make a chip which generates a hundred pages of text in milliseconds. When companies start bringing out hardware like that for cutting edge models, the entire business is dead. AWS will just eat the market.
History does not repeat itself, but it rhymes. Drawing these comparisons to the Dotcom bubble is only of limited utility. I think there's good reason to believe that recursive self-improvement is a bust, and LLM models will become a commodity. The real value lies in multi-modal integration and good harnesses. The current frontier labs are theoretically in a good position to capitalize on this, but it is far from obvious that they will succeed. I think Google and some of the chinese giants are in a far better position to actually go the last mile.
> 5% of every knowledge workers salary to go into tokens
In general, I don't think you can reason from the existence of potentially stranded investments back to revenue projections.
And when you frame this as percentage of salaries, that's a sneaky implication that this is only about reducing salaries and headcount, and not about adding capability, or doing things you couldn't do before, or making fewer mistakes, or capturing more revenue, or expanding margins, or competing more effectively.
That said, 5% of knowledge worker comp actually seems very low to me, given the capabilities, and considering the percentage of "knowledge work" that is absolute bullshit.
Two weeks ago I received an email from my HOA saying I'd been billed for a service I never asked for. So I replied to the email saying they'd made a mistake. There are now more than 30 messages in the thread, involving at least 8 "knowledge workers" at the property management company all passing the buck, and the problem is no closer to resolution.
An agent could wipe out all 8 of those bullshit jobs and solve my simple problem in five minutes instead of two weeks. Think of how many hundreds of thousands people are doing this nonsense just in the property management industry alone.
They could lock them down legally which would prevent commercial use, but they choose not to, and they boast about how many tens of millions of times Gemma models have been downloaded by developers.
So there must be more to the rationale than just local model weights getting hacked out of devices.
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