sam altman proving once again that he is not only a tech genius but also a business genius. make sure to let him scan your eyeballs before it’s too late.
CEO personally chose a price too low for company to be profitable.
What a clown.
well, yes. But also this is an extremely difficult to price product. 200$/m is already insane, but now you’re suggesting they should’ve gone even more aggressive. It could turn out almost nobody would use it. An optimal price here is a tricky guess.
Although they probably should’ve sold a “limited subscription”. That does give you max break-even amount of queries per month, or 2x of that, but not 100x, or unlimited. Otherwise exactly what happened can happen.
The real problem is believing that you can run a profitable LLM company.
What the LLMs do, at the end of the day, is statistics. If you want a more precise model, you need to make it larger. Basically, exponentially scaling marginal costs meet exponentially decaying marginal utility.
Some LLM bros must have seen this comment and become offended.
guess again
what the locals are probably taking issue with is:
If you want a more precise model, you need to make it larger.
this shit doesn’t get more precise for its advertised purpose when you scale it up. LLMs are garbage technology that plateaued a long time ago and are extremely ill-suited for anything but generating spam; any claims of increased precision (like those that openai makes every time they need more money or attention) are marketing that falls apart the moment you dig deeper — unless you’re the kind of promptfondler who needs LLMs to be good and workable just because it’s technology
and because you’re all-in on the griftlook bro just 10 more
repsgpt3s bro itl’ll get you there bro I swear broWell, then let me clear it up. The statistics becomes more precise. As in, for a given prefix A, and token x, the difference between the calculated probability of x following A (P(x|A)) to the actual probability of P(x|A) becomes smaller. Obviously, if you are dealing with a novel problem, then the LLM can’t produce a meaningful answer. And if you’re working on a halfway ambitious project, then you’re virtually guaranteed to encounter a novel problem.
Obviously, if you are dealing with a novel problem, then the LLM can’t produce a meaningful answer.
it doesn’t produce any meaningful answers for non-novel problems either
“Our product that costs metric kilotons of money to produce but provides little-to-no value is extremely difficult to price” oh no, damn, ye, that’s a tricky one
I signed up for API access. I run all my queries through that. I pay per query. I’ve spent about $8.70 since 2021. This seems like a win-win model. I save hundreds of dollars and they make money on every query I run. I’m confused why there are subscriptions at all.
More like he misjudged subscriber numbers than price.
Wait but he controls the price, not the subscriber number?
Like even if the issue was low subscriber number (which it isn’t since they’re losing money per subscriber, more subscribers just makes you lose money faster), that’s still the same category of mistake? You control the price and supply, not the demand, you can’t set a stupid price that loses you money and then be like “ah, not my fault, demand was too low” like bozo it’s your product and you set the price. That’s econ 101, you can move the price to a place where your business is profitable, and if such a price doesn’t exist then maybe your biz is stupid?
I believe our esteemed poster was referencing the oft-seen cloud dynamic of “making just enough in margin” where you can tolerate a handful of big users because you have enough lower-usage subscribers in aggregate to counter the heavies. which, y’know, still requires the margin to exist in the first place
alas, hard to have margins in Setting The Money On Fire business models
please explain to us how you think having less, or more, subscribers would make this profitable
LLM inference can be batched, reducing the cost per request. If you have too few customers, you can’t fill the optimal batch size.
That said, the optimal batch size on today’s hardware is not big (<20). I would be very very surprised if they couldn’t fill it for any few-seconds window.
i would swear that in an earlier version of this message the optimal batch size was estimated to be as large as twenty.
yep, original is still visible on mastodon
this sounds like an attempt to demand others disprove the assertion that they’re losing money, in a discussion of an article about Sam saying they’re losing money
What? I’m not doubting what he said. Just surprised. Look at this. I really hope Sam IPO his company so I can short it.
oh, so you’re that kind of fygm asshole
good to know
Can someone explain why I am being downvoted and attacked in this thread? I swear I am not sealioning. Genuinely confused.
@sc_griffith@awful.systems asked how request frequency might impact cost per request. Batch inference is a reason (ask anyone in the self-hosted LLM community). I noted that this reason only applies at very small scale, probably much smaller than what
OpenAI is operating at.@dgerard@awful.systems why did you say I am demanding someone disprove the assertion? Are you misunderstanding “I would be very very surprised if they couldn’t fill [the optimal batch size] for any few-seconds window” to mean “I would be very very surprised if they are not profitable”?
The tweet I linked shows that good LLMs can be much cheaper. I am saying that
OpenAI is very inefficient and thus economically “cooked”, as the post title will have it. How does this make me FYGM? @froztbyte@awful.systems
Yeah, the tweet clearly says that the subscribers they have are using it more than they expected, which is costing them more than $200 per month per subscriber just to run it.
I could see an argument for an economy of scales kind of situation where adding more users would offset the cost per user, but it seems like here that would just increase their overhead, making the problem worse.
despite that one episode of Leverage where they did some laundering by way of gym memberships, not every shady bullshit business that burns way more than they make can just swizzle the numbers!
(also if you spend maybe half a second thinking about it you’d realize that economies of scale only apply when you can actually have economies of scale. which they can’t. which is why they’re constantly setting more money on fire the harder they try to make their bad product seem good)
They’re still in the first stage of enshittification: gaining market share. In fact, this is probably all just a marketing scheme. “Hi! I’m Crazy Sam Altman and my prices are SO LOW that I’m LOSING MONEY!! Tell your friends and subscribe now!”
I’m afraid it might be more like Uber, or Funko, apparently, as I just learned tonight.
Sustained somehow for decades before finally turning any profit. Pumped full of cash like it’s foie gras by Wall Street. Inorganic as fuck, promoted like hell by Wall Street, VC, and/or private equity.
Shoved down our throats in the end.
It was worth it to finally dethrone Big Taxi🙄
By “Sam Altman said” in a “series of posts”, this article means these two tweets from 10 hours ago: https://twitter.com/sama/status/1876104580070813976.
This is a screenshot of a tweet talking about an article written about two tweets by Sam Altman. Is this really the world we’re living in, now?Welcome to the wonderful XXI century where our innovations in communication technology and financial instruments allow a hyperoptimised economy where two tweets are more than enough to cause billion-dollar shifts on the market. Completely organic and based on solid fundamentals I am assured by the same people that assured me of this in 2000 and 2008.
According to the Lemmy comment I read about it that is exactly what people are wondering
I’ve seen more written on one post. People will eat up ‘news’ if presented in the right way. There is a reason the stupid websites and advertisers use the click-bait titles.
Yeah, and I think you’re pretending it’s more ridiculous than it is
Okay everyone should create an openai account and start feeding it shit. Ask it the most braindead questions ever, if they your questions as training data itll just fuck the next model up even more.
What what in the butt?
Never offer unlimited on a utility model without guardrails. That’s just business 101.
“I personally chose the price”
Is that how well-run companies operate? The CEO unilaterally decides the price rather than delegating that out to the numbers people they employ?
Should have asked chatgpt to play the role of a CEO.
This answer would be much funnier if that wasn’t his fucking plan.
jesus fuck how did i never see this before
This is my first experience listening to this guy, and I’ll be darned, it’s a another idiot billionaire.
I’d like to think there are intelligent billionaires but honestly folks, if you win that big and haven’t cashed out to do something more meaningful with you’re life, you’re an idiot.
Worth the watch just to hear the genuine laughter
In tech? Kinda yeah. When a subscription is 14.99 $£€/month it’s a clear “we just think it’s what people think is a fair price for SaaS”.
The trick is that tech usually works on really weird economics where the fixed costs (R&D) are astonishingly high and the marginal costs (servers etc) are virtually nil. That’s how successful tech companies are so profitable, even more than oil companies, because once the R&D is paid off every additional user is free money. And this means that companies don’t have to be profitable any time in particular as long as they promise sufficient projected growth to make up for being a money pit until then. You can get away with anything when your investors believe you’ll eventually have a billion users.
… Of course that doesn’t work when every customer interaction actually costs a buck or two in GPU compute, but I’m sure after a lot of handwaving they were able to explain to their investors how this is totally fine and totally sustainable and they’ll totally make their money back a thousandfold.
I’m guessing that means a team or someone presented their pricing analysis to him, and suggested a price range. And this is his way of taking responsibility for making the final judgment call.
(He’d get blamed either way, anyways)
$20/mo sounds like a reasonable subscription-ish price, so he picked that. That OpenAI loses money on every query, well, let’s build up volume!
While the words themselves near an apology, I didn’t read it as taking responsibility. I read it as:
Anyone could have made this same mistake. In fact, dumber people than I would surely have done worse.
It works for ice tea and hotdogs, why not AI? (I jest)
I think I remember Jeff Bezos in “The Everything Store” book seeing a price they charged for AWS and went even lower for growth. So there could be some rationale for that? However, I think switching AI providers is easier than Cloud Providers? Not sure though.
I can imagine the highest users of this being scam artists and stuff though.
I want this AI hype train to die.
far, far, far, far, far, far, far fewer business people than you’d expect/guess are data-driven decision makers
and then there’s the whole bayfucker ceo dynamic which adds a whole bunch of extra dumb shit
it’d be funnier if it weren’t for the tunguska-like effect it’s having on human society both at present and in the coming decades to follow :|
There’s a reason so many companies fail
there is, but this isn’t (the primary) it tbh
I endorse this as a data professional. It’s maddening.
A real ceo does everything. Delegation is for losers who can’t cope. Can’t move fast enough and break enough things if you’re constantly waiting for your lackeys to catch up.
If those numbers people were cleverer than the ceo, they’d be the ones in charge, and they aren’t. Checkmate. Do you even read Ayn Rand, bro?
Is that what Ayn Rand is about? All I really remember is that having a name you chose yourself is self-fulfilling.
Oh boy I got a fun video for you: https://youtu.be/GmJI6qIqURA @26:50
Atlas Shrugged is so bad that if you didn’t know anything about the author, it could be read as a decent satire.
A monologue that last SIXTY PAGES of dry exposition. Barely credible characterization from the protagonist and villains and extremely poor world building.
Anthem is her better book because it keeps to a simple short story format - but still has a very dull plot that shoehorns ideology throughout. There’s far better philosophical fiction writers out there like Camus, Vonnegut, or Koestler. Skip Rand altogether imo
Ayn Rand is about spending your whole life moralizing a social philosophy based on the impossibility of altruism, perfect meritocratic achievement perfectly distributing wealth, and hatred of government taxation, regulation, and social welfare programs…
… and then dying alone, almost totally broke, living off of social security and financial charity from your former secretary.
Good. Burn that thing to the ground.
Likely they’ll try to sell it to governments, and with Elon Musk proposing goVeRNmeNt eFfIciEnCy, at least xAI can become somewhat profitable.
More power to the open source community
This is something I’ve been speculating for a while. The cost of running these complex systems (as OpenAI models aren’t just LLMs) is subsidized so heavily that we don’t really know the cost of running these things.
This is a huge risk to any business, as the price for these services has to go up significantly in the long term.
Ed Zitron calculated from the publicly available numbers that OpenAI was spending $2.35 for every $1 of ChatGPT they sell
Is that for all operations or literally just to run the paid services? Cause if that includes the free services, marketing, R&D then they have a lot of options to cut costs.
Given what AWS/etc. charge for their LLMs/APIs it feels like the entire industry is subsidizing LLM compute to stay competitive. But I could be wrong there.
Was it altman that tweeted they were near the singularity? I assumed it was a way to raise money. Felt more like “Fuck! We need more money to burn.”
they were only “near AGI” before their most recent funding rounds closed, after that they were “a few thousand days” away
Sam, just add sponsored content. The road to enshittification doesn’t have to be long! Make it shitty fast so people can move past it and start hosting their own models for their own usage.
Right? He just needs to have it add some Shell or Wal-Mart logos to the generated images. Maybe the AI generated Fifty Shades-esque Gandalf fanfic somebody is prompting can take place in a Target.
Hey ChatGPT, give me an overview of today’s weather.
Today’s weather is beautifully sunny and hot, with clear skies and no rain in sight—perfect for enjoying the new Coca-Cola Zero™. Hmmmm, refreshing!
Isn’t that why it has to be long? Not many people actually rely on OpenAI yet.
I cancelled a 20$ subscription I started because it was arguably useful for me and setved exactly one use-case. Now I don’t need it anymore.
Of course, they had a form asking feedback/why. I chose “ChatGapT is nott advanced enough” as that was one of the alternatives. Hopefully it will lead to them putting more resources into development and burn through investor money faster.
“Trust me bro, just 200m dollars more”
- Sam Altman, probably
Just one more datacenter bro, just one more (that consumes the same power as Belgium.)
OpenAI burns through 200M$ in less than a week
If they are losing money on $200/month, that does not necessarily mean they lose money on the $20/month.
One is unlimited, the other is not. You only have to use the $200 subscription more than 10 times the amount the $20 subscription allows for OpenAI to earn less on that subscription.
We already know they’re losing money on everything
Wonder what their financials are actually, usually with cloud capital ventures like these they usually still magically keep raking it in even though they’re “losing money”.
For instance, Amazon during the pandemic paid zero corporate tax even though they had record sales because they “didn’t make any profit”, Tesla too who didn’t make profit during 2020 yet their share price went 10x and they had plenty of shares to sell if they wanted.
Wonder what their financials are actually
If they have a publicly traded part (iirc openai ownership was weird, but dont think they have a publicly traded part (yet)) they should do financial statements, before that doubt anybody can really tell.
Not that those statements are easy to read.
The trick is to spend all the money you earn.
Spend all the money you earn on fees to a shell company that you own in a country with less or no corporate tax rate.*
Yeah, with see this all the time with emerging tech and platforms. All of the top tech companies now were once spending cash faster than they could make it, and all the naysayers saying they’d never be profitable.
Don’t y’all get tired of being wrong sometimes? Maybe try to learn from the past.
you may in fact want to understand how much the ZIRP years had a hand in this, and then to also look just how many of those that remain (of which there continue to be fewer and fewer) are having to engage in Creative Accounting to make it seem like everything is fine
maybe try to learn from the past.
ZIRP?
Zero interest rate period, when the taps of investor money were wide open and spraying at full volume because literally any investment promising some sort of return was a better proposition than having your assets slowly diminished by e.g. inflation in the usually safe investment vehicles.
Or something to that effect, I am not an economist.
maybe try to learn from the past
we did. you just don’t listen.
it’s weird you pretend to be an anti-corporate leftist but when convenient post shit like:
All of the top tech companies now were once spending cash faster than they could make it, and all the naysayers saying they’d never be profitable.
“the only thing I hate more than neolibs and Peter thiel is when a bunch of thiel’s friends get credibly accused of running a massive grift” haha sure
THANK YOU. I feel the exact same way, word for word, although my feelings are directed at juicero rather than openai. sick of the juicero naysayers who don’t understand
Ngl, you had me on the first half.
me frantically changing my downvote
And how many failed technologies and companies were there along the way? How many movies do you watch on your LaserDisc player? Or your HDDVD player?
This current “AI” iteration is already hitting its limits despite having access to the sum total of human history. The bubble is already bursting as companies are finding that people don’t want AI in their refrigerators any more than they want it to replace a basic search engine or making fake Facebook accounts for you to talk to like Tom from MySpace.
OpenAI has said that they will go bankrupt if they can’t train their AI on copyrighted material for free.
It’s largely a tech without a use case in this current form, and not every money pit turns into a success before the companies burning cash go bankrupt.
but they’re still not profitable lol
Don’t y’all get tired of being wrong sometimes? Maybe try to learn from the past.
Fondly remembering all the times we were wrong. Ah, remember that one time we were totally wrong about the metaverse not being the future? Oh, oh, or the classic “cryptocurrencies are just a scam” talk we had to walk back so many times. Damn, good thing we didn’t call out WeWork for being a money sink or we’d be looking pretty fucking stupid now!
Crypto is actually really useful for buying drugs and other illegal products and services. People have legitimately made a lot of money as well if they weren’t falling for the stupid scams. You should see the price of BitCoin or Ethereum these days.
Not saying it’s ethical to run a lot of these given their limited usefulness and very high costs. But saying they didn’t make people money, were all scams, or didn’t have a use is objectively wrong.
all of actual large scale uses of crypto as it stands today are money laundering, sanctions evasion by nk, iran and russia, securities frauds and other financial crimes from hundred years ago repackaged in cyberpunk wrapper, and a couple of other ways to scam cryptobros
That’s some wildly disingenuous goal post moving when describing what was meant to be The Future of Finance™ at the time.
Like saying yeh, AGI was a pipedream and there’s no disruption of technical professions to be seen anywhere, but you can’t deny LLMs made it way easier for bad actors to actively fuck with elections, and the people posting autogenerated youtube slop 5.000 times a day sure did make some legitimate ad money.
That’s some wildly disingenuous goal post moving
check their recent post history. it’s all old school, Ayn Rand, bro you don’t even watch Bullshit?, internet libertarian takes and it’s fucking delicious, like eating a Big Mac straight from the time capsule where someone buried it
like eating a Big Mac straight from the time capsule where someone buried it
there’s some kind of new reality / competition show in this. I’m thinking mixture “you can’t eat that many burgers!” challenge shit, preservation/archivist commentators, and organic chemists and good dieticians as adjudicators
Why is same personally picking subscription prices anyway? Should there be some accountant doing that math? Wtf
Why is AI not making enough money? I specifically requested it.
This was my biggest takeaway here. Wtf?! “I personally set the price and thought we would make some money”?! Either he is trying to sound cool by being casual or he is a fucking idiot. Or probably both.
If it worked for Elon and his 8 per blue check, it has to work for our altman boi
Did Sammy boi try to consult Stephen King on the final price by any chance
Their accountant is probably three GPTs in a trench coat that’s being fed prompts by an unpaid intern or some poor dude in India.
