Deep Impact.
Soundtrack: The Hives — Hate To Say I Told You So In the last week or so, but especially over the weekend, the entire generative AI industry has been thrown into chaos. This won’t be a lengthy, technical write-up — although there will be some inevitable technical complexities, just because the
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Here is a interesting quote from the article:
"How The Hell Is This So Much Cheaper?
That's a bloody good question, and because I'm me, I have a hypothesis: I do not believe that the companies making foundation models (such as OpenAI and Anthropic) have been incentivized to do more with less, and because their chummy relationships with hyperscalers were focused almost entirely on "make the biggest, most hugest models possible, using the biggest, most hugest chips," and because the absence of profitability didn’t stop them from raising more money, efficiency was never a major problem for them.
Let me put it in simpler terms: imagine living on $1,500 a month, and then imagine how you'd live on $150,000 a month, and you have to, Brewster's Millions style, spend as much of it as you can to complete the mission of "live your life." In the former example, your concern is survival — you have a limited amount of money and must make it go as far as possible, with real sacrifices to be made with every dollar you spend. In the latter, you're incentivized to splurge, to lean into excess, to pursue a vague remit of "living" your life. Your actions are dictated not by any existential threats — or indeed future planning — but by whatever you perceive to be an opportunity to "live."
OpenAI and Anthropic are emblematic of what happens when survival takes a backseat to “living.” They have been incentivized by frothy venture capital and public markets desperate for the next big growth market to build bigger models and sell even bigger dreams, like Dario Amodei of Anthropic saying that your AI "could surpass almost all humans at almost everything" "shortly after 2027." Both OpenAI and Anthropic have effectively lived their existence with the infinite money cheat from The Sims, with both companies bleeding billions of dollars a year after revenue and still operating as if the money will never run out. If they were worried about it, they would have certainly tried to do what DeepSeek has done, except they didn't have to, because both of them had endless cash and access to GPUs from either Microsoft, Amazon or Google.
OpenAI and Anthropic have never been made to sweat, receiving endless amounts of free marketing from a tech and business media happy to print whatever vapid bullshit they spout, raising money at will (Anthropic is currently raising another $2 billion, valuing the company at $60 billion), all off of a narrative of "we need more money than any company has ever needed before because the things we're doing have to cost this much.""
