It’s important that none of these entities can collude to price fix. Having China be the competitor ensures that.
Basic microeconomics is still the easiest way to understand token economies. How is it not a competitive market (where profits go to zero?).
Anything A or O does to keep more margin, any competitor can copy or choose to undercut, and undercutting has the benefit of collecting training data. So what is going to stop gross profit of tokens going to zero except for collusion/price fixing?
PE has two definitions, the first is its structure as a private business investment.
Pensions did not create this business structure, it has existed forever.
The second definition is the subset of PE that is systemically buying businesses and extracting wealth from consumer and worker to asset and shareholder.
The article is not talking about the first definition and neither am I.
To regulate private businesses equity is not what I’m going for either, it’s regulating the large PE firms doing this specific business model en masse.
Slavery is profitable. People only stopped doing it when it was perceived as immoral.
Lots of things are profitable but immoral. People will do crazy immoral and illegal stuff for money, but we outlaw and slander the more abusive stuff, like monopolies and such.
If it wasn't pensions that were funding PE, I'm sure PEs would get a lot more criticism and would not be allowed to do what they do.
To clarify the main point is it is wrong but because it affects old people no one wants to crusade against it. It has the perfect moral excuse to hide behind.
I think, if you were to say there is a way where you can take $10b and have that money make more ROI with less risk than $1000 can, people would look at it and scream this is broken let’s policy this out of our economy. It defies all laws of a balanced economy (not a capitalistic one, a balanced one). It’s just like monopolies and we have strong laws against that.
But… if you were to say hey we need to pay our old people and we desperately need some way we can deploy massive amounts of money at higher rates of return, people will say… hmm well it’s broken but the alternative is worse so we’ll ignore it.
But now imagine you have a way to deploy large amounts of money and get large returns off that money. Every large amount of money (endowments basically) will jump on it because why not? That’s literally an endowment dream scenario.
So pension funds are the moral reason these other huge chunks of money to get large returns. PE firms have become a streamlined business model because they continue to improve what they are good at doing, and it’s insane that we haven’t passed laws against it yet. Except of course we can’t mess with it because it touches government workers.
So yeah even if we wanted to policy it out of our society it’s practically impossible from a social point of view.
The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks.
Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone would scream bloody murder. But with the higher returns from PE they have 40-50 year runways and people can pretend everything is fine.
So PE firms exist to extract value from basically all high quality goods and services to show a high ROI to prop up pensions. They extract wealth by buying up companies and gutting the “extra” things in them - for luxury goods, it’s quality, customer service and warranties (like my venta humidifier or reformation dresses), for services it’s stripping the underlying excess risk management and quality control. One can argue that PEs make the business more efficient but in my opinion they just turn worker or consumer related benefits into profits (stakeholder and business benefits). It’s a transfer of value from worker and consumer to business and asset holders at a massive scale.
But sadly it’s not some evil dudes at the top doing this transfer, the market force behind it is because we promised old people way too aggressive paychecks when they retired. Pensions need to invest massive amounts of money into higher rates of return and PEs just happened to be the medium that is the most successful. Sure the people running the PE firm extract a ton of value drying up all luxury quality and robust services from the daily lives of working families, but their take home is a tiny fraction of the wealth they extract (but yes they take home a massive amount of wealth for an individual). Instead the wealth extracted shows up on a 1400$/m for some old person probably living in a retirement home somewhere.
Its probably that in 1 or 2 years local (free) models will completely take the place of cheap models so cheap models need to move up the quality chain.
You have free local models for most tasks, $20 subscriptions for near-frontier intelligence, and API per token costs for frontier intelligence.
Flash seems to be targeting the near-frontier category.
I think this is a valid point, but if the talent pool shrinkage was truly a threat to your academic institution are you really going to just watch?
And the argument is that research funding is coming back but just not to MIT. So I think it is a serious long term issue that they have to consider going forward, and not something that they can just hope goes away.
Respectfully, comparing a janitor's 401k to a $27.4 billion endowment is (very) tone deaf.
But yes, the tax goes against "keeping sacred systems sacred" principles and is an opinionated policy against rich entities that the current administration dislikes.
It is officially the 2010 Google era at Anthropic (the era where Google released tons of new products and spread themselves too thin).
Anyone remember Google's social media platform??? Google Plus?
This is a good era to be in! Its the era of product experimentation.
As long as you realize that 90% of the products will not be supported long term if it doesn't contribute to bottom line revenue, then just appreciate it for what it is, a bunch of smart people trying to create useful products.
Just don't be surprised if Anthropic goes the Google route, which is shutting down the majority of the products that are too small / not successful enough to impact their revenue.
Hard to say, but the fact is the intelligence was there and now it's not.
Maybe they are giving Sonnet, or maybe a distilled Opus, or maybe Opus but with lower context, not quite sure but intelligence costs compute so less intelligence means cheaper compute.
The thing that inspires my writing is that the best sentences are self evident. Meaning you declare it without evidence and it feels so intuitively right to most people. It resonates, either being their lived experience, or being the inevitable conclusion of a line of thinking.
Making a sentence like requires deeply understanding a problem space to the point where these sentences emerge, rather than any "craft" of writing.
So the craft is thinking through a topic, usually by writing about it, and then deleting everything you've written because you arrived at the self evident position, and then writing from the vantage point of that self evident statement.
I feel that writing is a personal craft and you must dig it out of yourself through the practice of it, rather than learn it from others. The usage of AI as a resource makes this much clearer to me. You must be confident in your own writing not because it is following best practices or techniques of others but because it is the best version of your own voice at the time of being written.
> It's been funny watching my own attitude to Anthropic change, from being an enthusiastic Claude user to pure frustration.
You were enthusiastic because it was a great product at an unsustainable price.
Its clear that Claude is now harnessing their model because giving access to their full model is too expensive for the $20/m that consumers have settled on as the price point they want to pay.
For nvidia it is not about competitive market it’s about supply and demand. A different subset of microeconomics.