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   tante (tante@tldr.nettime.org)'s status on Saturday, 26-Jul-2025 20:41:59 JST tante

   • Ruth Mottram

   @Ruth_Mottram you have not missed anything. LLMs are niche tools that could be used productively in a few specific cases but not in the way currently proposed: These systems are not economically viable.

   • Embed this notice
     Knud Jahnke (knud@mastodon.social)'s status on Saturday, 26-Jul-2025 20:41:57 JST Knud Jahnke

     in reply to

     • Ruth Mottram

     @tante @Ruth_Mottram

     I think the point was more that it's even hard to fathom how widely LLM-slop is being marketed and crammed into products. And partially used as well.

     Because if it were just about Shrimp Jesus by Stable Diffusion then this wouldn't result in a $300b investment risk.

     Minoru Saba repeated this.
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     David Chisnall (*Now with 50% more sarcasm!*) (david_chisnall@infosec.exchange)'s status on Saturday, 26-Jul-2025 20:41:57 JST David Chisnall (*Now with 50% more sarcasm!*)

     in reply to

     • David Gerard
     • Ruth Mottram
     • Knud Jahnke

     @knud @tante @Ruth_Mottram

     There are a few causes. Ed and @davidgerard have both written about the need for growth in the tech industry. If your stock price is going up, you can pay 50%+ of employees' salaries by issuing new stock, which means you can pay a lot more than your revenue would suggest.

     The root problem for tech companies is that user requirements grow at human rates. Bill Gates had the ambition to have a computer on every desk. That's a market of a few hundred million people who can afford a PC (possibly more now) and so you can grow from zero to that over a decade or two and have really big growth rates.

     I've written about why this is a problem for cloud companies before, so I'll try to be brief:

     Basically, the requirements for cloud customers grow by maybe 5-20% per year, but the cost of the compute to provide them halves roughly every 12-24 months. This means that you have a rapid growth phase as people move from on-premises to the cloud, but then the amount that people need goes down every year. That's a problem because it means that there's a cliff for cloud growth: as soon as all of the big companies have moved onto the cloud, you start losing. Their cloud requirements will grow more slowly than your costs go down (and you have to reduce your prices in line with those costs or you'll see people move out of the cloud as they realise that they're paying a lot but really only need one rack of machines).

     AI is their solution to this. It is a new use case that requires far more compute than anyone can afford on premises and guarantees growth for the cloud for a while.

     That means that all of the big cloud companies have a huge incentive to tell everyone else that AI is the future. Some of this is things that I'm quite surprised the SEC is okay with, such as investing in startups with no real business model solely so that they will buy your services and let you claim that you have customers.

     At the start of the bubble, over $1T of value in the stock market was predicated on the assumption that cloud sales would increase in a way that they absolutely could not without a Next Big Thing™ to drive compute demand. If they hadn't found something like AI, most of that money would be wiped out. That's a huge incentive for a lot of people to push AI into all of the things.