[zhobbs]

>For what? There is no ROI at that price point. There is no monetisation potential.

I think your whole argument is based on this being true, but you didn't give much argument about why there is no ROI. 400M USD isn't hard to generate...even a moderate ad engagement lift on X would generate ROI and that's just 1 customer.

Imagine going back in time and showing every VC how great the search business will be in 20-30 years. The only rational response would be to make giant bets on 20 different Googles...and I think that's what's happening. These all seem like rational investments to me.

[makestuff]

Ken Griffin had an interview where he said something along the lines of the technologies dot com bubble pretty much turned out to be what everyone thought they would become at the time. The issue was valuations grew way too fast and it took much longer than expected for the companies to build out their products.

I think a similar thing is playing out with AI. In 5-10 more years these LLMs will replace a google search today (and maybe be even better).

[loandbehold]

Everyone I know has already switched from Google to ChatGPT for most of their search queries.

[gmerc]

That's a red herring because it ignores the part where they could have done the same things spending a tiny fraction of the money.

[gordonhart]

_Could_ they have done the same thing with a tiny fraction of the money? Grok 3 benchmarks are SOTA for both base model and reasoning. By definition, nobody has been able to do the same thing with any amount of money (discounting o3 which has been teased but is unreleased). That may change in the future! But as of now this is the case.

[YetAnotherNick]

Why don't you do it then? If you are talking about Deepseek "$5M", then you would be interested to know that they pay 7 digit salaries and reportedly have H100s worth $2B[1].

[1]: https://sherwood.news/tech/the-trillion-dollar-mystery-surro...

[zhobbs]

Just wonder if it matters? If Google spent 10x as much in the first 5 years of its life would it be a worse company now? Giant TAM, winner takes all (or most?), all that matters is winning.

[loandbehold]

People like Demis Hasabis and Derio Amodei say that R1 efficiency gains are exaggerated. $5M training cost seems to be fake as sources suggest they own more GPUs.