this post was submitted on 29 Mar 2025
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[–] [email protected] 1 points 3 days ago

You could have made this same analysis in 2000 and it would be equally valid.

Yes, the business world is willing to pay big bucks to reduce labour costs and that business case is solid.

But we already see that success is not determined by the size of the model, but by the data and providing and processing that data in a smart way to the AI. And the companies that are successful in this area are model agnostic. They can, and will, switch to cheaper to run models that are good enough for their purposes.

So the dogma that whoever has the biggest model wins, just doesn't apply. AI is already hitting diminishing returns.

Once the investment money pumping the hype is gone, there will be a glut of capacity and a heavy price competition, which will drive down margins.