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LLMs as parlor trick to raise money for compute infrastructure
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Date: May 5th, 2026 6:35 PM Author: Richard Ames Huge amount of "AI will never work" doomers focus on the unprofitability of LLMs. "ChatGPT is losing money! It can't pay its bills!" Etc. etc. I have started to view LLMs as the equivalent of J.P. Morgan turning on the lights in his Manhattan estate to show off the power of electricity. Or World's Fairs of old with their dazzling lighting displays.
Whether or not LLMs can ever truly be profitable is besides the point. They have served as proof for the compute layer which will power the much more mundane uses of AI that will go much, much farther from an economic standpoint.
Shit like AI for trucking compliance (to save an unbelievable amount of paperwork), AI for internal firm coordination, AI for financial reporting. You can look at basically every industry and find layers of work that amount to moving information from one bucket to another with a modification or two -- specialized AI which runs on the compute layer will do this whether or not ChatGPT / Claude / Grok can maek it.
None of this will "replace all jobs" or automate everything via AGI. But it will dramatically change the landscape of white collar work such that firms will have fewer and fewer employees. They will still HAVE employees, but huge numbers of people who have simply existed to do basic information processing / formatting / transferring will be toast.
I am probably stating the obvious to most here. But I was lisening to Ed Zitron go on and on about how LLMs can never be profitable and I just thought to myself that he, and many like him, do not see the full picture at all. |
Date: May 5th, 2026 6:38 PM Author: The Redwall Cinematic Universe it's just another financialized ponzi scheme. the data center/infrastructure buildout is just another dimension of the ponzi
lots of companies "aren't profitable" but their valuations keep going up and up and up. AI isn't all that different from other VC ponzi scams. it's just the scale of it that's unprecedented |
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Date: May 5th, 2026 6:52 PM Author: Dr. Samuel-Auguste Tissot America is just a big ole heaping pile of rotting shit being sold back and forth (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868064) |
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Date: May 5th, 2026 8:45 PM Author: banks? COCKSUCKERS. (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868288) |
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Date: May 5th, 2026 6:44 PM Author: OYT and the Indie Reprieve ( ) where are they gonna build these massive data centers? some midwestern wasteland that no one cares about? (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868047) |
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Date: May 5th, 2026 6:55 PM Author: cowgod Why does the location matter at all OYT? Does everything have to be in a VHCOL area or else you scoff at it for no reason? (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868077) |
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Date: May 5th, 2026 8:44 PM Author: OYT and the Indie Reprieve ( ) I'm just asking where, s'all (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868284) |
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Date: May 5th, 2026 6:53 PM Author: ...,.,.,.,....,..,.,.,,.,.,,..,. the 'data centers' are just empty buildings like the Somali daycares. check the tapes. (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868069) |
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Date: May 5th, 2026 6:54 PM Author: Cave Johnson The future is in local AI. Anyone who doesn't see this coming is getting btfo (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868075) |
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Date: May 5th, 2026 6:55 PM Author: Dr. Samuel-Auguste Tissot *Deez Nuts (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868076) |
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Date: May 5th, 2026 6:56 PM Author: Cave Johnson It's the most competitive space for a reason. Why do you think Google is giving away Gemma for free? (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868080) |
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Date: May 5th, 2026 6:57 PM Author: Dr. Samuel-Auguste Tissot The Future is in DEEEZZ NUTTTSS (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868082) |
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Date: May 5th, 2026 6:55 PM Author: Richard Ames I am also open to the idea that it's just another ponzi to keep the debt bubble going. I am a big "the debt bubble drives everything" believer. But I can also see both things being true.
I can imagine doomers back in the day saying "World Fairs will never be profitable!!" and totally missing The Point. |
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Date: May 5th, 2026 7:02 PM Author: cowgod If AI becomes monetizable outside of writing LinkedIn posts, it’s going to fuck with the debt bubble imho (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868096) |
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Date: May 5th, 2026 7:04 PM Author: Dr. Samuel-Auguste Tissot what debt bubble? (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868101) |
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Date: May 5th, 2026 9:08 PM Author: Richard Ames Yes, but it allows the debt bubble to continue in a big way in the near-term. And by the time it's too big, there will be an "oops haha just enjoy your CBDCs goy" moment.
While Consuela's analysis often feels like he's just cribbing from Evangelion, he has a few good points. |
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Date: May 5th, 2026 9:10 PM Author: Hello, World! Yes, it’s acmass surveillance infrastructure, controlled by algorithms, dressed as “AI” (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868322) |
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Date: May 5th, 2026 9:15 PM Author: Cave Johnson Here's what's really happening. The demand is there. People want to use the AI but the computer isn't there, so the SOTA cloue providers - the companies that ONLY do AI like OpenAI and Anthropic, are doing workarounds and keeping everything a trade secret. Here's what that means:
The "full" Claude might be trained on 1.5 trillion parameters. It might require a terabyte of RAM to run the full uncompressed model. There's no way in HELL Anthropic is giving you that for $20/mo. People are saying they need trillion dollar data centers because that's what it would take to meet current demand for the full uncompressed dense models. The SOTA providers are using quants and MoE to get around this. That's why by some measures those models are getting shittier now. Users are reporting errors that didn't used to be there.
At the same time, open weight models with just 300 billion or maybe just 30 billion parameters are getting hosted by new maalrket entrants like Ollama, Opencode and Nous Research, and people are finding that they're "good enough,": especially as agentic harnesses
The open weight models are DOMINATED by CHINA with Alibaba, Deepseek,Z, Kimi just DOMINATING. The only American companies with their toe in the door are Meta and Google, although IBM just showed up too. Six months ago this was unthinkable, now it's the future. |
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Date: May 5th, 2026 9:16 PM Author: icanseemyneurons yeah exactly (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868332) |
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Date: May 5th, 2026 9:20 PM Author: The Redwall Cinematic Universe they're just going to lobby to make all the other models illegal except for the frontier models that are endorsed/approved by the government. anthropic and openAI are openly lobbying the government for this kind of regulatory capture
the drumpf administration has already started this process. WSJ ran an article like yesterday about how they're doing it |
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Date: May 5th, 2026 9:23 PM Author: Richard Ames Interesting. But if "agentic" solutions are built and rolled out in every industry, won't there still be a gigantic need for compute? Hence the data center buildout?
To be fair, your post is clearly information dense and I'm not sure I have enough raw understanding of the ins-and-outs of the industry players to fully grasp everything you're saying in-depth. |
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Date: May 5th, 2026 9:35 PM Author: Cave Johnson It may be more cost efficient for you to do it locally using locally generated electricity. The pop-up cloud providers are running on whatever hardware they can get, after that you're just paying for electricity. What's the point of paying extra for Claude if Claude is only serving you up MoE models? (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868363) |
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Date: May 5th, 2026 9:41 PM Author: Richard Ames Interesting. If this proves to be true, this seemingly means a lot of the data center buildout is a total waste of time and money.
If reporting is to be believed, it does seem like the buildout is slowing (or may be a bit of a house of cards to begin with.)
This would have meaningful consequences. Though I'm not sure what exactly at the moment. |
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Date: May 5th, 2026 9:46 PM Author: Cave Johnson A lot of this is straight-up ouroboros shit. Anthropic can't afford data centers, so it "leases" them from Amazon, but it doesn't pay the leases in cash but in "credits" from Amazon. In exchange for this, Anthropic promises to give Amazon a big chunk of its earnings 5 years from now. For now it's just operating on credits. When people say Amazon is "investing" in Anthropic, all that's happening is Anthropic is getting more credits for Amazon data centers to host Claude. No actual money ever changes hands. It sounds like Amazon has to front the cash for the gas turbines (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868385) |
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Date: May 5th, 2026 9:49 PM Author: Richard Ames Maybe it's all just one gigantic Rube Goldberg machine to maintain the illusion of progress. (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868394) |
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Date: May 5th, 2026 9:54 PM Author: Cave Johnson You shouldn't need to parse 30 billion parameters to answer the question "what's the capital of France?" (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868402) |
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Date: May 5th, 2026 9:36 PM Author: The Redwall Cinematic Universe open source and cheaper (chinese) models will be "good enough" for almost everything
the best hope the big guys have is regulatory capture. they're gonna go HARD on it |
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Date: May 5th, 2026 9:37 PM Author: icanseemyneurons no they just need to sell to monopoly incumbents and become monopolies, which they've all done (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868369) |
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Date: May 5th, 2026 9:48 PM Author: The Redwall Cinematic Universe wdym there will always be people undercutting the frontier models unless they're banned or prevented from doing so somehow (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868391) |
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Date: May 5th, 2026 9:51 PM Author: icanseemyneurons yeah we're all poasting on fucking linux rn right (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868396) |
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Date: May 5th, 2026 9:38 PM Author: Cave Johnson Google and Meta also have nothing to lose by competing in this space because they don't derive the bulk of their revenue by hosting frontier models. Google can afford to have intrabrand competition. Whether it can actually compete is yet to be seen. Today they LIED about MTP (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868371) |
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Date: May 5th, 2026 9:27 PM Author: ,.,....,..,.,.,,,,..,..,.,..,.,.,.,... cr. Guys like Ed Zitron aren’t worth paying attention to at all. He was calling a top of the bubble in 2024 and saying models wouldn’t get much better than they were then. Agentic coding is here now, models are much better, revenue is exploding because the models actually work, and there are non-trivial model improvements still occurring frequently. There are a number of unexplored ideas still out there to make models better and training compute is exploding, which will likely facilitate model progress. (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868353) |
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Date: May 5th, 2026 10:22 PM Author: Cave Johnson Here's what the future could look like: small scale data centers about the size of a McDonald's serving up a handful of businesses that run agentic harnesses on open weight models. It would seem disastrous if things go that direction while Chinese models dominate that space. By offering Gemma free of charge, Google is offering a platform it can integrate into its ecosystem that's certified not-chinese. (http://www.autoadmit.com/thread.php?thread_id=5864029&forum_id=2:#49868480) |