(edited to remove snark)
Your comment seems to miss the point that the article does not (necessarily) have a problem with Zitron being insufferable/annoying/smug. It's that his predictions are verifiably wrong. It's one thing to be annoying and right. Zitron is annoying, but not right.
Yes? What happened to FAANG in last 3 years, they cut a fuck load of jobs, the raised rent/prices, then inflation, then experience surge in new category AI. 1 + 2, i.e. squeezing rock has limits. 3 is fundamentally not sustainable, i.e. AI revenue gap order of magnitude relative to spend. This like debt crisis, there's lot of levers to burn to maximize extraction and make ledger look good short term, but is fundamentally not long term sustainable. Articles arguing over minutiae / short term accuracy pointless, market can stay irrational than one can stay liquid blah, blah - I mean its useful for investing - but when talking about long term predictions he's just stating the obvious, the financials don't make sense within the business cycle current players are operating in.
Like one can believe AI is speciation event technology eventually, but still given actual constraints, i.e. literally not enough investors for $$$, not enough hardware, not enough infra over xyz time horizon that these companies carrying stupendous debt and mathematically guaranteed stranded / deprecated compute infra is only digging themselves deeper vs future competitors. Sure AI can eventually capture 30% of GDP and knowledge worker's life time achievement is worth a few $100 of compute or a few pennies in thinking sand. But ultimate winners is probably going to be some future startup that pays pennies for thinking sand not incumbent who paid magnitude more and simply can't operate profitably due to balance sheet.
Luu is pretty specific about the predictions Zitron is making, has taken the time to pull them out and date them, and they're both risible and not rescuable with vibes.
His point isn't that Google or Meta are doing well or have bright futures. Luu is generally critical of tech giant engineering and product culture. He's critical of Google in particular in this very article.
But the point of the article is that it's not enough to have directionally satisfying vibes. If you made concrete forward-looking predictions and they're catastrophically wrong, that matters. If you make backwards-looking predictions that were literally wrong the moment you published them, that matters even more.
"Did you read the article" is a frowned-upon response on HN. The better way to write that kind of response, per the guidelines, is "the article mentions that". So: the article mentions that.
I don't know if directed at me because I didn't ask if one read article.
> it's not enough
It's enough for some of us, like his broad predictions that work on timescale of business cycles seem directionally correct. Even considering we're dealing with fast hardware deprecation cycles it will take years to play out especially with investors and incumbents burning through accumulated war chest. Luu seem oblivious to notion that companies with trillions in market cap can certainly out manipulate fundamental short / medium term market sanity. Part of Zitron's rant I find similarly compelling is the danger of dismissing directionally "satisfying" vibes because $$$ can capture reporting distort reality, which is only going to lead to bigger/more painful correction because directionally "correct" was dismissed as merely directionally "satisfying."
Let’s say it’s fine to give emotionally based arguments the same credence as rational arguments. That’s a huge cede, and yet, it doesn’t change anything, let’s see here:
If my cousin kept ranting about my other cousin was going to go bankrupt and fail and it was 3 years later and their income was up 2x I think I’d stop listening.
I worked at Google from 2016 to 2022 and agree with everything he says and you say, modulo the companies who are 2-3x on revenue and profits are going to 0. I worry that both of you have found a real problem but misattributed it, and insisting emotional arguments are the same as rational prevents you from participating in real fixes (ex. metas problem isn’t AI, it’s that they have a god-king CEO who cannot be deposed and monopoly profits. Imagine a twin of you and Zitron but instead of AI it’s 2020-era VR. If they weren’t focused on how their emotional argument was fine, they’d be your compatriots in noticing something’s off in Big Tech. Instead, we don’t hear about them because that battle was fought and lost years ago, and they lost credibility due to imagining Meta was going to 0)
Zitron gives timelines, and they don't come true --- in fact, the opposite thing happens. You can't come back to that with "well, it hasn't happened yet". By that logic, no prediction is ever wrong; wait long enough and maybe it'll come true. That can't possibly be the logic you'd hang your hat on here.
> Luu is pretty specific about the predictions Zitron is making
He is not, though. He precisely points to imprecise predictions, decontextualize them so he misses the point of the ones this thread is focused on, analyzes them with even less precise rationales that don't really rebut the prediction, and points suggestively (enough that you seem to have got that suggestion) that this rebuttal destroys the main prediction of every Zitron piece, while saying otherwise several times at the end of the rationale.
Zitron's predictions aren't all very good, but this article isn't either.
Ah I understand what you're saying. Yes I agree that if you pull back to, "We're in a bubble," then you can say that Zitron is correct, at least fundamentally, despite being wildly inaccurate in almost every other prediction he makes.
But Zitron isn't just blogging about how we're in a bubble. The assertions he makes are not minutiae, he basically continuously says that all the big SW firms are walking corpses. He's not having a rational conversation about the long term prospects for companies who invest in AI. There is a population of people who (rightfully) hate Google et al and want them to fail, and he just stokes their anger and frustration.
He doesn't add anything substantial, and (as the article indicates), even when he brings economic figures into the conversation, he's frequently wrong or misrepresents them.
I edited while you were responding with second para. I think his analysis that existing investors are walking corpses (or economically exhausted/weakened) is substantial. You have new companies going into extreme debt and established companies burning war chests may actually is important, and also valid economic argument ESPECIALLY if you think think AI will be economically transformative. Like current players basically spent $1000 on a screw driver to do $10 of work. Some of them went $1000 into debt, some of them drained $1000, which is much of their savings/warchest. The incumbant players rationalize future has $100 or $1000, or of work, but these companies are going to be vs player buying $1 screw drivers, i.e. the compute deprecation curve makes spending $1000 on screwdrivers in the first place very detrimental/terminal vs future competition. Zitrons argument is broadly there even if there is $1000000 work in the future, companies that spend $1000 on screw drivers balance sheet is working on timescale where there is $100 of work, i.e. the economics is not in favor of incumbents. The economics might still be very favorite for future AI... but not for first round of players who has to recover from grossly overpaying.
He makes very specific predictions about specific companies and they are wrong.
You think we are in a bubble and that AI won't pay off for the companies investing in it.
While I'm sure there will be companies that invest badly the problem with your prediction is that the public hyperscalers (Google, Amazon and MS especially) are already seeing returns from their AI investments.
Look at the revenue growth - that is actual dollars coming through the door.
Here's an exercise you should consider doing: instead of your $1000/$10 numbers, use real numbers for the major software companies investing heavily in AI.
Software companies aren't walking zombies for the same reason cabinet manufacturers aren't. Everyone can make their own cabinets, but few do, because they simply don't want to.
> The assertions he makes are not minutiae, he basically continuously says that all the big SW firms are walking corpses. He's not having a rational conversation about the long term prospects for companies who invest in AI.
...huh? How is it "not rational"? He's saying that, based on the financial information available, it appears AI doesn't actually make very much money given the capital investments. To the point that there may never be AI ROI.
I'm not sure how much this or that "prediction" matters. His arguments would be just as strong without them, perhaps stronger because they wouldn't give folks like Luu something to snipe at.At this juncture, the analysis seems sound. AI costs an absolute fortune and appears to make very little money, comparatively.
Is that irrational? IDGI. One needs look no further than Oracle to see a company in dire financial straits.
> Stock market bettors aren't sure they like these odds. The company's stock is down more than 40 percent in the last month
The stock is down because of the increased interest load and the impact of that in the next couple of quarters, not because of doubts over Oracle's viability.
If there were significant doubts over its viability it would be down a lot more than 40%!
- They've all been compelled to build the same horribly expensive AI infra, to serve similar models that have no ability to lock-in customers
- Google Search has to compete with LLMs
- Meta hasn't demonstrated a credible argument on how they're planning to use AI. AI 'friends' would kill their business model. Their saving grace ironically is that people absolutely hate interacting with AIs. Same goes for other AI assistants.
- Hyperscalers have to compete for the same hardware as AI companies, driving their costs up
- AI turned out to be excellent at both porting software to more optimized stacks and deleting the 'prestige' of building these ultra-inefficient microservice containerized stuff. I haven't read a single article about somebody bragging about this stuff. When it comes to tech (which is not AI), usually its about Zig, Rust and going native.
- So if customers really start feeling the heat of rising costs, they have a realistic path of optimizing their compute usage by using AI to rewrite the worst-offending components. I think one of the few things in which AI has demonstrated measurable economic value is rewriting software in Rust to be more efficient
No. Net income is up quite a bit and profit margins maintained at Microsoft, Amazon, Alphabet, and Amazon. Meta net income is flat, but they are maintaining profit margins.
Zitron's claim is that much of that boost in profit for microsoft and alphabet and amazon is from only a few customers, specifically openAI and anthropic, and that those companies are buying and promising to buy lots of resources with money from investments from those same companies, and that largely this is unsustainable unless openai and anthropic can find a profitable business model.
And with both OpenAi and Anthropic are announcing record revenue growth to the point where Anthropic is now profitable this seems like it's going to work out fine for them.
He is right about that. Those companies are subsidizing the use of their models and at some point they are going to have to make a profit. It is unsustainable the direction they are currently headed in many people don’t like the messenger of bad news, but someone’s gonna be caught holding the bag stay clear of the blast crater.
> They've all been compelled to build the same horribly expensive AI infra, to serve similar models that have no ability to lock-in customers
Emphasis added, since having a horribly expensive AI infra allows offering enterprise contracts, which is a form of lock-in and has been pretty lucrative for GCP/Azure/AWS.
To be fair to Ed, I’d describe his usual argument (at least currently) as saying that Meta, MS, google are “mature” companies trying to be maintain the high valuations and growth of a young company, which they no longer are.
If you take this to be his argument, then dan’s numbers are more consistent ed’s claim.
Of the three Google is in the best position. Meta and MS are in trouble. Zuckerberg will survive because he has control of his company, but Nadella is not going to survive Copilot if it don’t work.
Are they? These companies have been caught tweaking their numbers. One example, not sure if cited by Zitron, or others, is that they build data centers through holding companies, who have to absorb the costs and massive capex based financial liabilites, so that the brand-name big-tech companies get to keep their expenses off their books. There have been trillions of debt discovered this way. Another issue is the apparently relentless progress of the hardware industry, needed to justify their super-high P/E ratios, measured against the fact, that to lessen the effect of HW amortization, hyperscalers opted to lengthen the depreciation timelines of their GPUs. So there is an apparent contradiction that new hardware needs to be both substantially better, and substantially the same, to make both stories true. I'm not a finance guy, and a lot of it is over my head, but even finance people keep asking the 'who's gonna pay for this' question. We're way past the belief that this is going to produce reasonable returns (as in a value for money kind of way), and hoping we can financially engineer ourselves out of this situation without having to feel the pain.
> These companies have been caught tweaking their numbers... they build data centers through holding companies, who have to absorb the costs and massive capex based financial liabilites, so that the brand-name big-tech companies get to keep their expenses off their books.
This is about as far from "tweaking their numbers" as you can get. It's a standard way infrastructure-heavy industries structure their investments and people would be asking questions if they didn't do this!
> hyperscalers opted to lengthen the depreciation timelines of their GPUs.
Yes and so they should! GPU depreciation timelines used to be 3 years!!
Google is famously still running 10 year old TPUs at 100% utilization, and 10 year old H100s are worth more now on the second hand market than they were when they were bought.
> This is about as far from "tweaking their numbers" as you can get. It's a standard way infrastructure-heavy industries structure their investments and people would be asking questions if they didn't do this!
Well, it's enough to throw off standard EBITDA accounting and allow firms to report fictional earnings numbers. A standard story has been that companies have beat their Q3 estimates, only for their stocks to go down.
Coreweave has announced they will keep A100s in use until 2029 which will be 9 years old then. I think that is where I got the 10yo number I had in my head.
On TPUs, I was also wrong on that, but less so. The quote is:
"seven and eight-year-old TPUs have 100 percent utilization."[1]
That was last year, so 8 or 9 year old TPUs now (assuming it is still true). Slight exaggeration there and I wish I'd looked it up before posting.
Despite this, my point (that 3 year depreciation schedules for GPUs was too short) remains correct I think.
Over the years, I have accumulated a really sweet desk setup: standing desk, Herman Miller chair, Kinesis Advantage, BenQ programming monitor, nice lighting, decent audio setup, etc. I have a dedicated office, entirely separated from the rest of the house.
It's great, but I think being dependent on all that stuff can make you soft. I still do some of my best work from my laptop in the garden, coffee shops, the library, etc.
(Assuming that LLM does indeed multiply productivity)
We are likely in for some rough days, as it's much easier to just fire people and maintain the same level of productivity. Musk (arguably) did that with Twitter, even before this started. I was impacted by a post-COVID layoff, myself.
But do you think that once that has leveled out a bit, the bandwidth/market bottleneck you referenced will be identified as the new bottleneck[0]? Like, new businesses will launch, or existing companies will identify new growth areas that they did not have the capacity to move into.
I don't know how to respond to your second paragraph. Looking in that direction is a bit too overwhelming.
[0] I think this was always the problem, not developer productivity
I said this in the last Ed Zitron article too, but it's more than just having an axe or grind or acting in bad faith (though those are both true as well). He's a completely standard example of audience capture: there's huge demand right now for "AI is a scam" takes, fulfilling that demand is how he makes his living, and he can't abandon it without losing his audience no matter what the facts on the ground do. All he can do is pivot explanations whenever the old ones get empirically falsified.
I don't understand his audience still being in denial about what is coming. There may not be a job apocalypse but there is a decent chance tough times are ahead. Eventually, his audience may turn into outright Luddites. If that happens I sort of hope they don't stop at data centers/AI and go for the whole project of the Internet.
The audience feels threatened. Reading anti-AI hot takes is comforting when you’re afraid it’s going to take your job.
There is a lot of hype right now about AGI destroying the economy, replacing workers, or even ending the world. Companies are embellishing as they run up to IPO. But there’s a lot of unhealthy counter-beliefs trying to take it the opposite extreme. Keeping up with AI news is about avoiding the hype monsters at either end of the spectrum.
Yeah I don't disagree with him on a lot of the substance, but it's more about the tone of his writing (there's like 20+ exclamation marks in that article). Listening to his podcast, he is even more insufferable. It just has a feeling of "preaching to the choir", and as the parent commenter stated, it gives you a feeling that he is following where the wind is blowing.
It's only a feeling that I have, but I think that some folks live in a scarcity mindset, where they are only barely holding on to what they have. Note that this does not actually have to be their lived reality - you can be rich and think this way. Trying to adjust the system to "give more" to other people means less available to them. Sort of a zero-sum perspective on the world. If someone else gains, that means I lose.
This logic is fundamentally flawed. Pointing this out to people (often in strong language) makes them defensive. This creates the perfect combination to get people to vote against their best interests.
It's not about "being progressive" or "elite". It's about playing to the fears of people who are already fearful.
When I first took creatine from an Amazon dealer I had gut problems. I later bought a "micronized" creatine (similar to https://bulevip.com/es/3418-optimum-nutrition-creatina-powde...) and did not experience any gut problems. Taking the same product now for 3 years. Inbetween I used some other variant from time to time and have the theory that some vendors sell a not clean product that interferes with your gut.
It does that to me, on occasion. It's usually due to taking too high a dose at once and/or taking it in combination with caffeine. Now, it's not a guarantee that those conditions mean I'll get some gastrointestinal discomfort, but they certainly increase the likelihood.
I take 5mg a day with no side effects. I think this and dietary fiber are probably the only supplements worth taking. I have yet to find another supplement that has any noticeable effect but I’m happy to try if people have recommendations.
IMO The best supplements to any lifestyle are
* 2-3 days a week strength training
* 1-2 days a week of cardio
* Good sleep schedule
* creatine
* dietary fiber
* positive attitude even if you have to fake it some days (this is the hardest supplement imo)
I agree and I do all that as well. I started with the creatine a few years ago and have never had any issues which is why I was wondering if, for the people who experience them, the amount causes the stomach issues or the brand or just the creatine of any kind.
Yes I definitely have heard from others that they don’t agree with the cheap creatine but like the expensive stuff isn’t that expensive. Like I think I pay like 30€ for a couple months worth. I think people really undervalue what a good strength training and cardio routine does for you. It really helps control anxiety, keep me sleeping well, and helps me focus at work, as well as have a hang out spot with other people who come regularly. And it’s like 4-5 hours a week tops. Highly recommended.
That's a good point. I also used to have problems with >10g/day, but when slowly ramping it up (and not taking it all in one dose of course), I can get to 20g/day pretty easily.
I saw a tweet where some Zoomer was roasting an "Elder Millenial" for switching devices from a mobile phone to a desktop when making a big purchase (airline tickets? I forget).
I didn't feel like wading into that argument (what's the point? like spitting in a campfire), but... yeah.
Some folks say that we are regressing wrt technological proficiency, but it's really just that more people use technology than they used to. Regression to the mean, maybe? Is that the right expression?
This may not be relevant to the tweet, but big purchases can involve price discrimination, so making the same purchase from a different device/browser/location could get a better price.
Bit too personal for me to talk about sorry, but the therapy that worked was psybocilin (magic mushrooms) with a licensed counselor. Specifically a dosage of 5g taken in intervals + intensive guidance.
I can say that if I chose to remain too squeamish to ever try the "scheduled drugs" route, my life would have marched onward in an alternate timeline with little to no hope for recovery.
I think the population of people buying bespoke suiting is small enough that you would not want to alienate your existing customers. I agree that they should raise the prices, but I've got to think there's an aspect of a relationship there. It was hinted at, a little bit, in the article. It's not just a financial transaction, I mean.
Precisely. They're talking about a customer who has spent £700,000 ($870,000) on suits. That's a long-term relationship built on trust. Hiking your prices to manage demand might be a short-term financial bonanza, but it's disastrous in terms of reputation.
And the article suggests that's it's not even the population of everyone with a bespoke suit so much as the minority of whales who own a lot of them. There is going to be a fair number of very demanding and impatient rich guys in that group.
You can assume they'd rather be constructing new clothes, rather than doing alterations. You can also assume that there is some amount of their previous customer base who aren't interested in restarting the process at 0 with creating custom patterns, etc.
It's quite possible that the lasting effects are more dramatic, as this plays out over time and we move increasingly towards casual dress.
> You can assume they'd rather be constructing new clothes, rather than doing alterations
Thankfully, the free hand of the market provides a solution uniquely tailored to this kind of problem - just raise the price for the adjustments to a point where it's easier and cheaper if you just buy a new suit. In fact, if we are talking about huge weight loss I'm not even sure how the "adjustment" would be any less time-consuming than starting from scratch.
"The cost of alterations is an economically reasonable risk: the above would come in at £1,600 with Terry when they would need £5,000 to 7,000 for a replacement."
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