- New technologies will not be uninvented - generative AI will have a place in corporate OPEX. There are projects where it is rather cost-effective to justify the incrementally adapting AI can bring.
- But it won’t justify the tokenmaxxing strategy, indefinitely. It simply doesn’t make financial sense - not all tasks are cost effective to use the SOTA model on it.
- In a lot of ways, LLMs right now are like expensive Swiss knives. They are great, but question mark on whether everyone in the company needs it.
- A justification for tokenmaxxing strategy, is that it serves as a priority discovery tool. People don’t know what will be the most productive use case of AI, and would be worried that early curtails hurts potential innovations. So they let the puppy fly for a while, collect the data and estimate the distribution of values/cost. Then finance will come in, and there will be cost management coming in.
- The market will find an equilibrium. But the AI Capex, building of data centers, will take years to complete - and in cases already facing delays and challenges. https://www.wsj.com/tech/ai/americas-data-center-build-out-is-falling-way-behind-schedule-e408a9a8
- When these projects are not yielding cash flows early enough, what would happen? Things will turn ugly, pressures will come in, cost cutting underway, assets sales may happen to raise liquidity, etc.
- Adaptation of innovations like this, however, is interesting that it is relevant to everyone, not just pockets of work force. The last innovation like this is probably PC, or internet.
- Prudence. The best is yet to come.