Welcome to Ed Zitron. There is a reason this man doesn't heavily short the same companies he criticizes. Be wary of anyone that won't put their money where their mouth is.
> There is a reason this man doesn't heavily short the same companies he criticizes
yes, because in order to take a short position you have to predict exactly when the bubble is going to pop, which is different from predicting that at some point it will
Not quite. You could buy a long-dated put if implied vol and current rates are amenable. This protects you against the underlying going up significantly. You might also predict that it won’t go up too much, and just short the underlying with a stop loss.
“Exactly” is pushing it, but you’re going to have to be pretty close, because the instruments that you use to short a company (either put options or actual short sales) are _not cheap_.
While I don't really care one way or another, Zitron isn't arguing AI as a technology is going to fail and go away, but that the numbers of the American companies make no sense and there is a good chance they, or at least some of them, will go away. He does argue that there are large amounts of people who just don't care enough about "AI," and this is likely true. The thing to keep in mind though is that he is not talking about software developers here. What is evident about some of the comments in this thread (and HN comments in general) is that many people on this site seems to think that whenever anyone says anything along the lines of "AI doesn't work for me" that they automatically assume they are talking about "in software development" when they aren't.
the pro-AI side on the other hand has poured billions into ads and marketing and CEOs are forcing it on people due to a combo of FOMO, personal investments in AI (CEO, board, investor), etc
I think AI discourse is revealing some new contours to the information bubbles that we all live in.
folks in the US have been pretty aware that bubbles based on political opinions -- we're all surrounded by news from "our side" yet we know the other side exists in some other bubble. but for AI, we're all either surrounded by pro- or anti- opinions and its a little shocking to learn that theres a parallel internet with the opposite stance. especially shocking when you find somebody that lives in teh same political bubble but opposite AI bubble.
Both can be true. AI is very, very polarizing. The entire Internet is also filling up with AI generated content, some slop, some okay. There is also a very pro-AI managerial class that wants to replace everyone and everything with a Claude project so they can "just ask Claude!"
We don't really know that, for OpenAI and Anthropic. We suspect that, but as far as I know, even they have stopped claiming that they are profitable on inference.
unless you think that Opus is 10T+ params, its pretty much impossible for inference not to be profitable when doing some basic napkin math on other open models, and if Kimi K3 is 3T params with the same performance as Opus then that means that China is actually way more technologically advanced than the American labs.
extremely well known fact in the industry. they have reams of spare compute for prosumers which is why they can afford to give away so many resets and have even more subsidized usage limits
we are in the "millennial lifestyle subsidy" era for AI where companies ruthlessly undercut each other in an attempt to win marketshare, before then ratcheting up prices
I think it's not out of bounds to expect a company to go a little further to compensate for an issue. A prorated 1 hour refund doesn't reflect the reality that maybe that hour was more important to the customer because it was their only free time in the week. A free week is way too much but a free day sounds appropriate.
If there is a hole in the street and you fall down it, you wouldn't expect a refund just for the 1 second it would have taken you to drive over that hole.
Instead you should be compensated for your losses - the time and money it took you to repair that tyre.
Same with a web service. If I pay for 24 * 7 service and it's not working when I go to use it, I want compensation for my time and effort resolving the matter.
For some that'll be small - eg. Searching Google instead, taking 30 seconds. For others it'll be a big headache.
But downtime of 1 hour is almost certainly more costly for the consumer than 1/30/24 * subscription price.
Yeah, no, that's not how any of this works. This is the definition of inflated self importance!
Your contract doesn't have an SLA. If you are important enough, you can certainly negotiate one - and it will be far more expensive than your prosumer subscription.
And even then you will not get a 1:168 or 1:720 SLA like you are expecting - that's simply ludicrous and totally out of touch with every reality. Even if you were a lucrative enterprise customer (which you are not) they'd tell you to get lost.
> If there is a hole in the street and you fall down it, you wouldn't expect a refund just for the 1 second
Actually, you wouldn't get a refund at all unless you suffer damage or injury, which is an high bar to prove in court and a totally separate ball game.
You do see that ratio in, for example, business Internet service. You’ll get a month’s credit immediately upon asking if they can also see the brief outage. Even typically awful Comcast was good about this. However, as you note, in exchange, you’ve probably signed a two or three year agreement with them and you’d owe the balance if you canceled early.
Enough to offset any KV cache miss expenses is the absolute minimum.
The smart play is to refund customers something like $20-50 worth of unsubsidized credits.
Those are high margin and only the equivalent of 45 minutes of Fable usage once the KV cache reload costs are factored in.
Yet customers often need a few credits to finish a job without waiting 5 hours or days for their reset.
Keep in mind openAI already gives me free resets I can use when I want which are very useful to me. Seems a no brainer to tack those to subscriptions, actually.
It gives the user a little more flexibility, a little more control over their tools.
Are you crazy? Do you realize how much use they allow under a subscription already? I’m going through $200-400 in tokens per day on a $200/month subscription. Nobody has ever said anything, throttled me, encouraged me to go to API pricing, etc.
I wish it didn’t go down so frequently, but it does. Still, I get an enormous amount of value. I realize they probably prioritize API users over subscribers and I’m ok with that. I use the API and openrouter for the things that need to be resilient to outages.
I would be embarrassed to try to ask for a refund or free credits. They already give credits far in excess of what you pay for and you have practically the entire month to use them outside of a couple hours of downtime.
Not that it wouldn’t be a nice gesture but what did you agree when you bought the service? What’s the SLA? What’s the compensation model, service credits? Do you have anything like “for 1h downtime you get 2h for free”?
When you miss 1h of your job, do you give back a month for free?
You've misunderstood completely. No-one expects compensation. In reality, if you had a high enough limit anyway (ie, you bought a big enough plan), a reset makes no difference to you, so what sort of "compensation" is it anyway? This is about a fascinating battle for developer mindshare.
Claude Code built a lot of good will amongst developers. OpenAI are playing a great tactical game to try and catch up by offering things like weekly usage limit resets after outages.
Of course, once the finance types get control after the rapid growth phase is complete the inevitable enshitification will begin with comments exactly like yours.
They could at least give back the equivalent in usage for cache invalidation. Or, you know, just the usage you would have had for the ~1-2 hours of outage. Would buy them a lot of good will and they seem comfortable throwing cash in the trash.
Yeah I agree, I understand a weekly reset in some cases could be over the top but if they did a 5-hour reset and took 20% off your weekly usage that would offset the additional cost/inconvenience for most users.
I have a coworker that was complaining about Opus 5 and had random shitty skills and custom plugins wired in from YouTube tutorials watched over the past year. He also speaks with the model like it's GPT 4o.
Needless to say, none of the new models have worked well for him, and he refuses to remove the "tweaks" or update his style of communication, which is obviously breaking the experience.
> Needless to say, none of the new models have worked well for him, and he refuses to remove the "tweaks" or update his style of communication, which is obviously breaking the experience.
All attempts to control the output in a useful way for the user, in a way where the output is as reliable and repeatable as possible... and with a system not at all designed for it, that gets worse the more rules you throw at it.
The model can output what he wants, but he has way too many things that are confusing the model and harness. If he got rid of all the random crap and just gave it an instruction he would be fine.
Models needed a lot more steering a few months ago, now they need a lot less.
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