"I personally chose the price"
Is that how well-run companies operate? The CEO unilaterally decides the price rather than delegating that out to the numbers people they employ?
Should have asked chatgpt to play the role of a CEO.
This answer would be much funnier if that wasn't his fucking plan.
A real ceo does everything. Delegation is for losers who can’t cope. Can’t move fast enough and break enough things if you’re constantly waiting for your lackeys to catch up.
If those numbers people were cleverer than the ceo, they’d be the ones in charge, and they aren’t. Checkmate. Do you even read Ayn Rand, bro?
far, far, far, far, far, far, far fewer business people than you’d expect/guess are data-driven decision makers
and then there’s the whole bayfucker ceo dynamic which adds a whole bunch of extra dumb shit
it’d be funnier if it weren’t for the tunguska-like effect it’s having on human society both at present and in the coming decades to follow :|
I think I remember Jeff Bezos in "The Everything Store" book seeing a price they charged for AWS and went even lower for growth. So there could be some rationale for that? However, I think switching AI providers is easier than Cloud Providers? Not sure though.
I can imagine the highest users of this being scam artists and stuff though.
I want this AI hype train to die.
I’m guessing that means a team or someone presented their pricing analysis to him, and suggested a price range. And this is his way of taking responsibility for making the final judgment call.
(He’d get blamed either way, anyways)
While the words themselves near an apology, I didn't read it as taking responsibility. I read it as:
Anyone could have made this same mistake. In fact, dumber people than I would surely have done worse.
$20/mo sounds like a reasonable subscription-ish price, so he picked that. That OpenAI loses money on every query, well, let's build up volume!
It works for ice tea and hotdogs, why not AI? (I jest)
In tech? Kinda yeah. When a subscription is 14.99 $£€/month it's a clear "we just think it's what people think is a fair price for SaaS".
The trick is that tech usually works on really weird economics where the fixed costs (R&D) are astonishingly high and the marginal costs (servers etc) are virtually nil. That's how successful tech companies are so profitable, even more than oil companies, because once the R&D is paid off every additional user is free money. And this means that companies don't have to be profitable any time in particular as long as they promise sufficient projected growth to make up for being a money pit until then. You can get away with anything when your investors believe you'll eventually have a billion users.
... Of course that doesn't work when every customer interaction actually costs a buck or two in GPU compute, but I'm sure after a lot of handwaving they were able to explain to their investors how this is totally fine and totally sustainable and they'll totally make their money back a thousandfold.
Who needs to know what they are taking about anyway, just suck your finger in the air and set a price
CEO personally chose a price too low for company to be profitable.
What a clown.
They're still in the first stage of enshittification: gaining market share. In fact, this is probably all just a marketing scheme. "Hi! I'm Crazy Sam Altman and my prices are SO LOW that I'm LOSING MONEY!! Tell your friends and subscribe now!"
I’m afraid it might be more like Uber, or Funko, apparently, as I just learned tonight.
Sustained somehow for decades before finally turning any profit. Pumped full of cash like it’s foie gras by Wall Street. Inorganic as fuck, promoted like hell by Wall Street, VC, and/or private equity.
Shoved down our throats in the end.
well, yes. But also this is an extremely difficult to price product. 200$/m is already insane, but now you're suggesting they should've gone even more aggressive. It could turn out almost nobody would use it. An optimal price here is a tricky guess.
Although they probably should've sold a "limited subscription". That does give you max break-even amount of queries per month, or 2x of that, but not 100x, or unlimited. Otherwise exactly what happened can happen.
"Our product that costs metric kilotons of money to produce but provides little-to-no value is extremely difficult to price" oh no, damn, ye, that's a tricky one
I signed up for API access. I run all my queries through that. I pay per query. I've spent about $8.70 since 2021. This seems like a win-win model. I save hundreds of dollars and they make money on every query I run. I'm confused why there are subscriptions at all.
More like he misjudged subscriber numbers than price.
despite that one episode of Leverage where they did some laundering by way of gym memberships, not every shady bullshit business that burns way more than they make can just swizzle the numbers!
(also if you spend maybe half a second thinking about it you’d realize that economies of scale only apply when you can actually have economies of scale. which they can’t. which is why they’re constantly setting more money on fire the harder they try to make their bad product seem good)
Wait but he controls the price, not the subscriber number?
Like even if the issue was low subscriber number (which it isn't since they're losing money per subscriber, more subscribers just makes you lose money faster), that's still the same category of mistake? You control the price and supply, not the demand, you can't set a stupid price that loses you money and then be like "ah, not my fault, demand was too low" like bozo it's your product and you set the price. That's econ 101, you can move the price to a place where your business is profitable, and if such a price doesn't exist then maybe your biz is stupid?
The plagiarism power virus is too expensive to operate? I'm shocked I tell you
Now imagine if they actually paid for the training data as well.
Much like uber and netflix, all of these ai chatbots that are available for free right now will become expensive, slow, and dumb once the investor money runs out and these companies have to figure out a business model. We're in the golden age of LLMs right now, all we can do is enjoy the free service while it lasts and try not to make it too much a part of our workflow, because inevitably it will be cut off. Unless you're one of those people with a self-hosted LLM I guess.
Not LLM but there Google Assistant has gotten much more stupid over the past several years. They realized that it was too expensive and had to lobotomize it.
I believe that coincided with the Sonos debacle.
This. AI Hype beasts keep saying "This is the worst AI will ever be" and "It'll just get better" but really it's just going to get worse as they actually try to turn the bubble into a profit
will become expensive, slow, and dumb
Wouldn't they have to become smart first?
I was about to say, a selfhosted LLM means I'm not competing with every market analysis tool, customer service replacement, and 10 y/o kid bombarding the service with junk. It doesn't need to be ultra fast if I'm the only one using the hardware.
losing money because people are using it more than expected
"I personally chose the price and thought we would make some money."
Big MoviePass energy
Ahahahaha I forgot about moviepass
sam altman proving once again that he is not only a tech genius but also a business genius. make sure to let him scan your eyeballs before it’s too late.
What are people using the $200 plan for that makes it worth it? You only get their model with their training, you don't have any access to weights or training. And with how nerfed openai makes its models, nothing even remotely nefarious can be done with it. All you can do is process simple data. Which having a purposed trained model seems the most valuable for.
Probably mostly fake social media profiles and YouTube/Tiktok AI slop.
You could use it to create hundreds of real-looking fake accounts on reddit or other social media site. OpenAI's site doesn't have this kind of fake user function built into its app, but it should be easy enough with an API. Just have a bot randomly scroll reddit's most popular posts. Then have it find the most popular comments on those posts over a certain length. Feed the text of that comment to OpenAI, instructing the LLM to make a disagreeing/concurring/answering reply. Then have the bot post OpenAI's output as a comment on reddit. Have each account comment not at superhuman speed, but at the speed that a normal human user would post.
Use these tools to build up an arsenal of hundreds, perhaps thousands or even tens of thousands of sockpuppet accounts. Each will have years of post history behind them, so they will pass typical subreddit filters like "account must be this old or have X comment karma" to post. Just keep these bots constantly running and available.
Then, when you want to use them, use them. Don't even dramatically switch their persona. Want to use your bot network for politics? Have your 10,000 fake users mostly comment on random banal stuff. But every 10th post or so have them post a comment for whatever politician or cause you support. You might even have them regularly post content of that political persuasion as a normal part of their operation. Same thing with advertising. Have them mostly post random stuff, but have them occasionally post a glowing review for a product, film, or service.
The real use for OpenAI's software is as a vector for very effective and difficult to detect and filter astroturfing campaigns. Hell, just getting your name out there can be advantageous. Are you a nobody, but with a lot of cash, that wants to launch a political career? Higher such a bot net to sprinkle your name across social media. Even if all the bots do is mention you, neither praising or condemning, it gets your name out there. The next election cycle, when people start talking about potential primary candidates for a particular office, real people will suggest your name, simply because they heard it somewhere. Name recognition is a powerful thing.
yt/tiktok ai slop's point wasn't making these people who push it rich, the point was to sell them a guide that will claim to do that, because they're all suckers https://www.404media.co/inside-the-world-of-tiktok-spammers-and-the-ai-tools-that-enable-them/
Seems like they need to do lots ofovideo slop using sora
t their model with their training, you don’t have any access to weights or training. And wit
OK, I see what's going on. The original premise is flawed. The $20 model is limited. It's intended for you to hit their web page and query for things. The $200 model is unlimited, you can API the crap out of it for your random project, run an entire business through it. It also gives you full access to o1 which appears to do 6-10 queries for every query to make sure it's not lying to you.
The $20 model doesn't have to be losing money for the $200 model to be losing money, they're completely different use cases and honestly, unlimited queries for fixed capital is never going to work, you can just sublet the access,
Hmm, we should get together some funds to buy a single unlimited subscription, and then let it continuously generate as large and complex prompts as the rate limitting allows.
Buy two. Ask the other to generate expensive prompts.
Why is same personally picking subscription prices anyway? Should there be some accountant doing that math? Wtf
Their accountant is probably three GPTs in a trench coat that’s being fed prompts by an unpaid intern or some poor dude in India.
Why is AI not making enough money? I specifically requested it.
If it worked for Elon and his 8 per blue check, it has to work for our altman boi
Did Sammy boi try to consult Stephen King on the final price by any chance
This was my biggest takeaway here. Wtf?! "I personally set the price and thought we would make some money"?! Either he is trying to sound cool by being casual or he is a fucking idiot. Or probably both.
Sam, just add sponsored content. The road to enshittification doesn't have to be long! Make it shitty fast so people can move past it and start hosting their own models for their own usage.
Isn't that why it has to be long? Not many people actually rely on OpenAI yet.
Right? He just needs to have it add some Shell or Wal-Mart logos to the generated images. Maybe the AI generated Fifty Shades-esque Gandalf fanfic somebody is prompting can take place in a Target.
Hey ChatGPT, give me an overview of today's weather.
Today’s weather is beautifully sunny and hot, with clear skies and no rain in sight—perfect for enjoying the new Coca-Cola Zero™. Hmmmm, refreshing!
I cancelled a 20$ subscription I started because it was arguably useful for me and served exactly one use-case. Now I don't need it anymore.
Of course, they had a form asking feedback/why. I chose "ChatGapT is nott advanced enough" as that was one of the alternatives. Hopefully it will lead to them putting more resources into development and burn through investor money faster.
"Trust me bro, just 200m dollars more"
- Sam Altman, probably
Just one more datacenter bro, just one more (that consumes the same power as Belgium.)
OpenAI burns through 200M$ in less than a week
This 100% answers my question from another thread. These businesses have cooked the books so bad already that they thought this was gonna save them and it doubled down on em.
Sounds like they'll need a bailout, to preserve the economy.
really looking forward to how these multi-billion dollar AI datacenter investments will work out for big tech companies
that said I'm pretty sure most of that capacity is reserved for the surveillance state anyway
This makes sense why googles AI is famously bad. Trying to serve AI to every customer when 200/mo wont do it has to mean they're cutting so many corners.
I wonder who's telling lies to Apple that their AI assistant is going to be cost effective?
Apple’s been trying to get AI running on people’s devices directly, avoiding the huge data centre costs. But now people are starting to means having gigantic models using up storage on the phone.
I’m excited for the used hardware dump
This is something I've been speculating for a while. The cost of running these complex systems (as OpenAI models aren't just LLMs) is subsidized so heavily that we don't really know the cost of running these things.
This is a huge risk to any business, as the price for these services has to go up significantly in the long term.
Ed Zitron calculated from the publicly available numbers that OpenAI was spending $2.35 for every $1 of ChatGPT they sell
Is that for all operations or literally just to run the paid services? Cause if that includes the free services, marketing, R&D then they have a lot of options to cut costs.
Given what AWS/etc. charge for their LLMs/APIs it feels like the entire industry is subsidizing LLM compute to stay competitive. But I could be wrong there.
Was it altman that tweeted they were near the singularity? I assumed it was a way to raise money. Felt more like "Fuck! We need more money to burn."
they were only “near AGI” before their most recent funding rounds closed, after that they were “a few thousand days” away
If they are losing money on $200/month, that does not necessarily mean they lose money on the $20/month.
One is unlimited, the other is not. You only have to use the $200 subscription more than 10 times the amount the $20 subscription allows for OpenAI to earn less on that subscription.
We already know they're losing money on everything
By "Sam Altman said" in a "series of posts", this article means these two tweets from 10 hours ago: https://twitter.com/sama/status/1876104580070813976.
This is a screenshot of a tweet talking about an article written about two tweets by Sam Altman. Is this really the world we're living in, now?Welcome to the wonderful XXI century where our innovations in communication technology and financial instruments allow a hyperoptimised economy where two tweets are more than enough to cause billion-dollar shifts on the market. Completely organic and based on solid fundamentals I am assured by the same people that assured me of this in 2000 and 2008.
Just because it's a Twitter post doesn't undermine that he said it.
I'm glad news organizations pick up stuff from a platform I don't personally use
According to the Lemmy comment I read about it that is exactly what people are wondering
I've seen more written on one post. People will eat up 'news' if presented in the right way. There is a reason the stupid websites and advertisers use the click-bait titles.
Good. Burn that thing to the ground.
Likely they'll try to sell it to governments, and with Elon Musk proposing goVeRNmeNt eFfIciEnCy, at least xAI can become somewhat profitable.
Heard someone (I think that Shark Tank dumbass) already mention instituting some kind of "AI mandate" on healthcare. Musk will probably destroy OpenAI, because he seems to have a vendetta against them.
Never offer unlimited on a utility model without guardrails. That’s just business 101.
That's ISPs default model and they're very profitable
ISPs pay a more or less fixed rate for their infrastructure regardless of how much it's used, and it's inherently rate limited. You can't make a 1 gig connection go faster than 1 gig or use more power than it would at 100%. The reality is though that customers rarely push it to 100% so actually they save a ton of money making people share bandwidth.
Good riddance. We never asked for it, and we didn’t deserve it forced on us.
Can someone explain the Pale Horse reference?
In the Bible's book of revelations, John (the author) is witnessing the end of the world and sees four horsemen being unleashed upon the world to spread a curse/trial/whatever wherever they ride. Each horseman brings with them something different- famine, disease, war (or strife), and death. Death is the last, IIRC, and rides upon a pale horse. I think that's what they're referencing. This person is saying that openAI is going to die soon.
this is correct as to the background of the term itself, the reason ed uses it here is because it is the term that he selected some months ago when he listed “some likely pale horses that signal the bubble popping”
$200 a month for a user is losing money? There's no way he's just including model queries. An entire a6000 server is around $800 / month and you can fit a hell of lot more than 4 peoples worth of queries. He has to include training and or R&D.
It includes anything that will keep them from having to pay investors back. Classic tech start up bullshit.
Silicon valley brain rot formula:
Losing money, get billions every month
Making money pay billions back
Which one do you think they pick
I'm honestly fairly surprised as well, but at the same time, they're not serving a model that can run on an A6000, and the people paying for unlimited, would probably be the ones who setup bots and apps doing thousands of requests per hour.
Surely this includes staff, real estate, and other operating costs.
So people are really believing Altman would publish these damning statements without ulterior motives? Are we seriously this gullible? Holy shit, we reached a critical mass of acephalous humans, no turning back now.
When has "not profitable" ever stopped a tech startup lmao
More power to the open source community
This reminds me of this fossil cable company owner. He just couldn't understand why they needed more bandwidth. Netflix and youtube had come in to being and this old fart just didn't get that people were actually using their bandwidth.
He's actually saving us from AGI which will arrive and, I don't know - kill everyone? once OpenAI makes 100 trillion dollars.
Sooooo, wanna tell us how much the cost really is per prompt?
Okay everyone should create an openai account and start feeding it shit. Ask it the most braindead questions ever, if they use your questions as training data itll just fuck the next model up even more.
What what in the butt?
Uber didn't make a profit for a very long time. This is part of the game in silicon valley. Fake it until you make it.
Uber is built on increasing worker exploitation. GenAI can't do the same thing.
so when was youtube profitable?
Youtube wasn't burning billions per year and it's also pretty much the primary entity for video for the whole world which has other benefits for google. Finally Youtube can be monetized through adverts, since storage and bandwidth costs are relatively low. Whereas GenAI's compute costs aren't.
An ad before and after every single question you ask chatgpt? Worth a shot, I guess !
I don't think Youtube was ever profitable, to be honest.
Why would anyone believe this? It's a private company. They don't have to be truthful talking about their finances.
Why would they lie about losing money? Companies lie for the opposite all the time, but none of them boasts of losing money, as that causes FUD, which exactly what a hypelord like Altman doesn't want.
To drum up interest. Pro tip: CEOs are always salespeople.
Tax writroffs on the "losses"
"Nonprofit" image.
you don't understand how technology companies work. they're not always making money
yeah but there is a difference between losing some money on R&D and simply having an unviable business model.
you don’t understand how technology companies money. they’re not always working
lol they are converting to a for profit company and should be able to make a profit.
I dunno how to tell you this but the Setting Money On Fire company isn’t losing money on account of it being a weirdo NPO structure…
Yeah, we see this all the time with emerging tech and platforms. All of the top tech companies now were once spending cash faster than they could make it, and all the naysayers saying they’d never be profitable.
Don’t y’all get tired of being wrong sometimes? Maybe try to learn from the past.
maybe try to learn from the past
we did. you just don't listen.
And how many failed technologies and companies were there along the way? How many movies do you watch on your LaserDisc player? Or your HDDVD player?
This current "AI" iteration is already hitting its limits despite having access to the sum total of human history. The bubble is already bursting as companies are finding that people don't want AI in their refrigerators any more than they want it to replace a basic search engine or making fake Facebook accounts for you to talk to like Tom from MySpace.
OpenAI has said that they will go bankrupt if they can't train their AI on copyrighted material for free.
It's largely a tech without a use case in this current form, and not every money pit turns into a success before the companies burning cash go bankrupt.
it’s weird you pretend to be an anti-corporate leftist but when convenient post shit like:
All of the top tech companies now were once spending cash faster than they could make it, and all the naysayers saying they’d never be profitable.
“the only thing I hate more than neolibs and Peter thiel is when a bunch of thiel’s friends get credibly accused of running a massive grift” haha sure
The old guard is already so rabidly anti-AI, it’s bonkers. But the level of denial here is astounding. Y’all are calling it ‘the end of AI’ every other week for years. Now we’re pointing to standard tech start-up financing issues as the nail in the coffin? Come on.
And yeah, I am a leftist. I think the companies should nationalized for public control.
you may in fact want to understand how much the ZIRP years had a hand in this, and then to also look just how many of those that remain (of which there continue to be fewer and fewer) are having to engage in Creative Accounting to make it seem like everything is fine
maybe try to learn from the past.
Don’t y’all get tired of being wrong sometimes? Maybe try to learn from the past.
Fondly remembering all the times we were wrong. Ah, remember that one time we were totally wrong about the metaverse not being the future? Oh, oh, or the classic "cryptocurrencies are just a scam" talk we had to walk back so many times. Damn, good thing we didn't call out WeWork for being a money sink or we'd be looking pretty fucking stupid now!
Crypto is actually really useful for buying drugs and other illegal products and services. People have legitimately made a lot of money as well if they weren't falling for the stupid scams. You should see the price of BitCoin or Ethereum these days.
Not saying it's ethical to run a lot of these given their limited usefulness and very high costs. But saying they didn't make people money, were all scams, or didn't have a use is objectively wrong.
but they're still not profitable lol
Tech companies are not profitable now? Are you saying they’re giving fraudulent info in their earnings calls?
