LLMs will not disappear, even if improvements diminish, but the economics will likely never make sense: additional training is expensive, the more scaling, the more costly. And, as I have been warning, everyone is landing in more or less the same place, which leaves nobody with a moat. LLMs such as they are, will become a commodity; price wars will keep revenue low. Given the cost of chips, profits will be elusive. When everyone realizes this, the financial bubble may burst quickly; even Nvidia might take a hit, when people realize the extent to which its valuation was based on a false premise."
Gary Marcus, Confirmed: LLMs have indeed reached a point of diminishing returns, November 9, 2024
"We may make ourselves popular by telling our fellow citizens that they have made Discoveries, conceived Inventions, and made Improvements; We may boast that we are the chosen people; we may even thank God that we are not like other men. But after all it will be but flattery, and the delusion, the self deceit of the Pharisee."
John Adams, Letter to John Taylor, 29 July 1814
AI has been the subject of tremendous overselling and hype, often by the financial interests who are always on the lookout for some new era idea to distort and promote.
And indirectly related, crypto currency is all of that and more, with a much larger element of verbal manipulation and fraud.
But being shrouded in 'new era' mystique, normal reasoning is challenged by the notion that 'who can say' when indeed, most do not understand what it is that they are being called to believe in.
Are they both real and legitimate things? Absolutely. Both are founded in mathematics. My own house PhD's are well-versed in both of them. And I am constantly being cautioned with the intricacies of what is indeed a complex subject with a lot of technical nuances.
But as an old lab rat turned business manager with time-served observing and facilitating the adoption of new technologies into profitable product cycles, I am keenly aware of the hype that new ways of doing things can become by the marketing machines of predatory finance.
Everyone was made a believer by the internet, which has indeed revolutionized communications, and seemingly came out of nowhere. But those companies who have sustained and grown with it have done so with the same old boring methods of business: customer service, deploying and provisioning billable products, quality control, and the basic bull work of building things in the real world.
I delivered a talk to a large business technology conference on this subject in 1999 in Amsterdam, in which I urged them to give some thought to the practical adoption and management of what it was their companies were building as providers. I would estimate that easily more than two thirds of those companies did not exist by 2006, just in time for another bubble to arise from the monetization of something else. And of those who did still exist, most were hardly the same, except perhaps in name only.
But vast profits, enormous returns, can be made in the early days by those who sell the tools and the dream, and of companies that rise seemingly out of nowhere to capture fantastic valuations and fortunes, only to fade away into the bank accounts of the same old financiers and their enablers.
So, we had stocks lower today, as part of a recent rounding trend.
The VIX is signaling a short term low in the valuation of risks.
Gold and silver managed to hold their own after an overnight bear raid, most likely targeting the remaining open interest in the big December futures contract. The attack on the December contract is a perennial thing that I have written about in the past.
It is what those who are holding the bag for delivery of what they do not have will do, setting up 'alternatives' and distractions to delay their day of reckoning. In the short term, as always, it's all about the Benjamins
And on the horizon, the gathering storm that will come roaring in 'out of nowhere' and sweep it all away.
One of the consolations of living to an older age is to see the hard hand of time strip all the gilding off the ornaments and monuments of the hypocrites and Pharisees of finance.
The timing and specific trigger event(s) are still uncertain, but a steep decline in risk assets is coming. It will be on a scale with the last two bubbles when it comes tumbling back to earth.
It is like avalanche conditions prevailing. You know it is coming, but can only estimate what exactly will set it in motion, and when.
Have a pleasant evening.
