CEO of Composer Technologies. opinions are my own / not investment advice
Toronto
Joined January 2011
- Tweets6.3K
- Following1.2K
- Followers3.2K
- Likes45.9K
Hearing disturbing rumours that cost per transistor has been falling over last several decades, in fact by as much as 50% decline every two years.
I think what’s breaking people’s brains is that they’re used to inelastic demand, eg enterprise SaaS pricing. And yet here enterprise buyers have highly elastic demand.
A better mental model is to go back in time and think of computers themselves - if you need a mainframe to do a task, the market is a hell of a lot of smaller than if same processing power fits in your pocket.
I am shocked, absolutely shocked, that Anthropic ARR has likely gone vertical in October after they cut token prices.
Except the exact same thing happened for the entire AI market, which is why GPU rental prices have surged while token prices declined.
$100b plus in year-end ARR looks possible again.
Benjamin P Rollert retweeted
willpower is like yelling at your child to overrule a conflict. it can be useful, but there is a long-term cost. ideally you'd already be on the same page
This stat is just wild. It also feels like everyone and their neighborhood founded a decacorn when it’s actually incredibly rare
There are only 130 US tech companies, public or private, valued at $10B or more (decacorns). That’s roughly 20 to 30 new companies per decade, for the last five decades. This year alone, with a quarter to go, there have been 42 decacorns minted privately. Either this is the most economically transformative event since the industrial revolution, or we’re getting a wee bit ahead of ourselves.
Tokens have no intrinsic value. They are merely a means to an end. Tokens are useful if they do economically valuable work. If it takes less tokens to do a task, and/or the price of a token falls, then the value of a GPU hour *increases* because you can do more economically useful work with that capacity.
Why are people still hung up on falling token prices
Falling price per FLOP or GB over the last century didn’t exactly crush the computing industry
i think what's missing in the argument that LLMs are commodities that face disruption from China/open source is the tremendous heterogeneity of supply - totally unlike homogenous commodities like oil etc.
There is also extreme dispersion in willingness to pay because of heterogneity of demand/use case. There are lots of consumers who will always want to pay $0. There are also industrial scientists for whom a million $ is a small price of entry for potential ROI.
In equilibrium would expect a very diverse, segmented market with a lot of price discrimination.
You can just ignore token prices and look at marginal product per GPU hour to determine where price of compute will land. Just like wages converge at marginal product of labor.
Allegedly “the most important chart” for understanding the current state of the AI economy. The model layer seems to be going through a period of commodification as non-frontier models saturate everyday use while frontier models compete fiercely. Compute layer sees massive increase in total demand for compute regardless of the source or use case.
The chasm from seed to series A sucks in short term for founders, but is to their benefit in longer term. You don’t want to get buried in lit pref in something that can never have a venture scale outcome or you end up wasting years of your life.
Most businesses are simply not venture scale and better to discover that sooner than later.
like Supertake, certainly not a novel idea. But wonder if timing is finally right...
Robinhood and Revolut democratised access to financial markets.
But access ≠ sophistication. AI has the potential to change that.
Thrilled to share that @Sequoia has led @catalystapp's $30M seed round.
Benjamin P Rollert retweeted
Quant firms are hiring idea guys, not quants
I've been skeptical about the whole - software is commoditized, ideas are the moat argument
But I've seen first hand the best quant and technical firms in the world hire thinkers, liberal arts grads, and generalists
I predict the trend accelerates
Letter from @AQRCapital below
i dont think i've ever liked the aesthetic of anything generated by AI ever, and I'm an AI maxi when it comes to its impact
Benjamin P Rollert retweeted
AI is primarily a production tool, not a consumer good. That means that AI will show up in GDP as part of the value added in other sectors like health care, entertainment, and manufacturing.
9% is definitely not unrealistic.
To justify today's AI capex, we'll have to spend 9% of GDP on AI services, a study finds. Is it plausible we'll spend as much on AI as on food? Twice as much as on energy? The law of diminishing returns would like a word. My column: wsj.com/tech/ai/will-america…
