When the red line catches the blue line, if the cost of the blue products/companies don’t go down to be the same cost of the red products/companies, the red companies will win.

@chamath Hence Anthropic and Google turning to Spacex for cheaper token capacity?

@chamath Tracing the downward trends in soft market momentum.

@chamath Price can be a softmax over performance actually, and even a small gap that is consistent gives significant pricing power

@chamath Covered in more detail here:

@chamath Chinese AI should not be used in the USA.

That data will go straight to the party-state & PLA.

We should have learned 10,000x that when China prices to gain market share at the expense of profit, it's b/c they have a political or economic war objective.

@chamath good timing

Not true. Consumer ratings are not a proxy for frontier capabilities.

People may think a model sucks, but if mathematicians can use it to advance science, it doesn't matter what it costs.

Plus, the technological barriers to serve next gen 10T+ param models favor western companies with access to frontier silicon, networking and packaging and the gap will only grow from all indications for the next two years.

@chamath Market leaders rarely lose when they're 10x better. They lose when competitors become 90% as good for 10% of the price.

@chamath Grok is a much better value then Anthropocene and Open AI. The problem currently is Anthropic is light years ahead of Grok. I HOPE Elon can catch Grok up as I personally really want Grok to perform as it should.

@chamath The boat is data, compute, AND distribution. Not just distribution

@chamath Would it be the case that at least some of the red companies are heavily subsidized, so the cost is artificially held down? They won't be able to do it forever and they don't need to - just long enough to bankrupt blue companies.

@chamath Where would you list Composer 2.5 @grok ?

@chamath What country has the most productivity when it comes to AI today, @grok?

@chamath Yes, but the point is that the red line can't catch the blue line. Not until they do their own work and not just distil Claude prompts.

@chamath what happened with your preferred LA mayor candidate 🤣🤣🤣🤣🤣🤣🤣🤣

@chamath The price of tokens has always been the problem with AI. If tokens were 1/100th the current cost, AI would explode. Everyone would through tokens at everything. Token Cost is the only thing holding AI back. I think these frontier labs need to make cost effective models…

@chamath Chinese models are winning on raw cost and speed of adoption, but many big companies still prefer US providers for data privacy, compliance, and seamless integration with existing tools.

@chamath @0xSengh red companies will win

@chamath yup most people not factoring in the fact most of internet consumption happens outside of the west now, and this is only growing. - places that are more price sensitive