By the way, the fact that Ant revenue has been 10x-ing year over year, while compute has only been 3x-ing, suggests that there are very strong economies of scale in the model business.
Logically this makes sense - when you train a model, you pay this one time cost of learning all these different skills that you can then amortize across all your users. (Unlike with human labor, where each instance has to be retrained from scratch).
I wish we didn't live in a world with such strong economies of scale of intelligence (because I'm worried about power concentration). But it seems we do.
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"Lab compute 3x-es year over year. For a lab to 10x revenue while continuing to only 3x compute, some combination of the following 3 things has to happen:
1. Lab margins have to increase,
2. The price of compute has to increase,
3. Labs have to spend a greater fraction of their compute on inference.
My understanding is that basically all 3 of these things have been happening..."
"Consider the price at which Google and Anthropic are renting compute from SpaceX.
Google is reportedly paying $900 million a month for 110K GPUs [at] ... roughly 2x the spot price per hour for those GPUs. And the current spot price is itself 40% higher than it was in February."
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