AI doesnt have to fail for the bubble to burst

Reddit r/ArtificialInteligence News
ai-bubble competition cost-reduction distillation ai-economics

Summary

The article argues that the AI bubble could burst without AI failure due to competition from cheaper models and cost-reduction techniques like distillation, which may erode profits from large industry spending.

These companies are spending billions, but if a cheaper model does what most people need, why would people keep paying extra for a slightly better one? If competitors can use your models answers to train their own through distillation, and Chinese companies can buy training data from American vendors cheaply enough to help close the gap, how much of a lasting lead are those billions buying? The large spending is betting on profits later, but competition could easily keep pushing prices down. What keeps the cheaper models from eating away at the profits all this spending is betting on?
Original Article

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