dkrich

There is no plan. Talk tough, reverse under pressure, rinse repeat. Anyone surprised must not have watched season one which aired in 2019.

It’s interesting because I just watched an interview with him on cnbc and left it with much the same thoughts. Not that I took issue with anything in particular but he really didn’t say anything particularly insightful it was just bland, zero risk platitudes which to me is shocking for the CEO of what is supposed to be one of the most forward thinking companies in history. Like give us some bold predictions, opinions, etc. Not a great sign for Amazon imo

This was my take as well. Nadella is looking increasingly desperate by the day to salvage this investment. First that Jevon paradox tweet after futures opened Sunday night now this clearly leaked story plus a tweet from Altman of them together lol. I actually recall him making a similar tweet last time futures tanked a few months ago though I don’t recall the context.

Pretty clear that this thing is quickly getting away from them. Even if the data was stolen it doesn’t make any difference. You have no moat if scraped data is your moat. The moat was supposedly their ingenious engineers.

I think a 180 is coming soon when Microsoft stops doubling down, takes their medicine and shifts their strategy to cut back on infrastructure spend. I think the risks are still enormous for the tech sector.

I don’t necessarily disagree, I think he has very thorough and detailed analyses of many topics and I’ve learned a ton reading his blog over the years.

Nevertheless he’s human and every human no matter how hard they try is prone to certain biases at various times.

So he’s not invested monetarily in meta stock. But he’s clearly spent time with the higher ups at meta and settled on a particularly bullish narrative as it pertains to their future. That in and of itself makes him vested in meta being the winner because he predicted it and wants to be proven right.

The reason I bring this up is as someone who has read this blog very consistently for a long time now this is the first time I’ve sensed a shift in the tone. And this post seemed to be fired off quickly about an hour before the market opened and it seemed like he was palpably nervous about tHe situation and trying to calm people’s nerves. That in and of itself feels like it’s squarely in the bullish camp and hoping for a particular outcome.

This blog has taken an odd turn. It seems like he is invested in meta stock given the timing of this post and its focus on the stock market reaction to deepseek. That’s fine and I find no fault with it except that it’s hard to read the past few posts and not filter it through someone very bullish on meta no matter how the facts change.

Psst: it’s probably going to end up being a fraction of that but doesn’t make for as good a headline

I think a lot of his decisions can be boiled down to being hellbent on disrupting Apple.

I think the metaverse was his first crack at it until Wall Street gave him the hook for over spending.

Then when AI came around he again became fixated on the meta verse but using AI as the means of generating content for it.

I think these are all moon shot bets and meta still has no track record of success in hardware despite multiple attempts.

It seems that the next great hardware platform is probably a long ways away and will require some breakthrough that hasn’t happened yet and likely to come from a person with maniacal focus on a single application because that seems to have been the pattern in the past.

In other words I think it’s highly unlikely a current incumbent fosters the next hardware platform. I remember a time not so long ago when a lot of smart people were saying that Alexa was going to disrupt everything as we know it.

Also this AI shit on Facebook these days just seems really weird. But maybe there’s a vision of the future that suddenly makes it’s indispensable. Who knows?

If the stock market continues to rise there will be a bubble in defense stocks and a lot of defense IPOs

One of the unusual trends of the past several years is that higher education has become less and less respected and people now look to private industry for the R&D that universities were designed to perform for the public good.

I think 2025 Will mark a bottom for that in one way or another- either private industry (the FANGs) suffers a setback or (more likely in my view) research universities start a comeback as a new set of startups begin to launch out of a department (not necessarily CS or hardware). Perhaps in another field like gene therapy.

These tests are meaningless until You show them doing mundane tasks

That’s because it sparked a virtuous feedback loop at a time when it just so happens people’s credulity levels are off the charts. The creators of AI tools have a benefit in hyping it, as do software vendors as do hardware companies as do hyper scalers as does meta as does musk as do systems integrators like Accenture and on and on.

I think OP is saying despite all that there is little evidence that end users are actually paying significant sums of money to use it. To this point it’s a great marketing tool for companies that are all eager to be viewed as innovative and you have lots of very wealthy smart people with clout like Bezos and Zuckerberg talking it up. Like any good bubble you have to have at the core a real asset.

So of course there are people who use it daily as many anecdotes here in the comments point out. It’s a genuinely interesting and useful technology. That doesn’t mean though that it’s going to result in AGI or become profitable while liquidity conditions are still easy. I promise you Mark Zuckerberg would be singing a very different tune regarding chip investment if he were having to compete with bonds yielding 6-7%+.

The iPhone had enormous demonstrated demand

Interestingly it seems like we are investing many more magnitudes of capital for smaller and smaller gains.

For example, the jump in productivity from adding an operating system to a computer is orders of magnitude larger than adding an LLM to a web development process despite the LLM requiring infrastructure that cost tens of billions to create.

It seems that while tools are getting more and more sophisticated, they aren’t really resulting in much greater productivity. It all still seems to be resulting in software that solves the same problems as before. Whereas when html came around it opened up use cases that has never been seen before despite being a very simple abstraction layer by today’s standards.

Perhaps the opportunities are greatest when you are abstracting the layer that the fewest understand when LLMs seem to assume the opposite.

This seems to apply to all areas of AI in its current form and in my experience 70% may be a bit generous.

AI is great at getting you started or setting up scaffolds that are common to all tasks of a similar kind. Essentially anything with an identifiable pattern. It’s yet another abstraction layer sitting on an abstraction layer.

I suspect this is the reason we are really only seeing AI agents being used in call centers, essentially providing stand ins for chatbots- because chatbots are designed to automate highly repetitive, predictable tasks like changing an address or initiating a dispute. But for things like “I have a question about why I was charged $24.38 on my last statement” you will still be escalated to an agent because inquiries like that require a human to investigate and interpret an unpredictable pattern.

But creative tasks are designed to model the real world which is inherently analog and ever changing and closing that gap of identifying what’s missing between what you have and the real world and coming up with creative solutions is what humans excel at.

Self driving, writing emails, generating applications- AI gets you a decent starting point. It doesn’t solve problems fully, even with extensive training. Being able to fill that gap is true AI imo and probably still quite a ways off.

As someone (who likes to think) is pretty unbiased politically, I can say I’ll go wherever the people I’m interested post. I have been somewhat surprised that pretty non political accounts have moved to Bluesky which I have interpreted as both political and motivated by the loads of political bs that are posted on x that normal people simply get tired of. I think Bluesky will gain more traction than threads but will end up being a more successful mastodon. A place where people with massive followings who simply don’t like x will post and there will be two competing apps.

I love that so many people keep saying this so confidently yet if anyone bothered to look they’d see that the correlation between the two is nearly perfect over any timeframe including the past five years

This may make sense in theory but in reality is wrong. The DJIA has historically had a very close correlation to the S&P. Plus there is an inescapable psychological aspect to the Dow that is unique. When the Dow is off 1500 points it hits much differently than the S&P falling 200 points.

This is precisely why I’m skeptical. It assumes that that first advertiser can sell more of the same products just with better copy or more targeted placement and that more advertisers can backfill the previously used inventory that the first advertiser no longer needs and enjoy better sales too.

But doesn’t that then mean that many more product sales are taking place as opposed to the same number of sales spread across more impressions? I don’t see how many more sales can take place without users spending more money or the number of users going up and my original point was that meta is surely tapping into that addressable market as it is. There are only so many consumer dollars to go around.

This is a well thought out bull case for AI paying off at Meta. I just wonder what the upper limit is on ad spend in this economy from that long tail of advertisers, especially to Meta users which seem to be mostly focused on consumer goods. Surely Meta is already tapping into an enormous portion of that limit.

Yes and it’s negative

Not with the overhead of a draftkings or fanduel

Casinos are a proven business and have their highs and lows but will be fine. I’m talking specifically about betting apps. The fact that casinos have barely even entered the online space tells you all you need to know about how profitable it is

This is backwards. Casinos offer huge cross subsidization opportunities like getting people to spend lots of money in clubs and bars or gamble on games like slots that have a huge house edge while apps have near zero cross subsidization opportunities and massive overhead. An app running at draftkings scale costs a lot to operate.

I’ve believed for a long time and continue to that the math on these businesses just doesn’t work. Eventually they won’t exist because they aren’t profitable.

its going to end with these companies going towards zero and then possibly being acquired by private equity

I actually think this will be a self correcting problem.

Contrary to popular belief, running a sportsbook is a terrible business. Look at draftkings for instance. They’ve gotten gambling legalized nearly everywhere yet are still wildly unprofitable.

I guarantee you that they will never be profitable unless they are granted a monopoly which will never happen.

It’s fairly obvious. If you travel to Vegas and go to the Aria, one of the premier casinos on the strip, you will have to walk around to find the sportsbook. When you do you may be surprised to see that it’s not out in the center of the floor inviting people in, it’s in a dark remote enclosed corner that feels like a large coat room.

Now ask yourself why that would be? And why do casinos devote so much floor space to slot machines and table games?

Betting apps offer the terrible aspects of running a book- relatively unwealthy gamblers with the inability to cross subsidize more profitable games and alcohol along with the added drag of attracting disloyal users who can and will easily use other books to compare lines or take advantage of promos.

Ben is a smart dude and I don't often find myself at odds with any of his findings.

But in this case I very strongly disagree with his conclusion regarding Palantir. He seems to suggest that Palantir is a possible significant player in the first wave of AI because they are embedding themselves in the enterprise and doing the legwork of integrating data to make it useful and that the resulting benefits will outweigh the enormous costs.

Here's the problem(s). First of all, enterprise data is extraordinarily complicated as it evolves over many years and has the fingerprints of the prevailing technologies of the day all over it. It is nearly impossible to rip and replace or integrate those systems in flight because there is too much at stake and each system is endlessly complicated. That's to say nothing of the processes themselves which tend to evolve alongside the technology and are often inefficient because of the reliance on the dated technology. So Palantir has two challenges- overhauling data and processes.

Second, if the solution is integration work, what is special about Palantir? They hire the best analysts? C'mon. If it's a matter of talent that will become democratized with enough cash. There are loads of SI's that do this today. Are they just bad at it? If there isn't something special about Palantir then they have no edge.

Most damning though is that if you can integrate the data you don't really need AI because there are all sorts of tools available that would work amazingly well with the proper data. The challenge is always integration and making use of disparate data. There are hundreds of thousands of people who's job is solely being the glue between systems. Robotics could solve this but they are very inflexible, expensive and limited in functionality. Put differently, in this scenario AI is not the secret sauce it's the integrated data.

There is always this impulse when something new comes along to assume the existing way is dumb and those who use it or conceived it were ill-informed and this new thing or team will fix it all very easily. But once you get into it you realize there are an infinite number of considerations that make it very difficult to make any meaningful change.

I think the idea of agents is a great one but making them useful consistently will be very difficult and the question becomes does the benefit outweigh the enormous cost of building and training them. I suspect that with this enormous AI buildout you will end up with a lot of unused capacity that is later repurposed for an unintended use that nobody predicted. That is largely how bubbles eventually play out.

Ha in this case that’s actually the word I meant but Reddit has basically made that an impossible word to use in its intended form

Probably just comes down to less friction in getting paying users in their cars since they already have the app installed and these are small roll outs. From the announcement it sounds like the streets of Austin will be covered in waymos but after having been downtown a few weeks ago I can say there are like 10 of them. Partnering with a ubiquitous app makes getting real users in these small launches feasible.

Just a guess but if that’s accurate and then waymo expands to where it becomes the de facto option and familiar for a large number of ride hailers you can rest assured the next step will be to take back operations and cut Uber out

The economics of this seem highly questionable. After all how many robotaxi companies can there possibly be given the costs associated with vehicle ownership and autonomous software development? In a world where it costs nothing to create content or launch a drop shipping business aggregators like meta and Amazon make sense. But if you end up with like three AV providers, Uber seems like an unnecessary middleman in a business where margins are already incredibly tight.

You have to always remember that the competition is a guy in a car charging a couple bucks a mile

100% this. Dara came in and pulled all the P&L levers he could- basically closing down their own autonomous unit and buying a stake in aurora technology to allow another company to lose money and not have it show on their balance sheet. Then raising prices and lowering pay as much as possible.

They are now entirely reliant on quarter to quarter consumer spending and the performance of three stock holdings which are completely out of their hands.

Expect more and more manufactured headlines to keep the AV story in tact.