Discussion on AI Model Economics and Market Risks (Part 4)

That's just some war games. Yeah. I watch too much TV to think that what we are told is the full story. Yeah, yeah. I think that's fair. Right? I think that's fair. Too much is at stake. Yeah, it's too much at stake. Okay, so coming back to the actual again, finance, like I really want to be a primer for everyone. Yes. Who are new to the economics of models and model labs and what have you. One thing that people have said is, is that the R and D per model, let's say like what does Fable 5, Sonnet 5, Opus 5 cost? Let's call it a billion dollars. That lasted me six months. Right. Because you just said the depreciation lasted last six months. And so isn't that worrying, Right. Like about, like. Well, these things are the fastest depreciating assets in history. This is something that me and Sarogo have talked about before. Yeah, yeah, yeah, yeah. And I think the net is. There's no but like it's a qual know of. Well, as long as my next model run is better than the current state of the art, we're good. Yeah, yeah. But it's a little bit of a house of cards if the next one doesn't work out. Yeah. Which briefly affected OpenAI. So a lot of people know by now that like GPT4.5, the big run, wasn't that successful and they've since fixed it. But that a slump in a run, a failed run, can really, really screw with the ROI on the thing. And look, I think there's a really good analogy to the trip industry. And I remember speaking to someone much older and much smarter than myself who did a lot of semiconductor investing in the 80s and 90s about all these chip companies, they've seen it all and they've seen it all and they were highly skeptical. And sometimes you have industry vets that are highly skeptical and they miss the next big opportunity because they never think the incumbent can be disrupted. But the point of view they had was it's very different to tape out a chip that is competitive with the leading chips at the time. From building a machine that can continuously tape out chips that compete with, you know, it's the model factory. Yeah, the chip factory. And so he was like this. This individual's point of view was maybe a chip startup can build one chip, but guess what? They, they're not going to have the machine to constantly pump out a new chip every year and stay at the frontier from the chip standpoint. And that's why Nvidia is King. It's not because they have the best chip now, it's they have the best factor. Process four chips. The.