News Goldman Sachs says AI is too expensive and unreliable — firm asks if massive investments in 'overhyped' AI processing will ever pay off

[Admin]

Goldman Sachs interviewed several experts to offer contrarian views on the future of AI, plus they looked at the challenges the technology faces if it wants to grow indefinitely in the future.

Goldman Sachs says AI is too expensive and unreliable — firm asks if massive investments in 'overhyped' AI processing will ever pay off : Read more

 

[Notton]

It's good to be skeptical.
If anyone knows how to milk profits by doing all sorts of how-is-this-not-illegal things, it's Goldman Sachs.
And if they can't figure it out, its either a very poor investment, or they were too slow to the punch and want to short stock their competition.

Their role in 2007-2008 financial crisis is exactly why crypto ponzi schemes and nft money laundering became so popular in recent years.

 

[kjfatl]

Too expensive, unreliable, but a necessary business expense.
AI is a tool that can do some things cheaper and better, The obvious use includes things like scanning through billions of medical images looking for clues to disease markers. No human can do this as well as AI.
It can also be used for simple things like scheduling employees at a chain restaurant with the necessary training training for for a large chain done using a simple PC.

A few investments in AI will pay off handsomely. Most will be written off. All I need now is a reliable advisor who can tell me which one to invest in and when to get out.

 

[drea.drechsler]

Too expensive it may be, but investments will likely continue apace to continue developing it as a useful tool.

That is, until it either proves reliable and effective enough to justify expense or costs come in line...or both. At which point it will take off.

 

[hotaru251]

"AI" isn't profitable becasue its a niche thing that has no real value itself.

modern ai isnt what people want...they want actual ai not just llm's.

 

[bit_user]

I keep thinking of the Internet revolution, as a point of comparison. There were waves of companies that died before the Internet became essential infrastructure and so deeply integrated into our daily lives - even being right about the winds of change doesn't guarantee success. Many of the survivors of that era are now some of the biggest companies.

I think many companies are primarily focused on not being left behind, first and foremost, and focusing on RoI second. That's going to shift, as we move forward. As that focus shifts, the tech will continue to improve, as will people's experience with it. There might be a short-term cooling off, for AI tech, but the tech isn't going away and I don't expect quite the same magnitude of crash in AI that we had with dot-com companies.

 

[bit_user]

modern ai isnt what people want...they want actual ai not just llm's.

Well, that's quite a broad statement. Modern AI includes things like Image generators, which companies like Adobe haven integrated into their bread-and-butter products with impressive results.

As for LLMs, I agree that there are some mismatched expectations. People are initially amazed to see a computer do and know things they never thought possible. Once that amazement wears off, they quickly start to find its limitations and there's some degree of disenchantment.

Ideally, they stick with it long enough to learn how to optimize their prompts and find better ways of harnessing it. But, even if they don't, a whole generation of kids are growing up with it and have embraced it quite decisively. They're bringing it with them, almost everywhere they go.

 

[shady28]

I keep thinking of the Internet revolution, as a point of comparison. There were waves of companies that died before the Internet became essential infrastructure and so deeply integrated into our daily lives - even being right about the winds of change doesn't guarantee success. Many of the survivors of that era are now some of the biggest companies.

I think many companies are primarily focused on not being left behind, first and foremost, and focusing on RoI second. That's going to shift, as we move forward. As that focus shifts, the tech will continue to improve, as will people's experience with it. There might be a short-term cooling off, for AI tech, but the tech isn't going away and I don't expect quite the same magnitude of crash in AI that we had with dot-com companies.

That's basically what Goldman is saying. AI might be up and coming, but it's not this year or next year. It's probably 10+ years out.

And yes same thing happened late 1990s. Cisco's stock for example, topped out around 77/share, plummeted to 10/share, and today it sits at 47. Certainly Cisco itself has benefitted greatly from the widespread use of the internet as well as the spread of mobile devices (and hence, cellular infrastructure), but that doesn't mean someone who bought their stock in 1999 is doing well.

Of course, then there's 3COM.

 

[hotaru251]

Modern AI includes things like Image generators, which companies like Adobe haven integrated into their bread-and-butter products with impressive results.

you are paying for the service not the specific feature itself.

Nobody would pay adobe price just to add ai help. the core product isnt ai.

 

[bit_user]

That's basically what Goldman is saying. AI might be up and coming, but it's not this year or next year. It's probably 10+ years out.

No, that's way too far. The internet didn't take that long to "happen", even if it wasn't full transformative after just like 5 years.

AI won't take 10 years, either. The impact and extent to which it permeates everything will certainly be greater, after 10 years, but it will be a matter of course well before then.

And yes same thing happened late 1990s. Cisco's stock for example, topped out around 77/share, plummeted to 10/share, and today it sits at 47.

Back then, it had the game pretty much to itself. If you look at it now, its marketshare has been nibbled away in various market niches, and it has been facing big competition & price erosion from Huawei. So, it no longer represents the market like it used to. If you look at the TAM where it plays, that has grown hugely over the same time.

Cisco simply grew fat, mainly because it could. Much like I expect Nvidia will lose its complete dominance of the AI market, in the long run.

Of course, then there's 3COM.

Yup. Back in like 1998 or so, I paid a couple $hundred for a 100 Mbps 3Com PCI NIC. Within 5 years, you could buy little no name 100M cards for like $25. In 2004 or so, I got a motherboard with integrated 1 GigE. Perhaps where 3Com failed was making the transition to higher-speed enterprise NICs, because at least a few companies seemed to do alright in the 10 Gig market.

However, if you look at folks making cable modems, that market seems to have done pretty well.

 

[bit_user]

Nobody would pay adobe price just to add ai help. the core product isnt ai.

Not sure about that. It depends on which product we're talking about.

 

[shady28]

No, that's way too far. The internet didn't take that long to "happen", even if it wasn't full transformative after just like 5 years.

AI won't take 10 years, either. The impact and extent to which it permeates everything will certainly be greater, after 10 years, but it will be a matter of course well before then.

First time I used the internet directly was ~1993/1994. Back then it was Mosaic vs Navigator, or Gopher for the die-hard types. Before that, I and many others used gateways to the internet via BBS' and things like Prodigy which had ~500K users in 1990.

Your perception of how long the internet took to develop into a real juggernaut is pretty flawed.

It will take a lot longer than 10 years.

Back then, it had the game pretty much to itself. If you look at it now, its marketshare has been nibbled away in various market niches, and it has been facing big competition & price erosion from Huawei. So, it no longer represents the market like it used to. If you look at the TAM where it plays, that has grown hugely over the same time.

No, they didn't (have the game to themselves). Again, you don't seem to know much about computing in the 1990s and the development of the internet.

See Novell. And 3Com.

Cisco simply grew fat, mainly because it could. Much like I expect Nvidia will lose its complete dominance of the AI market, in the long run.

Cisco followed very closely the path that Nvidia is on. In March of 2000 it was the most valuable company in the world, at $500B USD. Today they are worth about $130B.

They had a lot more serious competition in the 1990s. That was my point of mentioning 3Com, but there were others, including IBM. Google "Token Ring".

 

[bit_user]

First time I used the internet directly was ~1993/1994. Back then it was Mosaic vs Navigator, or Gopher for the die-hard types. Before that, I and many others used gateways to the internet via BBS' and things like Prodigy which had ~500K users in 1990.

Your perception of how long the internet took to develop into a real juggernaut is pretty flawed.

Oh, I can play that game, too. Let's not.

So, we can pretty much go arbitrarily far back, if you want to start counting the Internet's age. I'll tell you what I had in mind, which is when it first entered popular awareness and roughly when the big money started flowing. By my estimation, that was probably early-to-mid 1990's.

With AI, we could also go arbitrarily far back. The name "Turing Test" should tell you all you need to know about just how long ago people have been thinking about it. As for commercialization, try looking up the term "AI Winter", sometime. Actually, here's the Wikipedia entry.

So, the date I figured we were counting from was basically when ChatGPT started blowing people's minds and Nvidia's H100 started getting back-ordered. So yeah, I think AI will be commonplace as soon as 2027 or so. By 2032, it should be transformative. It's obviously not going to exactly follow the Internet, but I think it and smartphones are two big transformational tech developments that we can look to, for a rough idea of how this might go.

No, they didn't (have the game to themselves). Again, you don't seem to know much about computing in the 1990s and the development of the internet.

Eh, I didn't really follow the networking industry until the early 2000's, but let's not get carried away. I'm sure I know at least a few things about 90's era computing that you don't. Again, I'm not really interested in playing that game.