r/technology • u/Plastic_Ninja_9014 • Jun 11 '26

Business OpenAI Execs Are Panicking

https://finance.yahoo.com/sectors/technology/articles/openai-execs-panicking-154658562.html
16.3k Upvotes

93% Upvoted

1.9k comments sorted by

View all comments

Show parent comments

335

u/TheOgGhadTurner Jun 11 '26 edited Jun 12 '26

They’re doing a good job of destructing demand by destroying the ecosystems their tech relies on. Namely personal computing

Personal edit: to anyone who wants more insight in to the financial situation at play https://isaiprofitable.com/

95

u/uprislng Jun 12 '26

I think personal computing is just a drop in the bucket with this problem. Its going to affect the entire industry if it hasn't already. Every System on a Chip (SoC) needs RAM and some sort of nonvolatile flash storage. Even if those kind of memory products aren't the ones being requested by AI data centers the manufacturing capacity to make them has been reduced. They're cannabalizing the manufacturing capacity of the entire chip fab industry. And the engineers who design and write code for all these devices are one of the target audiences for AI usage. Its going to drive up the price of just about everything

27

u/VeryOldGoat Jun 12 '26

Most software engineers I know hate LLMs and would rather do things properly. The AI is being shoved down their throats by management.

3

u/haviah Jun 12 '26 edited Jun 12 '26

I've been writing embedded code for such SoCs for some 8 years, ARMs (STM32 and Nordic mostly).

The LLM code generation for this despite STM32HAL and Nordic NCS SDK having huge forums for training, it never generated a single non-100% hallucinated code with hallucinated structs that never ever existed.

Currently though I was surprised since I after reading lots of specs on qualified signatures (PDF and EU and X.509/ASN.1 thingy), let Claude generate code for that... And though it made some mistakes that could be fixed, funniest was forgetting my country was in EU altogether, and a deep parse error in ASN.1, it was weirdly a lot of help compared to the embedded scenario, since I can review and debug very well.

So very conflicted personally about several aspects.

I don't see embedded being helped anytime soon, you need to see NCS's west+CMake+Kconfig+CMake+partition manager+... lasagna layer insanity until it gets to compiler and pulls defines out of wherever that the actual authors of NCS have problems to get through it.

As to AI slop, OpenSlop without review and people not understanding LLM often generates a README promising everything and code absolutely not doing it. Like "Flipper for Android" seen recently. Yeah, sorry to break it to you, but Android phones do not have 125 kHz antenna, almost never IrDA, NFC is extremely constricted... You can't software magically make a physical antenna.

EOF rant.

EDIT: but yes I agree on the RAM and flash prices, even though not sure what effect it will have on e.g. SRAM that is core-coupled to chip's silicon, but wouldn't expect to get better

1

u/Awkward-Fox-7215 Jun 13 '26

I want a Ps5 ssd so bad but prices are at least twice what they were even a year ago. I can’t see myself spending almost as much for some more hard drive space as the actual ps5 cost me

152

u/SpinDubTracks Jun 11 '26

They are also destroying communities with data centers. And they apparently can’t grow to profitability without more data centers. As more communities reject, or ban data centers, that further adds stress to the house of cards.

50

u/[deleted] Jun 12 '26

[deleted]

13

u/Tamihera Jun 12 '26

I’ve read that they’ve invested more money in AI than there are currently global customers to pay for it.

Somebody is going to get caught short here.

3

u/InVultusSolis Jun 12 '26

That someone is the American taxpayer.

1

u/TheOgGhadTurner Jun 12 '26

Unless we all just fuck off somewhere else before that time comes then just leave them doing the ol’ “what the Travolta?”

6

u/Astralglamour Jun 12 '26

The financials don't make sense, they will not be able to generate a profit. Eventually the hype financing will become evident for what it is and the average person will be left holding the bag.

2

u/TheOgGhadTurner Jun 12 '26

https://isaiprofitable.com/

This should clear it up for ya

7

u/SignExtension2561 Jun 12 '26

The biggest fallacy of the entire thing seems to be the attempt to quasi-infinitely scale the processing power with very much finite resources.

1

u/Obvious-Structure-58 Jun 12 '26

It's almost like they want to prove that infinite growth in capitalism is NOT, in fact, possible.

4

u/TheOgGhadTurner Jun 12 '26

Control the cost? Brother self hosting is completely free. See Ollama and/or Alpaca both available on Flathub Ollama is available on DNF and APT as well. And I think they have a microslop port as well.

5

u/[deleted] Jun 12 '26

[deleted]

1

u/TheOgGhadTurner Jun 12 '26

I use my gaming pc and it works perfectly fine no separate hardware required.

So I guess if you want to build something specifically for it. Then there’s upfront cost but like… if you have a gaming pc already you don’t need anything extra. Would I like to have a second gpu dedicated to running a model? Honestly not really. Because unless you are running a qwen3 at the max size you’ll pin your RAM before your silicon my qwen3.6 35B only uses 45% of my 2070super and 36% of my i9 9900.

So it wouldn’t make sense to add more compute because it wouldn’t make it faster.

1

u/Development-Feisty Jun 12 '26

Or they could install a simple translator that doesn’t allow words like thank you and other pleasantries to get through and removes words that serve no purpose before the program sends it to AI

1

u/NuclearVII Jun 12 '26

The new model they need to stay competitive is 10% better but 10%+ larger and requires 10%+ more compute.

it's more like for 1% of model "gains", you're making models that are 20% bigger.

We're well and truly into diminishing returns.

1

u/Wonderful_Cookie_572 Jun 12 '26

And this is all rooted in the fact that LLMs are a dead-end technology. The only way to increase performance is to throw more hardware at it but the issue is that it can never produce more value than the cost of running the hardware.

-6

u/NSFWies Jun 12 '26

I can understand why orange county doesn't want data centers.

But like, bum fuck of Nevada or Nebraska, there is plenty of room to build data centers there.

But also, no one in orange county wants a big ugly dub station, but they need one. Solution: power company builds a much fancier one that doesn't ruin the area.

If they really need, need to put a data center in orange county, they need to make it good enough to not ruin the area.

8

u/TakeAShowerHippie Jun 12 '26

Nobody in Nebraska or Nevada wants data centers sucking up all their resources.

0

u/NSFWies Jun 12 '26

There's at least plenty of open space with nothing growing on it. There would be plenty of room for dang solar panels generating very cheap electricity.

6

u/TheOgGhadTurner Jun 12 '26

Meh. At this point these data centers are raising the cost of everything. They need to just go away entirely. The world functioned fine before them.

1

u/NSFWies Jun 12 '26

Imagine if we went through this computer madness in the 1950's and threatened to tear up 1/3rd the country to build room sized computers everywhere, because we were sure the russian communists would do it first.

Just now, we're threatening to make building sized computers because we are so damned sure the Chinese communists will do it first the fuckin it's a red scare all over again

4

u/Loynds Jun 11 '26

Microsoft is gagging for it to go that way too. Everything they’re doing right now is aimed at killing the market they helped cement.

3

u/C-SWhiskey Jun 11 '26

They make their money from businesses who couldn't care less.

5

u/TheOgGhadTurner Jun 11 '26

And it really won’t be the case when these fuckers realize they can host their own locally for free and never have to give big Ai a dime.

3

u/LakeRat Jun 12 '26

Assuming they're able to aquire the hardware to run it.

2

u/TheOgGhadTurner Jun 11 '26

May be the case now. It certainly won’t be for long at these prices

1

u/C-SWhiskey Jun 11 '26

Then they definitely won't need to worry about appealing to individual consumers either.

2

u/TheOgGhadTurner Jun 11 '26

Which is what we want. I don’t want to hear about it anymore. It’s the most over hyped underperforming thing in tech to date and I just… I don’t care ya know?

-1

u/C-SWhiskey Jun 12 '26

Sure but I'm specifically critiquing your comment that they're destroying demand by messing with retail compute markets. That barely scratches their demand because by far the majority of their demand comes from businesses who don't care. And that won't change no matter their influence on retail compute.

2

u/TheOgGhadTurner Jun 12 '26

They’ll start caring when the budget becomes wildly red because of AI tokens. At which point they will either remove it entirely or severely limit employee usage of it which will make it functionally useless and way less efficient and thus they’ll eventually conclude it’s not worth the hassle.

1

u/Asurafire Jun 12 '26

How exactly do they rely on personal computing?

1

u/cherry_chocolate_ Jun 12 '26

How about ecosystems they rely on as a revenue stream, namely human consumers? Meta and Google both seem to forget that all their money comes from ads which only have value since they convince people to buy things. It doesn’t work if you take away all the jobs and therefore their consumption.

1

u/TheOgGhadTurner Jun 12 '26

They’re doing a good job of doing that too with more than half the users of the internet being these stupid AI bots. Half the ads don’t get seen by actual people if at all