Remmelt

• RemmeltMay 19, 2025, 1:33 AM

  6 points

  0 ∶ 0

  on: Our bet on whether the AI mar­ket will crash

  I adjusted my guesstimate of winning down to a quarter.

  I now guess it’s more like ¹⁄₈ chance (meaning that from my perspective Marcus will win this bet on expectation). It is pretty hard to imagine so many paying customers going away, particularly as revenues have been growing in the last year.

  Marcus has thought this one through carefully, and I’m naturally sticking to the commitment. If we end up seeing a crash down the line, I invite all of you to consider with me how to make maximum use of that opportunity!

  I still think a crash is fairly likely, but also that if there is a large slump in investment across the industry that most customers could end up continuing to pay for subscriptions.

  The main problem I see is that OpenAI and Anthropic are losing money on products they are selling, which are facing commodification (i.e. downward pressure on prices). But unless investments run dry soon, they can continue for some years and eventually find ways to lock in customers (e.g. through personalisation) and monetisation (e.g. personalised ads).
  

• RemmeltMay 9, 2025, 1:39 AM

  2 points

  0 ∶ 0

  in reply to: Marcus Abramovitch 🔸’s comment on: Our bet on whether the AI mar­ket will crash

  like AI & ML VC deal activity being <30% and Anthropic valuation <$30B

  My preference was for the former metric (based on AI PitchBook-NVCA Venture Monitor), and another metric based on some threshold for the absolute amount Anthropic or OpenAI got in investments in a next round (which Marcus reasonably pointed out could be triggered if the company just decided to do a some extra top-up round).

  I was okay with using Marcus’ Anthropic valuation metric with the threshold set higher, and combined with another possible metric. My worry was that Anthropic execs would not allow their valuation to be lowered unless they were absolutely forced to offer shares at a lower price; a bit like homeowners holding on to their house during a downturn unless their mortgage forces them to sell.

  I kinda liked the YCombinator option in principle, but I guessed that applicants for the summer 2025 program would already start to get selected around now, so that would not pick up on a later crash. Also, YC feels like the center of the AI hype to me, so I worried that they’d be last to give way (Marcus thought staff have their hand on the pulse and could change decisions fast, and therefore that made YC more of a leading indicator).

• RemmeltMay 9, 2025, 1:32 AM

  8 points

  0 ∶ 0

  in reply to: Jason’s comment on: Our bet on whether the AI mar­ket will crash

  Right, I don’t have a high income, and also have things in my personal life to take care of.

• RemmeltMay 8, 2025, 10:01 AM

  2 points

  0 ∶ 0

  in reply to: Remmelt’s comment on: Who wants to bet me $25k at 1:7 odds that there won’t be an AI mar­ket crash in the next year?

  Here is the post about our bet.

• RemmeltMay 8, 2025, 9:23 AM

  4 points

  0 ∶ 0

  in reply to: emre kaplan🔸’s comment on: Our bet on whether the AI mar­ket will crash

  Good question.

  Marcus and I did a lot of back and forth on potential criteria. I started by suggesting metrics that capture a decline in investments into AI companies. Marcus though was reasonably trying to avoid things that can be interest rate/​tariff/​broad market driven.

  So the criteria we have here are a result of compromise.

  The revenue criteria are rather indirect for capturing my view on things. I think if OpenAI and Anthropic each continue to make $5+ billion yearly losses (along with losses by other model developers) that would result in investors declining to invest, which in turn would lead to reduction in investments into AI data centers (and a corresponding reduction of Nvidia’s revenues). I also think that OpenAI and Anthropic are facing competition with cheaper/​free models that for users often function ‘good enough’, and that particularly during a larger US recession, people will be motivated to cancel their ‘luxury’ subscriptions. Though people can get locked into using personalised chatbots.

  I did ask for high betting odds, so there’s a trade-off here!

Our bet on whether the AI mar­ket will crash

• RemmeltMay 3, 2025, 11:40 AM

  4 points

  0 ∶ 0

  in reply to: Marcus Abramovitch 🔸’s comment on: Who wants to bet me $25k at 1:7 odds that there won’t be an AI mar­ket crash in the next year?

  Nice, let’s do it. I saw you messaged me.

• RemmeltApr 25, 2025, 12:11 PM

  7 points

  2 ∶ 0

  in reply to: Tristan D’s comment on: List of pe­ti­tions against OpenAI’s for-profit move

  It’s bad to support a race here. Given that no-one has a way to safely constrain open-endedly learning autonomous machinery, and there are actual limits to control.

• RemmeltApr 25, 2025, 10:23 AM

  1 point

  0 ∶ 0

  on: List of pe­ti­tions against OpenAI’s for-profit move

  Apr: Californian civil society nonprofits

  This petition has the most rigorous legal arguments in my opinion.
  

  Others I know also back a block (#JusticeForSuchir, Ed Zitron, Stop AI, creatives for copyright). What’s cool is how diverse the backers are, from skeptics to doomers, and from tech whistleblowers to creatives.

List of pe­ti­tions against OpenAI’s for-profit move

Crash sce­nario 1: Rapidly mo­bil­ise for a 2025 AI crash

• RemmeltApr 8, 2025, 1:58 PM

  6 points

  0 ∶ 0

  in reply to: NunoSempere’s comment on: Who wants to bet me $25k at 1:7 odds that there won’t be an AI mar­ket crash in the next year?

  Frankly, because I’d want to profit from it.
  
  The odds of 1:7 imply a 12.5% chance of a crash, and I think the chance is much higher (elsewhere I posted a guess of 40% for this year, though I did not have precise crash criteria in mind there, and would lower the percentage once it’s judged by a few measures, rather than my sense of “that looks like a crash”).
  
  That percentage of 12.5% is far outside of the consensus on this Metaculus page. Though I notice that their criteria for a “bust or winter” are much stricter than where I’d set the threshold for a crash. Still that makes me wonder whether I should have selected an even lower odd ratio. Regardless, this month I’m prepared to take this bet.

Who wants to bet me $25k at 1:7 odds that there won’t be an AI mar­ket crash in the next year?

• RemmeltApr 2, 2025, 5:13 AM

  2 points

  0 ∶ 0

  in reply to: OllieBase’s comment on: We’re not pre­pared for an AI mar­ket crash

  Haha, I was thinking about that. The timing was unfortunate.

• RemmeltApr 1, 2025, 6:36 AM

  4 points

  0 ∶ 0

  in reply to: Karthik Tadepalli’s comment on: We’re not pre­pared for an AI mar­ket crash

  Just because they didn’t invest money in the Stargate expansion doesn’t mean they aren’t reserving the option to do so later if necessary.… If you believe that the US government will prop up AI companies to virtually any level they might realistically need by 2029, then i don’t see a crash happening.

  
  Thanks for reading and your thoughts.

  I disagree, but I want to be open to changing my mind if we see e.g. the US military ramping up contracts, or the US government propping up AI companies with funding at the level of say the $280 billion CHIPS Act.

We’re not pre­pared for an AI mar­ket crash

• RemmeltMar 31, 2025, 8:16 AM

  4 points

  1 ∶ 0

  in reply to: Ozzie Gooen’s comment on: OpenAI lost $5 billion in 2024 (and its losses are in­creas­ing)

  This is clarifying context, thanks. It’s a common strategy to go red for years while tech start-ups build a moat around themselves (particularly through network effects). Amazon built a moat in terms of drawing in vendors and buyers into its platform while reducing logistics costs, and Uber in drawing in taxi drivers and riders onto its platform. Tesla started out with a technological edge.
  
  Currently, I don’t see a strong case for that OpenAI and Anthropic are building up a moat.
  –> Do you have any moats in mind that I missed? Curious.
  
  Network effects aren’t much of a moat here, since their users are mostly using the tools by themselves (though their prompts used to improve the tools; not sure how much). It doesn’t seem a big deal for most users to switch to another competing chatting tool or image generation tool say. Potentially, current ChatGPT or Claude users can later move to using new model-based tools that are profitable for those AI companies. But as it stands, OpenAI and Anthropic are losing money on existing users on one end, while being under threat of losing users to cheap model alternatives on the other end. It’s not clear whether with the head-start they got on releasing increasingly extractive, general use models that they are going to be ‘winners’. Maybe their researchers will be the ones to come up with new capability breakthroughs, that will somehow be used to maintain an industry edge (incl. in e.g. military applications). But over the last two years, there has been more of a closing of the gap between the user functionality of newer versions of Claude and ChatGPT and cheaper competing models (like Meta’s and DeepSeek’s). OpenAI sunk hundreds of millions of dollars over 18 months into a model that was not worth calling GPT-5, and meanwhile other players caught up on model functionality of GPT-4.

  OpenAI seems reflective of an industry where investment far outstrips user demand, as happened during the dotcom bubble.
  
  This is not to say that there could not be large-model developers with at least tens of billion dollars in yearly profit within the next decade. That is what current investments and continued R&D are aimed towards. It seems the default scenario. Personally, I’ll work hard to prevent that scenario since at that point restricting the development of increasingly unscoped (and harmful) models will basically be intractable.

• RemmeltMar 31, 2025, 7:02 AM

  4 points

  0 ∶ 0

  in reply to: BrianTan’s comment on: CoreWeave Is A Time Bomb

  Ah, it’s meant to be the footnotes. Let me edit that to be less confusing.

OpenAI lost $5 billion in 2024 (and its losses are in­creas­ing)

CoreWeave Is A Time Bomb