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Openai isn't even close to too big to fail. Bank of America fails the entire banking system collapses and the entire real economy grinds to a halt. If GM fails

Openai isn't even close to too big to fail. Bank of America fails the entire banking system collapses and the entire real economy grinds to a halt. If GM fails hundreds of thousands lose their jobs and entire supply chains collapse. If power utilities fail then people start actually dying within hours or days. If OpenAI fails nothing actually important happens.

yunwal 3y ago
I mean, there's about a hundred thousand startups built on top of their API. I'm sure most could switch to another model if they really needed, but if copyright is an issue, I'm not sure that would help.
- Andrex 3y ago
  If you've plugged your whole business into OAI's snake oil, you're an early adopter of technology and you'll likely be able to update the codebase appropriately. The sooner SCOTUS rules that training on copyrighted material is infringement, the better.
  - yunwal 3y ago
    > you'll likely be able to update the codebase appropriately Update the codebase to what exactly? Are there generative AI companies not training on copyrighted material that achieve anything even close to the results of gpt4? I'm not aware of any
whimsicalism 3y ago
you cannot erase that much value and say "nothing important happens", market cap is largely a rough proxy for the amount of disruption if something went under
- Thrymr 3y ago
  I do not think the situation is remotely comparable to the possibility of the banking system collapsing. Banks and other financial institutions exert leverage far beyond their market caps.
  - whimsicalism 3y ago
    But they are also extremely substitutable because they deal in the most fungible commodities ever made (deposits and dollars).
    - layer8 3y ago
      The good thing about AI is that it is substitutable by humans.
- dralley 3y ago
  "whose" money matters here. It's VC money, mostly. Well-capitalized sophisticated investors, not voters and pension funds. If Microsoft loses 30 billion dollars, it ain't great, but they have more than that sitting in the bank. If Sequoia or Ycombinator goes bankrupt, it's not great for lots of startups, but they can probably find other investors if they have a worthwhile business. If Elon loses a billion dollars, nobody cares.
  - whimsicalism 3y ago
    It is VC money pricing in the value of this enterprise to the rest of society. More over, if capital markets suddenly become ways to just lose tons of money, that hurts capital investment everywhere, which hurts people everywhere. People like to imagine the economy as super siloed and not interconnected but that is wrong, especially when it comes to capital markets.
    - lolc 3y ago
      In the case of OpenAI it's potential value that investors are assessing, not value. If they folded today, society would not care. And as for the whole idea of "company value equals value to society", I see monopolies and rent seeking as heavy qualifiers on that front.
      - whimsicalism 3y ago
        I agree with both of those points, it is a very rough proxy. (edit my original) Future value is still important though.
clbrmbr 3y ago
Yet. But we are getting close to an event horizon, once enough orgs become dependent of their models. Open source models are actually potentially worse. Even if OAI is not TBTF because of the competition, we have a scenario where AGI sector as a whole becomes TBTF and too big to halt.
ungreased0675 3y ago
When their product is embedded at the OS level in every Windows 11 computer, would that be too big to fail?

yunwal 3y ago

I mean, there's about a hundred thousand startups built on top of their API. I'm sure most could switch to another model if they really needed, but if copyright is an issue, I'm not sure that would help.

Andrex 3y ago
If you've plugged your whole business into OAI's snake oil, you're an early adopter of technology and you'll likely be able to update the codebase appropriately. The sooner SCOTUS rules that training on copyrighted material is infringement, the better.
- yunwal 3y ago
  > you'll likely be able to update the codebase appropriately Update the codebase to what exactly? Are there generative AI companies not training on copyrighted material that achieve anything even close to the results of gpt4? I'm not aware of any

whimsicalism 3y ago

you cannot erase that much value and say "nothing important happens", market cap is largely a rough proxy for the amount of disruption if something went under

Thrymr 3y ago
I do not think the situation is remotely comparable to the possibility of the banking system collapsing. Banks and other financial institutions exert leverage far beyond their market caps.
- whimsicalism 3y ago
  But they are also extremely substitutable because they deal in the most fungible commodities ever made (deposits and dollars).
  - layer8 3y ago
    The good thing about AI is that it is substitutable by humans.
dralley 3y ago
"whose" money matters here. It's VC money, mostly. Well-capitalized sophisticated investors, not voters and pension funds. If Microsoft loses 30 billion dollars, it ain't great, but they have more than that sitting in the bank. If Sequoia or Ycombinator goes bankrupt, it's not great for lots of startups, but they can probably find other investors if they have a worthwhile business. If Elon loses a billion dollars, nobody cares.
- whimsicalism 3y ago
  It is VC money pricing in the value of this enterprise to the rest of society. More over, if capital markets suddenly become ways to just lose tons of money, that hurts capital investment everywhere, which hurts people everywhere. People like to imagine the economy as super siloed and not interconnected but that is wrong, especially when it comes to capital markets.
  - lolc 3y ago
    In the case of OpenAI it's potential value that investors are assessing, not value. If they folded today, society would not care. And as for the whole idea of "company value equals value to society", I see monopolies and rent seeking as heavy qualifiers on that front.
    - whimsicalism 3y ago
      I agree with both of those points, it is a very rough proxy. (edit my original) Future value is still important though.

clbrmbr 3y ago

Yet. But we are getting close to an event horizon, once enough orgs become dependent of their models. Open source models are actually potentially worse. Even if OAI is not TBTF because of the competition, we have a scenario where AGI sector as a whole becomes TBTF and too big to halt.

ungreased0675 3y ago

When their product is embedded at the OS level in every Windows 11 computer, would that be too big to fail?