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It’s important that none of these entities can collude to price fix. Having China be the competitor ensures that. Basic microeconomics is still the easiest way
by spyckie2 2mo ago
It’s important that none of these entities can collude to price fix. Having China be the competitor ensures that.
Basic microeconomics is still the easiest way to understand token economies. How is it not a competitive market (where profits go to zero?).
Anything A or O does to keep more margin, any competitor can copy or choose to undercut, and undercutting has the benefit of collecting training data. So what is going to stop gross profit of tokens going to zero except for collusion/price fixing?
- intrasight 2mo agoYou left out the one that will: federal government industrial policy
- twelve40 2mo agoSo the federal government industrial policy is the thing that supposedly will keep the prices on "A and O" high in the US while the rest of the world will get comparable AI competing to get cheaper and cheaper?
- regularfry 2mo agoTerrible ideas get executed all the time, despite the problems with them being well understood.
- CuriouslyC 2mo agoBasically, the US govt will say that foreign models and providers are a security risk and ban them. If the US has shares of Anthropic/OAI due to a sovereign wealth fund, it'll be billed as domestic industry protectionism too.
- intrasight 2mo agoYup. Just like electric cars. Actually, more like network gear - so only non-western countries.
- HDThoreaun 2mo agoConsidering conditions within a single market is still microeconomics, I agree though its tough to see where firms will get market power from so profit will tend toward zero. I thought the same about GPUs though and nvidia still doesnt seem to have any real datacenter competition in sight.
- spyckie2 2mo agoThanks corrected it. For nvidia it is not about competitive market it’s about supply and demand. A different subset of microeconomics.