Will AI be the basis of many future industrial fortunes, or a net loser? (joincolossus.com)
102 points by saucymew 10 hours ago
Waterluvian 9 hours ago
I think the interesting idea with “AI” is that it seems to significantly reduce barriers to entry in many domains.
I haven’t seen a company convincingly demonstrate that this affects them at all. Lots of fluff but nothing compelling. But I have seen many examples by individuals, including myself.
For years I’ve loved poking at video game dev for fun. The main problem has always been art assets. I’m terrible at art and I have a budget of about $0. So I get asset packs off Itch.io and they generally drive the direction of my games because I get what I get (and I don’t get upset). But that’s changed dramatically this year. I’ll spend an hour working through graphics design and generation and then I’ll have what I need. I tweak as I go. So now I can have assets for whatever game I’m thinking of.
Mind you this is barrier to entry. These are shovelware quality assets and I’m not running a business. But now I’m some guy on the internet who can fulfil a hobby of his and develop a skill. Who knows, maybe one day I’ll hit a goldmine idea and commit some real money to it and get a real artist to help!
It reminds me of what GarageBand or iMovie and YouTube and such did for making music and videos so accessible to people who didn’t go to school for any of that, let alone owned complex equipment or expensive licenses to Adobe Thisandthat.
iamacyborg 23 minutes ago
> It reminds me of what GarageBand or iMovie and YouTube and such did for making music and videos so accessible to people who didn’t go to school for any of that, let alone owned complex equipment or expensive licenses to Adobe Thisandthat.
It’s worth reading William Deresiewicz‘ The Death of the Artist. I’m not entirely convinced that marketing that everyone can create art/games/whatever is actually a net positive result for those disciplines.
nostrademons 8 hours ago
I've noticed this as well. It's a huge boon for startups, because it means that a lot of functions that you would previously need to hire specialists for (logo design! graphic design! programming! copywriting!) can now be brought in-house, where the founder just does a "good enough" job using AI. And for those that can't (legal, for example, or various SaaS vendors) the AI usually has a good idea of what services you'd want to engage.
Ironically though, having lots of people found startups is not good for startup founders, because it means more competition and a much harder time getting noticed. So its unclear that prosumers and startup founders will be the eventual beneficiary here either.
It would be ironic if AI actually ended up destroying economic activity because tasks that were frequently large-dollar-value transactions now become a consumer asking their $20/month AI to do it for them.
chii 3 hours ago
> ironic if AI actually ended up destroying economic activity
that's not destroying economic activity - it's removing a less efficient activity and replace it with a more efficient version. This produces economic surplus.
Imagine saying this for someone digging a hole, that if they use a mechanical digger instead of a hand shovel, they'd destroy economic activity since it now cost less to dig that hole!
tbossanova 2 hours ago
59nadir 2 hours ago
Waterluvian 3 hours ago
bossyTeacher 8 hours ago
> I've noticed this as well. It's a huge boon for startups, because it means that a lot of functions that you would previously need to hire specialists for (logo design! graphic design! programming! copywriting!) can now be brought in-house, where the founder just does a "good enough" job using AI.
You are missing the other side of the story. All those customers, those AI boosted startups want to attract also have access to AI and so, rather than engage the services of those startups, they will find that AI does a good enough job. So those startups lost most of their customers, incoming layoffs :)
ares623 4 hours ago
benoau 9 hours ago
Yep this is a huge enabler - previously having someone "do art" could easily cost you thousands for a small game, a month even, and this heavily constrained what you could make and locked you into what you had planned and how much you had planned. With AI if you want 2x or 5x or 10x as much art, audio etc it's an incremental cost if any, you can explore ideas, you can throw art out, pivot in new directions.
DrewADesign 4 hours ago
The only thing better than a substandard, derivative, inexpertly produced product is 10x more of it by 10x more people at the same time.
fulafel 3 hours ago
KPGv2 7 hours ago
> With AI if you want 2x or 5x or 10x as much art
Imagery
AI does not produce art.
Not that it matters to anyone but artists and art enjoyers.
CalRobert 26 minutes ago
hansvm 3 hours ago
sixtyj 35 minutes ago
Easy entry not equals getting rich.
Cthulhu_ 17 minutes ago
In fact one could argue it makes it harder; if the barrier to entry for making video games is lowered, more people will do it, and there's more competiton.
But in the case of video games there's been similar things already happening; tooling, accessible and free game engines, online tutorials, ready-made assets etc have lowered the barrier to building games, and the internet, Steam, itch.io, etcetera have lowered the barrier to publishing them.
Compare that to when Doom was made (as an example because it's a good source), Carmack had to learn 3d rendering and making it run fast from the scientific text books, they needed a publisher to invest in them so they could actually start working on it fulltime, and they needed to have diskettes with the game or its shareware version manufactured and distributed. And that was when part was already going through BBS.
Gigachad 6 hours ago
It's good for prototypes, where you want to test the core gameplay ideas without investing a ton early on. But you're going to have to replace those assets with real ones before going live because people will notice.
raincole 2 hours ago
People will notice and still buy it if your game has done something else right. Source:
https://www.totallyhuman.io/blog/the-surprising-new-number-o...
catlifeonmars 8 hours ago
I have a similar problem (available assets drive/limit game dev). What is your workflow like for generative game assets?
Waterluvian 8 hours ago
It’s really nothing special. I don’t do this a lot.
Generally I have an idea I’ve written down some time ago, usually from a bad pun like Escape Goat (CEO wants to blame it all on you. Get out of the office without getting caught! Also you’re a goat) or Holmes on Homes Deck Building Deck Building Game (where you build a deck of tools and lumber and play hazards to be the first to build a deck). Then I come up with a list of card ideas. I iterate with GPT to make the card images. I prototype out the game. I put it all together and through that process figure out more cards and change things. A style starts to emerge so I replace some with new ones of that style.
I use GIMP to resize and crop and flip and whatnot. I usually ask GPT how to do these tasks as photoshop like apps always escape me.
The end result ends up online and I share them with friends for a laugh or two and usually move on.
danielscrubs 2 hours ago
WalterBright 3 hours ago
I enjoy using AI generated art for my presentations.
awjlogan 36 minutes ago
I chuckled seeing it in the first presentation of the conference. By the end of the conference, it was numbingly banal.
zwnow an hour ago
Funny how everyone is just okay with the basis for all this art being stolen art by actual humans. Zero sense of ethics.
hyperbovine 39 minutes ago
Not clear that being able to sample from a distribution == stealing.
zwnow 31 minutes ago
IAmGraydon 6 hours ago
I'm wondering a good way to create 2D sprite sheets with transparency via AI. That would be a game changer, but my research has led me to believe that there isn't a good tool for this yet. One sprite is kind of doable, but a sprite animation with continuity between frames seems like it would be very difficult. Have you figured out a way to do this?
LarsDu88 an hour ago
I was literally experimenting with this today.
Use Google Nano Banana to generate your sprite with a magenta background, then ask it to generate the final frame of the animation you want to create.
Then use Google Flow to create an animation between the two frames with Veo3
Its astoundingly effective, but still rather laborious and lacking in ergonomics. For example the video aspect ratio has to be fixed, and you need to manually fill the correct shade of magenta for transparency keying since the imagen model does not do this perfectly.
IMO Veo3 is good enough to make sprites and animations for an 2000s 2D RTS game in seconds from a basic image sketch and description. It just needs a purpose built UI for gamedev workflows.
If I was not super busy with family and work, I'd build a wrapper around these tools
Waterluvian 6 hours ago
I think an important way to approach AI use is not to seek the end product directly. Don’t use it to do things that are procedurally trivial like cropping and colour palette changes, transparency, etc.
For transparency I just ask for a bright green or blue background then use GIMP.
For animations I get one frame I like and then ask for it to generate a walking cycle or whatnot. But usually I go for like… 3 frame cycles or 2 frame attacks and such. Because I’m not over reaching, hoping to make some salable end product. Just prototypes and toys, really.
lelanthran 3 hours ago
I dont use AI for image generation so I dont know how possible this is, but why not generate a 3D model for blender to ingest, then grab 2D frames from the model for the animation?
raincole 2 hours ago
cactusplant7374 9 hours ago
I have been doing the exact same thing with assets and also it has helped me immensely with mobile development.
I am also starting to get a feel for generating animated video and am planning to release a children’s series. It’s actually quite difficult to write a prompt that gets you exactly what you want. Hopefully that improves.
visarga 2 hours ago
AI is used by students, teachers, researchers, software developers, marketers and other categories and the adoption rates are close to 90%. Even if it does not make us more productive we still like using it daily. But when used right, it does make us slightly more productive and I think it justifies its cost. So yes, in the long run it will be viable, we both like using it and it helps us work better.
But I think the benefits of AI usage will accumulate with the person doing the prompting and their employers. Every AI usage is contextualized, every benefit or loss is also manifested in the local context of usage. Not at the AI provider.
If I take a photo of my skin sore and put it on ChatGPT for advice, it is not OpenAI that is going to get its skin cured. They get a few cents per million tokens. So the AI providers are just utilities, benefits depend on who sets the prompts and and how skillfully they do it. Risks also go to the user, OpenAI assumes no liability.
Users are like investors - they take on the cost, and support the outcomes, good or bad. AI company is like an employee, they don't really share in the profit, only get a fixed salary for work
Tepix 2 hours ago
We also know from studies that it makes us less capable, i.e. it rots our brains.
visarga an hour ago
Books also make us less capable at rote memorization. People used to do much more memorization. Search engines taught us to remember the keywords, not the facts. Calculators made us rarely do mental calculations. This is what happens - progress is also regress, you automate on one side and the skill gets atrophied on the other side, or replaced with meta-skills.
How many of us know how to use machine code? And we call ourselves software engineers.
croes an hour ago
JimDabell 19 minutes ago
This is what the people actually studying this say:
> Is it safe to say that LLMs are, in essence, making us "dumber"?
> No! Please do not use the words like “stupid”, “dumb”, “brain rot”, "harm", "damage", "passivity", "trimming" and so on. It does a huge disservice to this work, as we did not use this vocabulary in the paper, especially if you are a journalist reporting on it.
tempodox 16 minutes ago
Never say never, but I certainly don’t see LLMs as the basis for industrial fortunes. Maybe future forms of “AI” could be that.
kristianc 9 hours ago
> Yet some technological innovations, though societally transformative, generate little in the way of new wealth; instead, they reinforce the status quo. Fifteen years before the microprocessor, another revolutionary idea, shipping containerization, arrived at a less propitious time, when technological advancement was a Red Queen’s race, and inventors and investors were left no better off for non-stop running.
This collapses an important distinction. The containerization pioneers weren’t made rich - that’s correct, Malcolm McLean, the shipping magnate who pioneered containerization didn’t die a billionaire. It did however generate enormous wealth through downstream effects by underpinning the rise of East Asian export economies, offshoring, and the retail models of Walmart, Amazon and the like. Most of us are much more likely to benefit from downstream structural shifts of AI rather than owning actual AI infrastructure.
This matters because building the models, training infrastructure, and data centres is capital-intensive, brutally competitive, and may yield thin margins in the long run. The real fortunes are likely to flow to those who can reconfigure industries around the new cost curve.
dash2 3 hours ago
The article's point is exactly that you should invest downstream of AI.
th0ma5 3 hours ago
The problem is different though, the containers were able to be made by others and offered dependable success, and anything downstream of model creators is at the whim of the model creator... And so far it seems not much that one model can do that another can't, so this all doesn't bode well for a reliable footing to determine what value, if at all, can be added by anyone for very long.
dash2 3 hours ago
xnx 9 hours ago
AI could've made someone unimaginably rich if they were the only one that had it. We're very lucky Google didn't keep "Attention is All You Need" to themselves.
back2dafucha 9 hours ago
I doubt we'll feel that way in 5 years.
echelon 8 hours ago
Because now they're keeping everything to themselves?
visarga 4 hours ago
dweinus 9 hours ago
I don't think most commenters have read the article. I can understand, it's rambly and a lot of it feels like they created a thesis first and then ham-fisted facts in later. But it's still worth the read for the last section which is a more nuanced take than the click-bait title suggests.
wewewedxfgdf 9 hours ago
You can't make such generalized statements about anything in computing/business.
The AI revolution has only just got started. We've barely worked out basic uses for it. No-one has yet worked out revolutionary new things that are made possible only by AI - mostly we are just shoveling in our existing world view.
giveita 9 hours ago
The point though is AI wont make you rich. It is about value capture. They compare it to shipping containers.
I think AI value will mostly be spread. Open AI will be more like Godaddy than Apple. Trying to reduce prices and advertise (with a nice bit of dark patterns). It will make billions, but ultimately by competing its ass off rather than enjoying a moat.
The real moats might be in mineral mining, fabrication of chips etc. This may lead to strained relations between countries.
Gigachad 5 hours ago
The value is going to be in deep integration with existing platforms. It doesn't matter if OpenAI had their tools out first, Only the Microsoft AI will work in Word, only the Apple AI will deeply integrate on the iPhone.
Having the cutting edge best model won't matter either since 99.9% of people aren't trying to solve new math problems, they are just generating adverts and talking to virtual girlfriends.
CuriouslyC 5 hours ago
That's 100% not the case. OpenAI is wedged between the unstoppable juggernaut that is Google at the high end and the state sponsored Chinese labs at the low end, they're going to mostly get squeezed out of the utility inference market. They basically HAVE to pivot to consumer stuff and go head to head with Apple with AI first devices, that's the only way they're going to justify their valuation. This is actually not a crazy plan, as Apple has been resting on their laurels with their OS/software, and their AI strategy has been scattershot and bad.
ares623 4 hours ago
Interesting thought. Once digital assets become devalued enough, things will revert and people/countries will start to keep their physical resources even tighter than before.
kg 9 hours ago
The way I look at this question is: Is there somehow a glaring vulnerability/missed opportunity in modern capitalism that billions of people somehow haven't discovered yet? And if so, is AI going to discover it? And if so, is a random startup founder or 'little guy' going to be the one to discover and exploit it somehow? If so, why wouldn't OpenAI or Anthropic etc get there first given their resources and early access to leading technology?
IIRC Sam Altman has explicitly said that their plan is to develop AGI and then ask it how to get rich. I can't really buy into the idea that his team is going to fail at this but a bunch of random smaller companies will manage to succeed somehow.
And if modern AI turns into a cash cow for you, unless you're self-hosting your own models, the cloud provider running your AI can hike prices or cut off your access and knock your business over at the drop of a hat. If you're successful enough, it'll be a no-brainer to do it and then offer their own competitor.
Retric 9 hours ago
People aren’t getting rich with AI products, they are getting rich selling AI companies.
autoexec 2 hours ago
bix6 9 hours ago
> IIRC Sam Altman has explicitly said that their plan is to develop AGI and then ask it how to get rich
If they actually reach AGI they will be rich enough. Maybe they can solve world happiness or hunger instead?
davidw 9 hours ago
blibble 9 hours ago
aleph_minus_one 9 hours ago
bbarnett 9 hours ago
sandworm101 9 hours ago
Thats why i just biult my own tiny AI rig in a home server. I dont want to grow even more addicted to cloud services, nor do i want to keep providing them free human-made data. Ok, so i dont have access to mystical hardware, but im here to learn rather than produce a service.
wewewedxfgdf 9 hours ago
>> Is there somehow a glaring vulnerability/missed opportunity in modern capitalism that billions of people somehow haven't discovered yet?
Absolutely with 150% certainty yes, and probably many. The www started April 30, 1993, facebook started February 4, 2004 - more than ten years until someone really worked out how to use the web as a social connection machine - an idea now so obvious in hindsight that everyone probably assumes we always knew it. That idea was simply left lying around for anyone to pick up and implement rally fropm day one of the WWW. Innovation isn't obvious until it arrives. So yes absolutely the are many glaring opportunities in modern capitalism upon which great fortunes are yet to be made, and in many cases by little people, not big companies.
>> if so, is a random startup founder or 'little guy' going to be the one to discover and exploit it somehow? If so, why wouldn't OpenAI or Anthropic etc get there first given their resources and early access to leading technology?
I don't agree with your suggestion that the existing big guys always make the innovations and collect the treasure.
Why did Zuckerberg make facebook, not Microsoft or Google?
Why did Gates make Microsoft, not IBM?
Why did Steve and Steve make Apple, not Hewlett Packard?
Why did Brin and Page make Google - the worlds biggest advertising machine, not Murdoch?
giveita 9 hours ago
bbarnett 9 hours ago
lubujackson 9 hours ago
awesome_dude 8 hours ago
> IIRC Sam Altman has explicitly said that their plan is to develop AGI and then ask it how to get rich.
There are still lots of currently known problems that could be solved with the help of AI that could make a lot of money - what is the weather going to be when I want to fly to <destination> in n weeks/months time, currently we can only say "the destination will be in <season> which is typically <wet/dry/hot/cold/etc>"
What crops yield the best return next season? (This is a weather as well as a supply and demand problem)
How can we best identify pathways for people whose lifestyles/behaviours are in a context that is causing them and/or society harm (I'm a firm believer that there's no such thing as good/bad, and the real trick to life is figuring out what context is where a certain behaviour belongs, and identifying which context a person is in at any given point in time - we know that psycopathic behaviour is rewarded in business contexts, but punished in social contexts, for example)
catlifeonmars 8 hours ago
Ologn 9 hours ago
> If so, why wouldn't OpenAI or Anthropic etc get there first given their resources and early access to leading technology?
innovator's dilemma
Nevermark 8 hours ago
> Consumers, however, will be the biggest beneficiaries.
This looks certain. Few technologies have had as much adoption by so many individuals as quickly as AI models.
(Not saying everything people are doing has economic value. But some does, and a lot of people are already getting enough informal and personal value that language models are clearly mainstreaming.)
The biggest losers I see are successive waves of disruption to non-physical labor.
As AI capabilities accrue relatively smoothly (perhaps), labor impact will be highly unpredictable as successive non-obvious thresholds are crossed.
The clear winners are the arms dealers. The compute sellers and providers. High capex, incredible market growth.
Nobody had to spend $10 or $100 billion to start making containers.
pizzly 6 hours ago
I think OP's thesis should be expanded.
-AI is leading to cost optimizations for running existing companies, this will lead to less employment and potentially cheaper products. Less people employed temporary will change demand side economics, cheaper operating costs will reduce supply/cost side
-The focus should not just be on LLM's (like in the article). I think LLMs have shown what artificial neural networks are capable of, from material discovery, biological simulation, protein discovery, video generation, image generation, etc. This isn't just creating a cheaper, more efficient way of shipping goods around the world, its creating new classifications of products like the microcontroller invention did.
-The barrier to start businesses is less. A programmer not good at making art can use genAI to make a game. More temporary unemployment from existing companies reducing cost by automating existing work flows may mean that more people will start their own businesses. There will be more diverse products available but will demand be able to sustain the cost of living of these new founders? Human attention, time etc is limited and their may be less money around with less employment but the products themselves should cost cheaper.
-I think people still underestimate what last year/s LLMs and AI models are capable of and what opportunities they open up, Open source models (even if not as good as the latest gen), hardware able to run these open source models becoming cheaper and more capable means many opportunities to tinker with models to create new products in new categories independent of being reliant on the latest gen model providers. Much like people tinkering with microcontrollers in the garage in the early days as the article mentioned.
Based on the points above alone while certain industries (think phone call centers) will be in the red queen race scenario like the OP stated there will new industries unthought of open up creating new wealth for many people.
chongli 6 hours ago
Red Queen Race scenario is already in effect for a lot of businesses, especially video games. GenAI making it easier to make games will ultimately make it harder to succeed in games, not easier. We’re already at a point where the market is so saturated with high quality games that new entrants find it extremely hard to gain traction.
autoexec 2 hours ago
> AI is leading to cost optimizations for running existing companies, this will lead to less employment and potentially cheaper products.
There's zero change that cost optimizations for existing companies will lead to cheaper products. It will only result in higher profits while companies continue to charge as much as they possibly can for their products while delivering as little as they can possibly get away with.
carom 3 hours ago
This article seems to have scoped AI as LLMs and totally missed the revolutionary application that is self driving cars. There will be a lot more applications outside of chat assistants.
mafro 2 hours ago
The same idea applies to self-driving cars though, no? That is an industry where the "AI revolution" will enrich only the existing incumbents, and there is a huge bar to entry.
Self-driving cars are not going to create generational wealth through invention like microprocessors did.
wsintra2022 7 hours ago
>When any would-be innovator can build and train an LLM on their laptop and put it to use in any way their imagination dictates, it might be the seed of the next big set of changes
That’s kinda happening, small local models, huggingface communities, civit ai and image models. Lots of hobby builders trying to make use of generative text and images. It just there’s not really anything innovative about text generation since anyone with a pen and paper can generate text and images.
rf15 2 hours ago
If we can create an AGI, then an an AGI can likely create more AGIs, and at that point you're trying to sell people things they can just have for free/traditional money and power are worthless now. Thus, an AGI will not be built as a commercial solution.
zkmon 2 hours ago
A few issues:
1. The tech revolutions of the past were helped by the winds of global context. There were many factors that propelled those successful technologies on the trajectories. The article seems to ignore the contextual forces completely.
2. There were many failed tech revolutions as well. Success rate was varied from very low to very high. Again the overall context (social, political, economic, global) decides the matters, not technology itself.
3. In overall context, any success is a zero-sum game. You maybe just ignoring what you lost and highlighting your gains as success.
4. A reverse trend might pickup, against technology, globalization, liberalism, energy consumption etc
mhb 9 hours ago
Seems like the thing to do to get rich would be to participate in services that it will take a while for AI to be able to do: nursing, plumbing, electrician, carpentry (i.e., Baumol). Also energy infrastructure.
palata 9 hours ago
Counterpoint: those engineers who get paid millions to work on AI.
firesteelrain 9 hours ago
There are plenty of companies making money. We are using several “AI powered” job aids that are leading to productivity gains and eliminating technical debt. We are licensing the product via subscription. Money is being made by the companies selling the products.
Example
https://specinnovations.com/blog/ai-tools-to-support-require...
Ozzie_osman 2 hours ago
Like any gold rush, there will be gold, but there will also be folks who take huge bets and end up with a pan of dirt. And of course, there will be grifters.
nextworddev 9 hours ago
AI by nature is kind of like a black hole of value. Necessarily, a very small fraction will capture the vast majority of value. Luckily, you can just invest wisely to hedge some of the risk of missing out.
bossyTeacher 8 hours ago
Funny thing with people suddenly pretending we just got AI with LLMs. Arguably, AIs has been around for way longer, it just wasn't chatty. I think when people talking about AI, they are either talking about LLMs specifically or transformers. Both seem like a very reductive view of the AI field even if transformers are hottest thing around.
ThrowawayTestr 9 hours ago
And Dropbox will never take off
unleaded 9 hours ago
people also said the juicero and the smart condom would never take off. this isnt a very useful gotcha
fred_is_fred 5 hours ago
The dig on Dropbox is that it was easy to build, not that it wasn’t useful. Juicero was neither easy to build (relatively) nor useful.
giveita 9 hours ago
Non sequitur: Dropbox is a single company in the industry benefiting from the first wave. His argument would not exclude Dropbox anyway.