Comment by sdesol
15 hours ago
> Tough to tell, given nobody is turning a net profit on LLMs yet.
I suspect in the case of Meta and other big players, profit isn't necessary required to bring substantial value. Imagine their model being able to help them moderate more fairly and accurately. This alone could prevent potential legal actions from individuals, companies, and governments.
> profit isn't necessary required to bring substantial value
They’re private companies. If they can’t tie it to profit, it’s not adding value.
> being able to help them moderate more fairly and accurately
This reduces legal costs and increases strategic flexibility. Sort of like HR or legal departments: cost centres add value by controlling costs, a critical component of profitability.
> They’re private companies. If they can’t tie it to profit, it’s not adding value.
Not true, even strictly from an accounting perspective. If you spend $400M and build an asset that is worth >$400M, then you have increased the value of the company without modifying profit. For example, if a company were to buy land, and build a building, that building has a value regardless of if it is associated with any revenue.
> * If you spend $400M and build an asset that is worth >$400M, then you have increased the value of the company without modifying profit. For example, if a company were to buy land, and build a building, that building has a value regardless of if it is associated with any revenue*
Why does it have value? It’s because it can be rented, occupied for productive use or sold to someone who can do either of those. Revenue-free assets are essentially money. (Companies aren’t in the business of non-revenue non-monetary assets—that’s the domain of society at large.)
Providing toilets to employees does not tie to profit. Toilets in all offices are now closed. We are saving over $10k per day.
> Providing toilets to employees does not tie to profit. Toilets in all offices are now closed. We are saving over $10k per day
Right. How do those companies tend to wind up?
I didn't say short-term profits. I said ultimately, the value of a non-monetary assets are tied to profitability. Particularly financial assets, e.g. C corporations. That doesn't mean that's the only measure of value. But for a company it's damn close.
Put another way: when a for-profit company starts arguing that profits don't matter, it's a little bit curious.
Some people are gonna shit in their pants hearing this new policy.
> They’re private companies. If they can’t tie it to profit, it’s not adding value.
Smart companies understand other types of value exist.
If a democratic population hates you, it is harder to convince politicians to do your bidding. (Not impossible, just harder!)
If potential employees don't think kindly of you, it is harder to recruit.
Llama is a constant source of good PR for Meta in the developer community. Compared to just a couple of years ago when they were mostly laughed at by devs for metaverse stuff. Now it is "holy cow Zuck is standing up to Microsoft and Amazon and democratizing AI!"
With Llama, Meta has got great PR, and also developed cutting edge tech.
They also get to benefit from thousands of developers trying to make Meta's models run more efficiently.
> other types of value exist
Sure. But they intermediate to profit. I'm not suggesting leadership should be justifying everything in those terms. But if an entire product line doesn't have a solid long-term net revenue generating or cost saving consequence, it's a flag for governance.
> potential employees don't think kindly of you, it is harder to recruit
And you get higher churn. Cost imperative. Not the sole reason--you have to work with the people, after all. But that's an agent benefit. Companies treat high-value employees well because it makes sense to, and they'd probably cease to exist if they stopped doing it.