Interesting. There's obviously been a precipitous drop in the sticker price, but has there really been a concomitant efficiency increase? It's hard to believe the sticker price these companies are charging has anything to do with reality given how massively they're subsidized (free Azure compute, billions upon billions in cash, etc). Is this efficiency trend real? Do you know of any data demonstrating it?

I have personal anecdotal evidence that they're getting more efficient: I've had the same 64GB M2 laptop for three years now. Back in March 2023 it could just about run LLaMA 1, a rubbish model. Today I'm running Mistral Small 3 on the same hardware and it's giving me a March-2023-GPT-4-era experience and using just 12GB of RAM.

People who I trust in this space have consistently and credibly talked about these constant efficiency gains. I don't think this is a case of selling compute for less than it costs to run.

People are comparing the current rush to the investments made in the early days of the internet while (purposely?) forgetting how expensive access to it was back then. Not saying that AI companies should make a profit today, but I don't see or hear that AI usage is becoming essentials in any way or form.

Yeah that's the big problem. The Internet (e-commerce, specifically) is an obviously good idea. Technologies which facilitate it are profitable because they participate in an ecosystem which is self sustaining. Brick and mortar businesses have something to gain by investing in an online presence. As far as I can tell, there's nothing similar with AI. The speech to text technology in my phone that I'm using right now to write this post is cool but it's not a killer app in the same way that an online shopping cart is.