Discussion on differentiation vs commodification in AI models, including language, image, and video models. Focus on jobs to be done in AI, capabilities vs. quality. Mention of Claude 3, benchmarking, and dropping LLM prices. Debate on SAFE vs. priced equity rounds in startup funding.
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Quick takeaways
Innovation models face a challenge in balancing early innovation with model commodification, emphasizing competition and differentiation.
Evolution of technology sparks competition among AI researchers for technical superiority and explores financial implications of investing in rapidly evolving assets.
Deep dives
Differentiation in Innovation Models
In the podcast, the discussion delves into the evolving landscape of innovation models in the tech industry. It emphasizes the challenge of balancing the early stages of innovation with the commodification of models, like language models and their rapid depreciation. The conversation explores the significance of competition and differentiation as markets evolve, highlighting the need to navigate a swiftly changing technological environment.
Evolution of Technology and Market Dynamics
The podcast touches on the dynamic evolution of technology and market trends, drawing parallels with historical advancements in GPUs and CPUs. It discusses the competition among AI researchers and companies to achieve technical superiority while addressing the financial implications of investing in rapidly evolving assets. The conversation reflects on the potential impact of nation-state actors on reshaping technological dynamics in various fields.
Complexities in Image and Audio Models
The discussion shifts to the complexities of developing image and audio models, exploring the nuances of creativity and control within these modalities. It compares the progress in image generation, highlighting the differentiation between stock images and custom creations that require fine-tuned control. The podcast contemplates the challenges in achieving aesthetic quality and user control in audio models like text-to-speech technology, emphasizing the need for innovation and user-focused development.
Foundational Considerations for Funding Rounds
The conversation navigates the realm of funding rounds, contrasting the benefits of SAFE agreements with priced equity rounds for startup founders. It underscores the importance of setting clean terms early on to establish a precedent for subsequent funding rounds, promoting simplicity and transparency in investor agreements. The discussion weighs the trade-offs between speed and complexity in fundraising mechanisms, offering insights into strategic decisions for founders in structuring their capital raises.
This week is a discussion of the points of differentiation vs commodification in various AI models. Including how these points might change over time, and might change between language, image, and video models. Then Fraser pivots to orienting around jobs to be done in AI, and how the various models have a huge gap between being capable of doing something, and doing it well.
We then talk about Claude 3, the nature of benchmarking, and the rapid dropping LLM prices. Lastly, we cover a startup subject, debating the merits of SAFE (Simple Agreement for Future Equity) vs. priced equity rounds in early-stage funding.
LMSys Chatbot Leaderboard for which models are sticking out right now
For areas where models don't differentiate, we are back to the 7 powers framework. Hamilton Helmer's website with overview of the 7 Powers framework: https://7powers.com/, Sachin Rekhi has a good detailed primer on the 7 Powers as well.
Carta guide on priced rounds vs SAFEs, which we don't really agree with all the pros and cons, but is a decent overview
(00:00) - Opening
(00:31) - Are models an inevitable commodity?
(05:58) - How image, video, and other models may pan out differently than language
(08:20) - It's not the model, it's the customer
(10:20) - Jobs to be done in AI - 1. Can it do it... 2. very well.. 3. exactly how I want it to.
(22:13) - Claude 3 by Anthropic
(25:25) - ELO Leaderboard Results
(26:25) - Claude 3 Haiku and Falling LLM Prices
(30:33) - SAFES vs priced equity rounds
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