20VC: Chips, Models or Applications; Where is the Value in AI | Is Compute the Answer to All Model Performance Questions | Why Open AI Shelved AGI & Is There Any Value in Models with OpenAI Price Dumping with Aidan, Gomez, Co-Founder @ Cohere
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
Non Incremental Expense on next gen model
The decreasing cost barriers in technology enable startups to access and develop advanced models more easily than ever before. While building previous generation models has become significantly cheaper, there is little to no market demand for them as new models quickly render them obsolete. Investing in cutting-edge technology incurs substantial costs, with estimates indicating that transitioning from an initial version to a second can require billions rather than mere millions. This shift reflects a non-incremental expense structure where advancements demand order-of-magnitude increases in investment rather than incremental costs. However, the trend is not universally applicable across all technologies, as some complex technologies may incur higher costs with new iterations, emphasizing the need for strategic investments in next-generation innovations.
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