The $60 million deal that Google cut with Reddit will emerge as incredibly cheap as foundational model providers realize amidst the data crunch that Reddit is one of the few sources of constantly renewed expert knowledge, with motivated experts in a wide range of fields contributing new knowledge on a daily basis for nothing more than social recognition. The deal is non-exclusive as was demonstrated by a subsequent deal with OpenAI, meaning Reddit will begin to print money.
Google’s vertical integration of hardware via their TPUs, their software applications, and their scientists inventing the algorithms that underpin the AI revolution is going to begin to pay off. Google will launch a number of compelling AI applications and APIs in 2025 that will take them from an academic institution creating algorithms for others, to a powerhouse in the commercial AI sector. Their cost advantage will enable them to deliver those applications at a far lower price to their customers, and in many cases, completely free. Shops like OpenAI lining up for NVidia GPUs will be the equivalent of a satellite ISP trying to compete with Starlink who have vertically integrated launch capability.
DeepSeek will continue to demonstrate unbelievable cost reductions after delivering V3 for less than $6 million as the group of former hedge fund guys continues to sit in a room and simply outthink OpenAI, which has been hemorrhaging talent and making funding demands approaching absurdity.
OpenAI will be be labeled the Netscape of the AI revolution and be absorbed into Microsoft at the end of the year. But like Netscape, many of their ideas will endure and will shape future standards.
As companies like Google and High-Flyer/DeepSeek prove how cheap is to train and operationalize models, there will be a funding reset and companies like Anthropic who raised a $4 billion series F round from Amazon in November will need to radically reduce costs and we may see down rounds.
We will see new companies emerge that provide tools to implement o1 style chain of thought in a provider and model agnostic way. Why pay o1 token prices for every step in CoT when some of the steps can be done by cheaper (or free) models from other providers?
China will continue to rival the USA in AI research and in shipped models. The new administration will rethink the current limits on GPU exports which will prove ineffective at accomplishing their goals of slowing the competition.
And finally my personal hope is that the conversation around the dangers of AI will shift from a fantastic Skynet scenario to the practical reality that out of the $100 trillion global GDP, $50 trillion is wages, and that is both the size of the AI opportunity and the scale of the global disruption that AI will create as it goes after human labor and human wages.
We need to acknowledge this reality and hold to account disingenuous companies and founders who are distracting from this through AGI and ASI scare mongering. This “look at the birdie while we steal your jobs” game needs to end. The only solution I’ve managed to think of is putting open source tools and open source models in the hands of the workers of the world to give them the opportunity to participate in what could, long term, become a utopian society.
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