The whole LLM as a service business model has a fundamental flaw to it. The cost of operating the data centres is an order of magnitude higher than the profit.

But if models get efficient enough to bring the costs down, then they become efficient enough to run locally. So, either it’s too expensive to operate, or nobody will want to use it as a service because running your own gives you privacy and flexibility.

The fact that investors don't get this is frankly incredible.

#llm #economy