Beato - How AI Will Fail Like The Music Industry

[GreatGazoo]

1. He is talking about a contraction, not a failure

He goes through how expensive studios were in the 1970s and how they got replaced by much cheaper tech, effectively ending their business model and bankrupting some peeps.

Then he goes on to how you can now run LLMs locally at a fraction of the cost of the data centers. What's missing is that the customer base for recording studios was very small and used to paying the high fees. Contrast that with the customer segments for AI which are much larger and more financially diverse.

It is a given that much of the money being spent on data centers will not pay off. It is a poker game to capture market share and then squeeze out other players. That is failure of some investments but it isn't failure of AI.