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This line: "this is my main argument against the valuation of frontier labs. It’s not that AI won’t create that much value, it’s that they won’t capture it."

That is a very astute and concise way to explain everything about how the frontier labs are behaving and how they're trying to push more people to pay token rates for the best models. At the current subscription prices ($100 or $200 a month for a generous, though bounded, amount of tokens), frontier models are a no-brainer, most folks and companies will use them. But, at token rates, 10x or 100x the cost of open models or what I was spending on the frontier models a month ago? That is a harder question to answer "yes" to. I certainly wouldn't spend $1000 a month for the best model, much less $10,000; my employer might pay $1000/month, but definitely not $10,000. The frontier labs need everyone to answer "yes" to spending 100x what they currently spend to justify the valuations, and it's just not going to happen as long as everyone knows how to make these models.

Both OpenAI and Anthropic are trying to figure that out now. Anthropic, in particular, has their finger on the trigger...they want to push people to usage-based billing for Fable. But, OpenAI released 5.6 Sol, competitive with Fable (or close enough), and it's available via subscription (even the $20 subscription!), and there's no moat keeping someone from switching. If Anthropic really does end Fable access on the subscription plans in a few days, I predict a large market move back toward OpenAI.

The market isn't going to bear the cost of making the frontiers investment make sense.

Yeah, I've started reaching for local models more. I'll use frontier models at the current cost for tasks that the local ones aren't great at, but when the rug pull inevitably comes, to me they're not worth 1000-2000 a month. And honestly, for my purposes I don't really need models to advance a lot. Like, I tried fable a couple of times and there just wasn't much there to justify its use to me. Opus did the same thing much cheaper.

I think an interesting question is going to be, if models are a commodity, who is going to want to foot the very expensive bill to train them? I'm sure training cost will drop.. eventually, but I doubt it will happen fast enough for any of these companies.

The funny thing about Fable, is we all but know it will be obsolete in a month or two. Between their embargo shenanigans (which IMO they could have avoided just by not pretending it was dangerous) and continuing to give access, whatever marginal advantage it had was essentially wasted.

It would have been an interesting experiment to charge more for it right away and see what the market would bear, rather than tease it for long enough for it to be presumably superseded any time now by whatever is next.

Best comparison is Anthropic/OpenAI are AOL/Prodigy. Massive market capture, no moat. Little by little, the convenience and weight will be scraped off, but they (probably) won't roll over and die for quite a while.

By the same measure, NVDA is Cisco, providing the backbone and capturing a ton of the early benefits, but soon becomes furniture while the excitement moves further up the chain.

> But, at token rates, 10x or 100x the cost of open models or what I was spending on the frontier models a month ago

And we can't ignore the power of "good enough". GLM5.2 may not be as good as the SOTA models, but it can be good enough for most, of not all, of our needs.

> It’s not that AI won’t create that much value, it’s that they won’t capture it.

Think airlines - both passenger and freight. They have never come close to capturing all the economic value they enable.

Who is going to end up capturing all this value being generated is going to be very interesting. Back in 1980, who’d have thought MS would capture the majority of the value from PCs over the next 3 decades, and not IBM?
Just to clarify your implication: Fable subscription usage was just (re)extended to July 19
While I do agree there will be disruption we haven't seen yet, my company is already spending >$40k/day for a "frontier model", so who knows. Then again, they're not using that for coding
Frontier labs will figure out all sorts of ways to wiggle into the value chain beyond being commodities.
> where’s all this new magical software that the productivity improvements should imply?

It's running, privately, in my homelab.

I think we are entering what I call the "have it your way" era. If an open source project doesn't do exactly what you want it to do, fork it, or create a new version. It's too easy.

This makes me a bit concerned about the future of open source. Upstreaming used to be worth it, since maintaining a fork is effort too. But now the balance has shifted significantly. Especially with many projects becoming a lot stricter about contributing, and some becoming outright hostile to AI. I can't blame them. But I think the effect will be that improvements are less likely to make it back to the community as AI adoption increases.

At least for me, the jump in productivity has resulted in building stripped down one-off software for my highly specific use-cases.

You can use an LLM to create anything but you still need to know what it is that you're building, and you need to think through how everything should work or the LLM will just fill it with sausage. You can tell that the models are still quite jagged and limited by the mixed quality from a lot of the software that these presumed trillion dollar companies are putting out. The future is sausage.

I felt the same way in 2024-2025. Then Sonnet 4 was released, and things started feeling different. Opus 4.5 was another step change for me. Everything feels like it's accelerating, and timelines are getting crunched. I guess in some ways I envy OP, who would "bet everything" against ASI - the truth is I don't know, and I don't think anyone knows, where this ends.
Since no one is talking about it: T2 isn’t about machines taking over the world. That has happened (or will happen). But humans eventually defeat the machines. Skynet is trying to prevent that by killing John Connor. That’s what the movie is about. I suppose it’s also about John searching for a parental figure through the T800. He doesn’t get that through is foster parents and his estranged mother.

Anyway, I don’t think this dude actually watched this movie. It’s too bad because it’s a classic.

I recently realized, that ever since I've had AI to "talk" to, I haven't had a stuck or "downtime" moment; there's always something to at least brainstorm on.

In the past when I couldn't figure out something, I'd take a break for a couple days, while going through Google → Stack Overflow → Reddit, and by the time you got to that point you rarely got useful answers, usually either trolls or silence.

Now I can just ask AI about fleeting ideas and always have a starting point for some area of some project to work on.

A lot/some of the concerns about the AI Age could be alleviated if people got UBI and a 4-day workweek.

like if AI's supposed to be so great why do we still have to work so much??

and if we don't have to work, how do we pay for food and bed?

He says he might have been too harsh in his “eternal sloptember” post from may: https://geohot.github.io/blog/jekyll/update/2026/05/24/the-e...

I wonder what he thinks was too harsh, still seems pretty bang on, I think it’s going to age well.

I love LLMs too, but I am concerned about their cost. They are all still very subsidised. Is there any guarantee that I'll be able to run a Opus 4.8-level model on my personal computer before the big AI labs decide to hike up the prices?
I'm not an AI skeptic but I hate the hype. Especially throwing compute for the sake of it.

I do alt inference prototypes and got much farther than I had hoped to. So indeed, any investor in AI should read deep and question hype and frontier lab investments.

See: https://github.com/guilt/TinyToT for the sort of hype busting I do.

I get it, I want to agree, I really do like the “this is a new tool in the toolkit of the professional software craftsperson” argument…

…but consider: the Q-tip. “Don’t use it to clean your ears”, but for most people that’s all they want to do with it, and empirical observation indicates that this dynamic results in either “using Q-tips irresponsibly” or “not using Q-tips”, with “uses Q-tips properly” being a small-to-vanishing proportion of the whole.

There's good reason to hate the merchants and their marketing. But builders are not merchants. They build with whatever tool is available.
>One, this constant bullshit about some window closing, or the perpetual underclass, or falling hopelessly behind. This is negative valence hype, not only is it not true, it’s mostly designed to make you feel bad about yourself and move to shitty San Francisco where everything really does suck like how these people claim.

It's possible to use LLMs without logging onto twitter to be exposed to the people spouting off about a "perpetual underclass." I love the internet, but it really feels like (now more than ever) you have to be intentional about what sites you visit.

Yeah I don't think any of the labs have some secret sauce for intelligence either. It seems most of the advancements are still coming from hardware, making LLMs more efficient and throwing more compute and data at problems. And even those problems still require a lot of prompt engineering: https://cdn.openai.com/pdf/04d1d1e4-bc75-476a-97cf-49055cd98...
Thank you. Love the post. Best of all it does not try to state the obvious but just share how one feels about the cr@p hype which is soooo tiresome - not just about the LLMs, it was pretty much the same for mobile apps, big data, lab on a chip, quantum computing, fusion (ma favourite), monkey in a jar & etc. However the sad truth is that - hype will continue, seems like a default feature irrespective of context and domain, more hype = more $, more visibility, more reach. Probably the only good thing is the cray talk lead by Sam Altman, weirdest though - so many zombies believe it but again - expected, will have the same faith as the EOW according to the Mayan calendar... lol
Honestly, who likes any hype in anything ever? Especially if you genuinely like and understand the thing being hyped.
>AI is the continuation of the computer revolution.

Yes, it is a vastly efficient search technique using fast computers.

Thank you, I really needed to read a sane voice. The relentless hype-onslaught is not easy to cope with.
> But models are useful just like... all the regexes I never learned how to write and now never will!

Wait, does this mean I'm better at something than geohot? All that time spent learning regexps wasn't a waste!

the 'i love LLMs but hate the hype' essay is now the 'hello world' of AI blogging. the models should just auto-generate one when you sign up for an API key.
I think I agree completely. It’s worth pointing out that Linus’s comparison of LLMs and compilers is that they are both tools, not that they’re the same thing. Like how both compilers and hammers are tools, but a hammer is not a compiler.

They’re really quite useful but the Bay Area mentality and hype is completely disgusting and turned me completely off for a while. What brought me back was a surge in useful Chinese models, with a significantly more mature approach to marketing and discourse. I think Geohot is 100% correct about SF and the people there perpetuating insanity. And I wonder, has it always been like that there, or is this a new phenomenon?

> What I don’t like is two things. One, this constant bullshit about some window closing, or the perpetual underclass, or falling hopelessly behind.

> And two, this strawman jump from, oh hey, it’s a fancy autocomplete, smart compiler, better search engine, to it’s gonna like own the whole light cone bro like if you aren’t in SF and at the right parties there’s gonna be like a flash of light in the sky one day and you’re not even gonna know what happened but everything just Changed.

Haha, OP has a way with words.

In a way, both these emotional extremes (FOMO & the singularity) are just tools being used to continue driving the massive CapEx behind LLM improvement. Hate to love it? Love to hate it?

As soon as we started unironically calling LLMs "AI" we went down the hype path. That has plenty of downsides, like stressing out the entire world and attracting cryptocurrency bros, but also the major upside massive of funding/acceleration.

So far, all we have is more software running on computers. It's powerful, and it's amazing, but it's not magic.

Calling it "AI" was possibly a net-negative but we don't know yet.

>One, this constant bullshit about some window closing, or the perpetual underclass, or falling hopelessly behind. This is negative valence hype, not only is it not true, it’s mostly designed to make you feel bad about yourself and move to shitty San Francisco where everything really does suck like how these people claim.

It's bullshit in the sense that they don't know for sure, but the author doesn't either. Why might or might not it be true?

Seems ironic coming from a poster child for hyping up hacking.
This was a refreshing perspective. Thanks for writing it.
I dont usually read rants, but sometimes I do. And sometimes I like 'em too.

This one is a well deserved read. and I find myself agreeing with @geohot

Even if the blog's title is "Singularity is nearer"

Without hype our companies would not pay for them :)
> all the vibe coded stuff is still slop (where’s all this new magical software that the productivity improvements should imply?)

Part-time vibe coder here. As far as I can tell it's no longer "slop" in the sense that I am no longer hitting the state where AI can't maintain what it has written or can't meet the requirements. But shipping is as hard as ever. Projects get more ambitious, scope creeps, nuances keep being discovered as you work on a piece of software, etc. Right now I feel that the absence of new software explosion is best explained by the fact that the part we have automated turned out to be relatively small.

it's kinda like riding an e-bike, but in heavy and unpredictable pedestrian traffic.
> A certain cult likes to claim credit for things that are happening with or without them, and this is my main argument against the valuation of frontier labs. It’s not that AI won’t create that much value, it’s that they won’t capture it.

> AI is something that’s happening mostly due to Moore’s law and general progress in computing, not something that they are doing.

But if these companies control the vast majority of compute power, which seems like the plan they are already executing, won't they capture most of the value from the progress of AI?

This feels a bit like a reframing of the rather absurd "Eternal Sloptember" nonsense, desperately trying to pivot from Luddism to visionary (and yes, I know this is the "hacked the iPhone" guy. I'm not a cult of personality person and I positively do not care). Also incredibly weird how it repeatedly talks about people moving to San Francisco, which ... what in the world is that nonsense about? People talking about the concerns of AI and automation are in no universe considering moving to SF as the protection...

"Where’s all this new magical software that the productivity improvements should imply?"

This is a recurring gotcha in the anti-AI marketplace of denialism. It's a bit like saying "I saw a fat guy, so why do people keep telling me that GLP-1s change everything?"

It takes time. Like already I would say just about every programmer has replaced a number of tools with random shit they spit out from LLMs. It percolates out from there as some things become products, etc.

And to anyone actually paying attention, and not just feeding their delusions, the impact is utterly enormous. Incontestable. The "Where's the software? / Where's the change?" people are absolutely going to find themselves in the dustbin of history.

It's also fascinating how often people do the stochastic parrot horseshit.

The other night I had to do a large scale compression test with libjxl, which notably is software that has seen an enormous amount of optimization interest and you would assume has little extra to be eked out. I've traced through this software before and the compression path is insanely complex. It's the sort of software that is headache inducing. Anyways, curious what the state of the platform was I grabbed the latest source and asked Fable to look for low-hanging fruit in the lossy and lossless compression paths. It suggested a few, created a test harness to A:B bitwise compare with the original, and implemented its optimizations. It achieved a 14% performance increase in a single pass, using just the remaining quota I had on a subscription as my week drew to a close. And all it did was some high level logical optimizations, some more efficient memory allocations, and so on. All of its code was completely in the style of the project, was no more significant than necessary, and so on. Anyone that isn't utterly blown away by that -- who gets the hype -- is lying to themselves.

every output looks similar now across the coding models
misunderestimate? So overestimate, or estimate exactly?
I think big money/private equity/vulture capitalists tend to ruin everything. They set these unrealistic goals and force companies to do shady shit in order to meet these often unattainable goals or achieve unicorn status.

It’s why con artists, scammers always flood every hype cycle. Greed ruins everything.

> What I don’t like is two things. One, this constant bullshit about some window closing, or the perpetual underclass, or falling hopelessly behind.

The blog has a tagline, "the singularity is nearer". I think belief in a "singularity" almost implies these things to some degree.

A lot of people died from Covid and if not for mRNA technology and extraordinary caregivers a lot more deaths would have occurred. That’s hype where it truly belongs. Don’t mix AI hype with Covid conspiracy theories.
I don't always agree with george, but his hot takes on LLM has been right on!
So am i.