Platformonomics TGIF is a weekly roll-up of links, comments on those links, and perhaps a little too much tugging on my favorite threads.
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It has been three weeks and a lot has happened — let’s fire this thing up again!
News
NVIDIA Earnings: Civilization Endures
At least for another quarter…
We will wait for their 10-Q filing before speculating madly on who got the GPUs this quarter.
VC Smackdown Over Open Source Models
New Luttig post well worth reading: The future of foundation models is closed-source
It is heartbreaking that generative AI is not structurally more advantageous for VCs. How can we fix this?
Team Primitives: What Sayest Thou?
Software value inexorably moves up the stack, through ever higher levels of abstraction. Generative AI is of course a perfect example (even venturing into non-deterministic abstraction).
This dynamic was top of mind watching the Microsoft Build keynotes this week. They spent maybe 10% of their time on chips/models/infrastructure. The rest was on the Copilot stack and all the tools to build AI apps. A number of long-term Microsoft bets, bringing both higher level abstraction and integration, feature prominently and usefully in this platform: e.g. Fabric, Graph. Office is actually well aligned (a level of platform conjunction that only happens every couple of decades), so the Microsoft AI stack is the entire Microsoft stack, and vice versa.
Meanwhile, AI laggard AWS has doubled down on being “primitive”. The claim is developers prefer a bag of low level parts from which to roll their own solutions. That primitives essay is interesting in two respects. First, the contrast in the level of abstraction for primitives in Amazon’s retail business (e.g. fulfillment) versus AWS primitives are still at a 2007 level of granularity (or even smaller). Second is the claim that “one of the many advantages to thinking in primitives is speed”, an attribute not yet discernible in Amazon’s generative AI efforts (we await the explanation for why there is a compression algorithm for experience when it comes to AI, but nowhere else). The limitations of AWS’ siloed data approach also loom larger, in contrast to an integrated data platform (note the Snowflake-Microsoft announce, which serves up Snowflake data to the Microsoft AI platform).
The annual AWS product announcement festival, re:Invent, is still six months away. Amazon is no doubt racing to get a first party frontier model story together and demonstrate that NVIDIA has decided to grace them with some GPUs (“we could not be more excited (now) about DGX Cloud!”). We’ll see if AWS is content to stick with primitives or will (very belatedly) decide they need to go full stack.
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Minesweeper Copilot
Perhaps more importantly, Microsoft also fleetingly showed Copilot support for FreeCell and Flight Simulator. I would be remiss not to remind the world that Minesweeper has had Copilot functionality for over 30 years.
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Cloud Repatriation is Going Just Great: Equinix Investigates Itself, Finds No Fraud
Equinix has investigated Equinix and says all is good at Equinix, and despite more than a few lawsuits and investigations, the company “does not expect to comment further on such matters until appropriate to do so”.
Not everyone is convinced:
Platformonomics Repatriation Index: Q1 2024
With that pesky fraud allegation completely behind it, Equinix managed to finally report Q1 earnings. The company, riding the twin tailwinds of AI and cloud repatriation, reported blistering growth of 6%.
We can now update the Platformonomics Repatriation Index™
The Index has hit an all-time low, meaning that movement to the cloud exceeds repatriation away from the cloud by the largest degree in the history of our simple heuristic. But hope springs eternal!
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Cloud Repatriation is Going Just Great: Continued Radio Silence, Cloud Repatriation is Going Just Great: Radio Silence from Equinix, Cloud Repatriation is Going Just Great: Equinix, New Cloud Repatriation Hypothesis, Cloud Repatriation Where Art Thou?, Cloud Repatriation: The Search Continues, Cloud Repatriation: Still Not a Thing, Platformonomics Repatriation Index™ – Q1 2023: Surf’s Up?, The Inexorable Attraction Between Terrible Things: Cloud Repatriation and Private Equity
We Can Only Hope
“Supported by Microsoft” is deliciously ambiguous.
EU Suffering From Premature Regulation
Obituaries for the AI safety movement obviously don’t apply to Europe (and I fear they’re not really dead elsewhere, but have gone to ground, and are biding their time for future assaults on the future).
We’ll see what kind of landmark it turns out to be. They do have global ambitions:
“The Act will have global reach. Companies outside the EU who use EU customer data in their AI platforms will need to comply. Other countries and regions are likely to use the AI Act as a blueprint, just as they did with the GDPR,” he said, referring to EU privacy rules.
You’d think the collapse of the European economic, energy and security orders would take precedence, but to each their own I guess.
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BREAKING: European Union Designated an Advanced Persistent Threat, UK Announces Big Tech Struggle Sessions “For The Children”, EU Announces DMA Struggle Sessions, EU Announces Meta Struggle Sessions, EU Insanity: Regulatory Contortions, EU Insanity: Not Learning From Regulatory Failure, EU Announces DMA Struggle Sessions, EU Insanity: AI Regulatory Suicide, EU Insanity: AI Energy Suicide, EU Insanity: The Kafka Singularity, EU Insanity: AI Energy Suicide (Part Deux), EU Insanity: Mistral Edition, Move Fast and Regulate Things (You Don’t Understand), The EU Will Continue to Fiddle While Rome Burns, When “Move Fast and Regulate Things” Breaks Down, AI Regulation: Move Fast and Regulate Things
What’s Your Emergency, Exactly?
That is roughly a year’s CAPEX if you’re playing in the big leagues.
Who Needed This Deal More?
“Our collaboration with IBM will bring even more generative AI solutions to our mutual customers,” said Ankur Mehrotra, General Manager of Amazon SageMaker at AWS.
“Even more”?
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Amazon Desperately Seeks Compression Algorithm for Experience, Most Greatest AI Company in Entire Universe Makes Major Strategy Pivot, SEC Embraces Platformonomics ClownWatch™, Warns Amazon and IBM, The AWS Generative AI Soap Opera, The Amazon AI Inferiority Complex, Platformonomics ClownWatch™: IBM, Follow the CAPEX: The Clown Car Race Checkered Flag, Introducing Platformonomics ClownWatch™, IBM and the Art of Misleading Investors, This Week in Securities Fraud, Clown CAPEX, IBM’s “Cloud” Business (or Lack Thereof), IBM: How Much Longer Do the Good Times Last?, IBM’s Lost Decade
Last IBM Strategic Imperative Bites the Dust
Remember when IBM was going to climb back to relevance with the“strategic imperatives” of cloud, analytics, mobile, social and security technologies?
They even reported “growth” numbers for each imperative. Until they tripped up padding growth imperatives with ye olde mainframe (oops). Despite being frequent practitioners, they’re not even very good at securities fraud.
Private Equity in Action: Not Every VMware Customer Was Screwed
Broadcom clarifies:
Or, in the original PEnglish:
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Private Equity in Action: The VMware Saga May Never End, Software Migration Alerts, Private Equity in Action: VMware “Unease” Continues, Perfidious Private Equity, Private Equity in Action: VMware Yet Again, Private Equity in Action: VMware (Continued), Private Equity in Action: VMware, Private Equity Will Buy and Ruin More Software Companies, Software Migration Alert: VMware (Continued), Software Migration Alert: VMware, Private Equity in Action: VMware Customer Complaints “Unwarranted”
Software Migration Alerts
Private equity was up to no good (naturally) while I was away:
When private equity comes amalgamating, it is time to start migrating. Software migration alerts have been issued for all these companies.
Who Could Have Predicted It?
Onward to a grand European AI project!!!
Artificial Ideology (AI): Xi Jinping Edition
We previously asked what the Chinese Communist Party would call its ideologically-pure LLM: ChatXi or ChatCCP? We have an answer, and the cult of personality wins!
LLMs hold a mirror up to humanity and then “guardrails” are applied to change that image in accordance with the prevailing ideology. In this case it is very hard to tell whether the LLM is hallucinating or the source material.
Xi Jinping is an unbelievably thoughtful guy. The breadth and pervasiveness of Xi Jinping Thought is staggering. I may have to do some thinking about Xi Jinping Thought.
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Best Descriptor for Chinese LLMs: ChatXi or ChatCCP?, Product Market Fit for Google Gemini?,One, Two, Three, Four: We Want a Meme War, Xi Jinping Thought on Wall Street Running Dogs, The Perils of Working for a Cult of Personality, Press Releases We’d Like to See, Best Nickname for Emmanuel Macron, Winnie-the-Pooh: Lover of Honey, Champion of Freedom, Missing the (Bamboo) Forest for the (Apple) Trees
Artificial Ideology (AI): Google Edition
Refreshingly, at Google the pendulum has swung from too many ideological guardrails to the polar opposite of letting unhinged content fly in their latest release. (Are they prioritizing competition with Elon’s Grok?).
Reddit stock is down. One presumes a revision has occurred to estimates of their future cash flows from data sales to AI companies.
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