Sam Altman:
A lot of people want local inference, and somehow they assume that the problem is solved now because we have open-source models, we’re going to be able to run them on our computers, and so we’re not going to need all the stuff in the data center.
But from a global allocation perspective, actually it’s quite terrible to have everybody, like, have a bunch of the world’s limited supply of DRAM sitting in their own computer and being used five percent of the time.
Like you want maximum utilisation in the cloud if you’re trying to deal with this very supply-constrained environment,
And somehow many people’s intuition is the opposite of that
TL;DR Guy selling product: “Here’s why owning your own product instead of renting it from me is a terrible idea”
McDonald’s can probably make hamburgers more efficiently than everyone can at home, but I’m not eating that shit any more than I’m giving Sam Altman my money or data.
Oh damn! Now there’s an analogy!
McDonald’s does but its still more expensive than making hamburgers at home, why?
Because profit motive is an inefficiency.
Profit motive is also a misallocation of limited resources.
Funny how there weren’t any systemic supply issues until someone decided to buy up all the RAM …
I was going to say that with swearing and all caps, thank you for keeping it classy.
Your parents didn’t waste money on an avacado toast addiction, and THEY have a RAM.
letting sam altman (or billionaires for that matter) have all the money from our work is a poor allocation of resources.
A lot of people want to be billionaires, and somehow they assume the problem is solved because we have unfettered predatory late stage capitalism and oligarchy in America, we’re going to be able to amass as much money as we want in our bank accounts, and so we’re all going to be rich without oversight, accountability or government interference.
But from a global allocation perspective, actually it’s quite terrible to have everybody, like, have a bunch of the world’s wealth sitting in a few private bank accounts and being used .05% of the time.
Like you want maximum circulation of currency if you’re trying to reduce inequality in this artificial scarcity environment,
And somehow, Americans’ intuitions are the opposite of that.
FTFY Sam.
This is genuinely a fantastic response that is also absolutely correct in its premise
Except that most of their “money” is parts of the company, it “works”. It only gets dangerous, if the economy is bad and people keep their (real) money, accelerating it further.
I was just going to leave it at “funny, I’d say the same thing about billionaires,” but this is more through.
Funny because it’s true
Fighting so hard not to make an edit about raping sisters, but that might be too degenerate for me
Personal computers are a ridiculous idea, you should use our scalable mainframes instead --IBM in the 80s, probably
There’s certainly nothing enjoyable to do on an AS400
Pissing on an AS400 is kinda fun, especially if it’s running and not backed up
Just be careful not to piss on any high-voltage components.
As someone that makes use of an AS400 (well i series), I can confirm that there is no fun to be had.
I haven’t seen the real thing in almost 30 years, but the company I work for uses the emulation and it has no noticeable improvements.
Crazy as it is. you can still get the (slightly modernized) hardware. IBM just makes too much money to stop supporting it.
Wow, that’s awful
There was famously a guy who’s said that the world needs like five or so computers. But that was when each computer took a whole room.
This fucking guy needs to suck a tailpipe
And who made those resources scarce, Sam? WHO MADE THEM SCARCE???
also screw you for trying to make the answer to ‘How should those resources be allocated?’ be ‘In the way that best enriches me personally’.
It kind of blows my mind how our society is set up to give the most power to the worst people.
I think it has to be with the way all the media channels ( controlled by the rich in power) essential brainwash people into not acting. Money and capitalism slowly corrupted the process of democracy and will see after Nov 3 if there is away to hold the rich in check.
Sam Altman is a terrible utilization of scarce resources.
I want to use ram for things unrelated to AI you fucking prick.
It wasn’t even scarce before them.
Sam Altman is
aterribleutilization of scarce resources.
Ram is so cheap to make that until the AI demand companies basically had to create new levels of density/speed and sell for less just to keep the business afloat. This is like when cellphone companies tried to claim megabytes were a precious finite resource. We live in a post scarcity society and these billion assholes are like “well that just won’t do”.
It reminds me of that kid we all know who just learned economics from school house rock and then goes “now if I can simply find every evee Pokémon card in the world and burn them all except for the one I have, I’ll be rich!”
It’s just so frustrating to see this sheer stupid amount of greed all of the time. Thanks for coming to my TEDex talk.
Even if it was a scarce resource that’s important to use efficiently, p2p inference sharing/markets are a thing, local hardware ownership doesn’t have to mean it all sits idle.
Next he’s gonna say people should stop using water.
“now if I can simply find every evee Pokémon card in the world and burn them all except for the one I have, I’ll be rich!”
I mean, it worked for DeBeers…
like when cellphone companies tried to claim megabytes were a precious finite resource
Limiting the usage of a shared channel is a valid approach, it’s remarkable how so many people just absolutely refuse to understand this. You can use the entire bandwidth of the shared channel for a while, when your webpage is loading. If you use the entire bandwidth nonstop, you fuck over everyone else on the channel. So the company has the choice between giving you fast load times but limiting your usage otherwise, or giving you 32 kbps unfettered.
If you want an entire channel of guaranteed bandwidth with unlimited usage, you always could and can get it — under business plans, which are orders of magnitude costlier, because they don’t share the channels.
In a similar fashion, if your healthcare system is entirely free, it’s getting clogged with retired old people who are lonely and have nothing better to do. If a doctor visit costs even a couple bucks (depending on the region), the doctors are suddenly much more free to deal with real cases.
Right… In this instance I would argue openAI is the shared channel. There are three memory manufacturers now illegally rigging the market as a push back against the corporate AI. Something like a memory oligopoly VS ai monopsony?
If we all have inference, we avoid clogging shared channel.
And as for megabytes, the value of the megabyte isn’t a finite resource and the value of it is determined by what data is served in the megabyte and the cell companies didn’t care what megabytes you’re getting charged for (example full bitrate advertisements on YouTube). I still think that’s a valid argument to be had.
By the value based on scarcity of bandwidth logic, the phone companies would be able to charge peak megabyte hours to specific websites (again like they used to for telephone calls with plans that included free calls at night) when in fact they can handle much more bandwidth now. In reality when it comes to that traffic, it’s often the providers at the ends of the line who have to suffer the constraints of demand. Maybe they should charge per minute of video accessed or it could be a solved problem in a hyper-competitive, over-saturated marketplace.
I understand what you are saying. I just don’t believe it applies in this specific domain any longer. This is potentially a more valid take an underserved market.
the phone companies would be able to charge peak megabyte hours to specific websites
ISPs in the US were aiming to do that, since video traffic dominates the web pretty heavily now. But that could be easily abused, so they were slapped away with the net neutrality regulations, which iirc Trump rolled back.
I just don’t believe it applies in this specific domain any longer.
You referred to the megabytes thing in the past tense, yes, but the reasoning applied back then. In fact, gigabit speeds are still not prevalent worldwide (nor just in the US, from what I understand about their shitty ISPs). I can easily saturate the 100 mbps allotted to my cable-connection plan in the neighbourhood that doesn’t provide much choice, and I’m pretty sure mobile connection isn’t better than that in most cases.
That’s insanely ironic coming from him. Meanwhile the crazy amount of waste that these companies are producing buying all the GPUs to create artificial scarcity. They are terrified of people being able to run their own local LLMs because it completely destroyed their entire business model, they will never be profitable.
And there it is.
“We made components scarce, so you have no choice but to use our cloud services where we control everything and you rent the privilege from us.”
Literally called it. Fuck these assholes with everything rusty.
Cory Doctorow predicted this fifteen years ago, although in a different context (transcript here).
new title:
“Man whose company lost $20b in previous year explains how to allocate resources.”
A lot of people want local inference, and somehow they assume that the problem is solved now because we have open-source models, we’re going to be able to run them on our computers, and so we’re not going to need all the stuff in the data center.
We don’t need them even without local inference. There was already more than enough total global compute for the most valuable use cases of LLMs (research, development, admin). The datacenter build-up is almost entirely fueled by utterly unrealistic expectations of future capabilities. Before and now the case for local inference is a matter of access, not capacity.
But from a global allocation perspective, actually it’s quite terrible to have everybody, like, have a bunch of the world’s limited supply of DRAM sitting in their own computer and being used five percent of the time.
Utilitarianism like this is a disease. By the same logic, it’s inefficient that we allow other species of animals to exist and consume usable energy. Hell, why stop at other species? It’s inefficient to allow humans to exist - let’s kill all humans!
Now, I know that’s not what he said, the point was to show that when someone uses utilitarianism as a serious argument, they are no longer worth listening to.
Like you want maximum utilisation in the cloud if you’re trying to deal with this very supply-constrained environment,
The supply is only constrained because you keep hoarding more than you need. Maybe it’s time for some communization? So communities where data centers are built get most if not all of the profits from it?
It’s inefficient to allow humans to exist - let’s kill all humans!
That’s already where his mind is at: https://www.theregister.com/software/2026/02/23/altman-you-think-ai-is-wasted-energy-try-raising-a-human/4181781
Well the less humans that are kept happy by having enough ram to do stuff the more unhappy humans looking for someone to blame there are… But yeah what’s the point in anything if there’s nobody there?
At this point - especially with this commentary - the datacenter build-up seems like market manipulation. Like how hyper-scaling keeps competition scarce.
Some of you will have to sacrifice for the greater good, but it won’t be him.
Finally, someone got the message.
No… he actually is right. A local machine will sit idle most if the time.
A data center can balance loads globally.
In terms of resources… data centers ARE cheaper.
However … there are other reasons to use local interference that might be more important than added cost
Totally agree. It’s really about wealth distribution and who controls the resources. Altman is just trying to steer the conversation toward efficiency instead.
Well yes, or data security or whatever.
But on a purely costs level such big data centers are cheaper… especially since they certainly getting better discounts than anyone else.
No, his analogy is poor for many reasons. One is that people using local models are likely using that computer for other things as well, it is a resource that does many things unlike their slop farms. Also, DRAM wasn’t a “scarce resource” until they devoured the industry with their AI ponzi scheme.
Only very few people have enough processing power to run a proper model.
You can aggregate spare LLM capacity in a collaborative p2p fashion. But my reasons would be to use spare PV capacity to run an uncensored model during daytime with full privacy.
Maybe but nothing will beat a dedicated data center in terms of costs.
Starting with purchasing prices etc etc.
And what happens if a rogue Ai hits a p2p network might be a funny read a few centuries later…
nothing will beat a dedicated data center in terms of costs.
If it was properly built.
That doesn’t include the garbage data centers being built currently, wasting local municipal water for cooling and running huge temporary generators for power.
https://newjerseymonitor.com/2026/09/22/nj-vineland-data-center-fined/
Which costs? It’s a PC. The power is free, since spare PV capacity.
The rogue AI will be the P2P network.
Going cheap almost always ends in a more expensive repair bill down the line.
Likewise, doing the most convenient thing to satisfy one’s own desires is probably the most ill-advised course of action. Mainly, because it makes other people take the most convenient course of action to remove the other person from being a problem in their lives altogether.
Sure… locking your customer in is always a good business option.
But the point remains… for any given demand a big data center always is cheaper.
Cheapest doesn’t mean best for all uses cases.
But even then I’d rather rent capacity from a hyperscaler than pay him.
