Grotesque Largesse

some thoughts on the AI talent wars

While we're all sitting around waiting for Powell, I wanted to touch on a topic I think about frequently, which is the culture of greed and gluttony at the best-funded AI firms. What brings this to mind this morning is none other than Mr. Mark Zuckerberg.

The "AI Talent Wars" has been a topic here on Slope since early 2024 (for obvious reasons which long-time readers remember), but it has gone from crazy to batshit insane. I offer you this latest revelation:

So let that sink in: Meta is offering a SIGNING BONUS (not compensation, but just a bonus for joining) of ONE......HUNDRED........MILLION.........DOLLARS.

That is seriously one of the most harebrained things I've ever heard.

I mean, look, I know I'm old school. I find it charming that Apple was funded with $1200 from the proceeds of selling an HP calculator (Wozniak) and VW bus (Jobs), and it delights me that Quibi FAILED six months after getting $1.5 billion in funding for their totally retarded idea.

Thus, it disgusts me that, even though Meta does in fact have to money to throw around, that they would choose the utterly foolhardy business decision of hurting a tenth of a billion dollars at any top scientist willing to jump ship and sit near Zuck to, ostensibly, created AGI and beat everyone else to the punch.

How motivated do you think they'll be when they get there? How magical is the engineering going to be when the big draw was just a financial fortune? It's called "fuck you money" for a reason, you know, and I strongly suspect that the entire affair will be a colossal waste. Paying people nine figures to join is NOT a viable business model. It's just idiotic. Gathering up a bunch of elite prima donnas is not the way to create a technological miracle. It's just going to be a billion-dollar catfight.

The excuse being offered these days is that top engineers are like top athletes: if a football quarterback can get paid tens of millions a year, why shouldn't a top AI person?

I sort of get that, particularly considering the analogy also holds true since the quarterback as well as the engineer will be considered washed-up by the time they're in their early 30s. Take the riches while you can, young man. I get that.

There's an important distinction, however.

Although I am the farthest thing possible from being a sports fan, I am aware that the stadiums and arenas around the country are jam-packed with tens of millions of paying customers, and that the NFL, NBA, and MLB are all extraordinarily profitable. Huge revenues. Huge profits. so, it makes abundant sense to pay top dollar to get the kind of talent that'll make revenues and profits even huger still.

Not so with AI! Observe this morning's item from Bloomberg:

$13 billion in losses. $500 million (ostensibly) in revenue. In other words, the revenue covers about two weeks of operating costs, and the other 50 weeks of the year are just blood. Plus, keep in mind that xAI is tiny compared to the likes of OpenAI. God only knows what they lose, but it surely dwarfs these figures.

I will also say that, due to the fact I've got pretty much a front row seat on all this stuff here in Palo Alto, the corporate cultures vary wildly.

Specifically, there's a world of difference between the young men at xAI and the chaps at OpenAI. At the former, they work their bloody asses off, and there are very few creature comforts to be had. You can forget about free meals, massages, unlimited snacks, having them do your laundry for you, and so forth. Musk doesn't play that way.

OpenAI, on the other hand, has everything short of concubines parked under each desk. I've heard on more than one occasion about how entire teams will prance into Michelin-starred restaurants and enjoy all the food and wine they like, all on OpenAI's dime (because they have a lot of dimes).

Simply stated, the corporate culture at OpenAI is one of gluttony, whereas the culture at xAI is one of relative thrift and industry. Even though OpenAI has far more funding, I suspect that, in the end, xAI will be a much more successful company, because they haven't raised a bunch of overweight spoiled brats who get everything they demand.

I would also say that the poison in the culture of the Silicon Valley is starting to peg the meter, as this breaking story reveals - - the TLDR of it is that a startup which claims to have made software to let students cheat on anything they want threw a party in which they lied about who would be there, just to draw a crowd and just for the lulz.

So, yeah, it's called "rage-baiting", whereas not long ago they would simply call the guy who send the invitations a lying asshole. Times change!

You think we're at the tippity-top of the tech bubble? I sure do. This is Roman orgy stuff, people, and with the exception of those able to rip off $100 million from a briefly idiotic Zuck, it isn't going to end at all well.