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# LLM Economics, LLC
- URL: https://www.bramadams.dev/202301190210/
- Published: 2023-01-27T06:56:25.000Z
- Updated: 2023-01-27T06:56:25.000Z
- Author: Bram Adams
- Tags: vc-culture, economics, ai, entrepreneurship

Hypothesis: The unit economics of the machine learning space LLM 2020's startups are not similar to the social networking space in the mid-2000s. This will create a five year vacuum in VC's expecting returns

Why?

- Metcalfe's law is at play for people-run networks, but interfacing with LLM is a single player game
- Computers are bought for their GPU number crunching ability, not their ability to serve data to millions of users instantly
- Most of the cost is upfront during training period
- Correctly built AI companies will slowly/quickly drive out middle management related work, decreasing the need to hire employees to scale/build/market a project