LLAMA2 is out and it’s pretty fancy, and there’s a news report that they’re making a way bigger one. But if it’s just open source stuff, how do they justify the massive costs to make it? It seems like everyone can just use it for free.
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It’s not really open source it’s paid over a certain scale like unreal engine”
2. Additional Commercial Terms. If, on the Llama 2 version release date, the monthly active users of the products or services made available by or for Licensee, or Licensee’s affiliates, is greater than 700 million monthly active users in the preceding calendar month, you must request a license from Meta, which Meta may grant to you in its sole discretion, and you are not authorized to exercise any of the rights under this Agreement unless or until Meta otherwise expressly grants you such rights.”
If you are ever curious how a digital based company can provide a free product, they are likely making their money off of the data they collect on you.
It’s possible that LLAMA is losing a bit of money. But they’re likely in research phase right now anyway (as are most “Ai” chats) so that’s acceptable.
But Facebook is free because of the data mining they do. It would likely be no different with any other free digital service.
All the answers about “you’re the product” and “make money later” is wrong.
Meta wants generative Ai (not just language models) to be cheap and plentiful so that the world generates a lot of content. Meta is in the business of showing you engaging content. The more good content there is in the world, the better for Meta.
This is a common business strategy called “commoditized your complements” where you make everything around you really cheap or free so that the thing you make money on is even more valuable.
https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/
This link has a ton of examples. They’re a little old but this is a standard tech company strategy that every tech company runs.
If the product is free, you are the product (Your data, behavior, queries, etc). Huge corporations like meta can have products be loss leaders because they generate revenue elsewhere in the portfolio.
They are recording everything you ask and can combine the ideas of everyone using it. The money will come later.
….Facebook is free too and they make money off of it. The same answer applies – they can collect data and info about you to sell and to more accurately target marketing to you literally across the internet.
Its also important from a competition stake. They want to prevent other competitors from havinga monopoly on the product and facebook has absolutely planned to be an enterprise solution. the actual product itself doesnt need to be profitable – it can still increase profit for the company as a whole
Commoditize your complements. If everyone uses LLAMA and it gets better and better, Meta is the biggest winner because they have the valuable part, user data.
AI is clearly going to be very important if not the most important capability in the future. Nobody is sure exactly what forms that will take. Meta wants to be sure they are on the cutting edge and have the hardware, software, network and data ready to pivot to take advantage of AI capabilities. For now they are content to build it and get the widest audience using it so they can see where the opportunities are. If they ignored AI they would eventually get run over by someone else who has better capabilities.
So it’s an investment in an unclear future.
The answer, that you’ve already received, is they don’t (sort of).
Now, other people have speculated on *why* they are willing to take a loss on it, and most of them seem to agree that it’s to harm OpenAI and their ChatGPT, but that skips over a very important piece of information that is, they want to catch up.
Many companies were seemingly blindsided by ChatGPT and are in a rush to catch up with the technology. OpenAI clearly figured out a good method to design and train their language models, and now other companies need to do the same. As it stands, Facebook can’t compete with OpenAI, so, in order to entice people to use, and consequently test, their product, they take a loss. In some ways, yes, they’re losing money on this, but in reality, they’re actually just investing it, as this is the cost of catching up to OpenAI.
It’s important to remember that companies are made of people, and these people need to learn how to do things (and do them better) for the company to innovate. Taking a loss on the training and operating cost of their model is really just the cost of their employees learning what OpenAI employees have already learned, but faster.
If something is free, it’s not the product, you are. Anytime a service offers free games, free interaction, free anything the goal is to get you in the doors. With a service like Llama, individual users can work with it and essentially train it, then as it becomes more efficient and effective it can then be licensed out for professional use. Your data is the product being utilized for return on investment.
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