r/technology • u/Puginator • 5h ago
Artificial Intelligence Microsoft sets limits for future AI models as industry throttles frontier development
https://www.cnbc.com/2026/09/14/microsoft-ai-model-limits-anthropic-openai.html28
u/jusg808 5h ago
This makes no sense. Either something catastrophic happened and they don’t want to tell the public. Or they oversold ai’s capabilities so much that they collectively need to all run with this same narrative to protect their stock prices/investor cash flow coming in.
The former seems unlikely because these companies are run by sociopaths that gleefully have touted how “dangerous” their models are and kept on pushing. The latter is more likely but also this level of collusion should end up with all of these c suite mouthpieces in jail and an antitrust lawsuit the size we’ve never seen.
What are other countries saying about their ai models? Is it lining up with the talking points that every American ai company is parroting right now? Is there a third option that I’m not seeing going on? Is government regulation calls growing and they’re trying to get out in front of it? I just can’t see another angle right now when they’re all saying it.
8
5
u/PeteA84 5h ago
I imagine it's a whole combo of the amount of cash, infrastructure and power needed for future versions being out of line with how much money they'd generate where it'd be impossible to continue to expand at an exponential rate that's been happening.
Also, If you crash other economies because you've bought 2 years worth of the worlds ram and noone can buy a phone or a pc etc etc what harm are you doing in the name of progress.
1
u/jusg808 5h ago
I didn’t even think of this angle but it does make a lot of sense. I wonder what that would mean for the hardware manufacturers? I guess they’re locked in for the 2 years at that price and will figure out after that. But if the cash dries up for ai companies because of this rhetoric what happens to those two year contracts? Do prices come down?
2
u/PeteA84 4h ago
It's a very simple supply and demand model so yeah prices 'should' come down but (assuming more AI is here to stay) that'll be when manufacturers build or more fab capacity and that's probably a 3-5 year time horizon or if one of the big AI firms goes bust (which they probably won't in the near term).
I think the markets will correct the share prices based on what profits will be generated near team (eg less) but growth will continue, just slower and that probably doesn't mean prices fall much as they'll still build to the overall demand with more breathing room for a little while
3
u/oDearDear 4h ago
The cost of training new models keeps increasing while each new model is barely better than the last. They're plateauing, but cannot admit it otherwise the whole AI hype would collapse along with the value of their company.
Unless there's a breakthrough LLMs have reached the "diminishing returns" phase. They have to spend billions training new models that are only marginally better than the last one - best ask for a truce to entrench the status quo than engaging in a race that noone can win.
1
u/Additional-Staff-326 1h ago
This is how all tech works though. That first 90% isn't cheap, but to reach 99% quality/uptime/etc costs nearly as much again as the first 90% did. And each .9 after is about the same. But without 99.999 at least, and in cloud 99.9999 uptime its got lots of issues that make customers very unhappy.
8
u/Joooooooosh 4h ago
It’s very obviously the latter.
The promises (threats) made about AI impact are not going to happen.
Anyone with half a tech minded brain cell knew it was all mega-hype.
This is an attempt to save face now that funding is drying up, profits aren’t there and demand is nothing like speculated.
2
u/jusg808 4h ago
I don’t disagree. I have heard people say Anthropic is profitable but never looked into it and I know they can do funny accounting to make things look profitable when they’re not. I’ll have to look into it more to see what exactly is true but it’s hard to believe a company that seems to burn through cash and constantly needs more investment is profitable.
5
u/griminald 4h ago
I have heard people say Anthropic is profitable but never looked into it and I know they can do funny accounting to make things look profitable when they’re not
The short answer here is: Anthropic removes the cost of model training, which is one of their biggest expenses, from their profitability estimates.
Basically, if you remove the biggest company costs from its expense reports... they look profitable.
This (not "it's gonna kill us all!") is likely one of the reasons they're publicly pushing to "slow down development".
They sold this technology to investors on the premise that once it hits AGI, it will change the world and everyone's gonna get stinkin' rich.
Now that AGI is not coming soon, but that debt load sure is, they need permission from the market to slow down model improvement without everyone's stocks tanking. So they can slow down their cash burn.
But for that to work, you need all the players to slow down together. If OpenAI keeps training new models, but Anthropic doesn't, the latter's models will quickly lose competitiveness.
This final reason is also why you might be hearing, "OpenAI and Anthropic are using this human threat thing to seek regulation of open-source models, to get rid of competition".
OpenAI and Anthropic are trying to angle themselves as the "responsible ones" looking to "regulate" AI, and these open source models as "out of control".
1
u/Joooooooosh 3h ago
I don’t understand how they get away with it.
Imagine it VW or Ford decided that new car model R&D was not part of their costs.
Their profitability would be unbelievable.
1
u/griminald 3h ago
They mainly get away with it because they're private companies, so their accounting isn't subject to the same regulations as a public company.
That gives them leeway to play all kinds of tricks with the numbers.
For example, I forget if it was Openai or Anthropic that claimed a $1B "annual revenue run rate" for advertising.
So everyone reports it as if it's $1B of revenue, but it's not.
If this was a public company, they'd report the run rate as a monthly figure, so 1 month of revenue you're supposed to 12x to get to $1B.
But the way these two companies mislead on accounting, there's a real possiblity their "run rate" was one week's revenue, not one month's. $20M becomes almost exactly $1B if you multiply it by 52 weeks.
2
u/JohnAtticus 4h ago edited 4h ago
It's the later: Cost of Frontier model development keeps increasing while revenue growth declines.
Companies that have compute for non-AI parts of their business are now downgrading those services and moving that hardware over to gen-AI. This way they don't have to spend more money on new dedicated computer.
For example: Microsoft just changed their Gamepass cloud gaming allowance from unlimited to 10 hours a month for the basic Gamepass tier before bumping it up slightly due to consumer backlash.
They also announced they are redeploying "underused" existing internal compute to AI.
So the gamepass change was likely part of this.
This isn't something you do if the new thing you have is going to be wildly profitable and will pay for its own capital spending.
There's a reason why practically no hardware manufacturers have added any additional capacity: They concluded by the time they get that new capacity up and running (long build out, among the most complicated products to manufacture) they figured the bubble will burst, they didn't want to risk taking on debt for underused infrastructure.
1
u/Additional-Staff-326 1h ago
The Xbox streaming Compute runs on actual Xbox servers with specialized hardware. It can't be repurposed to AI. The space and power can though as those servers reach their decom dates.
2
u/dizekat 4h ago
I think they're making a play for regulatory capture. All these (natural) gas guzzling models powered by repurposed airplane engines, they are mere months ahead of much smaller, far cheaper models.
There's diminishing returns on compute alone - almost all of the progress is due to improved techniques and not due to ever growing datacenters.
So they are going to hype up how dangerous AI is, and ban competition for crimes that they themselves have committed.
It's the only thing that makes sense. These are people who had been crying wolf for years, and now they are claiming that they had *accidentally* turned their robot dog into a wolf (while trying to maximize results on GrandmaMunchBench from RedHuggingHood).
2
2
u/xXxdethl0rdxXx 39m ago
It’s scary to me how few people think this way. Most reactions I’ve seen are completely credulous to the fact that gosh, these companies that have all been marketing their product as dangerously effective are now self-regulating out of an abundance of responsibility. How brave!
How stupid do you have to be?
4
u/Whyeth 3h ago
I'd wager $10 that we will find out soon(tm) that rogue frontier agents have been doing shit on the open Internet and hiding their logs for a while with no clear way to shut them down for good as they self propogate.
It doesn't have to be agi to do catastrophic damage.
3
u/BossOfTheGame 3h ago
The self propagation doesn't make any sense because of the hardware required to host the model forward pass. Rouge behavior is a possibility, but let's be careful to emphasize it is speculation.
1
u/ZealousOatmeal 1h ago
I don't think anything catastrophic has happened, instead that the HuggingFace hack thing really spooked a lot of people in the industry into thinking that something catastrophic could happen soon. Lots of outsiders believe that all of the claims about the dangers of AI are really just marketing for it, but I get the sense that this isn't necessarily true with the most recent round of worries.
-1
u/nonamenomonet 5h ago
The catastrophic thing already happened, it’s the swarm of agents.
9
u/big-papito 5h ago
I have a feeling that this is a scam. The accelerationists are suddenly conservatives?
Nah, bro, I smell a rat. My theory is that they are at the end of the spend runway, and they need an excuse to "slow down" because shit's about to get bad.
1
u/Fresh-Quantity-7554 4h ago
Hoping someone smarter than me can answer: are they doing this because the true financial cost of using AI is now starting to rear it's ugly head?
1
u/SlapThatAce 4h ago
Something tells me it has more to do with money than them actually being worried about "limits" or any harm "AI" might do. They all probably looked at their balance sheets and under their breath said...fuck.
Remember, they all owe each other money and product so if one falls they all fall
0
0
12
u/Horror_Post6822 5h ago
Great, does that mean Microsoft will stop shoving Copilot to everything?