The Trial Balance is CFO’s weekly preview of stories, stats and events to help you prepare.
Part 1 — Marc Andreessen says LLM development may not end well for stakeholders
Earlier this month at the technology conference Ray Summit, Marc Andreessen, general partner at venture capital firm Andreessen Horowitz, provided an interesting take recently published in its entirety on large language models (LLMs) and their profitability trajectory, specifically within product development. As Hewlett Packard Enterprise CFO Marie Myers mentioned during her keynote at a conference earlier this month, her company is one of many currently in the process of developing products that are essentially custom LLMs for businesses.
While Andreessen doesn’t dismiss the possibility of enormous profits for the few competitors who may emerge at the top of the LLM product race, he candidly identifies the reality that these companies may be competing in a “race to the bottom” due to the open availability of free LLMs, the inability to compete with open-source datasets and the large drop in price per token — a fundamental input and output metric that quantifies the processing power LLMs require.
When discussing the future of LLM development, Andreessen said, “Maybe all of these companies are in a race to the bottom. It [may] actually turn out, selling intelligence is like selling rice or something, where it turns out anybody can make an LLM, there’s open-source LLMs [and] there’s new LLM startups every day.”
He also referenced the data dilemma faced by these companies, which was self-identified via a leaked internal memo from Google last year, dubbed “We Have No Moat, and Neither Does OpenAI.” He noted the drop in token cost is rapidly outpacing the precedent set by Moore’s Law, an empirical phenomenon heavily relied upon by semiconductor developers that quantifies the trend of transistors on a microchip doubling approximately every two years while the cost of computing power is halved.
“[That’s] the exact opposite of what you’d expect if somebody was going to get a lot of profit out of that business,” Andreessen said.
Part 2 — This week
Here’s a list of important market events slated for the week ahead.
Monday, Oct. 21
Tuesday, Oct. 22
Wednesday, Oct. 23
Thursday, Oct. 24
- Initial jobless claims, week of Oct. 19
- S&P flash U.S. services PMI, Oct.
- S&P flash U.S. manufacturing PMI, Oct.
- New home sales, Sept.
Friday, Oct. 25
- Durable goods orders, Sept.
- Consumer sentiment (final), Oct.
Part 3 — Complex M&A deals, ed-tech CFO Q&A, how culture can make finance fun
This week’s content includes a story on navigating the modern complexities of M&A (10/22), a Q&A with UiPath CFO Ashim Gupta (10/24), a spotlight on how Long Island-based small business lender Lexington Capital Holdings has created a culture that embraces the fun in finance (10/25) and more.
