Meta's open AI hardware vision

> "This effort pushed our infrastructure to operate across more than 16,000 NVIDIA H100 GPUs, making Llama 3.1 405B the first model in the Llama series to be trained at such a massive scale."

So at 20k a pop (assuming meta has a decent wholesale price from Nividia) they spent $320 MILLION on the 405B model (not including probably 5-10 million in electricity for the training process, water, staff, infra).

Do we think that brings more than 400+ million in value to Meta? I think so. I don't want to do the math, so I'll ask Perplexity to look it up:

> "How much has Meta's valuation increased since they released their first open source model"

Answer (edited):

> Closing price on February 23, 2023: $509.50 > Closing price on October 11, 2024: $573.68 > The increase in stock price is $64.18 per share. > Total increase = Price increase per share × Number of outstanding shares > Total increase = $64.18 × 2,534,000,000 = $162,632,100,000 > Meta's stock valuation has increased by approximately $162.63 billion since the release of their first open source model on February 24, 2023.

They seem to be making the right choices!

> Do we think that brings more than 400+ million in value to Meta?

Tough to tell, given nobody is turning a net profit on LLMs yet.

Companies have a tendency to develop neuroses, though, just like people. Apple’s near miss with bankruptcy fuelled cash hoarding. For Facebook, their disastrous IPO and near miss of mobile seems to have made them hyper aware of the Innovator’s Dilemma. $400mm spent on a defensive move is certainly wider than tens of billions on the metaverse.

> Tough to tell, given nobody is turning a net profit on LLMs yet.

I suspect in the case of Meta and other big players, profit isn't necessary required to bring substantial value. Imagine their model being able to help them moderate more fairly and accurately. This alone could prevent potential legal actions from individuals, companies, and governments.

> profit isn't necessary required to bring substantial value

They’re private companies. If they can’t tie it to profit, it’s not adding value.

> being able to help them moderate more fairly and accurately

This reduces legal costs and increases strategic flexibility. Sort of like HR or legal departments: cost centres add value by controlling costs, a critical component of profitability.