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Is AI Profitable Yet?

isaiprofitable.com

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Re: Is AI Profitable Yet?

#51

Post by raincole »

collingreen wrote: post #14
raincole wrote: post #4

Now use common accounting standard and amortize the cost. Oh it doesn't fit the narrative. Never mind then.

In what ways do common accounting standards and amortizing the costs (this is tricky for ai and the current batch of gpus I hear!) change the data presented here? Does it detract from the point? Completely contradict it? You can turn your drive-by dismissal into something really informative if you want to.

First of all, the whole website is based on what the CEOs said they're going to spend. Not the actual money spent. So there is no real 'data' presented here or to contradict.

Second, even if you take CEOs' words at face value, they didn't distinguish the capex for hardware, electricity, software and salary. You can make up whatever the percentage for hardware and the depreciation rate you believe and fit an arbitrary narrative.

Re: Is AI Profitable Yet?

#53

Post by casualscience »

How are the Google numbers calculated? I've seen their net income increasing a lot as they've rolled out Gemini. This suggests that Gemini tokens are actually profitable, or at least not extremely unprofitable.

Yet this site suggests that tokens are very unprofitable

Re: Is AI Profitable Yet?

#54

Post by quantummagic »

nozzlegear wrote: post #44
crystal_revenge wrote: post #29

It’s weird to me that people here suddenly seem to care about profitability for relatively early stage companies just because they’re “AI”. I know a traditional SaaS company I worked for that IPO’d years ago and still has no signs that they can be profitable (and many others like it) and nobody seems particularly concerned.

What do you mean suddenly? People have been talking about it for as long as relatively early stage LLM companies have been noteworthy.

You misunderstand. He's saying there is a double standard, one for pre-LLM companies, and another for LLM companies.

Re: Is AI Profitable Yet?

#56

Post by girvo »

casualscience wrote: post #53

How are the Google numbers calculated? I've seen their net income increasing a lot as they've rolled out Gemini. This suggests that Gemini tokens are actually profitable, or at least not extremely unprofitable. Yet this site suggests that tokens are very unprofitable

> This suggests that Gemini tokens are actually profitable, or at least not extremely unprofitable.

Out of all the companies, considering their own silicon etc. I wouldn't be surprised. Though I do wonder in terms of total CapEx and R&D where it would be at...

Re: Is AI Profitable Yet?

#57

Post by choilive »

DrewADesign wrote: post #34
crystal_revenge wrote: post #29

It’s weird to me that people here suddenly seem to care about profitability for relatively early stage companies just because they’re “AI”. I know a traditional SaaS company I worked for that IPO’d years ago and still has no signs that they can be profitable (and many others like it) and nobody seems particularly concerned.

These companies are blowing through an incomparable amount of resources. If their bravado is misplaced, the economic impacts will be far more significant.

How so? Most of these companies will take a hit but will be fine Alphabet, Amazon, Google, etc can write off their entire investments in AI and will be a-OK. The pure AI companies will obviously be dead.

Re: Is AI Profitable Yet?

#58

Post by abathologist »

rdl wrote: post #9

For a rapidly growing new line of business, this isn't bad at all.

Oh really? A 195% cost to revenue ratio isn't bad at all? I'm not a biz expert, but I spent a few minutes looking this up (e.g., what are usual cost-to-revenue ratios for new lines of business), and this sounds like BS to me.

Re: Is AI Profitable Yet?

#59

Post by wmf »

SXX wrote: post #50
truncate wrote: post #35

Earlier quoted context omitted.

dot-com bubble? It's less about black or white, and more about how much of it. Nothing weird to me about caring given how it all also impacts peoples lives and much wilder all these numbers are becoming.

Difference is that Amazon, Microsoft, Google or Oracle are not going out of business if it all collapses. Neither chip or hardware manufacturers will be harmed.

Oracle is on the edge; if they can't put their capex in SPVs they would get taken out by a crash.

Re: Is AI Profitable Yet?

#60

Post by mgh2 »

crystal_revenge wrote: post #29

It’s weird to me that people here suddenly seem to care about profitability for relatively early stage companies just because they’re “AI”. I know a traditional SaaS company I worked for that IPO’d years ago and still has no signs that they can be profitable (and many others like it) and nobody seems particularly concerned.

The strategy of "scale for long term market dominance" or the idea of "build it and they will come" [1] were premised on the notion that adoption will be organic.

AI usage seems to have plateaued overall [2], except for niche use cases like coding, that is why companies are forcing it on their employees to justify ROI [3] or creating "products" w/ AI features [4] or embedded addiction.

[1] https://news.ycombinator.com/item?id=48241012

[2] https://news.ycombinator.com/item?id=48179021

[3] https://news.ycombinator.com/item?id=48148337

[4] https://news.ycombinator.com/item?id=48168626

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