This site is going to start doing the opposite of the author's intentions in a couple of years.
Is AI Profitable Yet?
111–120 of 229 posts
Re: Is AI Profitable Yet?
#112Earlier quoted context omitted.
These companies are spending more money than budgets of many countries enough to add 2+% to the US GDP so the amount of loss for if it comes all crashing down will be huge.
if these companies go bankrupt, they will have spent (not lost) all their money, the large amounts of money that they got from investors. That money generated profits for other companies they bought stuff from, and income for their employees, and capital gains for other people if AIco acquired other companies. the market cap of a company is computed by the current price of a company's shares, the last price paid; not…
This is way, way more neat and tidy than reality. When these stocks start to sink there is going to be an enormous evaporation of value from the overall market because people in riskier investments will get scared that other people will get scared. This will scare people with slightly safer investments, on up the line. Capital will dry up and velocity of money will drop. The market is not made by rational robots, it's run by barely sentient apes just minutes from reverting to crushing things with rocks. The markets run on vibes and fever dreams of hitting the next big thing.
Re: Is AI Profitable Yet?
#113It’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 difference is the sheer scale of the spend. I bet that SaaS company hasn’t spent the annual GDP of a small nation. If Chat GPT can’t pay the bills it is going to ripple through the economy likely causing at minimum a large correction. If the SAAS company goes under hardly anyone noticed.
Re: Is AI Profitable Yet?
#114I don’t think this website is fair. It does not factor in productivity increase and ROI from other areas that utilize AI to complete what they were doing. For example, if a new operating system was built into AI, the profit for that would go towards increased sales of licenses but this site seems to only track return on AI businesses
Re: Is AI Profitable Yet?
#115It’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.
Maybe because losing 700b so far is not "safe" for the economy?
It does not have to be bad, it depends on who they lost it to. Nvidea probably wins, the data center construction companies, electric companies etc. The tricky thing about an economy is that big picture "losing" means money is not moving and "winning" means that it is.
Re: Is AI Profitable Yet?
#116Earlier quoted context omitted.
Right, especially given that majority of this investment is into GPUs and data centers that are amortized over a longer period of time. This is actually very hopeful. Given how the curves look like in terms of ramping of spend, these are very healthy numbers.
'Long', as in 1-3 years? ( https://www.tomshardware.com/pc-components/gpus/datacenter-g... )
Even if it's 1-3 years, they are very likely to be ROI positive all in.
Re: Is AI Profitable Yet?
#117Earlier quoted context omitted.
Loss to who? Now all of a sudden, we are caring about investors and sovereign funds? And I think we passed the threshold for crash down for AI, even if AI companies wont be that profitable. Nvidia/cloud providers will be profitable as long as there is demand for AI.
Their loss, big deal. Let them suffer. The problem is that when they crash they bring a lot of other stuff down along with them. The people who lost money in the 2008 crash were not the ones who suffered the aftermath.
Because in 2008 ordinary everyday people invested in overvalued things like house.
Re: Is AI Profitable Yet?
#118Earlier quoted context omitted.
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.
All of those companies will be fine, but they are currently valued on the stock market for future earnings. Investors anticipate them making a lot more money in the future. So stocks will slide dramatically. Open AI and Anthropic might not survive. And suddenly you see a 20-50% pull back on stocks. That impacts retirement and pension funds. It may trigger a panic and sell off across sectors.
Re: Is AI Profitable Yet?
#119AI startups taking unprofitable risky ventures in search of growth opportunity and future returns makes sense to me.
Maybe most of them or all of them lose on their bets, but there's potential for a future where revenue grows beyond the immense capex and research investments.
Oracle though... Immensely risky capex to service a startup industry with what will soon be a commodity...
Re: Is AI Profitable Yet?
#120Deepseek is really killing it if that's their total spend
https://www.techinasia.com/news/chinas-deepseek-eyes-10b-fun...
Would be weird if they're raising $10 billion after spending only 0.3
https://newsletter.semianalysis.com/p/deepseek-debates
Probably more like 3-4 billion by now?