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Is AI Profitable Yet?

isaiprofitable.com

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Re: Is AI Profitable Yet?

#121

Post by YetAnotherNick »

rsoto2 wrote: post #100
YetAnotherNick wrote: post #70

Earlier 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.

Uhh I think a lot of people and their families likely have investment exposure to nvidia/hyperscalers. if places like Amazon spent unrealistically on ai or their stock goes down massively that could mean major job losses too. If AI companies aren't that profitable...then they're going to stop spending so much money on GPUs to train AI models. A gigantic amount of Nvidia's profits would go bust overnight.

But inference is increasing dramatically. Google says they now do inference of 3.2 quadrillion tokens per month, 7x increase in a year.

Claude code and others are here to grow even if they don't do any further training.

Re: Is AI Profitable Yet?

#123

Post by guidedlight »

dev1ycan wrote: post #61
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.

Maybe because losing 700b so far is not "safe" for the economy?

The US “loses” $1T every ~150 days on delivering basic government services, and every US citizen is on the hook for that, not just investors.

Re: Is AI Profitable Yet?

#124

Post by Imustaskforhelp »

altcognito wrote: post #103
mgh2 wrote: post #60

Earlier quoted context omitted.

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.co…

> AI usage seems to have plateaued overall, except for niche use cases like coding, I sure hope more people think like this, because it's going to leave a lot of money on the table (for me)

(I don't quite understand your take?) but overall, companies like cloudflare are basically firing people for the costs associated with AI and layoffs are starting to being questioned with this take.

I don't know what your statement is but if you are an employee, then as your employer is forcing you to tokenmax and forcing you to use slop and creating leaderboards for these token spend which will all end up forcing the company to bleed money afterwards they might even lay off people.

If you are an employer then there are still long term issues associated. For example, cloudflare is a company which hasn't been in profit but it has burnt through 5 million dollars per month for AI as it first created an incentive (shrewd even) for employees to use it (for everything) only to please the investors but in the end, its still unclear how profitable all of it is for cloudflare.

Perhaps I have misunderstood you but I really don't understand how its going to leave a lot of money on the table, the only thing I see is a race to the bottom.

Re: Is AI Profitable Yet?

#125

Post by sarchertech »

Aurornis wrote: post #84
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.

We go through this with every startup cycle. Startups are not expected to be profitable because they’re spending so much money on growth and R&D. The concept of running a business in an intentionally unprofitable state is confusing to those who don’t understand startup funding. The weird thing is that so many people believe that inference is unprofitable. There are large open weights models that companies run at a pr…

> There are large open weights models that companies run at a profit while charging far less than what OpenAI and Anthropic charge.

You have no idea whether those companies are making a profit.

1. All it takes is one of them operating a loss to gain market share to force the other ones to lower prices to compete.

2. There’s not reason to expect that these relatively small companies are correctly pricing GPU depreciation.

Re: Is AI Profitable Yet?

#126

Post by nextaccountic »

wmf wrote: post #67
0xbadcafebee wrote: post #37

AMD, Alibaba should be on there too. AMD is making good money on AI, with R&D at less than half the AI revenue. Whereas Alibaba's weird financials show it's kinda-sorta-protifable? I just wanna know how the OpenAI/Anthropic shell game works long-term. So both companies made equity deals with infrastructure providers; OpenAI on Azure, Anthropic on AWS, GCloud, and Colossus. They get a loan of compute credits and then…

There's a lot of revenue and outside investment coming in but the haters pretend it's all circular financing.

Outside investment is not a revenue, it's looking more like a pyramid scheme. It's yet more people putting their money in the scheme expecting a return

Either the actual revenue of paying customers ramp up or the bubble will pop at some point

I expect the paying customers will actually be companies buying ad, not people buying AI subscriptions

Re: Is AI Profitable Yet?

#128

Post by delish »

rdl wrote: post #9

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

The critic I see most frequently on the unprofitability of AI is Ed Zitron. I am sincerely curious if he shorted Facebook's, Amazon's, or Google's stocks. Or if he's in index funds which have tech stocks like those.

For example: I have index funds which have some of these stocks. So I, by process of revealed-preference, don't think it's a bubble, or I think I will keep my money in through the bubble's pop. I don't have that much else to say!

For the record: I would respect the creator of this site equally or more if he/she said, "I'm shorting these stocks and this is why."

Re: Is AI Profitable Yet?

#129

Post by daveguy »

acoward113472 wrote: post #114

I 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

Cool. Why don't you build that?

Re: Is AI Profitable Yet?

#130

Post by Retric »

fsckboy wrote: post #79
xbmcuser wrote: post #47

Earlier 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…

That’s an overly simplified model. AI companies spending results in infrastructure beyond the company such as manufacturing capacity, power lines, software systems, and even individual expertise.

If they fail then the negative impact ripples through the economy due to misallocation of resources.

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