Investors Are Suddenly Getting Very Concerned That AI Isn't Making Any Serious Money
Told you.
Bit of a late response on my part, but nothing here is really new, or indeed, shocking for people who know about AI.
For instance the fact that any investment in an AI company besides OpenAI/Anthropic/existing tech giant is just throwing billions of dollars in the trash bin is fairly obvious (due to the mere existence of the scaling laws), most of them won't ever turn a profit, and as frontier development becomes vastly more expensive the rest of the companies are going to run out of money and crash.
We are not at the bubble bursting yet, nowhere close. Venture capitalist are totally willing to throw tens of billions more into holes as long as they are promised good returns. So yes, some extremely optimistic investors/idiots will continue to invest in new AI companies that promise to revolutionize things, but lolno 99% they'll just run out of money and crash without accomplishing anything.
And when the bubble does burst for these small companies that doesn't mean the real players will go down with it.
If recent reports are to be believed, OpenAI may lose $5 billion this year and run out of cash in the next 12 months, barring further cash injections — an early warning sign that smaller companies already struggling to compete with Big Tech may be snuffed out before too long.
Like this nothing burger. "If open AI can't raise more money they will run out of money". Sure... but they will have 0 trouble raising another $10, or $20, or $30 billion dollars.
(And yeah, the small companies are screwed, but again, that was writing on wall obvious to anyone looking for well over a year).
Sure, the tech giant has a lot of cash to burn — but seeing any returns on those $49 billion will likely prove far more difficult. With the AI market clogged with products that are still mostly free, the tech costs a lot to run but isn't bringing in much cash.
Or how about this, "During a period where tens of billions are just being thrown into the market and dozens of companies can afford to put their products out literally for free because they don't need to make money right now its hard to make money".
Yeah, obviously?
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We'll see how it goes of course, but this reminds me of those "Has AI development stopped/reached a plateau?" videos I keep seeing on youtube.
That question can be trivially answered in a single word "No.", AI has continued to advance at a breakneck pace this year and shows no signs of slowing down.
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