Random Thoughts.....What Are You Thinking?

The profit comes when you're so addicted you will pay whatever to continue using it and they increase the cost to use. Alternatively, they contract with governments to forward all the personal information you're voluntarily feeding into these models to them. Sora cost an astronomical amount because of the amount of compute required to make a video feel smooth, the other models aren't quite so dire.

As much as I'd love to see all these companies crash and burn, I don't really expect that to be the case. OpenAI and Anthropic are both investing big in building their own datacenters so they don't have to pay for IAAS, which will save them significant amounts on operating costs. During this time, the marginal losses are just deductions for the company anyway and they continue to build addiction. Once they have enough people hooked to change the pricing model, they'll be profitable pretty quickly.

That profit's going to come at the expense of driving up consumer hardware and electricity substantially, because they're already making deals with ***localities to buy cheap power and buying out hardware producers' stock for years in advance. It's going to suck for everyone. But, I don't think they go under anytime soon.

OpenAI is so far removed from being a "startup" it's in a different universe.

Like a lot of things in tech, it's a solution looking for a problem. Some problems *are* suited to the machine learning tools we call AI. General applications like "make this better" are not suited to it otoh.

The publically available AI platforms are in fact crowd sourcing training the AI to humans, which is then used to train new not publicly available AIs. There are even paid jobs for this if you are an expert in a field.

The zeros are all injected by venture capital. Not one of those zeros is earned.

But there is no profit, its all burn rate. And their customers are used to a HIGHLY subsidized and totally unreal subscription rate.

Optimistic. The costs of AI services are 10 to 30!!! times the revenues. When reality hits the success rate won't be 2%, it will not even be 0.02%.

What AI needs to become profitable is something like a 1000% increase in throughput with 90% reduction in resource usage.