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chaosCruiser@futurology.today ⁨2⁩ ⁨weeks⁩ ago

As long as they can convince investors of potential future revenue, they will be just fine. In the growth stage, companies don’t have to be profitable because the investors will cover the expenses. Being profitable becomes a high priority only when you run out of series F money, and you the next investors can’t borrow another 700 million. It’s a combination of having low interest rates and convincing arguments.

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taladar@sh.itjust.works ⁨2⁩ ⁨weeks⁩ ago
The difference between AI companies and most other tech companies is that AI companies have significant expenses that scale with the number of customers.

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- chaosCruiser@futurology.today ⁨2⁩ ⁨weeks⁩ ago
  That’s a very good point. Actually, video hosting services also suffer from a similar problem, and that’s one of the main reasons why it’s so hard to compete with YouTube. Since there are so many LLM services out there at the moment, it makes me think that there must be a completely ridiculous amount of investor money floating around there. Doesn’t sound like a sustainable situation to me.
  
  Apparently, the companies are hoping that everyone gets so hooked on LLMs that they have no choice but to pay up when the inevitable tsunami of enshittification hits us.
  
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  - taladar@sh.itjust.works ⁨2⁩ ⁨weeks⁩ ago
    There are some numbers in this blog post wheresyoured.at/openai-is-a-systemic-risk-to-the-… (and a couple of others on the same blog) and they really don’t look like OpenAI is going to last a couple of years until profitability.
    
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    chaosCruiser@futurology.today ⁨2⁩ ⁨weeks⁩ ago
    Wow, those are some pretty big numbers! About 10x bigger than what I was thinking. I knew these things can get pretty weird, but this is just absolutely wild. When expectations fly that high, the crash can be all the more spectacular.
    
    When you notice that your free account can’t do much, that’s a sign that OpenAI is beginning to run out of money. When that happens, the competitors will be ready to welcome all the users who didn’t feel like paying OpenAI.
    
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