MANY companies aren’t profitable for several years. The one I work at wasn’t for 2 decades. It’s a long game.
95% of Companies See ‘Zero Return’ on $30 Billion Generative AI Spend, MIT Report Finds
Submitted 7 months ago by kalkulat@lemmy.world to technology@lemmy.world
Comments
SwimmingInTheeStars@lemmy.world 7 months ago
world_cavve@lemmy.world 7 months ago
For me that aren’t good with scripting AI can actually fill a educational role. Or at least point me in correct direction so I can complete the rest myself.
mushroommunk@lemmy.today 7 months ago
I feel like we could find ways and tools to help in that situation without stealing the entirety of human knowledge, boiling our planet, and spending a small nation’s GDP. Like better code library discovery or a better mentor environment amongst coders.
I’ve also seen plenty of people get pointed in the exact wrong way to do things by leaning on generative AI and then have to spend even more time getting back on track.
bigbabybilly@lemmy.world 7 months ago
Yeah. No shit. wtf did they think was gonna generate returns? They wanna run ads in the middle if responses?
Bwaz@lemmy.world 7 months ago
I’m not sure they were expecting returns. Just afraid that if other companies had AI, they might lose business to them. Except of course a lot of people (or at least I) avoid anything with AI and mistrust its results.
cyberwolfie@lemmy.ml 7 months ago
30-40 billion USD in total worldwide over three years seems very little compared to the massive expenditures by the AI companies to build the things?
BackgrndNoize@lemmy.world 7 months ago
My experience with AI so far is that I have to waste more time fine tuning my prompt to get what I want and still end up with some obvious issues that I have to manually fix and the only way I would know about these issues is my prior experience which I will stop gaining if I start depending on AI too much, plus it creates unrealistic expectations from employers on execution time, it’s the worst thing that has happened to the tech industry, I hate my career now and just want to switch to any boring but stable low paying job if I don’t have to worry about going through months for a job hunt
boor@lemmy.world 7 months ago
Similar experience here. I recently took the official Google “prompting essentials” course. I kept an open mind and modest expectations; this is a tool that’s here to stay. Best to just approach it as the next Microsoft Word and see how it can add practical value.
The biggest thing I learned is that getting quality outputs will require at least a paragraph-long, thoughtful prompt and 15 minutes of iteration. If I can DIY in less than 30 minutes, the LLM is probably not worth the trouble.
I’m still trying to find use cases (I don’t code), but it often just feels like a problem in search of a solution….
Lucky_777@lemmy.world 7 months ago
Sounds like we all just wamt to retire as goat farmers. Just like before. The more things change…they say
Sunflier@lemmy.world 7 months ago
Does this mean they’ll invest the money in paying workers? No… they’re just have to double down.
ShittDickk@lemmy.world 7 months ago
hello, welcome to taco bell, i am your new ai order specialist. would you like to try a combo of the new dorito blast mtw dew crunchwrap?
spoken at a rate of 5 words a minute to every single person in the drive thru. the old people have no idea how to order with a computer using key words.
rekabis@lemmy.ca 7 months ago
Once again we see the Parasite Class playing unethically with the labour/wealth they have stolen from their employees.
BreakerSwitch@lemmy.world 7 months ago
But it’s okay, because MY company is AHEAD OF THE CURVE on those 95% losses
roofuskit@lemmy.world 7 months ago
Imagine what the economy would look like if they spent 30 billion on wages.
Yaztromo@lemmy.world 7 months ago
This is where the problem of the supply/demand curve comes in. One of the truths of the 1980s Soviet Union’s infamous breadlines wasn’t that people were poor and had no money, or that basic goods (like bread) were too expensive — in a Communist system most people had plenty of money, and the price of goods was fixed by the government to be affordable — the real problem was one of production. There simply weren’t enough goods to go around.
The entire basic premise of inflation is that we as a society produce X amount of goods, but people need X+Y amount of goods. Ideally production increases to meet demand — but when it doesn’t (or can’t fast enough) the other lever is that prices rise so that demand decreases, such that production once again closely approximates demand.
This is why just giving everyone struggling right now more money isn’t really a solution. We could take the assets of the 100 richest people in the world and redistribute it evenly amongst people who are struggling — and all that would happen is that there wouldn’t be enough production to meet the new spending ability, so so prices would go up. Those who control the production would simply get all their money back again, and we’d be back to where we started.
Of course, it’s only profitable to increase production if the cost of basic inputs can be decreased — if you know there is a big untapped market for bread out there and you can undercut the competition, cheaper flour and automation helps quite a bit. But if flour is so expensive that you can’t undercut the established guys, then fighting them for a small slice of the market just doesn’t make sense.
Personally, I’m all for something like UBI — but it’s only really going to work if we as a society also increase production on basic needs (housing, food, clothing, telecommunications, transit, etc.) so they can be and remain at affordable prices. Otherwise just having more money in circulation won’t help anything — if anything it will just be purely inflationary.
Ensign_Crab@lemmy.world 7 months ago
We could take the assets of the 100 richest people in the world and redistribute it evenly amongst people who are struggling — and all that would happen is that there wouldn’t be enough production to meet the new spending ability, so so prices would go up. Those who control the production would simply get all their money back again, and we’d be back to where we started.
Then we should do that over and over again.
banause@feddit.org 7 months ago
You are repeating indoctrinated capitalist think patterns. In reality the market most often does not react like that.
The example as given by you is how you basically teach the concept of market balance to middle schoolers. However, it’s a hypotetical lab analogy. It’s over simplified for lay people. Comparable to the famous “ignore air resistance” in physics.
Markets are at times efficient, at other times inefficient. They may even be both concurrently.
Like our colleagues in the other social and natural sciences, academic economists focus their greatest energies on communicating to their peers within their own discipline. Greater effort can certainly be given by economists to improving communication across disciplinary boundaries
In the real world, it is not possible for markets to be perfect due to inefficient producers, externalities, environmental concerns, and lack of public goods.
ScoffingLizard@lemmy.dbzer0.com 7 months ago
This is not true. We have enough priduction. Wtf are people throwing away half their plates at restaurants? Why does 1 rich guy live in a mansion. The super rich consume more than people realize. You are wrong on so many levels that I do not know where to start. You sound like a bot billionaire shill.
vala@lemmy.dbzer0.com 7 months ago
There are more empty homes than homeless in the US. I’ve seen literal tons of food and clothing go right to the dump to protect profit margins.
Do you have any sources to back up the claim that we need to make more shit?
GooseFinger@sh.itjust.works 7 months ago
If we’re just talking about the USA, then the ~200 million working people would get $150 each.
millie@slrpnk.net 7 months ago
How do you figure?
The 5 richest billionaires have a combined $1.154 trillion, which divided by $340 million gives us $3,394 per American citizen. That’s literally just the top 5. According to Forbes there were 813 billionaires in 2024. Sounds pretty damned substantial to me. We’re talking life-altering amounts of money for every American without even glancing in the direction of mere hundred-millionaires.
brem@sh.itjust.works 7 months ago
Does the 30 billion also account for allocated resources (such as the incredibly demanding amount of electricity required to run a decent AI for millions if not billions of future doctors and engineers to use to pass exams)?
Does it account for the future losses of creativity & individuality in this cesspool of laziness & greed?
abbiistabbii@lemmy.blahaj.zone 7 months ago
How bad to you think this collapse gonna be? We gonna see a big name collapse into dust or we gonna see something akin to the Great Depression?
frog_brawler@lemmy.world 7 months ago
We’ll see the beginning of a crash in about a year and the crash probably won’t end for 7-10 years.
We’re looking at a full scale shift in the way large scale orgs are running their businesses; and it’s a shift a lot of them will need to pivot from once they realize it’s not working.
stormeuh@lemmy.world 7 months ago
The AI bubble is going to be like the dot com bubble I think, but with the world being so heavily financialized it might spiral into something like 2008 or worse…
Zannsolo@lemmy.world 7 months ago
It won’t be like the dot com bubble. The AI bubble is far more corporate investment with far fewer entities having money thrown at them.
Notyou@sopuli.xyz 7 months ago
I’ll take no shit for $500, Alex.
Sunflier@lemmy.world 7 months ago
With how much got wasted on AI, that $500 might not be there anymore. Would you take $5?
Jankatarch@lemmy.world 7 months ago
Nvidia is 5%
eestileib@lemmy.blahaj.zone 7 months ago
There are not enough 💯 emoji in the world for this post.
bigbabybilly@lemmy.world 7 months ago
💯
BarneyPiccolo@lemmy.today 7 months ago
They’ll happily burn mountains of profits on that stuff, but not on decent wages or health insurance.
TuffNutzes@lemmy.world 7 months ago
It’s a game to them that doesn’t take into consideration any human element.
It’s like the sociopathic villains in Trading Places betting a dollar on whether or not Valentine would succeed. They don’t really give a shit. It’s all for the game that might result in throwing more money on their pile.
BradleyUffner@lemmy.world 7 months ago
Some of them won’t even pay to replace broken office chairs for the employees they forced to RTO.
mrductape@eviltoast.org 7 months ago
Wages or health insurance are a very known cost, with a known return. At some point the curve flattens and the return gets less and less for the money you put in. That means there is a sweet spot, but most companies don’t even want to invest that much to get to that point.
AI however, is the next new thing. It’s gonna be big, huge! There’s no telling how much profit there is to be made!
Because nobody has calculated any profits yet. Services seem to run at a loss so far.
However, everybody and their grandmother is into it, so lots of companies feel the pressure to do something with it. They fear they will no longer be relevant if they don’t.
And since nobody knows how much money there is to be made, every company is betting that it will be a lot. Where wages and insurance are a known cost/investment with a known return, AI is not, but companies are betting the return will be much bigger.
I’m curious how it will go. Either the bubble bursts or companies slowly start to realise what is happening and shift their focus to the next thing. In the latter case, we may eventually see some AI develop that is useful.
rimjob_rainer@discuss.tchncs.de 7 months ago
I’ve started using AI on my CTOs request. My experience so far: it gives me working results really quick, but the devil lies in the details. It takes so much time fine tuning, debugging and refactoring, that I’m not really faster. The code works, but I would have never implemented it that way, if I had done it myself.
Looking forward for the hype dying, so I can pick up real software engineering again.
drunkpostdisaster@lemmy.world 7 months ago
There are still employers bitching about how no one wants to work anymore. I doubt any lessons will be learned here.
avg@lemmy.zip 7 months ago
it makes sense to someone like me who is not a dev but works with coding at times, I don’t get the experience to be quick with it.
rekabis@lemmy.ca 7 months ago
- Your code will be significantly more insecure. Expect anything exposed to world+dog to be hacked far quicker than your own work.
- You will code even slower than if you just did the work yourself.
- You will fail to grow as a coder, and will even see your existing skills erode.
Smokeless7048@lemmy.world 7 months ago
Yea
Vibe coding is for us armatures, who want the occasional hello world
I use it for programing home assistant, since I just can’t get my head around the YAML.
TuffNutzes@lemmy.world 7 months ago
“Ruh-roh, Raggy!”
It’s okay. All the people that you laid off to replace with AI are only going to charge 3x their previous rate to fix your arrogant fuck up so it shouldn’t be too bad!
rozodru@lemmy.world 7 months ago
I charge them more than I would if I was just developing for them from scratch. I USED to actually build things, but now I’m making more money doing code reviews and telling them where they fucked up with the AI and then myself and my now small team fix it.
AI and Vibe coders have made me great money to the point where I’ve now hired 2 other developers who were unemployed for a long time due to being laid off from companies leveraging AI slop.
Don’t get me wrong, I’d love for the bubble to burst (and it will VERY soon, if it hasn’t already) and I know that after it does I can retire and hope that the two people I’ve brought on will quickly find better employment.
Bonskreeskreeskree@lemmy.world 7 months ago
Computer science degrees being the most unemployed degree right now leads me to believe this will actually suppress wages for some time
Gradually_Adjusting@lemmy.world 7 months ago
That was always one of the main goals. They’d rather light a mountain of cash on fire than give anyone a thriving wage
zululove@lemmy.ml 7 months ago
Nice
thatkomputerkat@lemmy.blahaj.zone 7 months ago
Good
null@lemmy.nullspace.lol 7 months ago
Reading the article, the conclusions seem to line up with what I experience. Namely the part where it says that individual users found a productivity boost.
At my company, we have a bunch of AI based tools set up, and it’s impressive how much of the time consuming, boring, burnout-inducing gruntwork I can offload to the robots, and instead spend more of my working hours working on things I actually want to work on.
And we also deploy things like AI search for internal knowledge bases. Being able to quickly get the information you need to complete your job, especially if that information is related to sales is definitely good for business, but I’m not even sure how you’d measure that in terms of “profit”.
Croquette@sh.itjust.works 7 months ago
It is how its done today.
Every semi-big or big corpos gamble their money trying to be the one coming on top and capture the market.
So it is not surprising to see that.
8000gnat@reddthat.com 7 months ago
he’ll yeah, lose money you fuckers
nexguy@lemmy.world 7 months ago
Pets.com all over again
surph_ninja@lemmy.world 7 months ago
Emerging technology always loses money in the first few years. Sometimes for a decade or so. This isn’t new.
ilinamorato@lemmy.world 7 months ago
AI isn’t “emerging.” The industry is new, but we’ve had neural networks for decades. They’ve been regularly in use for things like autocorrect and image classification since before the iPhone. Google upgraded Google Translate to use a GPT in 2016 (9 years ago). What’s “emerging” now is just marketing and branding, and trying to shove it into form factors and workloads that it’s not well suited to. Maybe some slightly quicker iteration due to the unreasonable amount of money being thrown at it.
It’s kind of like if a band made a huge deal out of their new album and the crazy new sound it had, but then you listened to it and it was just, like…disco? And disco is fine, but…by itself it’s definitely not anything to write home about in 2025. And then a whole bunch of other bands were like, “yeah, we do disco too!” And some of them were ok at it, and most were definitely not, but they were all trying to fit disco into songs that really shouldn’t have been disco. And every time someone was like, “I kinda don’t want to listen to disco right now,” a band manager said “shut up yes you do.”
surph_ninja@lemmy.world 7 months ago
If you really want to be reductionist, it’s just electricity being fed through silicon. Everything is. Just 1’s and 0’s repackaged over & over!
But it shows a significant lack of insight and understanding. Guess you can make a ton of money with puts on all these companies, with that kinda confidence.
ubergeek@lemmy.today 7 months ago
As expected. Wait until they have to pay copyright royalties for the content they stole to train.
fishy@lemmy.today 7 months ago
I hardly post on any social media besides here and I still feel violated.
kittenzrulz123@lemmy.blahaj.zone 7 months ago
I hope every CEO and executive dumb enough to invest in AI looses their job with no golden parachute. AI is a grand example of how capitalism is ran by a select few unaccountable people who are not mastermind geniuses but utter dumbfucks.
skisnow@lemmy.ca 7 months ago
The comments section of the LinkedIn post I saw about this, has ten times the cope of some of the AI bro posts in here. I had to log out before I accidentally replied to one.
potato_wallrus@lemmy.world 7 months ago
prole@lemmy.blahaj.zone 7 months ago
Why do they keep throwing their money away on it?
ShinkanTrain@lemmy.ml 7 months ago
Dogiedog64@lemmy.world 7 months ago
In no small part because they see it as a time-limited gateway to permanent, infinite profits through market consolidation, job cutting, and government contracts. After all, if they get there FIRST, it’s all theirs, and the infinite profits then will make up for all the money spent now. Never mind the fact that in doing so they’ll destroy the environment, the economy, and the world long before they can actually SPEND those profits on anything.
grahamja@reddthat.com 7 months ago
It worked for Google. They corraled a majority of the internet into providing them add revenue. Google maps, Gmail, google search engine, youtube… all just more ways for them to scrape your data and serve you adds. Investors are hedging their bets on what could replace google as the information monopoly of the future.
TheMinister@sh.itjust.works 7 months ago
Sunken costs?
fishy@lemmy.today 7 months ago
More like most CEOs are fucking dumb. They attach to whatever the tech buzzword is. So AI being a buzzword drew them in, then the AI uses other buzzwords? It’s like a moth to the flame.
potato_wallrus@lemmy.world 7 months ago
pika@feddit.nl 7 months ago
The link in the article to the MIT report doesn’t directly link to any report. I wouldn’t trust this article until the report is accessible and verifiable.