Is "AI" profitable yet?
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We shared the quotes below and added a reply in the corresponding thread:
And for a more in-depth look, Ed Zitron seems to be the person to read, e.g. AI Is Slowing Down.
But I don't understand half of it, so no explicit endorsement from my end. :shrug:
Quotes
All figures are estimated cumulative totals (all-time). Because most of these companies are private, the numbers aren't exact; they are built from leaked financials, SEC filings, earnings calls, and industry estimates from sources like Bloomberg, the WSJ, The Information, and Epoch AI [...]
Spend includes direct R&D costs, compute, and capital expenditure on AI infrastructure (data centres, chips, and networking). Capex is treated as spend despite having long-term asset value; this is intentional. The framing shows the sheer scale of capital being committed to AI before returns materialise, rather than smoothing it across a depreciation schedule.
Revenue is the trickiest thing to estimate, as far less information is readily available. The revenue figures here are mostly estimated and extrapolated from ARR figures, so I'd say they currently lean optimistic.
Reactions
There were 4 instances of the NoAI emoji (moominpappa), as well as 14 replies to the post. Highlights:
- One person said they liked what we were doing, and that we had converted them from an oblivious AI user to someone that reduced usage. (Reasons given: Asthma around the SpaceX data centers, as well as higher awareness of tech determinism.)
- One person indicated that Ed Zitron had stated that he believes the numbers he came up with - but that he didn't have any skin in the game. If he were serious he'd short the hyperscalers - but he did not (like many others).
- This is actually addressed in the very first paragraphs of Ed Zitron's article:
Some were equal parts frustrated and angry that I don’t have money in the market, or, as they’d put it, “skin in the game.”
I get it! When your entire worldview is dictated by what a series of venture capitalists and psuedo-journalists on Twitter want you to believe, it must be difficult to imagine someone having “morals” or “beliefs” or that one might hold a position that wasn’t entirely based on greed or tribalism.
- The idea that something is only serious (or even real) if money trades hands is at least questionable. (Note: That notion had recently been critiqued in a "Mystery AI Hype Theater 3000" episode, so that was fresh on our minds.)
- The person then shared that Ed Zitron isn't sure whether the numbers scale and that he has said as much on a lot of podcast
- We asked them to show their receipts - which did not happen. (But also doesn't mean that the statement is inaccurate.)
- This is actually addressed in the very first paragraphs of Ed Zitron's article:
- The same person said that, while the numbers don't make sense, we have some certainty that some form of "AI" will survive, maybe some cost-effective ones.
- That's very unspecific. If you're making that argument, you have to be specific.
- Otherwise, it's wish-casting. Are training costs going down? Are "AI" companies not currently happy to slow down (in the guise of "doomsday prevention") because that allows them to spend less on training?
- One person shared two YouTube shorts from the "Nexus Institute": "Dropping birth rates and technology" and "Why Big Tech doesn't care if AI will wipe out humanity".
- Those matched the explanations around the TESCREAL bundle.
- So, we shared Émile P. Torres' "The ASI Extinction Debate Is the Opposite of What You Think"