An user on reddit has released a new website, appropriately named “Is AI Profitable Yet”, where it lists the main AI companies, their investments on the technology and the returns they’ve had from it.
The outlook is bleak… for the companies, that is. I don’t care if they break.
This is, of course, no surprise as we’ve seen a study before from MIT showing that 95% of AI companies make no profit, last year. The percentage must be even worse for them this year.
Tracking their disgrace
The platform—isaiprofitable.com—serves as a real-time, delightfully petty scoreboard for the tech industry’s favorite cash incinerator. Built using multiple sources and capex from the companies themselves, the tracker paints a painfully clear picture of the ongoing AI bubble: the house is losing. And it is losing on a historic scale.
According to the tracker’s aggregated financial data, the broader AI industry has torched roughly $1.4 trillion in capital expenditure, while clawing back a comparatively measly $613 billion in total revenue. Worse, the site features a live counter ticking up the dollars lost since you opened the tab, simulating the very real cash hemorrhage happening in data centers worldwide.
Because most of these companies are private, the numbers aren’t exact, but if the real ones were better, companies would make them public.
NVidia does well, for now
The hardware giant has spent an estimated $225 billion while raking in a staggering $478 billion in revenue, netting a cool +$253 billion. In the classic tradition of a gold rush, the prospectors are dying in the dirt while the guy selling the shovels is building a mansion on the hill.
This is unlikely to last.
Nvidia has been at the very center of the AI gold rush, being both supplier and their biggest customers in many cases. Right now, Big Tech giants are pouring billions into AI startups, who immediately use that capital to buy cloud compute from those same tech giants, who in turn funnel those revenues directly to Nvidia for more GPUs, who then buys their extra capacity if they can’t sell it.
Everyone is losing money.
Bubble pop? Unlikely
The bubble won’t pop so soon, if you ask me.
Investors’ brains are currently on vacation, and will remain so for the foreseeable future, as rich “people” have never been really smart, just psychopathic. They will keep investing their billions of dollars into those companies thanks to sunk cost fallacy and will keep bribing every politician world wide to do things that may make a quick buck for them.
This bubble will, more likely than not, deflate over a few years like a wet fart(invisible, but painful to everyone near), resulting in a slowdown of some countries’ economies and death of a couple companies, as CEOs continue to blame workers for mistakes AI makes, and the poor for not getting into more debt to pay for yet another subscription.
Once fully deflated, AI is likely to become a cheap commodity that you’ll either run locally or subscribe to for a few bucks, companies will likely stop being stupid and no longer demand AI to be used for everything at all times(looking at you AWS, Google, Microslop, etc) as its burning money with no positive result and the price of hardware is likely to sink to a all time low, as TSMC and Samsung both announced new fabs and China keeps advancing at large paces in the area.
