12 ms·

We will see more and more AI startups running out of money soon. I know of a handful of similar 100m+ raised companies that have no product to speak of and are

by matusp 1y ago

We will see more and more AI startups running out of money soon. I know of a handful of similar 100m+ raised companies that have no product to speak of and are just cruising towards their end.

6stringmerc 1y ago
When the dominoes start to fall, perhaps it’d be helpful to post a public list of existing / existed AI firms with brief descriptions, timespan of operation, capital / investments publicly known, and give a reference point for historical sake. The startup sector being quite diverse, one specifically for AI could be interesting…as in context for all the “problems” and “benefits” AI was going to solve but failed and burned money in the process.
- airstrike 1y ago
  Might as well start building that list here
- InsideOutSanta 1y ago
  Somebody needs to bring back Fucked Company for AI companies.
  - jsheard 1y ago
    Can we bring back Webshit Weekly while we're at it? RIP n-gate, you would have loved talking shit about AI companies.
    - formerly_proven 1y ago
      That blog aged very well > TikTok (business model: "Uber for Vine") is more popular than Facebook (business model: "Uber for Sino-Soviet Propaganda"), presumably because it bypasses the middleman and delivers the content straight from the source. Hackernews debates whether it's just a matter of time before it turns out to be evil, or whether a social-media application targeted at children and operated by a government full of genocidal monsters is and shall remain "fun." Other Hackernews point out that the app, which is operated by a company in which the murderous, barbaric Chinese government has an ownership stake, is mean to fat people. > Github (business model: "Uber for README.MD") directs its employees to eat its own dog food. Because of Github's acquisition by Microsoft (business model: "Uber for customer abuse"), it turns out that what Github engineers are eating came out of the dog to begin with. Hackernews tries to figure out whether they, as customers of Microsoft's latest desperate attempt to get anyone to use Azure, have any control over their information, or whether they'd be better off remaining with their existing workstation-as-a-service provider, Apple (business model: "Uber for garden walls").
      - dgfitz 1y ago
        The prose makes my head hurt. Horribly written.
    - isoprophlex 1y ago
      I'm sure an LLM would be up to the task of shit talking as a service. All the big models are probably trained on all of n-gate already. With a bit of high quality prompt engineering as your moat, raising a few million shouldn't be too arduous.
- Arkhadia 1y ago
  [dead]
imiric 1y ago
Hopefully it's a sign of the bubble starting to pop. This is the same situation we had in the late 90s with the dot-com bubble. Many companies built on hype with lackluster products. So much so that it became a meme with zombo.com. We need an AI-bubble equivalent parody product.
- voidfunc 1y ago
  Anything is possible at ZomboCom, You can do anything at ZomboCom. Seems to be covered already!
  - bluefirebrand 1y ago
    Oh man, I forgot about ZomboCom You're right. It would be a prime time to launch ZombAI
    - bombcar 1y ago
      ZomboCom has outlived five or six bubbles by my count, and still as good as ever!
  - Xmd5a 1y ago
    Still up! https://zombo.com/ https://zombo.com/
- stephenr 1y ago
  Don't be silly. Just because the Crypto/Blockchain promises of grandeur turned out to be mostly nothing, and the "fuck regulation, we are all the <hotel, taxi driver, you name it>" "gig economy" companies are losing customers as they show their true colours, and the AI bubble starts to burst, that doesn't mean that over-hyped niche "technologies" can't rake in millions of some poor VC investors money. It just requires lateral thought. Pay the completely untrained gig-workers peanuts to review AI written code to create a universal blockchain "bank without borders". I mean what could possibly go wrong?
  - 1y ago
oldpersonintx2 1y ago
isn't this normal for any new emerging market?
- mahirsaid 1y ago
  Depends! but Their selling the coming to investors on hopes of reinviting something that is already there. The data they're using isn't owned by them. All of these " unicorn " wanna be's are wasting investors money. This will be the norm for the upcoming years. Regulations are driving these AI companies to divert their efforts to something less substantial. First regulations has to be aligned with the goals of tech and see where this direction will head.
nyarlathotep_ 1y ago
This is my "hot take" as well. My genuine question--outside of programming-related use-cases (which are remarkable), what has come out of the generative AI "boom" that's a profitable product, or has a viable path to profitability? What "business transformation" has happened in the private sector as a result of "agents" or whatever? What companies look promising (don't say another VSC fork)?
- hiq 1y ago
  A lot more customer support seems to be handled by chat bots these days. For support that has migrated from humans to chatbots, I assume it's a poorer but cheaper implementation. For support that has migrated from older chatbots (that seemed to base their answers on regexes or some weird branching logic), maybe it's an improvement? I'm not into this space, but I also assume that translation work is moving from a writing to an editing job, since an LLM can do that pretty well. I just had an LLM correcting my German mistakes for an email I had to send today. I'm also not sure that profitability is relevant just yet, as inference costs keep going down. Programming-related use-cases do encompass a lot of why GenAI is useful, simply because they make anyone able to write their mothertongue a programmer. It's fine if LLM-based products bootstrap with high-margin industries like tech, and move into thinner margin ones as costs go down. Of course I'm also not saying the current valuations and hype are justified (I don't know).
- sameermanek 1y ago
  I think veo and other generative video startups will find their place in advertisement space. I recently saw a pharma ad and its so convincing. Apparently it was generated with just $500 credit, and i know that this price will have to go up multi folds for it to be profitable but given that these ads cost 100s of thousands to make in 1 language, I dont think we have anything against making ads with AI if they save us so much money and can generate same ad in multiple languages.
- dannersy 1y ago
  None. No one is making money off of AI except for Nvidia. Even if there are use cases, all of them are operating at extreme losses. As someone else said, maybe throw away video content? But I suspect that the providers are burning piles of cash to maintain users which is true for all AI driven products.
ludicrousdispla 1y ago
so many AI chatbots could be easily replaced with links to navigable documentation
- skydhash 1y ago
  Or just a proper sitemap.
nssnsjsjsjs 1y ago
Problem with AI startup Ps is most have to lose. Open AI or cursor making a great product means this one becomes irrelevant.
ljm 1y ago
I interviewed with them a fair while back and noped out as soon as they told me their ‘tech leads’ were typically assigned to handling 15 or 16 projects at a time for around £70-80k a year. Interviewed an ex senior engineer of theirs who was still junior/mid really. By all accounts it looked like another web dev sweatshop and it just used AI as bait. Decided to just step back from it all. Most AI startups are all talk and no action. Long hours and weekends with nothing to show for it.
binary132 1y ago
I think a lot of startups are not really built with winning in mind but are more like a VC grift or even just a way for “serial entrepreneurs” to keep themselves busy and paid.

by matusp 1y ago

We will see more and more AI startups running out of money soon. I know of a handful of similar 100m+ raised companies that have no product to speak of and are just cruising towards their end.

6stringmerc 1y ago

When the dominoes start to fall, perhaps it’d be helpful to post a public list of existing / existed AI firms with brief descriptions, timespan of operation, capital / investments publicly known, and give a reference point for historical sake. The startup sector being quite diverse, one specifically for AI could be interesting…as in context for all the “problems” and “benefits” AI was going to solve but failed and burned money in the process.

airstrike 1y ago
Might as well start building that list here
InsideOutSanta 1y ago
Somebody needs to bring back Fucked Company for AI companies.
- jsheard 1y ago
  Can we bring back Webshit Weekly while we're at it? RIP n-gate, you would have loved talking shit about AI companies.
  - formerly_proven 1y ago
    That blog aged very well > TikTok (business model: "Uber for Vine") is more popular than Facebook (business model: "Uber for Sino-Soviet Propaganda"), presumably because it bypasses the middleman and delivers the content straight from the source. Hackernews debates whether it's just a matter of time before it turns out to be evil, or whether a social-media application targeted at children and operated by a government full of genocidal monsters is and shall remain "fun." Other Hackernews point out that the app, which is operated by a company in which the murderous, barbaric Chinese government has an ownership stake, is mean to fat people. > Github (business model: "Uber for README.MD") directs its employees to eat its own dog food. Because of Github's acquisition by Microsoft (business model: "Uber for customer abuse"), it turns out that what Github engineers are eating came out of the dog to begin with. Hackernews tries to figure out whether they, as customers of Microsoft's latest desperate attempt to get anyone to use Azure, have any control over their information, or whether they'd be better off remaining with their existing workstation-as-a-service provider, Apple (business model: "Uber for garden walls").
    - dgfitz 1y ago
      The prose makes my head hurt. Horribly written.
  - isoprophlex 1y ago
    I'm sure an LLM would be up to the task of shit talking as a service. All the big models are probably trained on all of n-gate already. With a bit of high quality prompt engineering as your moat, raising a few million shouldn't be too arduous.
Arkhadia 1y ago
[dead]

imiric 1y ago

Hopefully it's a sign of the bubble starting to pop. This is the same situation we had in the late 90s with the dot-com bubble. Many companies built on hype with lackluster products. So much so that it became a meme with zombo.com. We need an AI-bubble equivalent parody product.

voidfunc 1y ago
Anything is possible at ZomboCom, You can do anything at ZomboCom. Seems to be covered already!
- bluefirebrand 1y ago
  Oh man, I forgot about ZomboCom You're right. It would be a prime time to launch ZombAI
  - bombcar 1y ago
    ZomboCom has outlived five or six bubbles by my count, and still as good as ever!
- Xmd5a 1y ago
  Still up! https://zombo.com/ https://zombo.com/
stephenr 1y ago
Don't be silly. Just because the Crypto/Blockchain promises of grandeur turned out to be mostly nothing, and the "fuck regulation, we are all the <hotel, taxi driver, you name it>" "gig economy" companies are losing customers as they show their true colours, and the AI bubble starts to burst, that doesn't mean that over-hyped niche "technologies" can't rake in millions of some poor VC investors money. It just requires lateral thought. Pay the completely untrained gig-workers peanuts to review AI written code to create a universal blockchain "bank without borders". I mean what could possibly go wrong?
- 1y ago

oldpersonintx2 1y ago

isn't this normal for any new emerging market?

mahirsaid 1y ago
Depends! but Their selling the coming to investors on hopes of reinviting something that is already there. The data they're using isn't owned by them. All of these " unicorn " wanna be's are wasting investors money. This will be the norm for the upcoming years. Regulations are driving these AI companies to divert their efforts to something less substantial. First regulations has to be aligned with the goals of tech and see where this direction will head.

nyarlathotep_ 1y ago

This is my "hot take" as well. My genuine question--outside of programming-related use-cases (which are remarkable), what has come out of the generative AI "boom" that's a profitable product, or has a viable path to profitability? What "business transformation" has happened in the private sector as a result of "agents" or whatever? What companies look promising (don't say another VSC fork)?

hiq 1y ago
A lot more customer support seems to be handled by chat bots these days. For support that has migrated from humans to chatbots, I assume it's a poorer but cheaper implementation. For support that has migrated from older chatbots (that seemed to base their answers on regexes or some weird branching logic), maybe it's an improvement? I'm not into this space, but I also assume that translation work is moving from a writing to an editing job, since an LLM can do that pretty well. I just had an LLM correcting my German mistakes for an email I had to send today. I'm also not sure that profitability is relevant just yet, as inference costs keep going down. Programming-related use-cases do encompass a lot of why GenAI is useful, simply because they make anyone able to write their mothertongue a programmer. It's fine if LLM-based products bootstrap with high-margin industries like tech, and move into thinner margin ones as costs go down. Of course I'm also not saying the current valuations and hype are justified (I don't know).
sameermanek 1y ago
I think veo and other generative video startups will find their place in advertisement space. I recently saw a pharma ad and its so convincing. Apparently it was generated with just $500 credit, and i know that this price will have to go up multi folds for it to be profitable but given that these ads cost 100s of thousands to make in 1 language, I dont think we have anything against making ads with AI if they save us so much money and can generate same ad in multiple languages.
dannersy 1y ago
None. No one is making money off of AI except for Nvidia. Even if there are use cases, all of them are operating at extreme losses. As someone else said, maybe throw away video content? But I suspect that the providers are burning piles of cash to maintain users which is true for all AI driven products.

ludicrousdispla 1y ago

so many AI chatbots could be easily replaced with links to navigable documentation

skydhash 1y ago
Or just a proper sitemap.

nssnsjsjsjs 1y ago

Problem with AI startup Ps is most have to lose. Open AI or cursor making a great product means this one becomes irrelevant.

ljm 1y ago

I interviewed with them a fair while back and noped out as soon as they told me their ‘tech leads’ were typically assigned to handling 15 or 16 projects at a time for around £70-80k a year. Interviewed an ex senior engineer of theirs who was still junior/mid really. By all accounts it looked like another web dev sweatshop and it just used AI as bait. Decided to just step back from it all. Most AI startups are all talk and no action. Long hours and weekends with nothing to show for it.

binary132 1y ago

I think a lot of startups are not really built with winning in mind but are more like a VC grift or even just a way for “serial entrepreneurs” to keep themselves busy and paid.