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I really doubt that, in an industry where chips are so hard to come by, draw so much power and are so terribly expensive, big players could at any time flip a s
by pmdr 1y ago
I really doubt that, in an industry where chips are so hard to come by, draw so much power and are so terribly expensive, big players could at any time flip a switch and become profitable.
They burn through insane amounts of cash and are, for some reason, still called startups. Sure, they'll be around for a long time until they figure something out, but unless hardware prices and power consumption go down, they won't be turning a profit anytime soon.
Just look at YouTube: in business for 20 years, but it's still unclear whether it's profitable or not, as Alphabet chooses not to disclose YT's net income. I'd imagine any public company would do this, unless those numbers are in the red.
- dist-epoch 1y agoStock price go up is another way a company is profitable. The amazon playbook for 10+ years.
- andrew_lettuce 1y agoAmazon made huge money as they captured more and more of the market and didn't return any of it. The company literally became worth more and more each year. Open AI continues to hemorrhage money.
- bfrog 1y agoIt's another Uber moment for VC. The bullshit ends as soon as becoming a functioning business suddenly takes precedence, and the real costs start to come out.
- wrsh07 1y agoI'm confused by this claim - OpenAI has pretty meaningful revenue. If they monetized free users, they would have even better revenue. The linked post estimates eg $1 per user per month would flip them to profitable.
- otterley 1y agoAmazon hemorrhaged money for the first decade of its life. It was founded in 1994 and didn’t turn its first profit until 2004.
- otterley 1y agoStock prices are (at least in theory, discounting speculation) a consequence of profits; they are not profits in and of themselves. Profits are at the bottom of the income statement.
- patapong 1y agoSure, but Alphabet is insanely profitable, based on having grabbed a lot of market share in the search market and showing people ads. The AI companies är betting that AI will be similarly important to people, and that there is at least some stickiness to the product, meaning that market share can eventually be converted to revenue. I think both of these are relatively likely.
- CSMastermind 1y agoYoutube by all accounts I've read is not and never was profitable. Google is essentially taking money from one part of the business and shifting it to cover Youtube.
- hu3 1y agoIf that's the case then we are lucky Google maintains Youtube because it just works and I can pay $22.99 so that my entire family is ad-free. And student pricing is just $8/mo.