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I would say the issue is that most of the big AI players are burning a lot more cash than they earn, and the main thesis is that they are doing so because their
by stephc_int13 11mo ago
I would say the issue is that most of the big AI players are burning a lot more cash than they earn, and the main thesis is that they are doing so because their product will be so huge that they will need 10x-100x infrastructure to support it.
But what we're seeing at the moment, is a deceleration, not an acceleration.
- mvkel 11mo agoThere is no example of a leading company that ships a world-changing product, yet somehow runs out of cash. Maybe they lose relevance. Maybe they miss the breakthrough. That becomes the reason. So perplexity? Sure. Anthropic, even? Yep. Google? OpenAI? Nah. Regardless, viewing the unit economics, there are very clear sight lines to profitability if they want it. Just like with Amazon, Tesla, Apple, etc., when you want to grow, hoarding cash is a bad play.
- stephc_int13 11mo agoOpenAI is very unlikely to go bankrupt, but they could be in such a difficult financial position that they would have to make painful compromises with Microsoft and/or Nvidia and lose most of their leverage.
- mvkel 11mo agoMicrosoft, largest software company in the world, has (publicly and privately) admitted that it is in their best interest to ensure that OpenAI remains the leading ai company for at least the next seven years. As for nvidia, if OpenAI has less leverage, that necessitates a different ai company having more. Who would it be?
- stephc_int13 11mo agoNvidia. Believe it or not but they have their own robotics and AI plans, fully financed by their GPU division. They don’t intend to sell shovels forever.
- tim333 11mo ago>no example of a leading company that ships a world-changing product, yet somehow runs out of cash Concorde, Lotus 1-2-3, Compuserve, AOL, Yahoo, Polaroid...