5 ms·

It’s weird to me that people here suddenly seem to care about profitability for relatively early stage companies just because they’re “AI”. I know a traditiona

It’s weird to me that people here suddenly seem to care about profitability for relatively early stage companies just because they’re “AI”. I know a traditional SaaS company I worked for that IPO’d years ago and still has no signs that they can be profitable (and many others like it) and nobody seems particularly concerned.

squibonpig 5mo ago
The economy is currently kinda riding on them.
DrewADesign 5mo ago
These companies are blowing through an incomparable amount of resources. If their bravado is misplaced, the economic impacts will be far more significant.
- choilive 5mo ago
  How so? Most of these companies will take a hit but will be fine Alphabet, Amazon, Google, etc can write off their entire investments in AI and will be a-OK. The pure AI companies will obviously be dead.
  - droidjj 5mo ago
    This is what people said about the banks in 2007. Just because the big players’ balance sheets can take the hit doesn’t mean the wider economy is insulated.
    - fooker 5mo ago
      And all these banks were bailed out by big brother. So the people were right.
      - onetokeoverthe 5mo ago
        [dead]
      - Zetaphor 5mo ago
        You're still ignoring their mention of the wider economy. The banks were bailed out, but everyone downstream of them still felt the brunt of the impact, atop paying for that bailout with tax dollars.
      - DrewADesign 5mo ago
        A) they still screwed the economy and everyone in it except themselves. B) Nobody gives a shit about the banks as businesses. They got bailed out because they physically made much of the world’s economy function, like plumbing. That’s not going to happen here.
      - dwb 5mo ago
        Yeah and a lot of far less powerful people got fucked over from the crash. Is that what a successful, functioning economy looks like to you?
    - unsungNovelty 5mo ago
      Exactly. The below reply to you also says the banks were bailed out. "So people were right". How so? Big corps got home safe. Not the people. People committed suicides and lost their livelyhoods.
  - DrewADesign 5mo ago
    https://fortune.com/2026/05/18/is-ai-a-bubble-1997-or-1999-wall-street-debate/ https://fortune.com/2026/05/18/is-ai-a-bubble-1997-or-1999-w... The stock market. Stocks crash, companies go belly-up, tons of people get laid off, unemployment spikes, people die. I don’t give a shit about the companies themselves. I do give a shit about who they employ, both directly and downstream, and the job market that will result from many of them losing their jobs.
  - etempleton 5mo ago
    All of those companies will be fine, but they are currently valued on the stock market for future earnings. Investors anticipate them making a lot more money in the future. So stocks will slide dramatically. Open AI and Anthropic might not survive. And suddenly you see a 20-50% pull back on stocks. That impacts retirement and pension funds. It may trigger a panic and sell off across sectors.
  - lenkite 5mo ago
    Hah, none of the big companies are going to write off their entire investment. They will come begging for bailouts. Privatize Profits and Socialize Losses is now Bog-Standard Operating Procedure.
truncate 5mo ago
dot-com bubble? It's less about black or white, and more about how much of it. Nothing weird to me about caring given how it all also impacts peoples lives and much wilder all these numbers are becoming.
- SXX 5mo ago
  Difference is that Amazon, Microsoft, Google or Oracle are not going out of business if it all collapses. Neither chip or hardware manufacturers will be harmed.
  - wmf 5mo ago
    Oracle is on the edge; if they can't put their capex in SPVs they would get taken out by a crash.
    - SXX 5mo ago
      I'm in no way expert on corporate finance, but Oracle has always been known to be sleaziest of sleazy companies. And Larry Ellison is still 6th richest person in the world and is not known to throw money on crazy moonshots like Mark Zuckerberg. Oracle likely structured everything the way that its gonna be everyone else problem before they go down. No?
    - loeg 5mo ago
      Oracle is a tiny fraction of the stock market.
  - truncate 5mo ago
    What are you saying then? Don't question or point out things that seem weird? Drink the kool-aid?
    - SXX 5mo ago
      This is just not dot com bubble. Its not like someone built x20 datacenter capacity than humanity needs or x10 chip manufacturing capacity or x5 power grid output. So far capacity barely grown because its super slow to build, but prices skyrocketed x5 to x100. If its blownup everyone will just return to selling hardware or capacity at 20% margin instead of 2000%. Only major labs will collapse because they have nothing but models and losses. People working for them still gonna find a job just with $10,000 bunus instead of $1,000,000.
abathologist 5mo ago
It's not weird if you consider the details and the many ways that the situations are very different. But also, people cared about that other kind of BS too, e.g., https://news.ycombinator.com/item?id=39438372 https://news.ycombinator.com/item?id=39438372 or https://www.currentaffairs.org/news/2017/10/undercover-at-the-bullshit-factory https://www.currentaffairs.org/news/2017/10/undercover-at-th...
dangus 5mo ago
It’s weird to me that profitability is so thoroughly dismissed by the software tech industry because of an assumption that the tech industry will always be “early stage” and “high growth.” We can look at a “success story” like Uber and it is still net negative over its entire existence. This is a business that’s in a literal monopoly/duopoly status in most markets it operates in with vastly reduced regulatory burden compared to the industry disrupted. Literally the ideal scenario for printing money and yet it hasn’t made any. It’s the poster child for the unicorn exit that founders dream of. The end result is that Uber and companies like it are a financial instruments that transfer dollars away from one set of investors to another set of investors. If Uber hasn’t yet made its investment back, I struggle to wonder how some of these AI ventures will ever make that money back when their expenditures make Uber look like a small little side project. Meta has spent almost 4 years worth of its net income for FY2025 on AI going by this website’s data, and counting. We are decades since Web 2.0 took off, almost 20 years since the iPhone launched, 50 years of Apple Computer. Software isn’t some new industry anymore. There isn’t an industry left that hasn’t completed its digital transformation. These spray and pray economies would have died off years ago if it wasn’t for the fact that software companies have uniquely low cost structures where they don’t need to build factories or distribution networks to get their products to their customers. These low cost structures might just be concealing the fact that it’s not going to be a growth industry forever.
- 48terry 5mo ago
  And also: AI is basically the only thing anyone is talking about. Yeah, Uber existed and it's known about and was advertised and such. It has not overwhelmed every topic ever like the current LLM mandate has been. People are getting sit down and told they MUST engage with this stuff. How has the sheer saturation of LLMs not resulted in profit? It has dominated the conversation, center stage, of every news outlet for like 4 years now. It is the most known-about thing currently out there. And we haven't been able to convert that much captured attention into profitability yet? That seems... bad?
  - bix6 5mo ago
    But why would you make it profitable now? We are still in the early innings and its growth at all costs. Growing from sustainable cash flow isn’t fast enough for investors, they want HYPERGROWTH (now with RAWBERRY)
nozzlegear 5mo ago
What do you mean suddenly? People have been talking about it for as long as relatively early stage LLM companies have been noteworthy.
- quantummagic 5mo ago
  You misunderstand. He's saying there is a double standard, one for pre-LLM companies, and another for LLM companies.
toomuchtodo 5mo ago
The AI Bubble – No One's Happy - https://news.ycombinator.com/item?id=48230753 https://news.ycombinator.com/item?id=48230753 - May 2026
shimman 5mo ago
Well seeing how they've all collectively spent over a trillion dollars and American citizens still don't have medicare for all, universal childcare, free school lunch, a publics job program, or universal education; it's quite easy to see why the American public has soundly rejected this technology where some are even trying to inflict violence to stop it.
- cindyllm 5mo ago
  [dead]
- deleted 5mo ago
  [deleted]
- onetokeoverthe 5mo ago
  [dead]
xbmcuser 5mo ago
These companies are spending more money than budgets of many countries enough to add 2+% to the US GDP so the amount of loss for if it comes all crashing down will be huge.
- YetAnotherNick 5mo ago
  Loss to who? Now all of a sudden, we are caring about investors and sovereign funds? And I think we passed the threshold for crash down for AI, even if AI companies wont be that profitable. Nvidia/cloud providers will be profitable as long as there is demand for AI.
  - dhosek 5mo ago
    Their loss, big deal. Let them suffer. The problem is that when they crash they bring a lot of other stuff down along with them. The people who lost money in the 2008 crash were not the ones who suffered the aftermath.
    - YetAnotherNick 5mo ago
      Because in 2008 ordinary everyday people invested in overvalued things like house.
      - dhosek 5mo ago
        It went beyond that. I didn’t own a house, but my employer, facing an economic downturn, laid off about half its employees.
        YetAnotherNick 5mo ago
        Because house is part of economy. Crypto went from $4T market cap to $2T and no wide impact was observed. Same will be true for $4T AI market cap.
  - rsoto2 5mo ago
mgh2 5mo ago
The strategy of "scale for long term market dominance" or the idea of "build it and they will come" [1] were premised on the notion that adoption will be organic. AI usage seems to have plateaued overall [2], except for niche use cases like coding, that is why companies are forcing it on their employees to justify ROI [3] or creating "products" w/ AI features [4] or embedded addiction. [1] https://news.ycombinator.com/item?id=48241012 https://news.ycombinator.com/item?id=48241012 [2] https://news.ycombinator.com/item?id=48179021 https://news.ycombinator.com/item?id=48179021 [3] https://news.ycombinator.com/item?id=48148337 https://news.ycombinator.com/item?id=48148337 [4] https://news.ycombinator.com/item?id=48168626 https://news.ycombinator.com/item?id=48168626
- altcognito 5mo ago
  > AI usage seems to have plateaued overall, except for niche use cases like coding, I sure hope more people think like this, because it's going to leave a lot of money on the table (for me)
  - Imustaskforhelp 5mo ago
    (I don't quite understand your take?) but overall, companies like cloudflare are basically firing people for the costs associated with AI and layoffs are starting to being questioned with this take. I don't know what your statement is but if you are an employee, then as your employer is forcing you to tokenmax and forcing you to use slop and creating leaderboards for these token spend which will all end up forcing the company to bleed money afterwards they might even lay off people. If you are an employer then there are still long term issues associated. For example, cloudflare is a company which hasn't been in profit but it has burnt through 5 million dollars per month for AI as it first created an incentive (shrewd even) for employees to use it (for everything) only to please the investors but in the end, its still unclear how profitable all of it is for cloudflare. Perhaps I have misunderstood you but I really don't understand how its going to leave a lot of money on the table, the only thing I see is a race to the bottom.
  - altmanaltman 5mo ago
    How? Like if AI usage skyrockets, I am sure the money on the table will be gobbled up by multi billion dollar companies before you, i would assume? And if they are right then what? You won't get a lot of money? Seems like a weird mix of inflated ego and lack of business understanding by you on this comment.
dev1ycan 5mo ago
Maybe because losing 700b so far is not "safe" for the economy?
- somat 5mo ago
  It does not have to be bad, it depends on who they lost it to. Nvidea probably wins, the data center construction companies, electric companies etc. The tricky thing about an economy is that big picture "losing" means money is not moving and "winning" means that it is.
- guidedlight 5mo ago
  The US “loses” $1T every ~150 days on delivering basic government services, and every US citizen is on the hook for that, not just investors.
deleted 5mo ago
[deleted]
Aurornis 5mo ago
We go through this with every startup cycle. Startups are not expected to be profitable because they’re spending so much money on growth and R&D. The concept of running a business in an intentionally unprofitable state is confusing to those who don’t understand startup funding. The weird thing is that so many people believe that inference is unprofitable. There are large open weights models that companies run at a profit while charging far less than what OpenAI and Anthropic charge. Deepseek V4 just made their 75% off deal permanent and it was already very cheap. Yes, you have to consider costs of training the models, but as usage grows it’s going to become a smaller and smaller part of the business. I think we will see some data center businesses and AI companies blow up, but I think the people expecting the entire AI scene to blow up because prices quadruple are going to be disappointed.
- vips7L 5mo ago
  You have to be naive to believe that any pricing is permanent.
- sarchertech 5mo ago
  > There are large open weights models that companies run at a profit while charging far less than what OpenAI and Anthropic charge. You have no idea whether those companies are making a profit. 1. All it takes is one of them operating a loss to gain market share to force the other ones to lower prices to compete. 2. There’s not reason to expect that these relatively small companies are correctly pricing GPU depreciation.
  - Aurornis 5mo ago
    > You have no idea whether those companies are making a profit. I doubt the various providers on OpenRouter are benevolently operating at a loss because they’re so generous. You can also calculate the cost to run these models yourself. They are open weight and the hardware required to run them is not a secret. They can be modeled and many have done the business modeling. I’m always surprised at how many Hacker News commenters are unaware that a lot of financial modeling and analysis has been done on these companies and models. It’s naive to think the the hottest topic in tech has not already been dissected and analyzed by the finance industry at every level.
wmedrano 5mo ago
We're talking about ~1 trillion $$$ valuations here tho
etempleton 5mo ago
The difference is the sheer scale of the spend. I bet that SaaS company hasn’t spent the annual GDP of a small nation. If Chat GPT can’t pay the bills it is going to ripple through the economy likely causing at minimum a large correction. If the SAAS company goes under hardly anyone noticed.
dnnddidiej 5mo ago
SaaS or web in general was disrupting X making it eventually the leader with some moat. I am not so sure about AI. I feel like there is a rush to make a commodity that will be nebulous to extract value from. Except for TMSC and NVidia.
bertylicious 5mo ago
What's the company's name? And why the unnecessary secrecy in the first place? It's a publicly traded company so this information is public by definition.
jchw 5mo ago
For the past 3 decades, it really has been normal for companies to remain very unprofitable even up until their IPO, but I don't think it's actually normal in general. In fact, if AI investment really is a bubble and it pops, I reckon it could very well mark the end of this era! (Is there a more extreme example so far of this than AI companies, just in terms of raw losses? As far as I know, Netscape's lifetime losses as an independent company "only" total a bit over $100 million dollars, which is a lot, it just doesn't look like all that much when put into perspective...)
culi 5mo ago
As of Feb 2026, $1.6 trillion had been spent on AI infrastructure. In 2024 dollars, we spent $36 billion on the Manhattan Project, $150 billion on the ISS, and $620b on the entire US interstate highway system. In 10 years, we've spent nearly 3x the cost of the entire US interstate highway system on AI. Some helpful visualizations: https://www.aljazeera.com/news/2026/2/19/visualising-ai-spending-how-does-it-compare-with-historys-mega-projects https://www.aljazeera.com/news/2026/2/19/visualising-ai-spen...

squibonpig 5mo ago

The economy is currently kinda riding on them.

DrewADesign 5mo ago

These companies are blowing through an incomparable amount of resources. If their bravado is misplaced, the economic impacts will be far more significant.

choilive 5mo ago
How so? Most of these companies will take a hit but will be fine Alphabet, Amazon, Google, etc can write off their entire investments in AI and will be a-OK. The pure AI companies will obviously be dead.
- droidjj 5mo ago
  This is what people said about the banks in 2007. Just because the big players’ balance sheets can take the hit doesn’t mean the wider economy is insulated.
  - fooker 5mo ago
    And all these banks were bailed out by big brother. So the people were right.
    - onetokeoverthe 5mo ago
      [dead]
    - Zetaphor 5mo ago
      You're still ignoring their mention of the wider economy. The banks were bailed out, but everyone downstream of them still felt the brunt of the impact, atop paying for that bailout with tax dollars.
    - DrewADesign 5mo ago
      A) they still screwed the economy and everyone in it except themselves. B) Nobody gives a shit about the banks as businesses. They got bailed out because they physically made much of the world’s economy function, like plumbing. That’s not going to happen here.
    - dwb 5mo ago
      Yeah and a lot of far less powerful people got fucked over from the crash. Is that what a successful, functioning economy looks like to you?
  - unsungNovelty 5mo ago
    Exactly. The below reply to you also says the banks were bailed out. "So people were right". How so? Big corps got home safe. Not the people. People committed suicides and lost their livelyhoods.
- DrewADesign 5mo ago
  https://fortune.com/2026/05/18/is-ai-a-bubble-1997-or-1999-wall-street-debate/ https://fortune.com/2026/05/18/is-ai-a-bubble-1997-or-1999-w... The stock market. Stocks crash, companies go belly-up, tons of people get laid off, unemployment spikes, people die. I don’t give a shit about the companies themselves. I do give a shit about who they employ, both directly and downstream, and the job market that will result from many of them losing their jobs.
- etempleton 5mo ago
  All of those companies will be fine, but they are currently valued on the stock market for future earnings. Investors anticipate them making a lot more money in the future. So stocks will slide dramatically. Open AI and Anthropic might not survive. And suddenly you see a 20-50% pull back on stocks. That impacts retirement and pension funds. It may trigger a panic and sell off across sectors.
- lenkite 5mo ago
  Hah, none of the big companies are going to write off their entire investment. They will come begging for bailouts. Privatize Profits and Socialize Losses is now Bog-Standard Operating Procedure.

truncate 5mo ago

dot-com bubble? It's less about black or white, and more about how much of it. Nothing weird to me about caring given how it all also impacts peoples lives and much wilder all these numbers are becoming.

SXX 5mo ago
Difference is that Amazon, Microsoft, Google or Oracle are not going out of business if it all collapses. Neither chip or hardware manufacturers will be harmed.
- wmf 5mo ago
  Oracle is on the edge; if they can't put their capex in SPVs they would get taken out by a crash.
  - SXX 5mo ago
    I'm in no way expert on corporate finance, but Oracle has always been known to be sleaziest of sleazy companies. And Larry Ellison is still 6th richest person in the world and is not known to throw money on crazy moonshots like Mark Zuckerberg. Oracle likely structured everything the way that its gonna be everyone else problem before they go down. No?
  - loeg 5mo ago
    Oracle is a tiny fraction of the stock market.
- truncate 5mo ago
  What are you saying then? Don't question or point out things that seem weird? Drink the kool-aid?
  - SXX 5mo ago
    This is just not dot com bubble. Its not like someone built x20 datacenter capacity than humanity needs or x10 chip manufacturing capacity or x5 power grid output. So far capacity barely grown because its super slow to build, but prices skyrocketed x5 to x100. If its blownup everyone will just return to selling hardware or capacity at 20% margin instead of 2000%. Only major labs will collapse because they have nothing but models and losses. People working for them still gonna find a job just with $10,000 bunus instead of $1,000,000.

abathologist 5mo ago

It's not weird if you consider the details and the many ways that the situations are very different. But also, people cared about that other kind of BS too, e.g., https://news.ycombinator.com/item?id=39438372 https://news.ycombinator.com/item?id=39438372 or https://www.currentaffairs.org/news/2017/10/undercover-at-the-bullshit-factory https://www.currentaffairs.org/news/2017/10/undercover-at-th...

dangus 5mo ago

It’s weird to me that profitability is so thoroughly dismissed by the software tech industry because of an assumption that the tech industry will always be “early stage” and “high growth.” We can look at a “success story” like Uber and it is still net negative over its entire existence. This is a business that’s in a literal monopoly/duopoly status in most markets it operates in with vastly reduced regulatory burden compared to the industry disrupted. Literally the ideal scenario for printing money and yet it hasn’t made any. It’s the poster child for the unicorn exit that founders dream of. The end result is that Uber and companies like it are a financial instruments that transfer dollars away from one set of investors to another set of investors. If Uber hasn’t yet made its investment back, I struggle to wonder how some of these AI ventures will ever make that money back when their expenditures make Uber look like a small little side project. Meta has spent almost 4 years worth of its net income for FY2025 on AI going by this website’s data, and counting. We are decades since Web 2.0 took off, almost 20 years since the iPhone launched, 50 years of Apple Computer. Software isn’t some new industry anymore. There isn’t an industry left that hasn’t completed its digital transformation. These spray and pray economies would have died off years ago if it wasn’t for the fact that software companies have uniquely low cost structures where they don’t need to build factories or distribution networks to get their products to their customers. These low cost structures might just be concealing the fact that it’s not going to be a growth industry forever.

48terry 5mo ago
And also: AI is basically the only thing anyone is talking about. Yeah, Uber existed and it's known about and was advertised and such. It has not overwhelmed every topic ever like the current LLM mandate has been. People are getting sit down and told they MUST engage with this stuff. How has the sheer saturation of LLMs not resulted in profit? It has dominated the conversation, center stage, of every news outlet for like 4 years now. It is the most known-about thing currently out there. And we haven't been able to convert that much captured attention into profitability yet? That seems... bad?
- bix6 5mo ago
  But why would you make it profitable now? We are still in the early innings and its growth at all costs. Growing from sustainable cash flow isn’t fast enough for investors, they want HYPERGROWTH (now with RAWBERRY)

nozzlegear 5mo ago

What do you mean suddenly? People have been talking about it for as long as relatively early stage LLM companies have been noteworthy.

quantummagic 5mo ago
You misunderstand. He's saying there is a double standard, one for pre-LLM companies, and another for LLM companies.

toomuchtodo 5mo ago

The AI Bubble – No One's Happy - https://news.ycombinator.com/item?id=48230753 https://news.ycombinator.com/item?id=48230753 - May 2026

shimman 5mo ago

Well seeing how they've all collectively spent over a trillion dollars and American citizens still don't have medicare for all, universal childcare, free school lunch, a publics job program, or universal education; it's quite easy to see why the American public has soundly rejected this technology where some are even trying to inflict violence to stop it.

cindyllm 5mo ago
[dead]
deleted 5mo ago
[deleted]
onetokeoverthe 5mo ago
[dead]

xbmcuser 5mo ago

These companies are spending more money than budgets of many countries enough to add 2+% to the US GDP so the amount of loss for if it comes all crashing down will be huge.

YetAnotherNick 5mo ago
Loss to who? Now all of a sudden, we are caring about investors and sovereign funds? And I think we passed the threshold for crash down for AI, even if AI companies wont be that profitable. Nvidia/cloud providers will be profitable as long as there is demand for AI.
- dhosek 5mo ago
  Their loss, big deal. Let them suffer. The problem is that when they crash they bring a lot of other stuff down along with them. The people who lost money in the 2008 crash were not the ones who suffered the aftermath.
  - YetAnotherNick 5mo ago
    Because in 2008 ordinary everyday people invested in overvalued things like house.
    - dhosek 5mo ago
      It went beyond that. I didn’t own a house, but my employer, facing an economic downturn, laid off about half its employees.
      - YetAnotherNick 5mo ago
        Because house is part of economy. Crypto went from $4T market cap to $2T and no wide impact was observed. Same will be true for $4T AI market cap.
- rsoto2 5mo ago

mgh2 5mo ago

The strategy of "scale for long term market dominance" or the idea of "build it and they will come" [1] were premised on the notion that adoption will be organic. AI usage seems to have plateaued overall [2], except for niche use cases like coding, that is why companies are forcing it on their employees to justify ROI [3] or creating "products" w/ AI features [4] or embedded addiction. [1] https://news.ycombinator.com/item?id=48241012 https://news.ycombinator.com/item?id=48241012 [2] https://news.ycombinator.com/item?id=48179021 https://news.ycombinator.com/item?id=48179021 [3] https://news.ycombinator.com/item?id=48148337 https://news.ycombinator.com/item?id=48148337 [4] https://news.ycombinator.com/item?id=48168626 https://news.ycombinator.com/item?id=48168626

altcognito 5mo ago
> AI usage seems to have plateaued overall, except for niche use cases like coding, I sure hope more people think like this, because it's going to leave a lot of money on the table (for me)
- Imustaskforhelp 5mo ago
  (I don't quite understand your take?) but overall, companies like cloudflare are basically firing people for the costs associated with AI and layoffs are starting to being questioned with this take. I don't know what your statement is but if you are an employee, then as your employer is forcing you to tokenmax and forcing you to use slop and creating leaderboards for these token spend which will all end up forcing the company to bleed money afterwards they might even lay off people. If you are an employer then there are still long term issues associated. For example, cloudflare is a company which hasn't been in profit but it has burnt through 5 million dollars per month for AI as it first created an incentive (shrewd even) for employees to use it (for everything) only to please the investors but in the end, its still unclear how profitable all of it is for cloudflare. Perhaps I have misunderstood you but I really don't understand how its going to leave a lot of money on the table, the only thing I see is a race to the bottom.
- altmanaltman 5mo ago
  How? Like if AI usage skyrockets, I am sure the money on the table will be gobbled up by multi billion dollar companies before you, i would assume? And if they are right then what? You won't get a lot of money? Seems like a weird mix of inflated ego and lack of business understanding by you on this comment.

dev1ycan 5mo ago

Maybe because losing 700b so far is not "safe" for the economy?

somat 5mo ago
It does not have to be bad, it depends on who they lost it to. Nvidea probably wins, the data center construction companies, electric companies etc. The tricky thing about an economy is that big picture "losing" means money is not moving and "winning" means that it is.
guidedlight 5mo ago
The US “loses” $1T every ~150 days on delivering basic government services, and every US citizen is on the hook for that, not just investors.

deleted 5mo ago

[deleted]

Aurornis 5mo ago

We go through this with every startup cycle. Startups are not expected to be profitable because they’re spending so much money on growth and R&D. The concept of running a business in an intentionally unprofitable state is confusing to those who don’t understand startup funding. The weird thing is that so many people believe that inference is unprofitable. There are large open weights models that companies run at a profit while charging far less than what OpenAI and Anthropic charge. Deepseek V4 just made their 75% off deal permanent and it was already very cheap. Yes, you have to consider costs of training the models, but as usage grows it’s going to become a smaller and smaller part of the business. I think we will see some data center businesses and AI companies blow up, but I think the people expecting the entire AI scene to blow up because prices quadruple are going to be disappointed.

vips7L 5mo ago
You have to be naive to believe that any pricing is permanent.
sarchertech 5mo ago
> There are large open weights models that companies run at a profit while charging far less than what OpenAI and Anthropic charge. You have no idea whether those companies are making a profit. 1. All it takes is one of them operating a loss to gain market share to force the other ones to lower prices to compete. 2. There’s not reason to expect that these relatively small companies are correctly pricing GPU depreciation.
- Aurornis 5mo ago
  > You have no idea whether those companies are making a profit. I doubt the various providers on OpenRouter are benevolently operating at a loss because they’re so generous. You can also calculate the cost to run these models yourself. They are open weight and the hardware required to run them is not a secret. They can be modeled and many have done the business modeling. I’m always surprised at how many Hacker News commenters are unaware that a lot of financial modeling and analysis has been done on these companies and models. It’s naive to think the the hottest topic in tech has not already been dissected and analyzed by the finance industry at every level.

wmedrano 5mo ago

We're talking about ~1 trillion $$$ valuations here tho

etempleton 5mo ago

The difference is the sheer scale of the spend. I bet that SaaS company hasn’t spent the annual GDP of a small nation. If Chat GPT can’t pay the bills it is going to ripple through the economy likely causing at minimum a large correction. If the SAAS company goes under hardly anyone noticed.

dnnddidiej 5mo ago

SaaS or web in general was disrupting X making it eventually the leader with some moat. I am not so sure about AI. I feel like there is a rush to make a commodity that will be nebulous to extract value from. Except for TMSC and NVidia.

bertylicious 5mo ago

What's the company's name? And why the unnecessary secrecy in the first place? It's a publicly traded company so this information is public by definition.

jchw 5mo ago

For the past 3 decades, it really has been normal for companies to remain very unprofitable even up until their IPO, but I don't think it's actually normal in general. In fact, if AI investment really is a bubble and it pops, I reckon it could very well mark the end of this era! (Is there a more extreme example so far of this than AI companies, just in terms of raw losses? As far as I know, Netscape's lifetime losses as an independent company "only" total a bit over $100 million dollars, which is a lot, it just doesn't look like all that much when put into perspective...)

culi 5mo ago

As of Feb 2026, $1.6 trillion had been spent on AI infrastructure. In 2024 dollars, we spent $36 billion on the Manhattan Project, $150 billion on the ISS, and $620b on the entire US interstate highway system. In 10 years, we've spent nearly 3x the cost of the entire US interstate highway system on AI. Some helpful visualizations: https://www.aljazeera.com/news/2026/2/19/visualising-ai-spending-how-does-it-compare-with-historys-mega-projects https://www.aljazeera.com/news/2026/2/19/visualising-ai-spen...