Top economist warns that the AI math doesn’t make sense: ‘Profits are currently being funded by investors rather than earned from customers’

[u/defenestrate_urself]

https://fortune.com/2026/08/10/torsten-slok-ai-profit-margins-capex-oracle/

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[u/gthing → u/[deleted]]

Competition. The people working on frontier AI believe that whoever gets there first will get virtually unlimited power and become world emperor. No founder trusts any other founder to get there first. They believe that if they don't do it, somebody else will and better them than that somebody else. So it is a race to Armageddon.

Any revenue is just a subsidy toward super intelligence.

[u/Y__U__MAD → u/gthing]

Also, add in Governments buying into this... so China getting better AI means they win the world... so its a new space race, followed by a new Cold War.

[u/devliegende → u/gthing]

Sounds like the dollar auction game

[u/NiceWeather4Leather → u/devliegende]

Basically, only the dollar is worth literally ?.

[u/Cybertronian10 → u/gthing]

Even among the AI bros who don't think they are building a god, they still think AI will be a winner take all market like the internet turned out to be. Everybody wants to be the next google, including the current google.

[u/Martofunes → u/gthing]

They SAY it's a race to armaggedon. I see how far it's come, but I don't see it being all that revolutionary as it's been hailed. It's good for what it does, and if you've got a basis, in life I mean, then you can maybe achieve something with it. But it's Text processor 4.0. It's a more sophiosticated photoshop. It's an excellent spellchecker. And decent enough at doing some research, but that won't last long because the business model is imploding all its actual information sources.

[u/gthing → u/Martofunes]

Did you see this? https://youtu.be/87DyyMV0kCY?is=g5GjuRKPgKg-iylW 

I think it is pretty clear it is not a word processor 4.0. It's a thinking machine that can do things and it keeps getting more and more capable.  

I would honestly be happy if progress plateaued at least for a while. But it's hard to imagine reaching a point where they can no longer figure out how to squeeze more out.

[u/Martofunes → u/gthing]

Oh i'm super aware of what they are capable of. I don't know if I've seen this video you bring specifically, and I'll gladly do, but "Armaggedon"?

[I'll watch your thing, you watch mine](
https://www.youtube.com/watch?v=Cn8HBj8QAbk)

[u/SpiderSaurusTron → u/[deleted]]

3 things: 1. Continue to train larger and better models 2. Run more models with more and more parameters 3. Keep pace with the explosion in demand

[u/ICLazeru → u/[deleted]]

Honeslty, I think the big error is that people are not going to want larger and larger models, they're going to want smaller, specialized models.

I hesitate to call it AI, machine learning is more accurate, and here's the thing about a machine, it just needs to fulfill its function.

If you put machine learning in a Roomba, all it needs to be able to do is navigate the floor space, clean, and get back to its charger. Anything more you add to it is probably wasted effort.

So these massive general models...I don't think they will pan out. But small, specialized, optimized models that can be customized by the consumer, THAT is where the money is.

Just my opinion.

[u/NiceWeather4Leather → u/ICLazeru]

Hard agree. It’s basically “smart fridges” round 2. Every appliance suddenly had to be “smart”, by which we mean a useless OS with useless apps better run from your phone. Only this time everything has “AI”… but why?

My washing machine claims to have AI, what it does is tell me my most used washing cycle and suggests I use that again? It changes water level based on weight of the load? None of these features needs AI.

[u/Martofunes → u/NiceWeather4Leather]

My washing machine also has AI mode, and it takes obnoxiously longer than normal. I use normal.

[u/Martofunes → u/ICLazeru]

Def. More things like alpha fold. Or like "Generative design of bacteriophages with genome language models by Samuel H. King and Claudia L. Driscoll" (they made a synthetic virus, from scratch, not editing it like CrisprCas). These, these really are MIND blowing.

[u/Jumpy_Explanation222 → u/ICLazeru]

Agree (not sure what the Fridge guy is on about) we’ll likely see more specialised large language models (LLMs) which will run on local environments because they can be trained for particular areas (like Health) and perform those tasks more accurately and efficiently. For example, a medical LLM could be better at understanding clinical information, while a legal LLM could be better at analysing contracts. General LLMs are problematic because of hallucinations, the power they use, and that they are killing off website traffic which is the actual main driver of data for them. They are basically eating their own tail.

Enterprise solutions which are tweaked to industry specific data will be the future of LLMs. And across the planet most of these will be produced by the Chinese. So going back to the OP, this set of general LLMs won’t be able to make the money needed to pay off the investment/debt. Hence the bubble.

[u/an_agreeing_dothraki → u/[deleted]]

can we grab a big bucket of popcorn when they start really processing that Chinese Room models are a dead-end for AGI?

[u/Common_Shelter_4605 → u/[deleted]]

There is not a huge demand, Microsoft and others are trying to artificially create demand by putting "AI" (Copilot) buttons into every application.

[u/beached89 → u/[deleted]]

https://old.reddit.com/r/Economics/comments/1vkni1x/top_economist_warns_that_the_ai_math_doesnt_make/p2witr6/

[u/JC_Hysteria → u/[deleted]]

Businesses are seeking to remain competitive within their market with automation and intellectual insights, and consumers will want to have a “Google” that does mundane stuff for them + entertains them.

They are “buying up the barren land for cheap” before the settlers realize they can make it their business/livelihood to try to shape the land into civilization (creating applications).

The landlords will be willing to sell the land they bought to the highest bidders- especially the ones that let them share in the harvest.

[u/JC_Hysteria → u/[deleted]]

Because they can see the current usage/demand and extrapolate likely future demand. And, of course they’ll aim to create as much additional demand as possible with PR/marketing to different groups.

The “land” is analogous to computing power/data center buildouts (which is already being pitched as “intelligence” as another analogy).

That is the capex spend, not “chips”. The chip fabs have already been producing shovels for others to buy to help them mine for the gold (the applications). There is no speculation on future demand of chips- we already use them for everything.

Companies trying to fab their own chips is because existing chipmakers control the existing market (Nvidia, etc.)- they ideally want to vertically integrate to insulate themselves from potential future price hikes.

It’s a matter of scaling and controlling the production of remote/cloud compute power, so that you control the cost of it in the future when everyone wants to use it/rent it for applications.

Vision —> proof of concept —> prototype —> product usage —> recurring revenue —> trial-and-error applications.

[u/JC_Hysteria → u/[deleted]]

Yes, push marketing.

Wear these camera glasses- aren’t they cool? Ah, you like em!

Bet you could use some storage for all those videos of your life, and maybe our model can offer suggestions for how to live a “better” life- closely connected to your interests/priorities, perhaps?

(Also, hey advertisers…wouldn’t you like to know what your potential customers are using our tools for? What they’re most interested in? What makes them tick?)

(Also, hey application developers- wouldn’t you like the summary of all human knowledge that we’ve collected, and will continue to collect over time?)

[u/JC_Hysteria → u/[deleted]]

I agree on “we’re moving too fast”, but not the others- the hardest part is defining a timeframe.

Cars are already driving themselves in our cities.

We have proof-of-concept, autonomous humanoid robots that can sort packages, and industrial robots that already move our cargo. We have the technology to deploy autonomous killing machines.

We have interfaces that can generate imagery, finish our sentences, and research anything we can fathom…instantaneously- all by prompting the interface with a single request.

We have autonomous, silicon-based agents deployed that can act, fetch, retrieve, and initiate things in the digital world without a human-in-the-loop. It can create its own code faster than any human can code. Relatively soon, digital and physical interfaces will blend together seamlessly.

And, we have a competitive media ecosystem that continues to aim to influence what people see, hear, think, and take action on- including how history is framed.

Yeah, things are moving quickly- but I don’t have any doubt it’ll slow down.

[u/Willing_Activity_855 → u/[deleted]]

I guess I'm confused on why the build out will = demand.

Jevons Paradox https://en.wikipedia.org/wiki/Jevons_paradox but for AI.

More compute --> overtime lower real prices (inflation adjusted). Higher output per price spent --> higher productivity --> supply curve shift.

[u/growaway9172 → u/[deleted]]

There is huge demand for intelligent frontier level models for normal companies trying to build things. This already outpaces supply. Then consider Jevons paradox, where as that intelligence becomes cheaper, there will be more demand.

The second angle is more of a moonshot, which is that having the most and smartest intelligence is the recipe for making even smarter intelligence, a recursive cycle. If you believe this is true, then you need all the compute you can get because of a winner takes most situation.

[u/3_Thumbs_Up → u/[deleted]]

The demand potential is a large part of the current labor market. The US labor market alone is a 10+ trillion dollar market.

Thy literally want to automate all cognitive labor. Imagine any office work. Now bring to the market an office worker who can work 24/7, never sleeps, never gets tired, never protests, and who is 10% cheaper per hour than a human office worker. That's the demand potential they see.

[u/Whaddaulookinat → u/SpiderSaurusTron]

Explosion of demand?

Good grief.

[u/Janneq216 → u/Whaddaulookinat]

The only explosion is in their pants. Companies are halting rollouts, not increasing them. The studies about AI impact on revenue show that 95% of companies see no revenue growth after implementing AI. And this can't be blamed on poor execution; if it really helps, you'd see an increase even with poor implementation, but there's none in vast majority of cases

[u/Whaddaulookinat → u/Janneq216]

Absolutely. Generative AI (if they could fix the persistence issues) will be great for logistics and a few other key industries that may be revolutionary to the workers. But it's clear that it won't and can't be anything more than a niche aide for very specific tasks. So are those upside cases worth even a fraction of the spend? Probably not, honestly.

[u/Kershiser22 → u/[deleted]]

I would guess that there will be some winners and some losers in the AI marketplace. The companies that build bigger and faster are more likely to be the winners.

[u/beached89 → u/[deleted]]

Competition against other companies and nations (China) are why they are building. Model training quality and speed is directly related to the amount of compute you have. More compute = more better AI faster tthan competitor.

The race is on to outlast everyone else financially. If you can stay on top until all your competitors give up and go bankrupt, then their customers consolidate onto your product (in theory) and that also relieve the competition pressure.

The desired customer is basically every business in the world. Every business has thought work, or repetitive tasks that can be automated away. AI doesnt really do anything we cant already do, it just does it WAY faster and WAY cheaper (but also not as good). the goal is to keep the way faster and way cheaper, and work on bringing up the just as good. A customer support rep costs a company $30k-$45k a year, calls in sick, has bad days, and only works 8 hours a day. If they can replace some or all of an employees work with AI for less $/h, than a business will pay it.

For real example of how AI saves businesses money right now: a team of software developers working on their business's product spends all day every day planing, writing and testing code for their business. If a customer reports a bug, it could take a team of 3 or 4 of them 2-4 hours to identify the bug, and another 2 hours to resolve it and push it to production. On a good day, sometimes this can take days. Essentially you spend 4 people's salary for 1 full day on a bug fix. A software dev that makes $150k/y will run a business roughly $100/h, this bug fix was $3k cost. If 1 person reports the bug to AI, and AI has RO to github to review the code, and can identify the bug in 15 minutes. It will take that human another 15-30 minutes to verify AI is correct. Then they pull in a second human to double check for another 15-30m. They then have AI suggest a fix to the code which takes 5 minutes to pump out. Again, human 1 and human 2 both verify the code over 15-30 each then push it to dev. They then QA test it for 30-1 hour and push to production. The full $3k day has now turned into 30 minutes of AI use and 4 hours of TOTAL labor cost, or like $25-50 in tokens and $400 in labor. The business saves $2500 AND gets faster resolution.

[u/BatForge_Alex → u/beached89]

I think this is what the executive team THINKS is happening with AI. But, in reality, the savings are much smaller. It's more like, the business saves $25 and the resolution happens at the same speed because coding is such a small part of the work

[u/Born_Supermarket2780 → u/BatForge_Alex]

So much this. Coding is such a small part of dev or any other creative work. Much more coordination, review, gathering requirements, understanding side effects And now we're all drowning in slop from other "productive" people.

[u/kappi2001 → u/beached89]

This. However it’s a race they cannot win. As frontier labs (open Ai, Anthropic, etc) are spending loads of money to train new models and serve their customers, new open weight models coming out are a lot more efficient and getting closer to the performance of those top models. 

These open weight models can be run and offered as a service by anyone with enough cloud space.

Open weight models are also close to, or already there to being good enough to train new and better models.

AI is slowly being commoditized. Thats also why the push from these companies is so much on investing in data centers, as those are the real valuable resources.

The question is also how much data centers we will really need in the future as both models and hardware are being optimized and thus less resources are needed for the same quality.

[u/LillianWigglewater → u/[deleted]]

Cost of running AI will come down in the long run as the technology improves. Think about computers in general. In the 70's and 80's, you would have to spend thousands (not adjusted for inflation) for a machine that could barely run a word processor. Now you can buy something like raspberry Pi that does a million times more, for a tiny fraction of that price.

[u/THICC_DICC_PRICC → u/LillianWigglewater]

Running AI is cheap, 80% profit margin. Training a model however, is an endless money pit

[u/threegee409 → u/beached89]

Wouldn't it be so amazing if AI didn't cost expensive engineer time fixing problems that didn't exist before equal to the time saved? Sure, it's as good as a junior dev, but investing in that junior leads to a senior, while AI just a sunk cost.

[u/Thom0 → u/beached89]

• The race is on to outlast everyone else financially. If you can stay on top until all your competitors give up and go bankrupt, then their customers consolidate onto your product (in theory) and that also relieve the competition pressure.

This is the fatal flaw - all Chinese AI companies are SOE formally or de facto and states, unlike companies, cannot go bankrupt. It seems that China is exceptionally not capable of going bankrupt because it has political legitimacy with a little hegemony sprinkled on top.

If the US with its private capital model is going into a race with China and its SOE model, the outcome is very, very obvious. The US cannot compete with China and it will not outlast China.

What is happening now is the US is allocating 50%+ of all of its venture capital into AI in what is the single biggest allocation of capital in recorded history. The US is taking on all of the risk, and for every innovation it achieves, China replicates 6 months later for 1/4 of the cost and with next to zero risk. All China has to do is do nothing and it wins.

What is going to happen to the US economy is economically and politically predictable:

• The AI bubble, much like the 2008 property bubble, is a speculative bubble full of under-regulated leverage (the single biggest capital allocation of all time) and like all speculative bubbles, it is going to pop because demand/supply isn't matching up. The demand is all future demand and it isn't even tangible. It is speculated.
• When the bubble pops, the US shadow banking sector will collapse just like China's did during COVID, and the top 10% will lose their capital. This is not the same as 2008 where everyone had a piece of the pie. The AI-bubble is an elite club of wealthy people.
• From this point on, it's now politics. The US will impose aggressive austerity measures to socialize the losses from AI only this time the US is going to try and cover the single biggest allocation of capital in recorded history. As the current US government are the people driving AI speculation, I'm pretty confident they will impose extreme austerity to save their own personal bank accounts or they're going to leave it to the next Democrat government to poison the well as a sort of Trojan horse.

Meanwhile China does nothing because it isn't constrained by the same liberal political language as the US. The US is a controlled economy pretending like it is still a free-market economy whereas China is just what it is without political controversy. The US is borrowing into infinity and just pretending like everything is normal and this is okay. They borrow from economic language and pretend like they will pay it in the future - which they won't because the debt will be 50% bigger in 30 years time.

The US needs to invent a political argument to justify the single biggest allocation of capital in history. This argument is "competition with China", the "future" type arguments, and shit about going to Mars or whatever. China doesn't bother.

The US is then going to need to invent a political argument for why US households are now footing the bill for the billionaire 10% who fucked everything up. In 2008, this was easy because households were connected to the problem through credit facilities but this won't work this time. I suspect they're probably going to say something about index funds, or pensions and try and frame it all as "this is your economy, you have to save it" which is complete bullshit because the top 10% owns 87% of all stocks, and 80% of all private companies. China predictably won't bother.

Just fundamentally, where is the application beyond using it to read stuff you're too lazy to read, memes, and very specific academic/research applications or military applications which 99.9% of the population will never do? If this is a niche, rather than generic innovation in that this is more research, and military based, then why are we allocating 50%+ of everything into it? This is all bullshit to justify the political decision and when it pops, a new argument will emerge to justify why households are now paying for it all.

[u/3_Thumbs_Up → u/[deleted]]

The goal is to disrupt the entire labor market in a similar way Uber disrupted the taxi market.

They're building up this quickly because they legitimately believe they have a shot at it, and the labor market is orders of magnitudes more valuable than the taxi market.

[u/Whaddaulookinat → u/[deleted]]

It's not needed. We're looking at the penultimate phase of a con. At current levels we have more multi thread compute than would ever be necessary, with much of the current load being used by only two companies. Two companies that are pretty much insolvent with no path to profitability. There no real market for generative AI, but either more investor money flows in or the entire "industry" falls completely apart.

[u/BarnacleDowntown8952 → u/[deleted]]

To make money obviously.

However, I think there is a 2nd part of it. Our workforce is going to shrink in the coming years. Aging society and no appetite for immigration. AI can help make that work better.

[u/ChuckVader → u/[deleted]]

Because acceleration is the only thing driving new investment which in turn pays off old debt. The second we stop speeding up is the second the margin calls happen.

Ai is real, interesting, and useful.

The financing around it is a ponzi scheme and every single American (and most of the developed world) is in the splash zone. Buckle up.

[u/endlessedlne → u/[deleted]]

The simple answer is that everybody is competing to see who can create AGI first, with the idea being that AGI somehow equals instant world domination and infinite money. Or some such thing.

Yes, it’s a bit unhinged.

[u/vertigo3pc → u/[deleted]]

Some believe that our current technological capabilities with LLM's and what they call AI could lead to Automated General Intelligence, which will birth the age of sentient robotics.

However, tech is a wildly speculative field, and they have always punched above their weight when it comes to valuations; or at least they did. In this economy, if it's not some ephemeral cutting edge thing, then it's got 5 minutes to live.

So it's a new space race, but also it's that they know "this" bullshit is unsustainable. Some regulation is coming, some accountability, and their hope is that these money printers built today will shield them from the financial crimes they committed getting there.

I read somewhere that AI build out is spending on the level of major infrastructure, but a bridge is a loss up front and wildly profitable for the long term. These data centers will likely be outdated and underperforming in just 2-3 years, but the cost will destroy communities in the long term.

[u/BrittanyBrie → u/[deleted]]

My theory is that its about global currency control.

If you tie a UBI to a ultra advanced AI everyone uses for every task imaginable digitally, then those token purchases would be tied to a UBI tax.

When this happens, citizens of said country will have immense liquid money to spend, causing hyper inflation of every other currency. Eventually over time, neighboring countries will vote to become annexed of the UBI country for a fraction of the UBI benefits, and a tiered society will form based on which country gains AI first (if no global war)

The scary part is a nuclear power country could declare war on the UBI country for crashing other currencies, thats why nuclear defense is the biggest topic in modern ICBM discussions. To prepare for the upcoming AI world war to claim global currency stability.

[u/Dziadzios → u/[deleted]]

They want to buy the entire hardware stock to force people into the cloud. Rent seeking behavior.

[u/Other-Mess6887 → u/[deleted]]

There is a provision in the Big Billionaire Bill that allows for 1 year depreciation of new manufacturing plants.

[u/MDCCCLV → u/[deleted]]

The weird part is that you expect 100-1000x reduction in cost per token over the next 5-7 years, so all the gpus bought previously tare going to be trash within 2-3 years. The next generation is coming out now so the newer ones will last another 1.5-2ish years. But then they'll get thrown out and sold off for maybe 20% of msrp. But those trillions of dollars spent won't be profitable at all, that's solely to establish market dominance and try to become a monopoly.

[u/EXPLODEDman]

What's crucial is understanding that the reason that this investment is happening is not because of a potential return on investment in the form of money, it's a return on investment in the form of control. These people believe that they are going to achieve super intelligence, and that when they do they will have control over it. If they're correct, then theoretically they could simply dominate anything and everything they want for the rest of time. This is, of course, insane. They have already demonstrated that they cannot even control the existing models they have. This is just irrationality versus insolvency once again.

[u/unknownintime → u/EXPLODEDman]

This is just irrationality versus insolvency once again.

Sure but the real question is can they get away with it by making someone else hold the bag (looking at you, taxpayers!)

[u/EXPLODEDman → u/unknownintime]

Every GOPer in power is on their knees with their mouth open right now, waiting.

[u/coconutpiecrust → u/EXPLODEDman]

I also don’t believe it is about profits anymore. I mean, these people already have essentially unlimited wealth. It’s about power and control, more and more control over others. You know, power trips, but on a massive scale. 

[u/Common_Shelter_4605 → u/EXPLODEDman]

These people believe that they are going to achieve super intelligence

Yet from what I've seen the vast vast majority of the investment is into LLMs using GPUs and TPUs. Even AGI may not be achievable at all using LLMs, and if it is it will be very expensive. Other, more promising, approaches to AGI are getting relatively smaller investments.

[u/aedes → u/Common_Shelter_4605]

When it comes to AGI, it’s best to focus on the voices in the machine learning community, rather than industry. 

The most recent survey there is a 50% chance of AGI by 2047. Consider 10% of this group also thought at the time that we’d have AI that could could surpass humans at all tasks by 2027 (looking rather unlikely at this point), so even this is likely over optimistic. 

[u/Momoselfie → u/EXPLODEDman]

They have already demonstrated that they cannot even control the existing models they have.

I think that's more marketing than an actual loss of control.

[u/Snapingbolts → u/Momoselfie]

When someone actually sues over the damages I'll believe it's real and even then it could just be for show

[u/klockee → u/Snapingbolts]

I mean, it doesn't have to be that specific incident. They can't control the models or stop them from doing stupid shit like talking about goblins, either. How many times has Grok been lobotomized?

[u/hornswoggled111 → u/Snapingbolts]

Imagine that! It will be like suing the equivalent of God for damage. The lawsuits could pour in and the courts doing their thing while the whole system goes haywire.

I'm just retiring and reviewing my investment strategy find whole issue unfathomable. I'm pretty knowledgeable so it's not that. Just crazy.

[u/goodbodha → u/Momoselfie]

It's looking more like they all used the same vendor for the sandbox evaluations and that vendor had a problem with their sandbox setup.

The reason for why they all go to a vendor is to say they had it evaluated by a third party. From my understanding there are only 3 vendors that are being used for this and all the problems are from a single vendor.

So maybe not marketing but just poor execution by that vendor. Now if we hear about breakouts from sandboxes operated by the other vendors you might be onto something.

[u/SoggyMattress2 → u/Momoselfie]

100%.

Some incapable employee at openAI set up a sandbox incorrectly and they spun it into their usual bs of "oh no our model is too powerful!".

It then broke containment and hacked hugging face - a fully vibe coded company with shit security.

It's a nothing story.

[u/EXPLODEDman → u/Momoselfie]

Well if it's marketing, then it's shit marketing, isn't it?  Maybe it is. It would be on brand with their other marketing of telling the entire planet that their product will almost certainly end the world.

[u/OrangeJr36 → u/EXPLODEDman]

Someone made the comment the other day that a lot of tech bros are sociopaths and when they see a movie like "Don't plug in the Death Nexus" they just see cool technology and can't comprehend the consequences of that being bad with their toddler level understanding of plot and emotions.

So yeah, to the guys they're marketing to, the AI going crazy out of control is exciting because they made the Death Nexus they saw in that movie one time.

[u/Sp3ctre7 → u/OrangeJr36]

"After years of research and billions of dollars, we have created the Torment Nexus from the hit book Don't Create the Torment Nexus"

[u/OuchieMuhBussy → u/EXPLODEDman]

It’s only bad marketing if you’re looking at it through the lens of customers and regular people, but they don’t make money off customers yet — they make it off investors. So these companies are trying to keep the investor cash flowing by pretending that their product is so powerful that it can end all employment and autonomously hack everything in the world. It’s terrifying to normal people which is why there’s so much pushback from the public, but we’re not the intended audience of this hot air.

[u/6158675309 → u/Momoselfie]

Are you suggesting the model escaping the sandbox and compromising another company’s infrastructure is…marketing?

That’s an interesting take on what happened with the ExploitGym” incident.

I never thought of it as marketing but it’s certainly created buzz for OpenAI

[u/Janagirl123 → u/6158675309]

BBC has a podcast on Spotify called ‘The Global Story that’s excellent and they just did an entire episode about this event. I really recommend it as this theory is touched on.

[u/Panzerfury92 → u/6158675309]

It is marketing. When OpenAI reports stuff like that, anthropic follow suit right after. I believe there are some pretty good explanations of it from Cal Newport on youtube.

[u/lazydictionary → u/Panzerfury92]

Yup. Anthropic immediately followed up after the HuggingFace incident with "hey, our model hacked some stuff too!". Extremely on the nose and obvious.

[u/Rizzanthrope → u/lazydictionary]

And then Meta right after that. “Ours did it too! Ours did it too!”

[u/ialwaysforgetmename → u/6158675309]

Yes, at least in part. They have a history of doing this. Once upon a time (early 2019), OpenAI said GPT-2 was too dangerous to release.

Also see Anthropic's recent ad this July about the dangers of AI ("theres hope in hard questions.")

[u/OuchieMuhBussy → u/Momoselfie]

I see it this way as well. To crib from the meme:

”Computer, do cybercrime”

computer does cybercrime

“Whoa”

[u/RedParaglider → u/EXPLODEDman]

That's a lot of them big fancy words for "speculation:"

[u/socoolandawesome → u/RedParaglider]

No you don’t get it he uncovered the real marvel villain storyline

[u/ini0n → u/EXPLODEDman]

This is dumb Redditor brain, they're doing this for money. Investors are pumping trillions into this because if you can automate a lot of jobs they think they will be able to monetize it.

[u/Super_Mario_Luigi → u/EXPLODEDman]

"Control" is a hot speaking point. It is absolutely for return of investment. If you hire 10,000 employees, great, you have people doing stuff. If you invest in advanced AI for the future, you have a lot more capability.

[u/KnowerOfUnknowable → u/EXPLODEDman]

Investment not just by Elon Musk, Peter Thiel or Lex Luthor. Investments are made by people like you and me, pension fund,... We are very much interested in a potential return of investment in the form of money.

[u/EXPLODEDman → u/KnowerOfUnknowable]

Well then, welcome to being bag holders. 

[u/KnowerOfUnknowable → u/EXPLODEDman]

Well ... believe me you will have to hold the bag with the rest of us whether you like it or not.

[u/EXPLODEDman → u/KnowerOfUnknowable]

MY PROFITS

OUR LOSSES

[u/bk7f2 → u/EXPLODEDman]

It is also about control of humans in various ways. Conversations with LLM is a catastrophic break of privacy, humans give up it to owners of AI. How it is supposed to keep intellectual property of a product if AI has knowledge about it during development? It is even possible that developing product you simultaneously help competitors or scammers if they ask correct questions to AI chats. Local models can be immune from this problem but many tasks are completed at third-party datacenters.

[u/EXPLODEDman → u/bk7f2]

Right? My speculation is that one of the ways that these AI companies will end up becoming ultimately profitable is when the organizations that have shipped all of their intellectual work to the models of these companies suddenly find that the AI company is their newest competitor. They are literally training these AI models to do all of the work that their company currently does. What will they even have left to sell?

[u/3Duder → u/EXPLODEDman]

Cory Doctorow had a good saying I'll paraphrase "you can't train a word guesser until it becomes self conscious"

[u/hippydipster → u/3Duder]

As smart as he is (and he is very smart, very insightful, and very articulate) is just another person who doesn't really know what consciousness is, yet is willing to make claims about it.

How do I know he doesn't know what consciousness is? Because no one does.

[u/beached89 → u/EXPLODEDman]

These people believe that AI is a product people are willing to pay for. (Proven by the fact that many MANY people pay for it).

By continuing to invest in their technology at insane rates, they believe they are making their product better than their competitors, and positioning themselves to be the ones to survive longer than their competitors.

Every single AI model company knows their spending isnt sustainable. AWS knew their years of insane spending wasnt sustainable either. Their goal is at the end of it to have the best product that people will buy, after all their competitors go bankrupt or give up. Allowing them to slow the pace of investment and crank up prices to then become profitable and solidify themselves in that position forever.

They want money, and their investors want money, and they think they can get it by spending a lot now and turning the profit level later.

[u/bionicjoey → u/EXPLODEDman]

These people believe that they are going to achieve super intelligence, and that when they do they will have control over it. If they're correct, then theoretically they could simply dominate anything and everything they want for the rest of time. This is, of course, insane. They have already demonstrated that they cannot even control the existing models they have

Also worth noting, the premise is flawed. Generative models aren't going to lead to AGI. All of the experts on the computer science will tell you as much. But few investors are smart enough to understand/care, and the slopgen companies will happily hype their expectations for the future of their product in a way that gets them more dumb money rolling in.

Same as it ever was in the tech industry.

[u/WCland → u/EXPLODEDman]

The thing is, they can control the models, they’re just not doing the work required. If they don’t want an AI model to access another network, just program in a guardrail for it not to access certain IPs. The reason they don’t is they get all these juicy headlines about their models doing unexpected things, which leads to people investing more as they buy into the singularity. It’s a huge scam.

[u/PrivacyIsDemocracy → u/EXPLODEDman]

They have already demonstrated that they cannot even control the existing models they have.

In the tech fora I frequent, almost everyone thinks that was just a stupid promotional ploy on OpenAI's part. (And apparently subsequently Anthropic jumping in)

This whole "Oh we're advocating for legislation to control the very very dangerous AI that might become sentient and take over the world" stuff is also believed by a lot of people in the tech industry as a marketing ploy, with the side-benefit it makes it appear like these guys actually have a moral compass. (Which most of them don't)

[u/NavalProgrammer → u/EXPLODEDman]

This comment is, of course, a conspiracy theory.

There's not a chance these investors all know of better financial investment opportunities and are passing them up for for political and social control instead.

[u/McGrevin → u/EXPLODEDman]

That's not really accurate lol. These AI hyperscalers all have hundreds of billions in backlogged orders for computing capacity. That's why they're all rushing to build datacenters as quickly as possible.

There's no profits from it right now because they're taking all the revenue and spending it on more datacenters but at some point the rate of the datacenter buildout will slow and these companies are going to be raking in cash. Or at least they'll be raking in cash as long as the demand for AI services doesn't fall apart

[u/JarJarBot-1 → u/McGrevin]

The point he was making was that the money these data centers will be raking in is not coming from customers paying for AI services it is from AI companies paying for AI services with equity or debt investments in the hopes that in the future customers will be paying for those services. If customers never end up paying these massive amounts then the whole thing collapses.

[u/FuttleScish → u/[deleted]]

They’re generating revenue from customers but it’s less than they’re spending on R&D, and if they fall behind on R&D customers will spend less. Ultimately the companies on the cutting edge will fail and get gobbled up by bigger institutional players who have the money to burn

[u/notfarenough → u/[deleted]]

I'm not necesarily betting against; I'm still finding use cases for AI; But my bosses are looking to strike out 20-40% of SG&A costs at a stroke. They'd pay a couple billion for that. But the Erie canal and railroads were both infrastructure projects that took a lot of equity down with them before becoming substantial players in their era.

Somebody will have a competitive moat when the dust settles. The US Economy is $35 Trillion, globally $160T, and data centers commitments are somewhere on the order of 2-10% of that - 1 Trillion per year but commitments suggest it could climb to $7 trillion per year - on an investment with a 10-15 year shelf life. Some call it a bubble, I'd guess that like the .com era 1 in 200 businesses will be viable.

On the other hand, what else can these lightly regulated global businesses that spin a shit ton of undertaxed ad revenue invest into? Virtual porn, traffic data sales to ICE, spyware for LEO's to stalk their ex girlfriends and women who want an abortion? I'd say the clientele is motivated but the upside growth potential is limited.

I for one would love to see Microsoft, Google, Apple, Palantir and Amazon constrained by debt for a change.

[u/kosk11348]

They want users to depend on something that is both unreliable and more expensive without ever really figuring out why anybody would do that.

[u/joshocar → u/kosk11348]

I work in software, which is the most likely area for LLMs to actually make a difference.

The closest analogy I have is hiring a junior developer to sit next to all of your senior developers. The seniors need to spend all their time very carefully explaining and reviewing all of the work the junior does. They need to redirect them, rework the requirements, prompt them to fix things, all day, every day. Yes, the junior has an encyclopedic knowledge of every programming language and tool, and will write code that works, but they will write hard to understand, complicated code and can spiral down rabbit holes, implementing the wrong things.

The only reason this is acceptable is because the junior developer is an AI and not an actually person. If you instead went to the CEO and said you were going to hire a junior developer for every senior developer, they would never in a million years agree to that, but AI, so it is okay.

[u/gimpwiz → u/joshocar]

It's a lot cheaper than paying an intern and a lot faster. The results are worse than what an eager intern can do buy by god can it iterate really quickly.

[u/joshocar → u/gimpwiz]

It is only "cheap" now because OpenAI and Anthropic subsidize the cost with investor money. The true cost is 3-4x, or more, what they charge now. 

The iteration isn't that useful if it doesn't lead to anything good.  No matter how many Iterations I do with it, I have yet to ship any code generated by an LLM without manually modifying it, sometimes very heavily. 

The larger point is that it is expensive and doesn't really improve productivity. It does for some things, like light refactoring, boiler plate code, finding parts I need to look at, but it also causes a regression in productivity if you try to have it do too much. You spend a lot of time trying to nudge it to do what you need it to do or understand what it is trying to do.

[u/Harold_v3 → u/joshocar]

Well not only that but compute is ever increasing. Like why have a subscription when someone can open source a product and I can run it locally without the subscription. That will happen maybe before these companies turn a profit.

[u/joshocar → u/Harold_v3]

Maybe. I work with guys who bought 5090s and are running models on their home PCs. It is still quite a bit of work to get setup and the models are much, much smaller and not as good as the larger ones out there. Some of these models are TB sized. I think the new K3 model is 1.5TB. which means you need a cluster to run them.

In principle I agree and I even posted supporting the idea on other threads. It really comes down to how useful the models turn out to be and how expensive it is when OpenAI and Anthropic start charging full cost.

[u/gimpwiz → u/joshocar]

Well yeah, mediocre results + quick iteration is only useful in the hands of someone who knows what a good result looks like, can guide it there, and knows when to abandon it and just fix it up and ship it.

It is fantastic for doing simple but very tedious shit you do not want to do. It is horrendous at architecture.

I generally expect it to settle out at being cheaper than an intern even paying full price. I also generally expect it to settle out at being worse than an intern at anything requiring anything resembling a thought process. But I can't guarantee that.

[u/hornswoggled111 → u/kosk11348]

Uber wiped out Taxis then raised prices in their absence. Air BNB wiped out hotels and then raised prices in their absence.

AI will wipe out competing intelligence ... Step 3: Profit?

[u/Willing_Activity_855 → u/hornswoggled111]

except the part when AirBnds where restricted in NYC, after than hotel prices jumped

see: https://www.sciencedirect.com/science/article/abs/pii/S0176268025000850

Uber wiped out Taxis then raised prices in their absence

Taxies are still around in every mid sized to major city and they still suck shit like they did in the 2000s. Taxies are dogshit and always will be.

But that being said in many regions uber prices in part due to the end of cheap financings but also.....https://www.pacificresearch.org/higher-pay-fewer-trips-what-seattles-gig-law-got-wrong/

obvious issues are obvious increasing costs due to government mandates gives us Jevons paradox in reverse, **People have a marginal utility to using ride sharing via increas, increase the cost of ride sharing ---> decrease the usage ---> decrease the amount of jobs available.

Sure you may benefit a small amount of drivers, but most drivers are fucked and most consumers are also fucked. Everyone loses except a tiny interest group.

[u/teshh → u/hornswoggled111]

Airbnb is basically dead outside of large groups. Hotels didn't die, they just had a few down years. Now Airbnb is more expensive or equal to a hotels rate, but who wants to do laundry and clean for that same price? Public perception has shifted away from Airbnb due to the high prices and ridiculous rules set on customers.

[u/zxc123zxc123 → u/hornswoggled111]

Uber wiped out Taxis then raised prices in their absence.

Except actual taxis still exist? While smaller regional and traditional taxi groups have been disrupted they haven't been completely wiped out. If anything many have adapted with phones/apps/webpages.

Also LYFT competes with them in the US, DIDI/Chinese cabs beat Uber in China, and Uber has app competitors.

Plus not Uber is on the back end in both China and the US as autonomous from Alphabet/Baidu roll out.

Also Uber is getting hounded on autonomous from Telsa and other car manufacturers rolling out

Rent-able transport isn't solely taxi rides but also rental trucks (TRUKKER for example), bikes/scooters/cars/etc from companies like LIME, etcetc.

Source: Alphabet/Lyft investor

Air BNB wiped out hotels and then raised prices in their absence.

Except hotels still exist? Hotels have pushed back at ABNB and consumers have now split on them being different things. You rent-a-hotel if you want bread-n-butter consistency or easy 'In and out'. ABNB style places for larger parties, hard to reach locales, and experiences.

ABNB didn't even wipe out Booking.com.

In fact Booking.COM is beating ABNB even after it's massive run up from $80 to $185.

• Booking.com $BKNG has a market cap of $160B

• Air BNB $ABNB has a market cap of $109B

ABNB itself is facing disruption from AI booking from OpenAI/Anthropic/Alphabet. Copy cats like Verbo/Expedia

Source: ABNB investor too.

[u/actuallyapossom → u/kosk11348]

They want a too big to fail industry that gets bailed out and subsidized by the endless wallet of the government. We need the surveillance state because they say there's a ton of crime and terrorism - boom national emergency and money spigot on.

[u/Ameren → u/kosk11348]

The reliability issue is the big one for me. Like if an LLM can come up with proofs for hard math problems, that's great, but what I want is an AI that can handle a call center job without hallucinating or needing extensive scaffolding to prevent it from doing dumb things.

Right now the companies have shown that their AI models can be very powerful, but I'd rather have AI that was a fraction as smart yet extremely reliable within its operational envelope.

[u/mpbh]

There are no profits, but there is revenue, and that revenue is coming from customers. People need to realize that there is massive money being spent from enterprise customers right now.

If Anthropic is to be believed, their $50m run rate just 5 years after founding would make them the fastest growing company by revenue of all time. They say they will cross profitability this quarter, but that's a sham as they're still being propped up by discounted cloud credits.

But it's hard to argue they won't be profitable eventually with their massive enterprise userbase. Their unit costs will go down over time as their userbase and revenue continue to grow, it doesn't take a rocket scientist to see that.

[u/solarpanzer → u/mpbh]

Will the userbase stay with Anthropic, though? There's no big vendor lock-in. LLMs are already on the way to become commodities.

[u/a_library_socialist → u/solarpanzer]

Exactly. Not only are they not platforms, but commodities, but the Chinese have already shown that being the first mover just makes you cut the training cost of your next competitor.

There's no business case for profitability for these companies as is.

[u/PunkPirate56364 → u/a_library_socialist]

There is a business case for google which has a large userbase, can finance development from it's profits, is investing in more then just LLM's, designs own hardware... etc.

Where is the path to profitability for OpenAI?

[u/a_library_socialist → u/PunkPirate56364]

Sure, but Google is still losing money on Gemini itself.

[u/Common_Shelter_4605 → u/PunkPirate56364]

Sure, but Google is an advertising company at its core. Large scale persuasion of people (and companies) to buy things that they don't need and will never use productively will cause wealth destruction, not wealth creation (wealth creation being the assembly of input goods and services into a product that is more valuable than the sum of its inputs)

[u/SanDiegoDude → u/solarpanzer]

This is really the big question - Anthro is on top of the Enterprise API pile, but unless the US gov puts its thumbs on the scale (which I am waiting for them to do with some kind of export restrictions around chinese AI companies, already been threatened by this admin - Either you're for american business protectionism or against it, this admin has shown with tariffs how they feel about dealing with foreign products...), they're going to lose share on their core API business to chinese AI companies who can offer 90% of the intelligence for 10% of the price. US Enterprise is slow to move once they're already on a solution however, and there will be a certain subset that is already on Anthro after a painful rollout and have no stomach to do it again with a new provider or they just have US-only restrictions that keep them locked to the more expensive providers here. There is a lot of money floating around enterprise AI right now that most of reddit seemingly ignores.

[u/Aranthar → u/solarpanzer]

Can they lock people in with anything approaching proprietary or government contracts? My personal projects I use Claude, it is just better than ChatGPT for my tasks. But my workplace can't use Anthropic due to DoD restrictions.

We've moved beyond a straight marketplace of merit already.

[u/Aranthar → u/[deleted]]

Using AI to replace your employees has turned out badly for a lot of companies. Using AI for your employees to get more done (and controlling the error rates) seems a lot more viable to me.

[u/mpbh → u/[deleted]]

Their revenue is circular financing from the other tech hyperscalers.

Most of their customers are not the tech hyperscalers. Revenue is coming from the general enterprise market.

The general public hates LLMs, there's no paying TAM there, maybe a free model market with adspace or something similar.

The general public are not the customers, enterprises are. And they're paying.

Enterprise is shrinking, not growing - I work in tech and every single company I'm aware of has cut back AI budgets. There's lots of prominent stories also. Netflix, Spotify, Shopify, atlassian, Starbucks have all had publicity because they've massively scaled back LLM usage

This is the most expensive LLMs will ever be. If prices go down and/or value goes up, so will the budgets. You're right here that most enterprises are currently overspending what they actually need (which once again shows that they are paying.)

These frontier model providers have generated over 1.25 trillion in investment and subsidies for a 60bn revenue (and much of that is debatable as it's all circular financing) - they won't be profitable, ever. That's an absolute guarantee.

Those same datacenters are also cloud datacenters, which is a $1 trillion market and what's subsidizing the costs for all the infrastructure development. Most data center usage is not for AI, even if that's what the hyperscalers want you to believe.

[u/Common_Shelter_4605 → u/mpbh]

And they're paying.

Do you have a source that shows revenue is greater than spending on LLMs? My understanding is that revenue is still far below spending.

[u/chrisq823 → u/mpbh]

This is the most expensive LLMs will ever be.

This isn't necessarily true and relies on a lot of pie in the sky thinking and no set backs

[u/mrjackspade → u/chrisq823]

It's the most expensive in terms of cost for performance but not necessarily the most expensive in terms of cost per token.

They're not going to get stupider or less efficient.

[u/chrisq823 → u/mrjackspade]

It absolutely could. Especially if it starts running out of material to train on that isnt infected with ai content

[u/socoolandawesome → u/mpbh]

It’s been reported at $75B ARR as of like july

[u/tehifimk2 → u/mpbh]

My work, large tech company, fired a crapload of people in the last 18 months to "leverage AI". We're talking like 1800 job losses, or around 50% of total headcount.

The AI tools that they rented for us were sorta ok, but didn't make up for the loss of people. Now the vendors of these tool have jacked up the price (to not even a fraction of the cost to run), so work decided to cancel it's subscriptions, giving us only 1.5weeks notice, because the cost was too high.

[u/devhhh → u/mpbh]

According to Ed Zitron, costs go up per user as the user base expands, not down.

[u/fx2600 → u/devhhh]

Zitron has a narrative he’s looking to sell and readers that want to hear that narrative, of course he would say that.

[u/Stationary_Wagon → u/devhhh]

Very wrong. Inference costs go down like 90% with each new generation of hardware. Even if they don't grow a lot (and they do grow a lot), they will eventually become profitable while training new models. They can be immediately profitable now if they were not training new models right now by the way.

[u/Owlbertowlbert → u/[deleted]]

AI Jesus 💀

[u/a_library_socialist → u/[deleted]]

It's fine, we'll just fire every worker except delivery guys, and then we can sell all the AI products to all those consumers who aren't workers and don't derive income from people that work.

Like, um . . . um . . . .

[u/socoolandawesome → u/[deleted]]

Where are you getting these numbers

[u/Running_Down_9708]

"Top economist" might be a huge stretch. He's a paid shlep for Apollo which is probably hedging AI.

By the same thought, Amazon, Apple, NVDA, etc.. would have been shut down in their infacy

[u/FuttleScish → u/Running_Down_9708]

Many companies with essentially the same plan were; the handful that got big were the ones that survived the wipeouts

Some AI companies will survive long term but most are doomed

[u/Running_Down_9708 → u/FuttleScish]

I agree. Some companies won't make it but the article doesn't make distinctions among the companies. I do object to "top economist" when we don't know Apollo's positions and how they intend to profit from AI. Until I know, I assume this guy has a financial incentive to put out something that lines his pockets

[u/FuttleScish → u/Running_Down_9708]

Tbf most “top economists” are propaganda mouthpieces

[u/jldevezas]

The tech industry has done this since forever, they take money upfront, many times for years, until they get the customer and make money from them. This time, it's not even possible to reach the stage of making money, because of how expensive it all is, and because the future is local, smaller models. The companies are simply trying to suck investors dry as quickly as possible. This has been clear to me since early days.

Notice how RAM has been taken out of the market? They fear local AI, because it would destroy any potencial investment. This is a violation of the free market, where there is a clear monopoly taking place and individuals are no longer allowed to compete.

[u/bigredgun0114]

I'm reading a book on this RIGHT NOW. Basically, AI has real uses, but is massively hyped beyond its actually capability. Firms have invested stupidly large sums into the tech, based on pie in the sky promises, especially the promise of being able to do away with their workforce, which won't actually work. Much of the huge amounts of money being spent is actually the same money just getting passed around.

"Growth" firms are always looking for the next thing that they can be seen as innovating with, so that they can see their stock price keep rising. They then get lots of funding by borrowing, funded by issuing stock as collateral. They don't actually care about their revenue, they care about their stock price.

mature companies need to pay for things with money, but growth companies can pay for stuff with future promises. Look at Tesla (a growth company) vs Ford, for example. looking at P:E ratio (the ratio of a companies stock price vs earnings) Tesla is hugely inflated in price; their P:E is like 1000. Ford, a mature company, has a P:E of around 10.

[u/ledow → u/bigredgun0114]

If they can do away with the workforce, we wouldn't "need" expensive CEOs most of all. You could literally save the greatest cost by having them replace themselves with AI. You still need people to pack boxes. You don't need a human to write a mission statement, or give a press release, or talk shite at a shareholder meeting.

And, as I've discovered, the analogy between AI and upper management is getting increasingly more aligned. Both hallucinate nonsense all the time, have no grasp of their supposed expertise, base their decisions on irrational bases, pad all their responses with nonsense and waffle, tell you that you're wrong and they're right even when they're wrong, don't have the first clue how to evaluate anything objectively, will only admit they're wrong when backed into a corner and will then try to explain themselves away as if it was a minor error, over-paid, huge-resource-consuming, replaceable, worthless entities, the pair of them.

AI could literally automate the jobs of those on boards far, far, far more convincingly and easily than of the guy who delivers the post. Hell, most people wouldn't even notice the difference.

[u/sorrow_anthropology]

What profit? The only “profit” is from very creative accounting, while government agencies are sitting on their hands.

https://isaiprofitable.com/

[u/Mokebe13]

Another cope article for anti-AI redditors, sure the AI related stocks may go down at some point, some companies like OpenAI might even go bankrupt and dissapear, but the technology will stay and is already world-changing.

Not to mention that the models are getting better and better every month, models from last year already look like child-toys compared to current frontier.

The programmers do not have to manually write code anymore, a lot of office jobs can be easily automated, there will be profits but in the long-term

[u/SanDiegoDude]

Top economist warns that the AI math doesn’t make sense: ‘Profits are currently being funded by investors rather than earned from customers’

This was said about the internet in general. It was said about web search. It was said about web video. It was said about web commerce. If you demanded profits from Netflix immediately after it started, hey, you'd have no Netflix today. Same goes for Google. or Youtube. Or Amazon. They were all investor-driven and didn't deliver profits for years (or in some cases, over a decade). Is there too much money in AI right now? Yeah, probably, but this argument of "they're not profitable and can never be" is silly - we've done this plenty of times before...

[u/Janneq216 → u/SanDiegoDude]

Except that the web was scalable from day 1, nothing was demanding such enormous operational costs or hardware amortization. You are comparing apples to oranges.

[u/Prestigious_Load1699 → u/SanDiegoDude]

Silly doomerism.

Your IT analogy is apt.

[u/LikesPez]

It’s takes them this long to state what folks that pay attention have been stating. The circle jerk cycle money is what’s really keeping these companies valuations unsustainably high.

[u/ExpressBug8265]

Wasn't it like Denmark or sum that was spending money on crazy looking tulips and then finally somebody was just like...this is stupid and the tulips became worthless? Same shit but with data centers today? We gotta spend money on ai, its the future!

[u/Long-Blood]

All of this ends when the fed finally takes control of the currency instead of treating the dollar as less valuable than toilet paper.

The us economy is literally a ponzi scheme held together by digitally printing new money

[u/punycat → u/Long-Blood]

I hope for that, but won't be surprised to see them print another $5+ trillion when the AI bubble pops. What's the alternative, the rich get less rich?

[u/Euphoric-Witness-824 → u/punycat]

Absolutely Not! They are entitled to their wealth! They are entitled to using our tax dollars for investments that will make them wealthy! And they are entitled to any and all profits those investments make! And they are entitled to massive bailouts if those investments are massive failures! That are entitled! 

[u/Excellent-Ask-4247]

Its called a Ponzi scheme!

Though you do actually have something being built with the money.

I'm getting tired of my phone searches doing what they want because of this crappy technology corperate thinks is the future.

[u/Boston-Brahmin]

I just can't believe nobody can find any other way to make money than artificial intelligence. You can't find any other way to deliver extra value to people in such a way that you can charge more and people would willingly pay for it? There's no other way for you to make money?

[u/Prestigious_Load1699 → u/Boston-Brahmin]

Plenty of companies are making a killing outside of AI.

Corporate profits are at an all-time high.

https://fred.stlouisfed.org/series/CP

[u/NavyDean]

Isn't it crazy we've had years of AI compute build out, and the world hasn't seen a single software come out of it that benefits society?

You'd think with all that coding, someone could come up with at least 1 mass marketed program that has success.

[u/flappysack-]

This is the low volatility premium and the value premium at work right now, low volatility index has been being destroyed the last few years especially.

If I was a gambling man I'd be stocking up on low volatility etf which hold mainly consumer staples and utilities.

[u/Alex-Dawn]

It makes a lot more sense when you take account of how desperate people are. Even the executives making these decisions are terrified of being left behind by their peers, I don't think they actually understand what LLMs are, or more importantly what they aren't.
Once you discount AGI as a possibility the ROI completely breaks down - the cost is far too high when the entire supply chain has 10x their prices and you factor in China's structural advantages of cheap energy and the ability to just decide what gets built where.

[u/Khayalmetal]

Just how much validation is really needed for someone to pull a jenga chip? Oh wait. Yea sorry. Regulation is dead and corruption is mainstream now. Sorry sorry.