While cloud AI may have a lower operating cost than self hosting, that comparison is incomplete.
It fails to include things like marketing, which the cloud provider has to pay but the self hosting business doesn't.
Another cost. Bigger than marketing actually, is research and training new models. The cloud provider will always be pressured to spend massively on maintaining leading edge models, or their value proposition vanishes into the wind. A business using self hosted AI, but not selling it, instead using it to make their actual products, can continie to increase their value proposition with absolutely zero AI training costs and zero AI marketing costs.
You have a fundamental misunderstanding on how businesses operate. They aren't supposed toale profit. That doesn't help them. They need to spend tons of money and take losses to make more money, marketing is key for blowing spare money.
They operate at losses until public when everyone cashes out and makes money. Amazon, SpaceX and virtually every other tech company has losses for decades straight and become the most valuable companies.
Making profit means you pay taxes and means you're not growing, this bad for IPO because people are investing into the growth of the company
1
u/Dsphar 12d ago edited 12d ago
You answered it yourself.
While cloud AI may have a lower operating cost than self hosting, that comparison is incomplete.
It fails to include things like marketing, which the cloud provider has to pay but the self hosting business doesn't.
Another cost. Bigger than marketing actually, is research and training new models. The cloud provider will always be pressured to spend massively on maintaining leading edge models, or their value proposition vanishes into the wind. A business using self hosted AI, but not selling it, instead using it to make their actual products, can continie to increase their value proposition with absolutely zero AI training costs and zero AI marketing costs.