The AI boom has turned the standard profit margin model on its head, according to Apollo Chief Economist Torsten Slok—and it’s making the industry’s growth unsustainable.
That’s pretty much what is driving the entire AI “boom”. It’s the Amazon effect.
Amazon, and Netflix to a certain extent as well as a number of other early internet startups, lost money for around 10 years before they started making shit tons. And everybody wants to be on that particular ride. So they are queueing up in every AI line they can find to hedge their bets on one of them being the one that survives and thrives. It doesn’t really occur to any of them that all of them could fail. Because “AI is the future”. Except there is no plan to monetize any of them. And so far every time one of them introduces a charge, people stop using it.
I feel like it’s just as likely that further breakthroughs cause costs to plummet to the point that any of the major AI companies will never even be capable of seeing a profit, paving the way for some yet unestablished or open model to reign supreme in the end.
That’s pretty much what is driving the entire AI “boom”. It’s the Amazon effect.
Amazon, and Netflix to a certain extent as well as a number of other early internet startups, lost money for around 10 years before they started making shit tons. And everybody wants to be on that particular ride. So they are queueing up in every AI line they can find to hedge their bets on one of them being the one that survives and thrives. It doesn’t really occur to any of them that all of them could fail. Because “AI is the future”. Except there is no plan to monetize any of them. And so far every time one of them introduces a charge, people stop using it.
It’s not everybody, though.
I feel like it’s just as likely that further breakthroughs cause costs to plummet to the point that any of the major AI companies will never even be capable of seeing a profit, paving the way for some yet unestablished or open model to reign supreme in the end.
Hopefully, anyway lol.