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https://www.freedium.cfd/https://medium.com/predict/this-fatal-flaw-could-kill-the-ai-industry-5085548cc717>
"AI will revolutionise the world and, in doing so, displace vast swathes of the
economy and create some of the most profitable and valuable companies ever. Or
at least, that's the line we have been sold. Over the past few years, this
narrative has only grown stronger, and investors, particularly institutional
investors, venture capitalists (VC) and tech giants, have poured hundreds of
billions of dollars into the AI space to secure their slice of this revolution.
However, upon reflection, many of them are expressing deep buyer's remorse.
Why? Well, when you look at the numbers, AI can simply never become properly
profitable.
The first hint of anything being financially wrong came last year from the
Analytics India Magazine. They noticed that at the time, OpenAI was spending
$700,000 per day, or $255 million per year, just on maintaining the underlying
infrastructure of ChatGPT. At the time, OpenAI was only predicted to have an
annual revenue of $200 million. In other words, despite the vast success of
ChatGPT and the switch to a for-profit model, it seems OpenAI would continue to
run at a loss of hundreds of millions of dollars per year, as they couldn't
even cover their basic costs. At the time, OpenAI was predicted to have a 2024
revenue of $1 billion, but as operational costs were set to grow dramatically,
Analytics India Magazine predicted OpenAI would go bankrupt by the end of
2024.
As it turns out, these predictions were a little off. Thanks to major deals
with the likes of Apple and Microsoft, OpenAI recently reached an annualised
revenue of $3.4 billion. However, it has also dramatically expanded its
infrastructure since last year, meaning its operational costs have also
skyrocketed. Indeed, despite this huge up tick in revenue, there is no sign of
OpenAI reaching profitability, and in fact, all signs point towards the company
burning through funds."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
