Comment by maccard
9 months ago
> where’s the business model?
For who? Nvidia sell GPUs, OpenAI and co sell proprietary models and API access, and the startups resell GPT and Claude with custom prompts. Each one is hoping that the layer above has a breakthrough that makes their current spend viable.
If they do, then you don’t want to be left behind, because _everything_ changes. It probably won’t, but it might.
That’s the business model
That’s not a business model, it’s a pipe dream.
This bubble will be burst by the Trump tariffs and the end of the zirp era. When inflation and a recession hit together hope and dream business models and valuations no longer work.
Which one? Nvidia are doing pretty ok selling GPU's, and OpenAI and Anthropic are doing ok selling their models. They're not _viable_ business models, but they could be.
NVDA will crash when the AI bubble implodes, and none of those Generative AI companies are actually making money, nor will they. They have already hit limiting returns in LLM improvements after staggering investments and it is clear are nowhere near general intelligence.
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They are doing OK in the sense that they are spending a dollar to earn a dime I suppose.
The ZIRP era ended several years ago.
Yes it did, but the irrational exuberance was ongoing till this trigger.
Now we get to see if Bitcoin’s use value of 0 is really supporting 1.5 trillion market cap and if OpenAI is really worth $300 billion.
I mean softbank just invested in openai, and they’ve never been wrong, right?
You missed the end of the supply chain. Paying users. Who magically disappear below market sustaining levels of sales when asked to pay.
> Going from $1M ARR to $100M ARR in 12 months, Cursor is the fastest growing SaaS company of all time
Just because it's not reaching the insane hype being pushed doesn't mean it's totally useless
I've been here a long time (not this account) and have heard this many times. They all died or became irrelevant.
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I never said it was sustainable, and even if it was, OP asked for a business model. Customers don’t need a business model, they’re customers.
The same is true for any non essential good or service.
Than any silly idea can be a business model. Suppose I collect dust from my attic and hope to sell it as an add-on on my neighbor's lemonade stand, with a hefty profit for the neighbor, who is getting paid by me $10 to add a handful of dust in each glass and sell it to the customers for $1. The neighbor accepts. It's a business model, at least until I don't run of existing funds or the last customer leaves in disguist. At which point exactly that silly idea stops being an unsustainable business model and becomes a silly idea? I guess at least as early as I see that the funds are running up, and I need to borrow larger an larger lumps of money each time to keep spinning the wheel...
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