Comment by quitit
2 days ago
>We have reached a point where the shareholders are a companies real customers and that is who they all try to attract.
We currently have a handful of AI companies who make no profit, have revenue far below operating costs, their entire business runs on investment and they're posturing themselves for IPOs. Meaning that the reason they can keep the lights on solely comes from attracting investors (and will likely be that way for the foreseeable future).
That's not unique to AI though. That's very common for tech startups.
If they keep doing it, it must be because sometimes it works.
[Slaps roof of barge]
You can fit zo many tulips in this bad boy
While AI is an example, it's an extreme one - the uniqueness here is that the AI companies have very large spend commitments that exceed expected cash generation, even under presumption of no faults and very strong revenue assumptions because infrastructure costs outpace revenue by a significant margin.(1)
This differs quite a bit from a typical venture-backed or boot-strapped entity, which has a realistic pathway to profitability.
https://www.analyticsinsight.net/news/hsbc-warns-openai-coul...
Ponzi schemes work* too.
*At a specific point in time and for certain investors
Please just talk about capital and leverage like an adult. Do you expect a CFO and their team to look at the math and say, "Well, we figured out that we can speed up adoption and bring forward billions of dollars of revenue by spending fewer billions from capital injection and debt deals this year" and then not do it?
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What doesn't work are the predictions of Uber's collapse, of which there were many, cheered on by a great deal who still gather here looking for the next things to see through.
I am personally betting on Uber’s collapse for the obvious reason: it won’t compete with robotaxis and AV companies would rather have customers on their own apps rather than Uber’s platform.
Just unsure about the timing
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Uber actually has a service that's worth paying for. I can't say I feel the same about most AI slop factories.