Comment by popalchemist

1 month ago

Because typically one expect a return on investment with that level of spending. Not only have they run at a loss for years, their spending is expected to increase, with no path to profitability in sight.

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popalchemist

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throw1235435  1 month ago

Tbh this whole AI thing is probably a negative ROI but it will pay off. Even if the debt is written off the AI enhancements that this whole misallocation of capital created are now "sunk" and are here to stay - the assets and techniques have been built.

There's an element of arms race between players, and the genie is out of the bottle now so have to move with it. Game theory is more driving this than economics in the short term.

Marginal gains on top of these investments probably have a ROI now (i.e. new investments from this point).

bdangubic  1 month ago

not that I disagree but would it be fair to say though that we have seen this before where it turned out OK? say Uber? Amazon?

  • jcranmer  1 month ago

    IIRC, current estimates are that OpenAI is losing as much money a year as Uber or Amazon lost in their entire lifetime of unprofitability. Also, both Uber and Amazon spent their unprofitable years having a clear roadmap to profitability. OpenAI's roadmap to profitability is "???"

    • bdangubic  1 month ago

      I have lived through Amazon’s rags to riches and there was never a clear plan to profitability. Vast majority of people were questioning sanity of anyone investing in Amazon.

      I am not saying OpenAI is Amazon but am saying I have seen this before where masses are going “oh business is bad, losses are huge, where is path to profitability…”

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