Comment by usef-
3 days ago
They made money by licensing their search technology to other sites, as well as selling physical search appliances for businesses. They were considered by some to be struggling to find a way to monetise well.
Computational cost is indeed higher than search (though remember, search has been heavily optimised for many years!), but search and web companies were one of the lowest cost, highest-margin businesses in human existence. Many higher-cost businesses have been supported by ads.
>Many higher-cost businesses have been supported by ads.
Not at the scale of a trillion dollars, though. You can't make that kind of money back with eyeballs. You either need government subsidies or insane vertical integration. And if your program threatens to neuter the GDP of a country, I don't know how long subsidies will last. At least not in a democracy. People are so mad about immigrants taking jobs, and this would be 10 times worse (and bipartisan, eventually).
Even then: we're quickly hitting a resource wall as well. Are we really going to go to war just so we can have some dude generate AI sheep memes? Something's got to give.
It's not only the computational cost though. Hardware requirements are much higher and GPUs need to be replaced every 2-3 years. Plus model training expenses which are considerable. I imagine it's easily 100x more expensive and the margins (if there's ever any profit) will be very low.