The current technology of AI is not going to produce profits to justify the gargantuan levels of investment. Generative AIs excel at creative tasks, which is undoubtedly amazing, but creative industries have already had their margins beaten down by the hordes of humans who want to work in creative industries. You’re not going to create hundreds of $billions of revenue by replacing stock photography and blog post authors.
In objective contexts, generative AIs struggle with reliability, which makes it hard for folks to build them into the critical systems necessary to generate huge revenue. There is a reason Google did not deploy generative AI into search until OpenAI basically forced them to. And now that Google has rolled it out, does anyone think it is driving huge new revenue for them? No.
The reality is that much—maybe even most—of the current levels of investment are predicated on the idea that someone among the current crop of AI companies will create a “general intelligence” which will be intelligent and reliable enough to transform “hard” industries like energy, manufacturing, transportation, health care, etc.
Let’s recognize that investment thesis for what it is, a speculative bet. No one even agrees how to define AGI, let alone understands the concept rigorously enough to calculate how to get there from ChatGPT.