Are these AI companies already profitable or is it speculation that's causing them to get a ton of funding? AI is such a polarizing subject and I find it difficult to sift through all the hype and hate surrounding it.
If you're only referring to the big players creating foundation models, like OpenAI and Anthropic, it's mostly speculation of future improvements and revenue, because the amount of money they've raised pretty much requires massive returns. This is similar to how most venture capital works, e.g. Amazon was laughed at for being unprofitable for the first, what, 10 or 15 years of its life.
If you're referring to a broader set of AI companies, then most of the more "normal" AI companies have raised far less money, and are usually eyeing more clear use cases and are sometimes already generating real revenue. For them, I'd say it's not all speculation, a lot of it is productizing and monetizing this new technology that's come along, and is the obvious "low hanging fruit" that actually needs to get done.
Most other noticeable(drummed up in news media and various other prominent online media) are mostly wrappers around big players' APIs, more commonly OAI. I have seen some using Mistral(mostly nerds), but if I were to say that if OAI sank, a broader set of AI SME will sink with it, because they are symbiotic.
There are some covert "old fashioned" AI companies I know of, who are still stuck at previous era CV(majority) suddenly gained a lot of interest(+funding), but they are more well positioned to continue revenue generation compared to the more hyped smaller ones.
I can very quickly generate a lot of revenue if my investors will let me buy eggs at $0.50 each and resell them for $0.05, but I don't think I'd get any bites unless I could explain how that enterprise will eventually turn a profit.
People underestimate how hard it is to sell things: you could have the cure to cancer in your hands today and still need to lose mllions to get anywhere with it.
Otherwise known as investing. Sometimes it works. Sometimes it doesn't. And the last 20 years has been chockfull of excesses absolutely. But Uber is profitable these days, and has genuinely transformed how people get around. It looked like a negative unit margin dog until it didn't.
> If there are no drivers, there are no customers. With no customers, who would drive?
No worries, Waymo is coming soon to kill Uber as well as everyone Uber took out of business.
So they are currently printing 1 dollar bills at a cost of $2.35 each.
Jerry: How is it a write-off?
Cosmo Kramer: They just write it off.
Jerry: Write it off what?
Cosmo Kramer: Jerry, all these big companies, they write off everything.
Jerry: You don't even know what a write-off is.
Cosmo Kramer: Do you?
Jerry: No, I don't.
Cosmo Kramer: But they do. And they're the ones writing it off.
Not a value statement on whether is this is right or wrong.
That is my point.
That's orders of magnitude less than the thousands of employees and billions of dollars being deployed with no clear business model or profitability in sight.
They're paying $2.35 in hopes that the $1/year customer sticks around for more than a few months.