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Comment by lolinder | Hacker News Reader

But what was the cost of producing that revenue? At what point do they expect to break even on their investment?

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.

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But this is what the food delivery companies were (are?) doing. This is what Uber is doing. This is pretty much what every VC funded company does. They burn through the investors' money (because who cares it's not their personal money) until they get a foothold.

That's what they were doing when money was free. Money is no longer free, unless you're an AI company.

> They burn through the investors' money (because who cares its not their personal money) until they get a foothold.

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.

Otherwise known as https://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29

This isn't quite dumping. It was more about achieving the scale necessary to make it usable. If there are no drivers, there are no customers. With no customers, who would drive?

It is indeed dumping. Scale out so big that previous competitors can't keep up, then squeeze hard shaking out other competitors(taxis/rentals) as well as your own minions(a.k.a. gig economy workers) for blood.

> 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.

it does seem very likely that $ per token of inference (at fixed quality) will continue to go down rapidly as hardware and software continues to improve.

In 2021, SoftBank is very interested in your egg selling company.

After all, you can't make an omelet without breaking the bank on some eggs.

If you can find a way to sell billions of dollars of eggs, even at a loss, people will invest. At scale you can increase the price of eggs, make the eggs cheaper, etc. Obviously the fact your eggs are artificially cheap is helping you sell them, but that won't be all there is to you as a seller.

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.

It's better than that, OpenAI are stealing the eggs and lobbying to make egg theft legal, so long as you only steal eggs from small farmers and back yards. Because they can, by their own admission, never stay in business if they have to pay for the eggs.

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