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Comment by gfrecvh | Hacker News Reader

Im not sure what this phrase even means. Does it mean that "70% of the revenue made by companies selling tokens comes from openAI and anthropic"? If so, how does it follow that "the AI industry doesn't exist"? For every other industry, the "size of the industry" is given by the total revenue, not by the percentage of the top 2.

These people don't know what they're talking about.

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I'm with you on Zitron being a bit challenged in the knowing what he's talking about department.

I think he's implying the money in AI is all spending from OpenAI+Anthropic who get it from investors. But those two have annualized revenue of about $26bn and $74bn or about $100bn total which presumably represents actual customer demand for the product.

That's $100bn revenue on about $1tn capex so far which isn't enough to make it profitable in itself but the things growing like crazy so you'd expect that. $100bn is about 0.08% of world GDP so if AI customer demand grows to 1% of GDP that's up 12x from here.

Microsoft and others report their stake in Open AI as net income. Open AI and others revenue comes in large part from large customers like Microsoft. Nvidia makes large investments into Open AI, SpaceX, and core weave and in return they buy Nvidia hardware. It is all very circular. And at the same time it appears these companies have near zero moat. I think it is foolish to not question how big this business really is. Seemingly no one knows.

Surely AI is a thing that is here to stay, but I am not at all convinced that the big frontier models are going to be able to return their investment and if it becomes apparent they cannot, then you are almost certainly going to see a massive correction.

> Open AI and others revenue comes in large part from large customers like Microsoft.

Could you provide a citation for this?

I mean obviously everything being equal, a firm with 10x more developers might spend 10x. But why is that noteworthy, and why does that enter the estimation of how large the industry is? It might enter the calculation of how much pricing leverage openAI and anthropic might have, but that's not what he actually said, he talked about the industry size.

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