Writing up my notes from NELE at Northumbria has me thinking back to the predictions I made about Gen AI a few years ago when it started to become a thing. I was right about site licenses for dedicated tools, but the bubble shows no sign of popping yet. Which gives me an excuse to share this website: Is AI Profitable Yet? Spoiler alert: no. $1.4 trillion spent, $613 billion made in revenue. That’s just shy of a trillion dollar loss. The only people making any actual money are the hardware companies like Nvidia who are churning out the chips.
So if bubble shaped, why no pop like bubble? I don’t know. I’m no finance boffin, but I feel like I know enough to comment that the US stock market, in particular, has become irrational and vibes based. The recent IPO of SpaceX being a great case in point. The actual rocket / satellite bit of the company is the only bit that actually makes a moderare profit, but all the promises of data centres in space and moon colonies are idiotic and fall apart under even basic scrutiny.
Given the shift to vibes, I don’t think AI will pop like 2008 or the Dot Com crash, but will just kind of fizzle away. I think there’s a good chance that the standalone AI companies won’t survive in the long term, and will be eaten by the bigger fish that actually have profitable business outside of AI that can absorb the loses – in particular, OpenAI by Microsoft, and Anthropic by Google.