this post was submitted on 18 Jun 2026
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Programming
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Yes, judging them now the big AI companies are terrible businesses, they are just about, maybe, marginally profitable if they stop the huge fixed expenses which they cant stop because of their environment.
The gamble is that AI will increase in usage, while becoming more efficient and resisting becoming commoditised. I don't think there's a strong chance of all three of those happening, but if they did that would justify them losing money now in order to make big profits later. That's the gamble.
Sorry about that, here is another https://archive.ph/3V0oc
But again we already know that is impossible since the economies of scale do not work. Each extra user means a shit ton of extra processing in those Data Centers and, even disregarding the destruction of the planet, nobody will pay that cost just to get 35% hallucinations in their queries.
Right now, they are literally gambling with the IPOs that they hype will last long enough for them to cash out and let pension plans and other large automated index investors holding the bag.
This Xmas may not be merry at all...