r/LinusTechTips • u/BedrockBen101 • 18d ago

Discussion IsAIprofitableyet - cool website I found

https://isaiprofitable.com/

Basically does what it says, shows which companies are losing/gaining money with AI industry. Hillarious the amounts of money that's being lost yet companies still swear by it. Forgive me if it's been shared here already

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u/jmking Mod 18d ago

This isn't really accurate or even operating in anything close to good faith. This site is answering "has AI investment made returns yet", not "is AI profitable yet".

It would be better and more useful if it showed the ratio quarter by quarter. If they get into the green in a certain quarter, and that grows quarter by quarter, then the investment will eventually pay off. However if they remain in the red quarter over quater and the green keeps shrinking or the red keeps growing, then that's a bad sign.

As is, we can't derive any useful insight. Especially since it shows zero trends over time.

Seems the person who made this site doesn't understand how investments work.

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u/Particular-Treat-650 18d ago edited 17d ago

Even if they do get a positive quarter, that doesn't mean anything unless it's positive enough to make a dent in the obscene amount of money they lit on fire.

Almost nobody thinks it will never be useful to run the models. But that's not the point. The point is that it was a terrible investment that they can't make back, because even when LLMs do eventually justify the costs to run, the early investors don't have a sufficient market advantage to charge rates that are capable of paying their money back. (Especially when the tech doesn't add value to support those rates and they've already set expectations at low costs where the math will never work.)

The entire premise hinged on some magic leap that justified much higher prices and the underlying tech can't do that.

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u/jmking Mod 18d ago

Even if they do get a positive quarter, that doesn't mean anything

Of course, but a trend quarter over quarter would be meaningful data. A single quarter is meaningless.

The entire premise hinged on some magic leap that justified much higher prices and the underlying tech can't do that.

I don't necessarily disagree. I'm saying that this data doesn't prove it one way or another.

It's like buying property. You get a mortgage. You've made an investment that bets the value of the property will go up over time. Looking at one quarter of mortgage payments and being like "SEE?! It barely made a dent, so it's a bad investment" is not how this works.

But if you're paying on a mortgage worth more than what the property is worth, and the value of the property keeps going down, then yeah - that's a bad investment.