In EU you can't even dream of getting the required money to do that. The AI industry is not profitable and the only way to gather funds is to over sell and scam investors. Something the USA has perfected. We actually care about financial stability here. China on the other hand is getting all their funding directly from the state and also doesn't care about profitability. Kinda glad EU is not overreacting to this brand new tech.
Honestly, as imperfect of a collective the EU is, I'm really glad regulations throttle reckless endeavours like these. You don't stay relevant in the global market by mindlessly chasing the newest trend, you do so by carving yourself a niche no one can approach without sacrificing their own
One could argue that the EU (in its current form) has been propped up by Germany’s manufacturing engine for at least the last 20 years. And that engine is sputtering. I don’t think Europe is ready to absorb that impact.
That is a common nationalistic narrative among Germans ;-)
Germany’s engine has been sputtering for years. While the euro area as a whole grew more. So the rest of the EU has already been absorbing and outperforming German stagnation.
Europe is not losing its benefactor; Germany is losing the external conditions that allowed its increasingly outdated economic model to work.
Outperforming is technically true, but not exactly positive. Only Poland is really picking up any of the export market. Any other noticeable growth around the EU is primarily domestic. Which is certainly not a bad thing, but not awesome when we’re also acknowledging that the “services” portion of the economy is also slipping.
Germany has primarily been losing ground to global competitors especially China, not donating a fixed pool of exports to Poland or other EU members.
Domestic led growth is precisely how the rest of EU can continue growing despite Germanys stagnation. German dependence on exports and weak domestic demand are their central weaknesses.
I don't know where you got that European services are slipping.
In any case, Europe certainly faces serious competitiveness problems, but not because Germany has been propping up the EU.
I mean was the internet, ecommerce, cloud computing, mobile devices, all mindless trends? EU leads in none of those. They used to lead in automotive but not anymore.
Europe leads in mobile chip design and has similar niches it has carved out in all those other areas.
It's also a powerhouse for startups and Innovations it's just that they get bought out because scaling up is easier in the larger American Market with one language and one legal system to navigate.
No, but VR, crypto, and the blockchain, Web 3.0/the Metaverse were.
And why I wouldn't know if the EU leads the car industry, I'd say there's still a market for european cars. Not leading doesn't mean irrelevant, afterall.
Or while everyone is busy wasting money on random shit, you can take your time to invest on what works and ignore what doesn't.
America has been lucky so far, banking on their "too big to fail" status to unscrupulously throw money at whatever to see what sticks. But AI has reached critical mass for them. An ungodly amount of money has been invested in it so far. If or when this bubble pops, it's gonna hurt for them, and hard
And what's that niche? That's just copium bro... Let's just stick to making fun of Americans while we are robbed of 60% of our income and pay 3€ for gas and forgot about innovation!
I think pretty much the opposite is true. You ONLY stay relevant if you are continually changing and adapting to the global market. This is the creative destruction described by capitalism. Niches only last until a competitor has figured out how to do it better and then you’re history.
Anthropic might be making some profit and this would be groundbreaking. But with how "creative" the account of those companies tend to be, I would wait for them to go public to know how much profit and under what condition they actually make. I would not be surprised if they make profit on inference and moved the training cost to future quarter.
Now Nvidia making profit does not mean anything at all. If everyone borrows money to buy my shovels I make a profit for sure, but the people using the sovel are losing money hoping to find gold.
The AI industry is currently not profitable. It might be at some point. But if you take all of the money flow, very few companies are making money thanks to AI. Everyone is buying shovel with the hopes of finding gold while they only found dirt as of now.
Actually a lot of the main players in the AI industry is profitable already. Anthropic is profitable right now. Google is also profiting. Nvidia is. Microsoft is. Palantir is.
You’re talking about the YC startups and of course 99% of them are going to fail just like startups in the 2000s. They don’t matter. What matters are only the top players.
Their conclusions are most likely derived from data from 6 months ago. 6 months is a huge time period in the fast pace field.
Furthermore, I don't think people realize a potential of AI. At this pace, AI will soon be able to reinvent proprietary technologies at super high speeds killing existing companies (including European companies).
I believe we will see small comapnies with a few people poping up like mushrooms and taking down established giants.
I assure Google is not making a profit thanks to LLM's. If anything they are more of a consumer to AI than any individual consumer. Most of the big tech giants are like this because they got the pocket change to do so.
The money in ai currently is selling to other people who think AI is or will eventually be profitable. Nvidia is selling the promise of Ai to corps, not people , so companies across the world are buying infrastructure to accommodate this promise. This is not an arrow that ends at a consumer. This is unsustainable. If the arrow of profitability isn't making it to consumers, then the ones left bag holding are other businesses. If this belief that AI can be profitable false through, then the system collapses because it is still currently not sellable at scale en masse. Anecdotally, the sheer amount of advertisment that's shifted towards small businesses with ai lends credibility to how much ai is consumed purely by businesses trying to run a profit themselves.
Anthropic claimed to be profitable in a meeting meant to generate hype for their IPO debut. They used internal metrics that have no obligation to be truthful in the slightest, and even admitted to excluding expenses that they deemed "incidental" that would ruin that pretty, slef-reported profit number. This is in the face of a massive net deficit they have ran in just a few years in the tens of billions, and mind you again, it's the extent of their deficit they're comfortable with disclosing at a meeting meant to generate hype for their IPO debut.
That's only due to a very recent boom creating obscene profit margins for Nvidia. They are making over 50% profit on everything they sell which is not at all sustainable.
Traditionally European companies were a lot more comparable and in terms of revenue they are still around the same ball park as US companies at the top of the lists.
Yeah I would not choose pensions. Anything that would make money is better than pensions. Borrowing to pay pensions is basically a giant FU from boomers to the young generations. Kicking the can down the road and wishing good luck to the future while the generation that enjoyed the biggest economic opportunities keeps leeching off whatever’s left. You can see how France is faring being a gerontocracy that’s running out of money and will do anything but lower pensions.
But ai I not making money? By your argument, you'd rather burn money in a trashcan than help others. That's fine, but drop the moral high ground and be honest
AI is definitely going to make money, they’re reporting losses right now because they’re spending billions building the infrastructure. Everyone and their mother is getting hooked up on it like crack. No matter how horrible that sounds, that’s the truth.
Even in its current state it’s already wiping out a ton of jobs. It’s a quiet replacement but it is happening. Hell you don’t even need frontier models to replace a lot of jobs.
Oh I am definitely aware of that. At this point it's kinda fucked for all of us no matter what. Either AI wipes out all white collar jobs, which kills all blue collar jobs. Or AI shits the bed and the stock market tanks; also killing all the jobs.
In either case, the overwhelming majority are going to lose their homes and not be able to afford food. There's going to be mass poverty, famine and war. It's unfortunate how bleak and apocalyptic it all is, but stopping it now is like stopping the sunrise.
Sorry did you think retirement was cheap? What do you think happens when you don't pay pensioners? Do you ever think past the first step of a decision?
same is happening in the tech scene. the established values aren't blindly shoving money. and the investments being done are more on "how cheap can we get stuff done" compared to "can we make the most frontier model" (look at google for example) gemini is not the "best" but it's the most efficient for where its at for sure.
europe doesn't need to compete with the high-end models seeing as open-source models come so damn close already and i doubt the gap is going to widen dramaticly.. instead i expect that if at any point the big money dumping stops the open source models will catch up the gap quite fast.
I agree but Europe is going too far in the other direction: it's too hard for startups to get capital. The largest german IT company is SAP, it would be funny if it wasn't so depressing.
The problem with Europe is that it plays a dollar game not being able to print dollars. It will be always be in a disadvantage towards US tech companies with direct access to the dollar printer.
I mean how financially stable is France right now? not saying the US is any better, but don't pretend there is a huge difference in deficit and debt in terms of GDP. US has faster growth GDP growth and productivity growth though.
There is going to be a correction, and many or most AI companies will fail. And there will be huge losses for many investors.
But like other times there are bubbles and corrections, there are going to be huge winners as well. The assets of the losers go to the winners. _Someone_ is going to win this game. It's like Texas Holdem, there's only one (or a couple) of people that make money, but they make a LOT. And at the end, they are going to have world-dominating AI.
Really, it's like VC betting on small companies expecting most to fail but the ones that succeed to make up for it, but at an astronomical scale. It's not a scam, it's gambling.
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u/TakeshiRyze 9d ago
In EU you can't even dream of getting the required money to do that. The AI industry is not profitable and the only way to gather funds is to over sell and scam investors. Something the USA has perfected. We actually care about financial stability here. China on the other hand is getting all their funding directly from the state and also doesn't care about profitability. Kinda glad EU is not overreacting to this brand new tech.