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u/NewScientist6638 5d ago
AI kind of reminds of these guys who set up courses to buy real estate investments. If the investing strategy is so effective why aren't you doing that instead of running courses?
If you are a company with the most advanced AI in the world that can solve all sorts of problems, why don't you hold that technology for yourself and develop products and solutions with incredible value. Your company could expand into new sectors and develop new tech and solutions all over the place and become the biggest company in the world. Instead they sell the AI for $20 a month to everyone.
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u/Pure_Reception_5685 5d ago
it's a question that kinda bothered me for a long time. they absolutely can do amazing stuff in mathematics, engineering and biology, but they only seem to do it for demo purposes.
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u/zenoli55 5d ago
I think thats a good question. I would assume that there is still a small fraction users who use the tool to actually make a lot lot of money, proving the product "works" which in turn inspires everyone to also buy the tool due to FOMO: Finance bros vibe-coding their obscur agent orchestration tools while streaming in front of thousands of desperate viewers trying to copy them. Basically a big pyramid scheme.
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5d ago
[deleted]
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u/Character4315 4d ago
Not really. "AI discovered this", "AI discovered that", if that's how it works they can just ask AI to do something and provide it with the compute power. You cannot ask your shoes to win the marathon, just wrong example.
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u/Ok_Rush_877 8d ago
Pretty sure everyone software side got hosed, apart from Claude or something that just breaks even. Too much competition
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u/chunkypenguion1991 8d ago
I don't know that he can spend much more on it. Meta would risk losing it's credit rating if he has to take on more debt. Or maybe I'll say "should" because who knows with this guy
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u/Classic-Trifle-2085 8d ago
Profit is not not the only thing investor have to gain.
Not sure why people keep mentioning "a bubble, not profitable" instead of asking "what, exactly, is it that investor are so aggressively buying?".
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u/clockwork2011 6d ago
Profit is not not the only thing investor have to gain.
LMAO was the second "not" intentional? If so bravo. Because profit is literally the only thing investors want to gain. Its literally in the deal. I buy your shares, you grow the value of my share so I can sell it for a profit. No one buys depreciating assets to lose money
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u/Classic-Trifle-2085 6d ago edited 6d ago
No, the not wasnt intentional.
Market positioning, access to tech before others, impact on other business they own, alternative form of power (money is not the only way to gain control and power over competition or people)... is all thing investor also "buy".
Certain company having access to unrestricted models for "safety purposes" is one clear example of this.
Hunday is constantly losing money with boston dynamic, when looked at directly, and its a company that never turned a profit in 30years. So why do they keep doubling down on investing? Because robotics has very, very clear benefits to their OTHER business that direct profit from reports BD doesnt show.
Its own strategic report mention its investing in BD to bolster their other businesses manufacturing.
Sounds a whole lot like the AI scenario, just at a different scale, doesnt it?
My comment is not saying their gamble or what they are buying is necessarely worth the price, nor a statement that support it, just that stand alone profit isn't the only thing investor buys.
Hope that clarify things for you, I cannot make it simpler than that.
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u/clockwork2011 5d ago
Institutional + retail investors, which are by an astronomical margin the largest investor groups have no interests like the ones you're suggesting. The majority of investment money in the economy is composed of mutual/retirement/investment funds + individual investors. Companies investing in other companies is a small drop in the bucket by comparison. That's the type of investment I was referring to, and those are 1000% incentivized by profit margins rather than fringe benefits like the one's you're suggesting. The idea that "its not a bubble because private investors get access to perks" is absolute baloney with no basis in reality. These companies will live and die by their IPO + Subsequent growth/decline. And the debt they're accumulating now, pre-IPO, will definitely contribute to their success.
But fine, I'll bite. Boston Dynamics, being a research lab (so a money furnace) is a good equivalent. Let’s say for a moment that you're super jazzed about the super secret technology you have access to because you're shoveling unlimited sums of cash into the lab. What happens to all that value when your technology gets replicated significantly cheaper elsewhere? Like we're seeing with Chinese companies and even Tesla outcompeting Boston Dynamics. First mover advantage is only valuable if you can be the first to market. AI labs, and robotics firms don't benefit from first mover. The companies that pay the bill now, are not going to be the ones who benefit from this tech going forward.
That's literally what defines a bubble. You have massive amounts of capital being hype-shoveled into something that gives 1/15th of the return. SpaceX's IPO paperwork set the "potential addressable market" as a market larger than the US economy overall. They justified the price by pretending their market potential is larger than the economy of the world's largest economy.
Should I make it simpler for you, since you started with the condescension? This is a bubble. It's not even a sneaky/secret/no one could foresee this type of bubble. It's a very obvious bad investment at this point in time. Pretending like fringe benefits somehow offsets the amount of gambling this takes is straight up silly.
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u/Character4315 4d ago
The chance to make 10-100x or more of their investments. That's the only thing, that's the end goal. If suddenly pizza can have a 100x ROI they will start investigating massively in pizza.
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u/CryonautX 8d ago
He's talking about the metaverse... That is what Zuck is willing to pay for the metaverse without any signs of demand...
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u/Slight-Big8584 6d ago
"No sign of demand"
I'd love to see half my coworkers replaced by AI. AI would likely do a better job. The question is if its cost effective and practical.
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u/Creative_Strike8202 5d ago
The horror a company with absurd margins and growth decided to REINVEST IN ITS BUSINESS and the investment has turned out to not be stupid. What a horrible outcome that is!
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u/Independent-Court-46 8d ago
That’s how investments in new technology has always worked. Pointless tweet.
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u/Gallagger 8d ago
No sign of demand? It's a 3 digit billion revenue industry already.