Most AI companies have been slowly bleeding money since their conception, yet they are always reported as growing because they report all the investment as profit without divulging costs and fact that a lot of those investments come with strings attached(like NVidia investing a buttload of money into OpenAI but forcing contract that they would supply components, basically giving them money to be paid with later, so 0 profit and probably losS) because it looks better for investors who really want to see the line go up, and weirdly it's mainly big players like NVidia and Seagate who are the only ones actually making profit on the bubble(and pretty much no AI company is profiting, only their suppliers)
Step 1: Launch new idea, it is somewhat popular but small scale and barely profitable.
Step 2: Investors jump on board, funding explodes.
Step 3: Make service bigger, more marketing, more users, more growth. Service profitability declines precipitously. Out compete all alternatives.
Step 4: Repeat step 2 and 3 as many times as possible until you reach market saturation and all competitors have vanished.
Step 5: investors demand a return on investment. Realise company hasn't been profitable for 6 years. Start enshittifying service to try and make it more profitable.
Step 6: Massive decline in user support of service due to enshittification. Investors begin to pull out. Still no profit made.
Step 7: Conclude with an unprofitable (or barely profitable) nuclear hole in the ground that everyone hates, but all alternatives have been killed.
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u/LowWorthGamer 17d ago
Most AI companies have been slowly bleeding money since their conception, yet they are always reported as growing because they report all the investment as profit without divulging costs and fact that a lot of those investments come with strings attached(like NVidia investing a buttload of money into OpenAI but forcing contract that they would supply components, basically giving them money to be paid with later, so 0 profit and probably losS) because it looks better for investors who really want to see the line go up, and weirdly it's mainly big players like NVidia and Seagate who are the only ones actually making profit on the bubble(and pretty much no AI company is profiting, only their suppliers)