alt Hacker NewsWhat AI lab is profitable?
And in before ‘JumpCrissCross chimes in about inference being profitable while ignoring all the investment costs needed to get inference to where it is.
Replies
none (unless you count google and meta),
but profitability is a very narrow view on the labs, and investors are pricing in future free cash flow
you need to take into account the derivative, what is their growth? their opex and capex? their revenue growth? their moat? New product lines and applications?
Not saying that it's a homerun, but there is a case to be made for the labs being wildly profitable in 4-10 years
Why have they needed to worry about profitability?
They have been chasing extreme growth with cheap money. That enabled them to hyper scale at a pace the world has rarely seen before. They have made the correct choice so far.
The absolute dumbest thing they could have done up to this point is slow down to try to turn a profit. They have not needed to. Market capture is the sole thing they should be focused on. Here's a hint: how many users does GPT have now versus three years ago?
There appears to be very widespread confusion about what purpose turning a profit serves and how business operations actually work.
Go back in time and tell Uber in ~2013-2015 that it needs to immediately become profitable and not focus on capturing the market.
Profitability is an awfully narrow metric.