Building a jet doesn’t require over a trillion dollars of capex, and selling jets is profitable. There’s solid evidence that inference isn’t profitable, and the AI labs need inference to be extremely profitable if they’re going to meet their absolutely ludicrous contractual performance targets. Oracle is expecting hundreds of billions of dollars from OpenAI by like 2030. That shit is not happening.
Whether inference is profitable or not is not a global yes/no question. It depends heavily on the circumstances, what you’re using it for and what you’re charging for it. A lot of the money being invested in research right now is going into making inference cheaper, which would of course make it more profitable to sell at current price points. Or just run it yourself, local models are getting quite capable these days.
I wouldn’t bet on any specific company being the ones to survive this, especially not first-movers like OpenAI. More likely they’ll spend their money blazing the trail and the ones to profit from it will be the ones who followed along behind. When a company goes bankrupt it doesn’t poof out of existence, its assets get sold off at pennies on the dollar and then whoever bought those assets gets a chance at running them without the overhead of the previous company’s debt.
Building a jet doesn’t require over a trillion dollars of capex, and selling jets is profitable. There’s solid evidence that inference isn’t profitable, and the AI labs need inference to be extremely profitable if they’re going to meet their absolutely ludicrous contractual performance targets. Oracle is expecting hundreds of billions of dollars from OpenAI by like 2030. That shit is not happening.
Whether inference is profitable or not is not a global yes/no question. It depends heavily on the circumstances, what you’re using it for and what you’re charging for it. A lot of the money being invested in research right now is going into making inference cheaper, which would of course make it more profitable to sell at current price points. Or just run it yourself, local models are getting quite capable these days.
I wouldn’t bet on any specific company being the ones to survive this, especially not first-movers like OpenAI. More likely they’ll spend their money blazing the trail and the ones to profit from it will be the ones who followed along behind. When a company goes bankrupt it doesn’t poof out of existence, its assets get sold off at pennies on the dollar and then whoever bought those assets gets a chance at running them without the overhead of the previous company’s debt.