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Talents leave AI companies: "They are putting profits over sanity and safety"
(www.computerworld.com)
This is a most excellent place for technology news and articles.
They're also not providing a large language model, so they actually did have a path to profitability. It's keeping LLMs updated and running that costs so much money that companies trying to do so are losing billions, and Midjourney doesn't have that problem.
It's just that their path to profitability was built on plagiarism on an astonishing scale. You're spot on, they should have been utterly destroyed right at the start.