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Without Subsidies, AI Is Unaffordable (charleshughsmith.substack.com)

AI is based on massively subsidizing users’ costs. Once those subsidies end, what’s left are costs, not profits. Play that any way you like, but massive subsidies are not sustainable, though they generate a temporary illusion of viability that can be exploited by those selling a fantasy of future profitability to credulous investors and enterprises.

Left unsaid is a lot of money is being gambled on the illusion that subsidies are sustainable. They’re not. Enterprises don’t have profits, they have costs.

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[-] ColeSloth@discuss.tchncs.de 9 points 2 days ago

This was written by someone who doesn't really understand the ai game plan.

First, it's stealing all the data possible for use before their are any laws or large payments required.

Second, is to keep pace enough to be one of the 5 biggest providers and crush or buy out anyone else in order to have as close to a monopoly as possible.

Third is eat the costs and bleed money for like 5+ years to get so many people so used to using AI that they won't hardly be able to function without it.

Then last, start climbing the prices up and doing away with the public getting to have a "free" version. This is where the market gets cornered and profits start coming in. The people who use it will drop, so no more dumping money into more expansion and more electricity\costs. The corporations that need to keep using it will be paying much, much, higher prices, and law offices and hospitals, and mortgage agencies and brokers will just absorb the costs. Then their will still be some people paying a somewhat high cost for a dumbed down bit of access, like small businesses or college students.

[-] chunkystyles@sopuli.xyz 4 points 1 day ago

There are lots of problems with this approach, though. The product isn't worth the non-subsidized prices. And also, free, self hostable models exist and are also getting better every day.

So it's too expensive and they can't completely corner the market.

[-] eyesaremosaics@lemmy.zip 2 points 1 day ago

There's one gaping hole in the plan, the sale price where becomes profitable for the AI companies is far higher than consumers are willing to pay and unprofitable to run a business on, it's not a viable plan

this post was submitted on 11 Jul 2026
206 points (99.0% liked)

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