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Companies Are Realizing They’re Spending a Fortune on AI Just So Their Employees Can Generate Error-Riddled Slop, and Suddenly Cutting Back Budgets. (futurism.com)
submitted 1 week ago by to c/technology@lemmy.world
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[–] 25 points 1 week ago (4 children)

Because these companies started selling at a loss from the start to get people hooked. Neither Claude nor OpenAI are turning a profit right now.

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  • [–] 7 points 1 week ago* (3 children)

    The biggest problem isn't cost of running the models right now, the biggest problem is all the debt they built up on training and data center buildouts. That's what they need to recoup and that's what's going to drive prices up. And once it's recouped they'll need to make pure profits.

    And I hope that debt kills them because all the big AI companies are terrible in one way or another, and the eventual price disparity will make it uneconomical to use their models. Then we might return right back to development focusing on small models, not large ones.

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  • [–] 5 points 1 week ago

    But aren’t the AI companies always needing to train the next version and replace/upgrade the HW? If it were just a one time startup cost then maybe they could become profitable, but if they will always need to invest heavily in traing the next gen and replacing HW every 2 years, then that’s more of an ongoing expense.

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  • [–] 3 points 1 week ago

    But look how dangerous these models are. They need to be regulated so that only responsible closed model providers can produce them.

    Just ignore that the responsible closed model providers are the ones opening their sandboxes and training their models on blackhat sources.

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