They’re working on it. They just need a little more of your internal documents and source code.

Because it is a scam. Just like the people selling, instead of using:

• healing crystals
• essential oils
• blockchain
• penis-enlargement pills
• JIRA

I'd wager it's simply not possible to be profitable using AI for most use-cases. You either burn way too many tokens on your queries or risk your business falling victim to an under-tokenized AI hallucination.

In a gold rush it is better, on average, to sell the shovels then to mine the gold.

When potatoes came over from the New World, a lot of Europeans grew them as decorative plants. New shit makes people do weird stuff.

Not everybody is trying to make a business with so-called AI. The peddlers are just the loudest.

The companies promise their models can do all this stuff for paying customers. If the models were truly that capable, the so-called AI companies ought to be doing everything with them and be raking in the dough like mad. Which they're not because they know the limitations of the models. It's what economists call the bullshit gap between marketing and reality. And by economists I mean me.

If I recall correctly, shovel companies made a lot of money while only a few of their shovels actually struck gold.

Because nobody but nvidia profits from LLMs.

They are going for the gold rush pick axe business model

Because its a scam.

Better question is if you can really build an app as easily as writing a prompt, why would anyone pay you for your app?

Somehow AI bros like to pretend that AI is some secret lifehack despite it being one of the most mainstream things in human history.

Been shouting this from the rooftops since the beginning. If it was half as good as claimed, I would NOT have access to it.

This is exactly the question i ask "investment advisor" services when they call asking if i want help managing investments.

For you to have a system that works well enough for me to be interested , there'd be no need for you to spend money on call centers full of people ringing up strangers for money, you could take all of that money and invest it in the plan you are trying to sell me.

If you come to seminar at the Holiday Inn, I'll teach you why! Only $500, and at the end you'll be able to start your own AI powered business and make millions per year!

I saw a thread a few minutes ago on a profitable AI business. The business model was hacking websites at scale to steal hundreds of thousands of credit card numbers...

https://lemmy.world/post/52304304

They want AGI, not LLMs. They're pretty much betting everything on getting there first knowing that if they do it'll pay them back a millionfold what they invested up front. They're taking a massive risk for a potentially massive reward. They're coaching a college kid to become a professional athlete. It's not profitable yet but they're investing heavily in them in the hopes that one day it will be.

1. The AI tech they peddle is impressive and has some uses; but it is nowhere near ready to live up to the hype they created in which you can just pay $10K a year for a license and get rid of a $250K employee

2. The AI tech they sell for $10K a year, actually costs $20K to run and they know nobody would pay the full cost, let alone the cost + their profit margin

PS: those are made up numbers to answer the question, while not real numbers, they represent the points I am trying to make

AI is becoming a pretty big problem where executives are challenging experts or subject matter experts on topics based on their Ai usage. The problem is because the answers sound really good, but often the prompts aren't quite right so then the experts need to do a bunch more work to explain and justify things that the executives just find rebuttals for through further ai prompting.

For the same reason that people were selling crypto mining boxes rather than just plugging them in:

The only guaranteed profit in a gold rush is to be the one selling shovels.

See Nvidia for details.

Cuz it doesn't work.

They're waiting for the to big to fail bailout like the banks in '08.

Their business is the LLMs. It's like asking if a loaf of bread is expensive, then why don't millers bake bread using their own flour

Why does it cost so much to engineer new models? I thought AI can replace software engineers now, shouldn't the development cost of new models decrease over time?

You're on to something …

The real reason isn't that they can't turn a profit, it's that they don't have to.

They don't have to be profitable because they aren't fueling growth with profits, they're fueling it with debt and investment. Like many have noted, they cannot do that forever and will eventually pass that cost to consumers. A significant portion of their existing cost is driven by research, which they can scale back by lobbying for legislation, so that peers getting a leg up is more difficult and small players catching up is almost impossible.

Also, both Anthropic and OpenAI have planned IPOs, where they will inevitably raise a ton of cash. It's a game of chicken though. How long can they fuel growth without being publicly accountable to balance sheets and shareholders? Whether we like it or not, they will almost certainly transition to being profitable businesses, but only when it is advantageous for them to do so. Right now, it's not a priority; the priority is growth to the point of diminishing returns.