"My gut instinct is that this is an industry-wide problem. Perplexity spent 164% of its revenue in 2024 between AWS, Anthropic and OpenAI. And one abstraction higher (as I'll get into), OpenAI spent 50% of its revenue on inference compute costs alone, and 75% of its revenue on training compute too (and ended up spending $9 billion to lose $5 billion). Yes, those numbers add up to more than 100%, that's my god damn point.

Large Language Models are too expensive, to the point that anybody funding an "AI startup" is effectively sending that money to Anthropic or OpenAI, who then immediately send that money to Amazon, Google or Microsoft, who are yet to show that they make any profit on selling it.

Please don't waste your breath saying "costs will come down." They haven't been, and they're not going to.

Despite categorically wrong boosters claiming otherwise, the cost of inference — everything that happens from when you put a prompt in to generate an output from a model — is increasing, in part thanks to the token-heavy generations necessary for "reasoning" models to generate their outputs, and with reasoning being the only way to get "better" outputs, they're here to stay (and continue burning shit tons of tokens).

This has a very, very real consequence."

https://www.wheresyoured.at/why-everybody-is-losing-money-on-ai/

#AI#GenerativeAI#BusinessModels #LLMs #Chatbots#AIHype#AIBubble

"My gut instinct is that this is an industry-wide problem. Perplexity spent 164% of its revenue in 2024 between AWS, Anthropic and OpenAI. And one abstraction higher (as I'll get into), OpenAI spent 50% of its revenue on inference compute costs alone, and 75% of its revenue on training compute too (and ended up spending $9 billion to lose $5 billion). Yes, those numbers add up to more than 100%, that's my god damn point.

Large Language Models are too expensive, to the point that anybody funding an "AI startup" is effectively sending that money to Anthropic or OpenAI, who then immediately send that money to Amazon, Google or Microsoft, who are yet to show that they make any profit on selling it.

Please don't waste your breath saying "costs will come down." They haven't been, and they're not going to.

Despite categorically wrong boosters claiming otherwise, the cost of inference — everything that happens from when you put a prompt in to generate an output from a model — is increasing, in part thanks to the token-heavy generations necessary for "reasoning" models to generate their outputs, and with reasoning being the only way to get "better" outputs, they're here to stay (and continue burning shit tons of tokens).

This has a very, very real consequence."

https://www.wheresyoured.at/why-everybody-is-losing-money-on-ai/

#AI#GenerativeAI#BusinessModels #LLMs #Chatbots#AIHype#AIBubble

This is one of the best things I read this summer:

"In the Future All Food Will Be Cooked in a Microwave, and if You Can’t Deal With That Then You Need to Get Out of the Kitchen." Thank you for writing it so brilliantly @colincornaby 🙏

https://www.colincornaby.me/2025/08/in-the-future-all-food-will-be-cooked-in-a-microwave-and-if-you-cant-deal-with-that-then-you-need-to-get-out-of-the-kitchen/

#AI #aibubble #hype

This is one of the best things I read this summer:

"In the Future All Food Will Be Cooked in a Microwave, and if You Can’t Deal With That Then You Need to Get Out of the Kitchen." Thank you for writing it so brilliantly @colincornaby 🙏

https://www.colincornaby.me/2025/08/in-the-future-all-food-will-be-cooked-in-a-microwave-and-if-you-cant-deal-with-that-then-you-need-to-get-out-of-the-kitchen/

#AI #aibubble #hype

"- OpenAI and Anthropic both lose billions of dollars a year after revenue, and their stories do not mirror any other startup in history, not Uber, not Amazon Web Services, nothing. I address the Uber point in this article.

- SoftBank is putting itself in dire straits simply to fund OpenAI once. This deal threatens its credit rating, with SoftBank having to take on what will be multiple loans to fund the remaining $30 billion of OpenAI's $40 billion round, which has yet to close and OpenAI is, in fact, still raising.

- This is before you consider the other $19 billion that SoftBank has agreed to contribute to the Stargate data center project, money that it does not currently have available.

- OpenAI has promised $19 billion to the Stargate data center project, money it does not have and cannot get without SoftBank's funds.

- Again, neither SoftBank nor OpenAI has the money for Stargate right now.

- OpenAI must convert to a for-profit by the end of 2025, or it loses $20 billion of the remaining $30 billion of funding. If it does not convert by October 2026, its current funding converts to debt. It is demanding remarkable, unreasonable concessions from Microsoft, which is refusing to budge and is willing to walk away from the negotiations necessary to convert.

- OpenAI does not have a path to profitability, and its future, like Anthropic's, is dependent on a continual flow of capital from venture capitalists and big tech, who must also continue to expand infrastructure.

Anthropic is in a similar, but slightly better position — it is set to lose $3 billion this year on $4 billion of revenue. It also has no path to profitability, recently jacked up prices on Cursor, its largest customer, and had to put restraints on Claude Code after allowing users to burn 100% to 10,000% of their revenue. These are the actions of a desperate company."

https://www.wheresyoured.at/the-haters-gui/

#AI#GenerativeAI#OpenAI#Anthropic#ChatGPT#Claude#AIBubble#AIHype#SoftBank#StarGate

"- OpenAI and Anthropic both lose billions of dollars a year after revenue, and their stories do not mirror any other startup in history, not Uber, not Amazon Web Services, nothing. I address the Uber point in this article.

- SoftBank is putting itself in dire straits simply to fund OpenAI once. This deal threatens its credit rating, with SoftBank having to take on what will be multiple loans to fund the remaining $30 billion of OpenAI's $40 billion round, which has yet to close and OpenAI is, in fact, still raising.

- This is before you consider the other $19 billion that SoftBank has agreed to contribute to the Stargate data center project, money that it does not currently have available.

- OpenAI has promised $19 billion to the Stargate data center project, money it does not have and cannot get without SoftBank's funds.

- Again, neither SoftBank nor OpenAI has the money for Stargate right now.

- OpenAI must convert to a for-profit by the end of 2025, or it loses $20 billion of the remaining $30 billion of funding. If it does not convert by October 2026, its current funding converts to debt. It is demanding remarkable, unreasonable concessions from Microsoft, which is refusing to budge and is willing to walk away from the negotiations necessary to convert.

- OpenAI does not have a path to profitability, and its future, like Anthropic's, is dependent on a continual flow of capital from venture capitalists and big tech, who must also continue to expand infrastructure.

Anthropic is in a similar, but slightly better position — it is set to lose $3 billion this year on $4 billion of revenue. It also has no path to profitability, recently jacked up prices on Cursor, its largest customer, and had to put restraints on Claude Code after allowing users to burn 100% to 10,000% of their revenue. These are the actions of a desperate company."

https://www.wheresyoured.at/the-haters-gui/

#AI#GenerativeAI#OpenAI#Anthropic#ChatGPT#Claude#AIBubble#AIHype#SoftBank#StarGate

My main problem with @edzitron.com 's piece on the #AIbubble is that I agree with so much of it.
I'm now wondering if I've missed something about #LLMs? The numbers and implications for stock markets are terrifyingly huge!

https://www.wheresyoured.at/the-haters-gui/