"To be clear, everybody is losing money on AI. Every single startup, every single hyperscaler, everybody who isn’t selling GPUs or servers with GPUs inside them is losing money on AI. No matter how many headlines or analyst emissions you consume, the reality is that big tech has sunk over half a trillion dollars into this bullshit for two or three years, and they are only losing money.

So, at what point does all of this become worth it?

Actually, let me reframe the question: how does any of this become worthwhile?Today, I’m going to try and answer the question, and have ultimately come to a brutal conclusion: due to the onerous costs of building data centers, buying GPUs and running AI services, big tech has to add $2 Trillion in AI revenue in the next four years. Honestly, I think they might need more.

No, really. Big tech has already spent $605 billion in capital expenditures since 2023, with a chunk of that dedicated to 5-year-old (A100) and 4-year-old (H100) GPUs, and the rest dedicated to buying Blackwell chips that The Information reports have gross margins of negative 100%:"

https://www.wheresyoured.at/big-tech-2tr/

#AI #GenerativeAI #OpenAI #Nvidia #AIBubble #Economy #Economics #BigTech