There's lots of reasons to believe the AI "hyperscalers" can never be profitable, and not just because of the gigantic expenditures and negative unit economics (they lose money with every customer and every use, and they lose more money with each generation of their products):
https://pluralistic.net/2025/09/27/econopocalypse/#subprime-intelligence
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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2026/09/16/beggar-thy-neighbor/#red-queens-race
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The industry strenuously denies this, of course. They insist that they are only days away from turning their balance sheets right side up. All they have to do is fix those unit economics, then they can make back the cost of producing their models by selling access to them. The problem is that the evidence for those improving unit economics is weak, while the evidence that they're faking their finances is *very* strong:
https://www.wheresyoured.at/exclusive-openai-financials/
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Exclusive: OpenAI Losses Increased Nearly 8X in 2025, With Spending Hitting $34 Billion