AI Bubble Watch
9 hours ago
- #profitability concerns
- #tech spending
- #AI bubble
- AI companies, including OpenAI, are burning through unprecedented amounts of money with no clear path to profitability.
- OpenAI is projected to spend $115 billion by 2029, up from previous estimates, and has committed to $10 billion in AI chips and $500 billion in data centers.
- Major tech firms like Meta, Amazon, Alphabet, and Microsoft are collectively spending up to $320 billion on AI in 2025.
- Despite high revenue projections, there is skepticism about the actual profitability of AI companies, with many relying on venture capital and hype.
- AI-generated code is often poor quality, requiring additional time to debug and fix, undermining productivity gains.
- Studies show that 95% of companies adopting AI have not seen meaningful returns, leading to declining adoption among large firms.
- Only a small fraction of ChatGPT's 700 million weekly users are paying subscribers, raising questions about sustainable revenue models.
- The AI industry is compared to the dot-com bubble, with expectations of a future crash before eventual stabilization and utility.