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A curious site has appeared: isaiprofitable.com. The author has balanced the books for all top AI companies.

Total industry costs: $1.4 trillion.
Total revenue: $613 billion.

The only one actually cashing in on this sandbox is Nvidia (+$253B net PNL). Classic: during a gold rush, the shovel seller makes the most money.

But then the festival of burned investor money begins:
▫️ OpenAI: in the red by $27B.
▫️ Anthropic: minus $26.5B.
▫️ Big tech (Amazon, Google, Microsoft, Meta): poured hundreds of billions into infrastructure and data centers, and their payback is still somewhere beyond the event horizon.

Meanwhile, the economy is completely circular: Microsoft pours money into OpenAI so they can pay for Azure computing. Google pours billions into Anthropic so they can buy Google Cloud capacity. Left pocket transfers to right pocket, while paying Nvidia for chips along the way.

Right now, all our code generations are subsidized by investor money and revenues from big tech's core businesses (advertising, cloud, office suites). Our money doesn't even cover a fraction of the computing power you utilize if you use the limits to the fullest.

This is exactly the same strategy Uber had in 2015: transport people below cost to kill taxi fleets and capture the market, covering losses with investor money.

But as soon as investors get tired of playing charity and demand real ROI (and they will), companies will have exactly two monetization paths left:

What will happen to prices next:

1️⃣ Multiple price increases. $20 will turn into $100 or $200. Market segregation will finalize: "smart" models will become a tool only for corporations and those whose hourly work is worth more than the subscription. For the poor, they will leave stripped-down small models that will get confused sorting an array.

2️⃣ Microtransaction hell. Instead of a fixed fee, we will face even more draconian quotas, strict context token limits, and dynamic pricing during peak hours (already in place in some places). Want to throw the entire project codebase into context on a Friday evening? We'll charge you fifty bucks from your card.

Very soon we will have to relearn how to work, unless some fundamental breakthroughs in computing technology or energy occur 🤷‍♂️