In a gold rush it is better, on average, to sell the shovels then to mine the gold.
Slop image
For the same reason that people were selling crypto mining boxes rather than just plugging them in:
The only guaranteed profit in a gold rush is to be the one selling shovels.
See Nvidia for details.
Because its a scam.
A scam that will inevitably end humanity on a global scale…… probably.
Nah mankind will continue, but it’ll definitely hurt when this shitshow implodes and possibly takes out the current economic model and quite a few governments with it.
Because nobody but nvidia profits from LLMs.
Shovel salesmen
How’s TSMC doing these days?
Yeah, all right, “hardware suppliers” in general.
This is exactly the question i ask “investment advisor” services when they call asking if i want help managing investments.
For you to have a system that works well enough for me to be interested , there’d be no need for you to spend money on call centers full of people ringing up strangers for money, you could take all of that money and invest it in the plan you are trying to sell me.
I’ve always thought that as well. Surely it wouldn’t take them long to become ludicrously wealthy with their top investing acumen.
Ikr. If I knew a “foolproof” investing strategy to “make loads of money”, I wouldn’t spend my time trying to teach other people about it, id just be using that strategy myself and actually NOT want other people to know about it.
The reality is the product is the easy part.
Actually selling it, maintaining it, selling more of it and running a profitable business is the hard part.
So the AI makes the product really easy to make, but selling it is the hard part.
Why don’t they ask ai how to sell it. After all, isn’t it super intelligent?
I do work for a software company, and sales is part of my job. And yes, sometimes I get the AI to review a tricky sale. Not usually though.
However, the reality is it takes years and years to build relationships, get into markets, get visibility.
Basically embed yourself into a market. So the product is the easy part. The sale is the hard part.
Been shouting this from the rooftops since the beginning. If it was half as good as claimed, I would NOT have access to it.
The real reason isn’t that they can’t turn a profit, it’s that they don’t have to.
They don’t have to be profitable because they aren’t fueling growth with profits, they’re fueling it with debt and investment. Like many have noted, they cannot do that forever and will eventually pass that cost to consumers. A significant portion of their existing cost is driven by research, which they can scale back by lobbying for legislation, so that peers getting a leg up is more difficult and small players catching up is almost impossible.
Also, both Anthropic and OpenAI have planned IPOs, where they will inevitably raise a ton of cash. It’s a game of chicken though. How long can they fuel growth without being publicly accountable to balance sheets and shareholders? Whether we like it or not, they will almost certainly transition to being profitable businesses, but only when it is advantageous for them to do so. Right now, it’s not a priority; the priority is growth to the point of diminishing returns.
That’s like asking why doesn’t Adobe make their own content and keep the tools internal.
AI is becoming a pretty big problem where executives are challenging experts or subject matter experts on topics based on their Ai usage. The problem is because the answers sound really good, but often the prompts aren’t quite right so then the experts need to do a bunch more work to explain and justify things that the executives just find rebuttals for through further ai prompting.
Cuz it doesn’t work.
To be fair, a reasonable answer would be the same as any reseller or value-added business. They have some skill, capital, or existing market capture that the whole seller does not.
Don’t get me wrong it can still be bullshit, but it’s actually pretty common.
Why does it cost so much to engineer new models? I thought AI can replace software engineers now, shouldn’t the development cost of new models decrease over time?
Joking aside - I think the whole “engineer time is expensive, computer time is cheap” approach stopped being true half a decade or so before LLMs were a thing. It was kind of self defeating - you’d think companies were trying to increase their usage of computing resources due to some misconception that it’d automatically decrease work humans have to do, saving them money in the long run.
I don’t have the numbers, but I wouldn’t be surprised if software/hardware costs exceeded engineering costs for about a decade now, with all these inefficient-on-purpose frameworks and with everything being on the cloud and with using various services for the sake of using a service.
Why does it cost so much to engineer new models?
We need at least two massive quantum leaps in quality before this stuff can be long-term profitable; and there probably simply aren’t two quantum leaps left in the current pathways being explored.
But turning off all the bots, contracts, and lies would cause the investment money to stop immediately, rather than later.
Everyone perpetrating this scam wants to cash out a tiny bit more before it crashes.
You can’t avoid the compute requirements
The AI companies could probably be profitable if they weren’t dumping tons of money into new model research, but then they would stagnate and die to the ones who keep moving forward.
Companies using their AI don’t need to worry about that expense.
It’d be so funny if research hits a breakthrough that absolutely collapses the cost of inference, allowing anyone to self host frontier models, eliminating the ability for all the main AI companies to ever recoup their costs.
Well, except where everyone’s data gets sold at bottom dollar in liquidation. Actually, that’d be pretty funny too.
Self host on what? The way we’re going 16GB of RAM to run the models will be a capital investment…
I don’t know if that’ll happen to frontier models, but I definitely see it happening with models that work well enough for the vast majority of personal use.
It’s a definite risk. They do steal your inputs and the outputs they send back to you. They will always have even more powerful models that aren’t released yet. If you avoid sending them all of your code, they could hack you to steal it. They will certainly copy any good ideas their competitors come up with (Meta Muse agent, jev) within weeks, as they all copied claude code and open claw. Answer to OP is “just not yet”.
The unified US establishment goal is to create skynet for global and domestic domination. Theoretically, the AI bond villains could make sufficently sophisticated weapon/control systems to threaten the government, but why bother when it already wants to give them all of our money. “Whoever wins AI, wins” means only first to skynet, wins. Zero relevance to any AI customers, who obviously win through the widest competition/choices on what to use to help them. Not the nationality of the oligarchs that profit off them.
https://naturalfinance.blogspot.com/2026/09/a-global-prosperity-manifesto.html
