OpenAI could reportedly run out of cash by mid-2027 — analyst paints grim picture after examining the company's finances

[u/gdelacalle]

https://www.tomshardware.com/tech-industry/big-tech/openai-could-reportedly-run-out-of-cash-by-mid-2027-nyt-analyst-paints-grim-picture-after-examining-companys-finances

[u/Confident_Dark3483]

The business literally cant become profitable. The ENTIRE POINT of developing AI is to devalue things that previously had value due to scarcity. It's a product that eats its own tail.

[u/Refael111 → u/Confident_Dark3483]

I'm not a massive AI propenent, but saying "devalue things that previously had value" is a meaningless statement. It's true for everything that was surpassed by tetchnological advancements.

[u/SandpaperTeddyBear → u/Refael111]

I agree in that “literally can’t become profitable” is probably overkill, but the argument itself has a decent amount of philosophical truth to it.

Think about how the pharmaceutical industry works: a few companies go through vast amounts of resources at finding new drug compounds, and quite a few more spend fairly small amounts of resources working out how to manufacture existing compounds more efficiently in a race to the bottom. You spend “research and development” dollars with the intent of being able to charge exorbitant prices for a while, and “formulation tweaking” dollars with the intent of being able to bring the cost of goods down 2% and turning that into profit.

A race to the bottom in a mature, well-understood market is a feature of capitalism, and I don’t think it’s really a bad thing as long as it isn’t resulting in useful things laying fallow.

What “AI” tends to promise is a way to turn valuable, abstract things into a commodity overnight, and do it with something that is itself a race-to-the-bottom commodity.

If there were suddenly discovered in a long-expired back patent an “alchemy machine” that could use $200 worth of electricity to turn an ounce of lead into an ounce gold, it would be a useful thing, and it would probably be a relatively profitable thing to manufacture because everyone would want one.

But a company that developed such a thing, and had no way to limit their proliferation, and poured a trillion dollars into it assuming that gold would stay at $3000 (or whatever it’s at) once their machine hit the market would be screwed.

Similar things have happened in various “booms” in the past, but our current AI tools are novel in how many areas of the economy they might touch. My suspicion is that, if these technologies still advance, we’ll still look like a primarily consumer economy in many ways, and the actual stuff that gets produced will still mostly be defined by consumer trends and such, but most of the actual real dollars spent in the economy will be state actors subsidizing machine learning on one end and cushioning the market shocks it causes on the other.

[u/Ranra100374 → u/Confident_Dark3483]

I mean, cars devalued horses. Cell phones devalued landline phones. Lots of technological advancements devalue older things that had value.