[memothon]

I always find it really strange when articles like this claim nobody is paying for generative AI. I can't find reliable stats on this but there are at least a million ChatGPT Plus subscribers. Does that not count?

It takes time for new advancements to get proliferated through the economy.

[samizdis]

Yes, those subscribers do count, but the author writes of sustainability doubts in that respect, arguing that current hype and FOMO-style thinking may well fizzle out:

>I believe that a lot of businesses are "trying" AI at the moment, and once those trials end (Gartner predicts that 30% of generative AI projects will be abandoned after their proof of concepts by end of 2025), they'll likely stop paying for the extra features, or stop integrating generative AI into their companies' products.

[memothon]

I don't disagree it is unsustainable, I'm really trying to be more precise about whether anyone is getting value out of the tools. I'm just really skeptical that nobody is getting value.

[tabtab]

I don't think anyone is arguing it's giving zero value, only that the total value is not keeping up with investments. Look at the recent smart-speaker bubble: people indeed use them, but not often enough for profitable activities, and so the speaker market popped. Trying to goad people into shopping with them failed.

Making AI pictures of Pee Wee Herman riding a shark blindfolded is indeed fun, but not profitable for Microsoft because it's too hardware intensive for ads to cover. I gotta make more goofy pics before the bottom falls out...

[memothon]

Yeah I get what you're saying. totally agree.

[bgnn]

Who is getting value though? That should be easy to answer yet there's no clear answer yet.

[memothon]

Good question, remains to be seen. Will need to see how it plays out!

[tabtab]

Objective info is currently hard to come by, but my horse sense is that Big AI is subsidizing it for many projects, including those in other companies, to gain both market share and investor excitement (deserved or not).

If one looks at most the bubbles of the past, the writing is on the wall. AI won't go away, but will probably take longer to make profitable than anticipated, just like dot-coms and smart-speakers. Force feeding it is causing indigestion, and it's likely to PukeGPT.

[JumpCrisscross]

> find it really strange when articles like this claim nobody is paying for generative AI

Where was this claimed? The author quotes OpenAI’s multi-billion dollar revenues.

[memothon]

Sorry I should have been more specific.

The article does mention that OpenAI has huge revenue.

> While The Information reported that OpenAI's revenue is $3.5 to $4.5 billion a year in July, The New York Times reported last week that OpenAI's annual revenues have "now topped $2 billion," which would mean that the end-of-year numbers will likely trend toward the lower end of the estimate.

But then the author claims that the business value is questionable.

> And even if they did, it isn't clear whether generative AI actually provides much business value at all. The Information reported last week that customers of Microsoft's 365 suite [snip]

I would have appreciated a deeper discussion of why OpenAI's revenue isn't a data point toward generative AI having some business value. Presumably if nobody was using generative AI in a way that gives them value, OpenAI wouldn't be using all those GPU hours. That's what I was missing from the article personally.

[enragedcacti]

I though his point was fairly clear. When Microsoft tries to charge non-AI companies at or above cost for generative AI products basically no one takes the deal. OpenAI and Anthropic have a lot of revenue but:

> Based on how unprofitable they are, I hypothesize that if OpenAI or Anthropic charged prices closer to their actual costs, there would be a ten-to-a-hundred-times increase in the price of API calls, though it's impossible to say how much without the actual numbers.

Lots of revenue is flowing into generative AI but would that trend continue if they started needing to actually cover costs? And how much of that revenue is from AI companies that would pop right alongside them?

[ac29]

> I would have appreciated a deeper discussion of why OpenAI's revenue isn't a data point toward generative AI having some business value. Presumably if nobody was using generative AI in a way that gives them value, OpenAI wouldn't be using all those GPU hours. That's what I was missing from the article personally.

Firstly, the revenue numbers are rumors. I have no doubt OpenAI has significant revenue, but both reported numbers are imprecise suggesting they likely are estimates at best.

Furthermore, a non-trivial amount of OpenAI's revenue is certainly coming from other AI startups. They in turn are likely burning investor cash, which isnt an indication that OpenAI is providing business value, its an indication that they provide a tool to speculate on future value. Or, more cynically, the provide a tool for companies to convince investors to give them more money.

[ratedgene]

I've seen people use it to make loras of themselves, paying to get it trained and paying to leverage them in generating images.

[__loam]

It counts if the unit economics are positive. Right now the only people who know if it is are at OpenAI.