[CharlieDigital]

The model you described probably works great (not just in AI) as long as it's not your primary and direct source of revenue with which you must pay back investors. Once it becomes your primary and direct source of revenue and you must generate some returns for investors or meet some revenue targets, then whatever you're doing somehow has to align with that revenue stream (often ruining the fun).

[bko]

You're describing a lot of tech companies like Google that had all these different orgs that were money sinks not related to a direct source of revenue and funded by dominance in search and high margins. And these programs didn't necessarily yield great creative products. Quite the opposite.

Whereas if you have some objective measure that's driving your decisions, like revenue or customer engagement (proxy for usefulness), you can drive great results.

I think either method can work if you have the right culture.

[CharlieDigital]

Having the right culture is easier said than done.

The enshittification of nearly everything can largely be attributed to the difficulty of maintaining that culture of open-ended creation without direct accountability to revenue.

[zem]

have to disagree there - the enshittification of nearly everything is 100% attributable to the seductive nature of rent seeking (more specifically, trying to gouge ever more in recurring revenue from people who you try to ensure have no other options). even companies who have innovative products and positive revenue streams have gone down that road.

[CharlieDigital]

I mean, why do you think they are rent seeking in the first place?

(Hint: to make a profit and deliver profits to shareholders and investors)

[lcnPylGDnU4H9OF]

> to make a profit and deliver profits to shareholders and investors

This is only part of the reason. It's really to signal that they can provide ever-increasing value. This year's 5% stock price increase cannot preclude next year's 5% stock price increase. It should be obvious this can't go on forever but it seems investors today either don't notice or don't care. It's precisely why enshittification happens: costs (things the business does to make their products/services more appealing to the customer) go down and revenues (the prices of the products/services) go up.

Making a car and selling the car is profitable (presuming the manufacturer is able to attract buyers). Making a car and selling the car while holding back software features unless the purchaser of the vehicle pays a monthly subscription fee is profitable and rent-seeking. The former used to be what happened and increasingly the latter is what's happening. It's not because the car companies weren't profitable in the past, it's because they want to show investors that they can continue to grow their profits.

[zem]

the goal of nearly every single company out there is to make a profit, but not all of them engage in rent seeking.

[dundarious]

Have you seen the "returns" for OpenAI, etc.? All cutting edge research is subsidized by government or megacorps in USA.

[CharlieDigital]

They are not profitable. The problem is that they have to find their way to profitability because investors and shareholders need to be paid back. And because they have to do that, you could say that it "compromises" on objectives that would more rapidly advance the field like openly sharing their reasoning architecture.