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"- The main technology behind the entire "artificial intelligence" boom is generative AI — transformer-based models like OpenAI's GPT-4 (and soon GPT-5) — and said technology has peaked, with diminishing returns from the only ways of making them "better" (feeding them training data and throwing tons of compute at them) suggesting that what we may have, as I've said before, reached Peak AI.
- Generative AI is incredibly unprofitable. OpenAI, the biggest player in the industry, is on course to lose more than $5 billion this year, with competitor Anthropic (which also makes its own transformer-based model, Claude) on course to lose more than $2.7 billion this year.
- Every single big tech company has thrown billions — as much as $75 billion in Amazon's case in 2024 alone — at building the data centers and acquiring the GPUs to populate said data centers specifically so they can train their models or other companies' models, or serve customers that would integrate generative AI into their businesses, something that does not appear to be happening at scale.
- Their investments could theoretically be used for other products, but these data centers are heavily focused on generative AI. Business Insider reports that Microsoft intends to amass 1.8 million GPUs by the end of 2024, costing it tens of billions of dollars.
- Worse still, many of the companies integrating generative AI do so by connecting to models made by either OpenAI or Anthropic, both of whom are running unprofitable businesses, and likely charging nowhere near enough to cover their costs. As I wrote in the Subprime AI Crisis in September, in the event that these companies start charging what they actually need to, I hypothesize it will multiply the costs of their customers to the point that they can't afford to run their businesses."

https://www.wheresyoured.at/godot-isnt-making-it/

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