#4826 Statement about Where the Profit is in AI
#4826 Statement about Where the Profit is in AI #4826 Consider the following statement: "The money is not in subscription, or even corporate use. ***IF*** there is money to be made, it will come from incredible discoveries from more potent LLMs. Unlikely to occur. but that is the game I believe these companies are playing." This statement captures the tension at the frontier of AI investment, but it conflates the asymmetric moonshot of the industry with its bread-and-butter economic floor . Here is an analysis of where the thesis is dead-on, where it overlooks massive existing value, and what game the frontier labs are actually playing. Where the Statement is Accurate 1. The Capex–Revenue Mismatch The sheer capital expenditure poured into datacenters, custom silicon, and power infrastructure (projected in the hundreds of billions annually across Big Tech) cannot easily be recouped by $20-a-month consumer subscriptions. The consumer SaaS market has low switching costs, high ...
