95% of Companies See ‘Zero Return’ on $30 Billion Generative AI Spend, MIT Report Finds
95% of Companies See ‘Zero Return’ on $30 Billion Generative AI Spend, MIT Report Finds
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95% of Companies See ‘Zero Return’ on $30 Billion Generative AI Spend, MIT Report Finds
Keep in mind this is the case for most US tech companies regardless of AI. Ever since Google became a giant, in the late 2000s they started buying up competition. Since then it's become a dream of silicon valley techs to make the dumbest saas possible just so that a bigger company will buy them out and they can retire. The only profitable tech companies are basically the giants, and everyone else is finding investors to keep afloat year to year.
Amazon itself makes the biggest share of its profits on AWS, not on the online store.
Their promise to investors is "we'll find a way to make it profitable eventually" and that day likely never comes. Spotify was notoriously in the red for most of its existence. Nowadays they report net profits, but I find that hard to believe considering nothing has changed in their model and their other ventures (like the "car thing") failed miserably.
In regards to AI this may open up more open source efforts because these are not driven by profits and there is a flourishing ecosystem there already.
It helps to understand the whole business model as pump and dump schemes. VCs invest in a start up, and their goal is just to get it to the next round of funding where they can cash out, or get it to the IPO stage where the stock will jump and they can sell it off at a huge profit. So, the idea is to just create Potemkin villages that look good on the surface and some sucker might dump more money into.