if that were true, and the current models were actually good, there would be wide adoption of the current models while people wait for the next leap… instead, you get glimpses of the terrible numbers like 3% of user base is actually paying for these things

maybe we torture our analogies to death but you make it sound like they have the formula for coca cola but instead of selling that, they are burning cash trying to find an even better formula

when the reality is that they have something that is technically drinkable and not officially poison and they are selling it like the next elixir of life (while they burn cash trying to catch up to their own hype)

To make posts and comments that advertise their products.

That's the neat part.

Joking aside - I think the whole "engineer time is expensive, computer time is cheap" approach stopped being true half a decade or so before LLMs were a thing. It was kind of self defeating - you'd think companies were trying to increase their usage of computing resources due to some misconception that it'd automatically decrease work humans have to do, saving them money in the long run.

I don't have the numbers, but I wouldn't be surprised if software/hardware costs exceeded engineering costs for about a decade now, with all these inefficient-on-purpose frameworks and with everything being on the cloud and with using various services for the sake of using a service.

Well, hardware companies (Nvidia) are making massive profits. The rest, no.

https://jarvispowered.com/you-dont-hate-jira-you-hate-your-manager/

There's a lot of reasons;

1. The people who run these businesses have grown incredibly wealthy by taking investment to grow. They do not need to be profitable
2. Selling inference is massively profitable. They lose money on model training
3. If you're suggesting they build a "product" that is profitable, I would argue that's a bad idea- it's a high competition space. The people selling AI are in a much better position

AI has sequestered the inventory and future production of memory starting at DDR5 and up. Meta has made an abomination "adapter" to use ddr4 in place of ddr5. They supposedly have backorders to 2030.

The idiots declared they had discovered fire but instead were merely rubbing two rocks together with such force to make sparks and smoke. A lot of people know they called it to early and are now trying to brute force create AGI.

AI capital investment is rumored to be over a trillion USD for just 2016 2026. Microsoft has revenue at just under 300 billion. Google's revenue is around 350 billion. Both of these companies are going to drown when someone finally calls it.

https://isaiprofitable.com/

edit: faxed tpyo

The term AGI was coined far before LLMs even existed.

It still takes time and effort to be a project manager for app developer agents. Might as well just pay for it and get stuff done today. Instead of spending time on software maintenance, you could just pay for someone else to deal with all that hassle.

Exactly! Now you're getting it 😁

I mean yes, I hate the manager who set up JIRA that way, but JIRA is marketed to and designed for managers to over-complicate it. It is not designed as a tool for engineers to track their work. It is designed for managers to mis-manage teams, because that sells at volume.

I also have other reasons for hating JIRA:

1. no ticket hierarchy
2. no multiple owners
3. slow. so very slow
4. sometimes keyboard shortcuts work, sometimes they don't. There is no apparently pattern.

Shovel salesmen

Yeah, but they aren't an "AI company". They are a hardware company that is propping up AI companies to keep them buying (and warehousing) GPUs via circular financing.

That doesn’t change how it’s being used or why it was invented.

They'll need child-cannibalist rituals minute of work.

I'm only countering your claim where you seem to be suggesting that the term AGI was made up to market LLMs. It wasn't - that term has existed for a long time.

You are glomming onto a slightly poor wording choice on my part because you are wrong and desperate to salvage a win from this conversation and I wish you could just admit it.

That slightly poor wording choice was my entire point.

Ikr. If I knew a "foolproof" investing strategy to "make loads of money", I wouldn't spend my time trying to teach other people about it, id just be using that strategy myself and actually NOT want other people to know about it.

The real reason isn't that they can't turn a profit, it's that they don't have to.

They don't have to be profitable because they aren't fueling growth with profits, they're fueling it with debt and investment. Like many have noted, they cannot do that forever and will eventually pass that cost to consumers. A significant portion of their existing cost is driven by research, which they can scale back by lobbying for legislation, so that peers getting a leg up is more difficult and small players catching up is almost impossible.

Also, both Anthropic and OpenAI have planned IPOs, where they will inevitably raise a ton of cash. It's a game of chicken though. How long can they fuel growth without being publicly accountable to balance sheets and shareholders? Whether we like it or not, they will almost certainly transition to being profitable businesses, but only when it is advantageous for them to do so. Right now, it's not a priority; the priority is growth to the point of diminishing returns.

I know, your whole point is missing mine.

People are adopting the current models, mostly coders right now. Most people using LLMs are using them for basic information search, ie. Google AI overviews. Those tasks don't require the top models and don't burn that many tokens so the companies keep them free to get the public exposed to AI.

Then there's the 3% of people who are the power users using it for work, especially coders. For productivity the top models do perform better and the stakes are higher so they need to perform better. The top models aren't needed for every task, but they shine as an orchestrator of smaller models handling more basic tasks. Coding also requires a lot more tokens, to read all the existing code; to do "thinking" which generates a bunch of output tokens to imitate reasoning; then to generate the code itself; then to review it, adjust after a review...

All of that equates to large bills for token spend to anthropic or open AI. My Claude bill on my company account is approaching $2,000 this month, and that's about average / what's expected from an engineer at my company. I'd bet that every engineer in silicon valley is burning through a similar amount as well.

This is why both open AI and anthropic are both seeing extremely high revenue growth. Anthropic ended 2025 with $9b in revenue , they are now on track to hit $100b revenue this year, for reference / the analogy coca cola made $47b this year, it's a larger revenue then every other software company except Microsoft. THAT IS INSANE, no company has ever seen that kind of growth. Yes it's being weighed down by training costs so they aren't profitable but if they even double there revenue next year that could change.

And a lot more money. And so much more power and water. And more data. And more money, too.

Why did the snake oil salesman grow old and die? Same reason.

Right. But Fermi's Paradox applies.

Everyone is buying and selling software miracle cure...but all of the software itself is still exaclty as healthy as a con artists prize race horse (not healthy, and actually a mule).

Why does it cost so much to engineer new models?

We need at least two massive quantum leaps in quality before this stuff can be long-term profitable; and there probably simply aren't two quantum leaps left in the current pathways being explored.

But turning off all the bots, contracts, and lies would cause the investment money to stop immediately, rather than later.

Everyone perpetrating this scam wants to cash out a tiny bit more before it crashes.

People are adopting the current models, mostly coders right now.

Models are being push down people's throats, mostly to coders right now... there FIFY

Most people using LLMs are using them for basic information search, ie. Google AI overviews. Those tasks don’t require the top models and don’t burn that many tokens so the companies keep them free to get the public exposed to AI.

Again, this is forced, you literally cannot perform a google search (or bing) without getting some AI results whether you want it or not. Then AI companies, like you, use this to pretend it's actual demand for their products

... All of that equates to large bills for token spend to anthropic or open AI

If 3% of people generate the cost the AI companies cannot keep to the prices they charge, then this is the definition of an unprofitable business

This is why both open AI and anthropic are both seeing extremely high revenue growth. Anthropic ended 2025 with $9b in revenue , they are now on track to hit $100b revenue this year

No, this is what they ARE CLAIMING THEY WILL REACH. Last year, Altman said it was ridiculous that people were saying they generated $12 billion in revenue... just to then show it was less than that. Now they are delaying their IPO which means the books stay closed for another while longer

THAT IS INSANE, no software company has ever seen that kind of growth

Again you are just drinking the koolaid here (not counting all the anecdotal evidence you now apply to all of Silicon Valley). The truth is that whatever revenue they actually have (or claim, "trust me bro"), you can't even know if half of it comes from new investments, creative accounting or selling off assets, you just assume it is more people demanding more of their services and paying through the nose for it even if they have barely showed any tangible results in real life https://fortune.com/2026/08/22/executives-ai-productivity-layoffs-study/

but if they even double there revenue next year that could change.

Oh that's it? just double the already inflated revenue they are reporting without any evidence? of course!!! and all I need to fly is to grow some wings, that's it, it's really that simple

I don't think you understand the scale, even if half of that number is real that's $50b , that's larger then coca cola, that's larger then Salesforce and every other software company except Microsoft. That's 5x growth on $10b , that is unheard of in the software industry, much less any other industry.

IDK what to tell you if you don't believe the numbers, yes they aren't official but every credible source is pointing to massive revenue growth. We'll see the actual numbers in the coming weeks as they prepare for the IPO, and if they do turn out to be cooking the books to the tune of $50b , I'll come back to this comment and admit I'm a credulous idiot who fell for the hype. But if they are true I'll also be coming back with an I told you so.

Also do you think they would cook the books to that extent if they are still going ahead with an IPO? Fabricating $50b in revenue would hurt an IPO once it's found out way more then some temporary hype from a NYT article.

It's a definite risk. They do steal your inputs and the outputs they send back to you. They will always have even more powerful models that aren't released yet. If you avoid sending them all of your code, they could hack you to steal it. They will certainly copy any good ideas their competitors come up with (Meta Muse agent, jev) within weeks, as they all copied claude code and open claw. Answer to OP is "just not yet".

The unified US establishment goal is to create skynet for global and domestic domination. Theoretically, the AI bond villains could make sufficently sophisticated weapon/control systems to threaten the government, but why bother when it already wants to give them all of our money. "Whoever wins AI, wins" means only first to skynet, wins. Zero relevance to any AI customers, who obviously win through the widest competition/choices on what to use to help them. Not the nationality of the oligarchs that profit off them.

https://naturalfinance.blogspot.com/2026/09/a-global-prosperity-manifesto.html

We can know that because a massive spreadsheet has no more ability to think than a tiny spreadsheet.

No matter how big the spreadsheet gets, it is still fundamentally a spreadsheet.

Nah mankind will continue, but it'll definitely hurt when this shitshow implodes and possibly takes out the current economic model and quite a few governments with it.

The AI companies could probably be profitable if they weren't dumping tons of money into new model research, but then they would stagnate and die to the ones who keep moving forward.

Companies using their AI don't need to worry about that expense.

It'd be so funny if research hits a breakthrough that absolutely collapses the cost of inference, allowing anyone to self host frontier models, eliminating the ability for all the main AI companies to ever recoup their costs.

Well, except where everyone's data gets sold at bottom dollar in liquidation. Actually, that'd be pretty funny too.

The model releases are getting shorter and shorter. close to a month now. There is no actual profitability not because the price isn't higher than cost of ingredients, but because they don't count throwing away the ice cream mixer, and factory every month, when they should if replacing them is part of the process.

I don't know if that'll happen to frontier models, but I definitely see it happening with models that work well enough for the vast majority of personal use.

Slop image

How's TSMC doing these days?

To be fair, a reasonable answer would be the same as any reseller or value-added business. They have some skill, capital, or existing market capture that the whole seller does not.

Don't get me wrong it can still be bullshit, but it's actually pretty common.

Yeah, all right, "hardware suppliers" in general.

The reality is the product is the easy part.

Actually selling it, maintaining it, selling more of it and running a profitable business is the hard part.

So the AI makes the product really easy to make, but selling it is the hard part.

Why don’t they ask ai how to sell it. After all, isn't it super intelligent?

I do work for a software company, and sales is part of my job. And yes, sometimes I get the AI to review a tricky sale. Not usually though.

However, the reality is it takes years and years to build relationships, get into markets, get visibility.

Basically embed yourself into a market. So the product is the easy part. The sale is the hard part.

That's like asking why doesn't Adobe make their own content and keep the tools internal.

There's nothing else in your reply for me to respond to. I made a comment about statistical probabilities and you responded with ramblings about AGI that in no way address anything I said. You're entitled to your opinion and I'm not interested in trying to convince you otherwise.

They're selling hype, not technology

For the same reason that people were selling crypto mining boxes rather than just plugging them in:

The only guaranteed profit in a gold rush is to be the one selling shovels.

See Nvidia for details.

Self host on what? The way we're going 16GB of RAM to run the models will be a capital investment...

that's larger then coca cola, that's larger then Salesforce and every other software company except Microsoft. That's 5x growth on $10b , that is unheard of in the software industry, much less any other industry.

and you only need the to double it (the full 100 billions} to make a profit lol…

IDK what to tell you if you don't believe the numbers, yes they aren't official but every credible source is pointing to massive revenue growth

define "credible"

Also do you think they would cook the books to that extent if they are still going ahead with an IPO? Fabricating $50b in revenue would hurt an IPO once it's found out way more then some temporary hype from a NYT article.

the ipo they are already postponing for "safety"?

https://fortune.com/2026/09/12/sam-altman-openai-ipo-delay-ill-advised-moment-safety-concerns/

https://www.investors.com/news/technology/anthropic-ipo-delayed-openai-expects-massive-cash-burn/