I think it's fairly uncontroversial that these companies are not profitable. But look at how long it took other web platforms or services to become profitable. For example Youtube or Reddit. They all live on investor money, with the expectation that they will become profitable one day. And OpenAI is fairly young in comparison, so they're still in that phase. Difference is the ludicrous amount of money they burn through and the extent of the hype.
this post was submitted on 24 Feb 2025
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The point was that their business model can't sustain growth of the userbase which makes it not like any other platform. The flaw is in comparing LLM companies to other tech companies where the larger the userbase, the more profitable they become.
Fair. But the current business model isn't becoming profitable by growing the userbase. It's first giving out things for free to grow the userbase, and then becoming profitable by adding enshittification. So I'd argue this is just the more modern approach. But I get the point.
Yes, but the article goes on to say that when the userbase of paid customers grows the model becomes less sustainable as those paid numbers go up. It costs more money to support new paid users than those users can pay. More compute power, more resources, and larger models (which also become exponentially expensive and unsustainable due to the lack of clean training data).