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Mainstream News Anchors Now Talking About the AI Bubble Bursting at Any Moment: "I think the entire AI boom is investing in the wrong future." (futurism.com)
submitted 4 weeks ago by to c/technology@lemmy.world
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[–] 5 points 3 weeks ago (1 child)

We've basically got to wait for Anthropic and OpenAI to actually IPO before any of this can get started properly. Once there's a public expectation for profit from the two biggest AI labs, then the market will start acting against them. We can hope, at least.

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  • [–] 10 points 3 weeks ago

    Once there's a public expectation for profit from the two biggest AI labs

    I don't think that it's necessarily the order things will go.

    Anthropic and OpenAI have bills to pay, including obligations to pay a ton of money to partners/vendors in the coming years. They need cash to do that. And the cash can come from 3 main places: revenue from customers, loans from lenders (usually in the form of issuing bonds), and issuing new stock/equity to raise funds.

    The IPOs are basically their last chance to raise funds by issuing new equity. Even if each of them raise $100 billion, that's probably not enough to hit self sustaining profitability. As lenders start to get more skeptical, in a macroeconomic environment with high interest rates and high energy prices, they start to run into a very real possibility that they hit illiquidity issues, even if their core business model actually works by then (and I don't think it will). There's just not enough runway for them, even in the most optimistic long term projections.

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