Uber used accounting tricks to hide their true losses for years. They’ve only recently managed to become profitable by squeezing both drivers and passengers at the same time. Is that sustainable? Almost certainly not, but, for the moment, they’re getting away with it.
this is not a bad analogy, but you are off by orders of magnitude
more importantly, both Uber and Amazon always had a path to profitability (Amazon specifically was already making tons of money on AWS long before the store front made money). AI has already been shown to not have a path to profitability; whatever little value companies around the world have been able to extract, cannot pay the cost of producing it.
think of it this way:
You produce a little car that can drive 2 people and some bags around, it costs you $1000 to make and you sell it for $3000 which a ton of people can afford… you have a path to profitability
I enter the market with a car that can carry 20 people, plus full on luggage for all and it moves twice as fast… but, in practice, I can only really move 3 people and often take them the wrong way, also the luggage was a complete lie and I can only allow passengers with their purses… also my car cost $50,000 to make so I would have to sell it for $70,000 and nobody would pay that when they could get 20 of your cars for less… also also, I promised the people making some parts of my car that would invest 7 kajillion on their companies somehow.
How many years did Uber go markiing a loss ? Amazon similarly.
Uber used accounting tricks to hide their true losses for years. They’ve only recently managed to become profitable by squeezing both drivers and passengers at the same time. Is that sustainable? Almost certainly not, but, for the moment, they’re getting away with it.
Amazon didn’t make a profit, they didn’t lose 11Billion a quarter
this is not a bad analogy, but you are off by orders of magnitude
more importantly, both Uber and Amazon always had a path to profitability (Amazon specifically was already making tons of money on AWS long before the store front made money). AI has already been shown to not have a path to profitability; whatever little value companies around the world have been able to extract, cannot pay the cost of producing it.
think of it this way:
You produce a little car that can drive 2 people and some bags around, it costs you $1000 to make and you sell it for $3000 which a ton of people can afford… you have a path to profitability
I enter the market with a car that can carry 20 people, plus full on luggage for all and it moves twice as fast… but, in practice, I can only really move 3 people and often take them the wrong way, also the luggage was a complete lie and I can only allow passengers with their purses… also my car cost $50,000 to make so I would have to sell it for $70,000 and nobody would pay that when they could get 20 of your cars for less… also also, I promised the people making some parts of my car that would invest 7 kajillion on their companies somehow.
Which company would succeed? yours or mine?