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:
no ticket hierarchy
no multiple owners
slow. so very slow
sometimes keyboard shortcuts work, sometimes they don't. There is no apparently pattern.
I'd wager it's simply not possible to be profitable using AI for most use-cases. You either burn way too many tokens on your queries or risk your business falling victim to an under-tokenized AI hallucination.
I agree with you, but I liken to to how companies tend to replace competence with bureaucracy. With enough layers, a significant amount of mistakes get caught. It just slows everything down and costs a bunch of money. There are still problems that get through, just less of them.
I know I am getting down voted for this because people haven't tried it. And let me differ, it has reasoning skills, it now gets beyond predicting the next word. And even reducing it to next word is some kind of primitive reasoning.
By experience, by telling the AI to not guess APIs and function names and instead provide it with a way of looking through docs, and inspecting the code and other tools to get it do some tests, the hallucinations disappear. I've been able to have better results with this setup.
This is very different than the "no mistakes" joke.
"it has reasoning skills" Nope. It has larger context windows and someone coded in the ability to reprompt itself for "thinking" steps that are literally just a new prompt with the same context that gets fed back in which merely increases the chances of it guessing the next output token correctly.
It still doesn't "reason". It still doesn't know what the words mean. The modified algorithms are just attempting to generate the corrective prompts for you. If you've ever messed with them long enough, you'd understand that these, "no wait fix it" prompts have rapidly diminishing returns at the best of times. Their "thinking" is a bandaid, and a piss poor one at that.
I know I am getting down voted for this because people haven't tried it.
People here have tried it, LLM use is basically enforced at a ton of companies and the tech industry crowd is a huge portion of the population here.
You're likely being downvoted as you seem to have a fundamental misunderstanding of how LLMs function. LLMs don't reason. LLMs don't think. Telling an LLM to not guess might help ever so slightly, but LLMs can and do hallucate search results regularly.
It's a mistake to trust that LLMs aren't hallucinating just because you told the LLM to not guess.
I juste don't want to talk about this any more becausefor me adding those instructions in AGENTS.MD and giving it the full API and language and platform docs dropped significantly the hallucinations. You just disregarding my experience and want me to believe in your assumptions.
It doing sgupid stuff is another issue separate from hallucinations. Preventing LLM from doing dumb shit is more difficult, you need more guards and harnesses.
I’ll back you up on this. I’ve had the experience of seeing Claude fabricate stuff, and then when I challenge it, it says something like “I guessed, let me look deeper” and then it indeed does check deeper with docs or a configured LSP etc and then discovers the real answer.
It doesn’t matter if this was the result of reasoning or just more pattern prediction, the result is that if you tell it not to guess, it responds appropriately.
This logically leads to a similar question to OP’s again: if it’s so easy to cut down on hallucinations, then why haven’t the designers of this software already integrated that in?
That's the economists angle, yes, but that's not what I'm getting at.
You can't make a business with AI because anyone can use an LLM to do anything an LLM can do.
There are exceptions in the short term, but they may not last. For example, we're paying a hefty subscription fee for an AI service that scrapes financial data from scanned pages. It's much more accurate than traditional OCR.
Presently its better than its competitors so commands a premium price. However, I don't think it will enjoy that position for long.
This doesn't make a lot of sense. Just because everyone can use Word doesn't mean you can't make a business using it. Oh no, everyone has calculators, guess you can't have a business that uses calculators. Businesses and people in general use the best tools available for the job, which might be pencil and paper, or eventually an LLM.
If you noticed that calculators were really good at adding up numbers, and started a business using a calculator to add up numbers for people, you won't attract any customers because people can just use their own calculators.
That does not mean businesses do not use calculators.
Wild, accountants must not exist in your mind. Everyone can own a computer but there are massive services of renting those computers 'in the cloud'. Everyone can buy storage, but for some reason the majority think its easier and cheaper to buy in the cloud. Hell, you could go to the store and purchase a movie, but many still think seeing them in a theatre, or you know, streaming them are a better option. You say LLMs have no business opportunity which seems to show the failure of your thinking.
When potatoes came over from the New World, a lot of Europeans grew them as decorative plants. New shit makes people do weird stuff.
Not everybody is trying to make a business with so-called AI. The peddlers are just the loudest.
The companies promise their models can do all this stuff for paying customers. If the models were truly that capable, the so-called AI companies ought to be doing everything with them and be raking in the dough like mad. Which they're not because they know the limitations of the models. It's what economists call the bullshit gap between marketing and reality. And by economists I mean me.
I mean if you were an economist you'd know exactly why AI companies are making massive profits, because its more profitable to sell shovels during the gold rush than it is to find gold. Doesn't mean gold is worthless and not profitable, it's pretty basic economics, but you know that already.
I mean if you were an economist you’d know exactly why AI companies are making massive profits
They are literally not making massive profits. They may be making lyin' Sam Altman rich, but the VC money is drying up and OpenAI has repayments coming up in 2027 that it doesn't have a chance in hell of being able to payback.
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.
You aren't separating hardware/training costs and costs when the models are developed. Ask the Chinese how thats working out for them, and one of many reasons why their models are so much cheaper.
Recent scholarship confirms that merchants made far more money than miners during the gold rush.
The wealthiest man in California during the early years of the rush was Samuel Brannan, a tireless self-promoter, shopkeeper and newspaper publisher. Brannan opened the first supply stores in Sacramento, Coloma, and other spots in the goldfields. Just as the rush began, he purchased all the prospecting supplies available in San Francisco and resold them at a substantial profit.
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.
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.
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).
Yea. Slightly modified - "If conditions are now so prefect now that 8 billion humans can ask their computer nicely to program itself, and it works, then why is non-shit-tier software still vanishingly rare?"
Anyone can prompt Shlawp to write some code, but an expert would need to check it for errors and stupid design decisions. Normally, the user isn’t qualified to verify the validity of the answer or quality of the code and that’s why people who use Shlawp can’t make high quality applications.
So, when you say “it works” it’s true for being able to generate at least some kind of code, not good code. The thing about Shlawp is that all of its outputs are very mediocre at best. They look convincing to everyone who aren’t qualified to evaluate the outputs. Those who are, will immediately notice all sorts of flaws.
This is exactly the question i ask "investment advisor" services when they call asking if i want help managing investments.
For you to have a system that works well enough for me to be interested , there'd be no need for you to spend money on call centers full of people ringing up strangers for money, you could take all of that money and invest it in the plan you are trying to sell me.
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.
If you come to seminar at the Holiday Inn, I'll teach you why! Only $500, and at the end you'll be able to start your own AI powered business and make millions per year!
I saw a thread a few minutes ago on a profitable AI business. The business model was hacking websites at scale to steal hundreds of thousands of credit card numbers...
They want AGI, not LLMs. They're pretty much betting everything on getting there first knowing that if they do it'll pay them back a millionfold what they invested up front. They're taking a massive risk for a potentially massive reward. They're coaching a college kid to become a professional athlete. It's not profitable yet but they're investing heavily in them in the hopes that one day it will be.
You could not possibly know that. You're attributing to it a probability of zero and zero is an extreme number. Unlikely is a claim you can defend. Zero you cannot.
No, we all know that for certain. AGI is a pipe dream that’s why they made up the term AGI so they could act like LLMs were anywhere close to movie AI and not just slightly improved Watson (the model that beat Ken Jennings at Jeopardy). AI has been around for 70 years and we are no closer to thinking computers now than we were then.
The term AGI was first used in 1997 by Mark Avrum Gubrud in an article named ‘Nanotechnology and international security’
By advanced artificial general intelligence, I mean AI systems that rival or surpass the human brain in complexity and speed, that can acquire, manipulate and reason with general knowledge, and that are usable in essentially any phase of industrial or military operations where a human intelligence would otherwise be needed. Such systems may be modeled on the human brain, but they do not necessarily have to be, and they do not have to be “conscious” or possess any other competence that is not strictly relevant to their application. What matters is that such systems can be used to replace human brains in tasks ranging from organizing and running a mine or a factory to piloting an airplane, analyzing intelligence data or planning a battle.
yep it can be programmed to pretend to be agi and if it was agi they would also know that 90% of the would problems are the epstein class and by default would remove them even if they put gaurdrails in place to prevent this then the agi would not be real agi then if they were truth seeking maximizing good for humanity if they do not target the source of most of the the world evil then the agi is evil and anti human and thus humans would be in danger. lets see if agi is programmed to be on human side or the epstein side.
The AI tech they peddle is impressive and has some uses; but it is nowhere near ready to live up to the hype they created in which you can just pay $10K a year for a license and get rid of a $250K employee
The AI tech they sell for $10K a year, actually costs $20K to run and they know nobody would pay the full cost, let alone the cost + their profit margin
PS: those are made up numbers to answer the question, while not real numbers, they represent the points I am trying to make
That’s because the whole point of AI is to finally back us all into a corner where cloud computing is our only option and we can be monitored and controlled, our news and opinions filtered, dissenters found quickly, and our IP hoarded and summarized, our markets predicted and our products beaten before they launch.
They dazzle the brain dead middle managers who all lament the lack of flying car futures with a piece of magic, and once enterprise (the big money) isn’t demanding powerful workstations anymore then average consumers can get fucked and we will be locked out of society if we organize.
Well unless they have reach a level where training is not needed (which will be never for an LLM), what you told me is that you make a profit freezing ice cream but lose it on the eggs, cream and sugar necessary to make it
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.
Training is not needed to run inference on the existing models, it's needed to make new models. If LLMs plateau and there's no use in training new models, or the government regulates them and they can't train new frontier models, then they can still run inference on the currently existing models and make a profit.
This is more like making a profit for making ice cream but losing a bunch of money researching new recipes for ice cream. If you decide the recipe is good enough and stop doing that research you can still make money making and selling ice cream.
so a model trained in 2 year old data is just as good? as a model trained today?
Yes, assuming a plateau in LLM capability the only reason you'd train on an updated corpus is to get fresh info. That's not worth it because:
The model will most likely be wrapped in a harness that has search capabilities, so it can use that to fetch fresh info
2 year old data may actually be better as the Internet becomes increasingly tainted with LLM content
Most of the improvement from new models isn't coming from expanding or updating the corpus, its coming from increasing the parameter size and reinforcement learning.
So they are just choosing to lose money?
No, they are competing. If open AI decides to stop training new models right now then anthropic will and take all there business as the switching cost for models is low. That's why they want the government to regulate it, so they can have a ceasefire to start taking in profits from inference without worrying about their competitor making a new better model and eating there lunch.
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)
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.
AI is becoming a pretty big problem where executives are challenging experts or subject matter experts on topics based on their Ai usage. The problem is because the answers sound really good, but often the prompts aren't quite right so then the experts need to do a bunch more work to explain and justify things that the executives just find rebuttals for through further ai prompting.
If they were not profitable just selling the flour but saw the potential profitability of baking bread, I'm sure they would. It's just that they are profitable selling the flour so there's no need.
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.
Why does it cost so much to engineer new models? I thought AI can replace software engineers now, shouldn't the development cost of new models decrease over time?
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.
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.
Because you need to have idea that people agree to pay money for. AI companies have idea that is selling GPU (nvidia) computer generated chat ( OpenAI, Anthropics ). People don't really need GPU or computer chat but they are willing to pay for it because they believe it will help them to save time or money by spending time and money using this shit.
That's paradox of modern times. We are being sold time spending tools that bring nothing to our lives except turning our heads from the fact that planet is dying.
AI is highly subsidized for users so AI wrappers can be profitable. (Even though they are a net negative to the economy)
But ai companies burn trillions of dollars of investor money with fake promises. They can't make a reddit chatgpt bot that charges a user 10$ a month and make a profit.
Google seems to be figuring it out pretty quickly. Getting easier and better to simply use Gemini than it is to actually use Google's search. That's been the tech idea for years. Come in quick and disruptive, make it cheap on someone else's back, and then when people are hooked, wrack up the costs.
They want somebody else to be on the hook for their screw-ups. Doesn't mean they won't get sued if it's something bad enough or their meatshield business decides to make an issue out of it but this way, they've reduced their risks a little.
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.
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.
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.
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.
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.
The people who run these businesses have grown incredibly wealthy by taking investment to grow. They do not need to be profitable
Selling inference is massively profitable. They lose money on model training
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
Both open AI and anthropic are making a profit on inference / api usage. So if you're using Claude code and burning through millions of tokens they're making money off that. The revenue from this is also growing rapidly.
What's dragging down the bottom line is training, which is the big money sink. They have to do it though to make the next biggest model to compete with each other. They're hoping that they'll hit a plateau in capabilities, whether that be AGI or some government regulation, so they don't have to train any more. At that point they can sit back and collect billions from the inference money printer.
I could be wrong, but I don't think that's what the question was about.
It was "if people are trying to use Anthropic or OpenAI's services to build a profitable company, why wouldn't Anthropic or OpenAI just build that company themselves"
And the answer there would be lack of subject matter experts. You need people who know the industry they're building the product for if you want to have any fighting chance. AI can work as a force multiplier, trying to use it as a completely autonomous agent that gets near-zero human feedback is hopeless. I doubt any of the AI companies want to take on thousands of employees just to use their own AI to take risks on new industries when they could just sell the AI to people who take on the risk.
The only upside to this is that all of these actual idiots puting money into this will lose that money, and hopefully put this reigh of speculation to an end for dacades.
The plan is, broadly speaking, to commoditize intelligence. Instead of selling train cars filled with hogs, their train cars are filled with the next token, thought, or action.
Properly define "thought" as, "we made it reprompt itself with 'are you sure?' and that tooootally is the same thing as thinking, promise no backsies", and you'd be much closer to the truth.
The intelligence is indeed artificial... Artificially projected onto LLMs via the ELIZA effect. There is no intelligence here. Neither from the LLMs nor the executives pushing this shit.
google is now a NET NEGATIVE on businesses ask ai about how much it inflates costs of product they said at least 15-30% of the product is inflated if you click on the google link to their product.
one would have thought google ads would account for 1-2% at most but since it now costs 15-30% of a product google has now become net NEGATIVE value on the world and should in fact be shut down same with meta and all ad corporations.
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They’re working on it. They just need a little more of your internal documents and source code.
They’ll announce soon that personal ai assistants require a blood sacrifice to run, on top of the monthly and metered fees.
They'll need child-cannibalist rituals minute of work.
And a lot more money. And so much more power and water. And more data. And more money, too.
Because it is a scam. Just like the people selling, instead of using:
LOL Love the (accurate) JIRA inclusion there
Q: Couldn't this JIRA ticket just be an email?
A: No! Because JIRA will send you like, 10 emails.
Jira, lol.
Jira is awful 😞😔
https://jarvispowered.com/you-dont-hate-jira-you-hate-your-manager/
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:
I mean, it kinda fits with the rest of that category, other than I've never been harassed about healing crystals.
I'd wager it's simply not possible to be profitable using AI for most use-cases. You either burn way too many tokens on your queries or risk your business falling victim to an under-tokenized AI hallucination.
Or any AI hallucination
I love the assumption that if you spend enough tokens, it won’t hallucinate, like it isn’t a mathematical certainty or anything.
I agree with you, but I liken to to how companies tend to replace competence with bureaucracy. With enough layers, a significant amount of mistakes get caught. It just slows everything down and costs a bunch of money. There are still problems that get through, just less of them.
Right like. The more tokens you spend, the more hallucinations you get.
You can cut hallucinations by 90% just by prompting the LLM to.not guess API and function names and to provide it with full docs or MCP to find docs.
Yeah but it’s not guessing in the first place. It has zero reasoning skills. It just outputs the most likely next word. Even when you ‘tell it not to’
I know I am getting down voted for this because people haven't tried it. And let me differ, it has reasoning skills, it now gets beyond predicting the next word. And even reducing it to next word is some kind of primitive reasoning.
By experience, by telling the AI to not guess APIs and function names and instead provide it with a way of looking through docs, and inspecting the code and other tools to get it do some tests, the hallucinations disappear. I've been able to have better results with this setup.
This is very different than the "no mistakes" joke.
"it has reasoning skills" Nope. It has larger context windows and someone coded in the ability to reprompt itself for "thinking" steps that are literally just a new prompt with the same context that gets fed back in which merely increases the chances of it guessing the next output token correctly.
It still doesn't "reason". It still doesn't know what the words mean. The modified algorithms are just attempting to generate the corrective prompts for you. If you've ever messed with them long enough, you'd understand that these, "no wait fix it" prompts have rapidly diminishing returns at the best of times. Their "thinking" is a bandaid, and a piss poor one at that.
People here have tried it, LLM use is basically enforced at a ton of companies and the tech industry crowd is a huge portion of the population here.
You're likely being downvoted as you seem to have a fundamental misunderstanding of how LLMs function. LLMs don't reason. LLMs don't think. Telling an LLM to not guess might help ever so slightly, but LLMs can and do hallucate search results regularly.
It's a mistake to trust that LLMs aren't hallucinating just because you told the LLM to not guess.
I juste don't want to talk about this any more becausefor me adding those instructions in AGENTS.MD and giving it the full API and language and platform docs dropped significantly the hallucinations. You just disregarding my experience and want me to believe in your assumptions.
It helps, sure. But it still does stupid shit CONSTANTLY.
So do humans. Constantly.
It doing sgupid stuff is another issue separate from hallucinations. Preventing LLM from doing dumb shit is more difficult, you need more guards and harnesses.
I’ll back you up on this. I’ve had the experience of seeing Claude fabricate stuff, and then when I challenge it, it says something like “I guessed, let me look deeper” and then it indeed does check deeper with docs or a configured LSP etc and then discovers the real answer.
It doesn’t matter if this was the result of reasoning or just more pattern prediction, the result is that if you tell it not to guess, it responds appropriately.
This logically leads to a similar question to OP’s again: if it’s so easy to cut down on hallucinations, then why haven’t the designers of this software already integrated that in?
This is kinda fundamental to economics: the moment AI learns to perform some task, that task becomes less valuable.
But then aren't there just different tasks to do? VisiCalc and Excel didn't make accountants irrelevant.
That's the economists angle, yes, but that's not what I'm getting at.
You can't make a business with AI because anyone can use an LLM to do anything an LLM can do.
There are exceptions in the short term, but they may not last. For example, we're paying a hefty subscription fee for an AI service that scrapes financial data from scanned pages. It's much more accurate than traditional OCR.
Presently its better than its competitors so commands a premium price. However, I don't think it will enjoy that position for long.
This doesn't make a lot of sense. Just because everyone can use Word doesn't mean you can't make a business using it. Oh no, everyone has calculators, guess you can't have a business that uses calculators. Businesses and people in general use the best tools available for the job, which might be pencil and paper, or eventually an LLM.
You're conflating a tool with a service.
If you noticed that calculators were really good at adding up numbers, and started a business using a calculator to add up numbers for people, you won't attract any customers because people can just use their own calculators.
That does not mean businesses do not use calculators.
Wild, accountants must not exist in your mind. Everyone can own a computer but there are massive services of renting those computers 'in the cloud'. Everyone can buy storage, but for some reason the majority think its easier and cheaper to buy in the cloud. Hell, you could go to the store and purchase a movie, but many still think seeing them in a theatre, or you know, streaming them are a better option. You say LLMs have no business opportunity which seems to show the failure of your thinking.
If you think accountants "add up numbers" in 2026 then I can't help you mate.
In a gold rush it is better, on average, to sell the shovels then to mine the gold.
Slop image
When potatoes came over from the New World, a lot of Europeans grew them as decorative plants. New shit makes people do weird stuff.
Not everybody is trying to make a business with so-called AI. The peddlers are just the loudest.
The companies promise their models can do all this stuff for paying customers. If the models were truly that capable, the so-called AI companies ought to be doing everything with them and be raking in the dough like mad. Which they're not because they know the limitations of the models. It's what economists call the bullshit gap between marketing and reality. And by economists I mean me.
I like your newly coined term: "marketing bullshit gap". I will start using it.
A agree with your point of view fully.
I mean if you were an economist you'd know exactly why AI companies are making massive profits, because its more profitable to sell shovels during the gold rush than it is to find gold. Doesn't mean gold is worthless and not profitable, it's pretty basic economics, but you know that already.
They are literally not making massive profits. They may be making lyin' Sam Altman rich, but the VC money is drying up and OpenAI has repayments coming up in 2027 that it doesn't have a chance in hell of being able to payback.
https://www.wheresyoured.at/brokenomics/
Well, hardware companies (Nvidia) are making massive profits. The rest, no.
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.
You aren't separating hardware/training costs and costs when the models are developed. Ask the Chinese how thats working out for them, and one of many reasons why their models are so much cheaper.
https://isaiprofitable.com/
I think the person “selling shovels during a gold rush” is nvidia slingin GPUs. And also in this analogy the gold is pyrite.
If I recall correctly, shovel companies made a lot of money while only a few of their shovels actually struck gold.
https://en.wikipedia.org/wiki/California_gold_rush
Because nobody but nvidia profits from LLMs.
Shovel salesmen
How's TSMC doing these days?
Yeah, all right, "hardware suppliers" in general.
They are going for the gold rush pick axe business model
But there is no gold at the end of that rainbow. It’s more like a selling Florida swampland to real estate developers model.
The difference is there was actual gold in them there hills. LLM’s are hogwash
Because its a scam.
A scam that will inevitably end humanity on a global scale…… probably.
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.
Better question is if you can really build an app as easily as writing a prompt, why would anyone pay you for your app?
Somehow AI bros like to pretend that AI is some secret lifehack despite it being one of the most mainstream things in human history.
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.
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).
Fermi paradox? The one about aliens existing?
Yea. Slightly modified - "If conditions are now so prefect now that 8 billion humans can ask their computer nicely to program itself, and it works, then why is non-shit-tier software still vanishingly rare?"
Oh that way. Now I get it.
Anyone can prompt Shlawp to write some code, but an expert would need to check it for errors and stupid design decisions. Normally, the user isn’t qualified to verify the validity of the answer or quality of the code and that’s why people who use Shlawp can’t make high quality applications.
So, when you say “it works” it’s true for being able to generate at least some kind of code, not good code. The thing about Shlawp is that all of its outputs are very mediocre at best. They look convincing to everyone who aren’t qualified to evaluate the outputs. Those who are, will immediately notice all sorts of flaws.
Been shouting this from the rooftops since the beginning. If it was half as good as claimed, I would NOT have access to it.
This is exactly the question i ask "investment advisor" services when they call asking if i want help managing investments.
For you to have a system that works well enough for me to be interested , there'd be no need for you to spend money on call centers full of people ringing up strangers for money, you could take all of that money and invest it in the plan you are trying to sell me.
I've always thought that as well. Surely it wouldn't take them long to become ludicrously wealthy with their top investing acumen.
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.
If you come to seminar at the Holiday Inn, I'll teach you why! Only $500, and at the end you'll be able to start your own AI powered business and make millions per year!
I guess you will teach me how to build courses using AI and sell them for $500 at a fancy resort?
So now the Holiday Inn is a fancy resort.
I saw a thread a few minutes ago on a profitable AI business. The business model was hacking websites at scale to steal hundreds of thousands of credit card numbers...
https://lemmy.world/post/52304304
They want AGI, not LLMs. They're pretty much betting everything on getting there first knowing that if they do it'll pay them back a millionfold what they invested up front. They're taking a massive risk for a potentially massive reward. They're coaching a college kid to become a professional athlete. It's not profitable yet but they're investing heavily in them in the hopes that one day it will be.
No, they're coaching a spreadsheet to become a professional athlete.
Exactly LLM are unable to become AGI. So it just them wasting trillions on something that can never advance to what they want.
You could not possibly know that. You're attributing to it a probability of zero and zero is an extreme number. Unlikely is a claim you can defend. Zero you cannot.
No, we all know that for certain. AGI is a pipe dream that’s why they made up the term AGI so they could act like LLMs were anywhere close to movie AI and not just slightly improved Watson (the model that beat Ken Jennings at Jeopardy). AI has been around for 70 years and we are no closer to thinking computers now than we were then.
The term AGI was first used in 1997 by Mark Avrum Gubrud in an article named ‘Nanotechnology and international security’
I fail to see how this disproves my point.
The term AGI was coined far before LLMs even existed.
ELIZA effect is not and will never be AGI.
yep it can be programmed to pretend to be agi and if it was agi they would also know that 90% of the would problems are the epstein class and by default would remove them even if they put gaurdrails in place to prevent this then the agi would not be real agi then if they were truth seeking maximizing good for humanity if they do not target the source of most of the the world evil then the agi is evil and anti human and thus humans would be in danger. lets see if agi is programmed to be on human side or the epstein side.
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.
To paraphrase Cory Doctrow, you can keep breeding faster & faster horses, but they will never foal a locomotive.
The AI tech they peddle is impressive and has some uses; but it is nowhere near ready to live up to the hype they created in which you can just pay $10K a year for a license and get rid of a $250K employee
The AI tech they sell for $10K a year, actually costs $20K to run and they know nobody would pay the full cost, let alone the cost + their profit margin
PS: those are made up numbers to answer the question, while not real numbers, they represent the points I am trying to make
That’s because the whole point of AI is to finally back us all into a corner where cloud computing is our only option and we can be monitored and controlled, our news and opinions filtered, dissenters found quickly, and our IP hoarded and summarized, our markets predicted and our products beaten before they launch.
They dazzle the brain dead middle managers who all lament the lack of flying car futures with a piece of magic, and once enterprise (the big money) isn’t demanding powerful workstations anymore then average consumers can get fucked and we will be locked out of society if we organize.
You are right.
Open AI and anthropic make a profit on inference / api usage. It's only really the training that's dragging down their bottom line.
Well unless they have reach a level where training is not needed (which will be never for an LLM), what you told me is that you make a profit freezing ice cream but lose it on the eggs, cream and sugar necessary to make it
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.
Training is not needed to run inference on the existing models, it's needed to make new models. If LLMs plateau and there's no use in training new models, or the government regulates them and they can't train new frontier models, then they can still run inference on the currently existing models and make a profit.
This is more like making a profit for making ice cream but losing a bunch of money researching new recipes for ice cream. If you decide the recipe is good enough and stop doing that research you can still make money making and selling ice cream.
yeah? so a model trained in 2 year old data is just as good? as a model trained today?
So they are just choosing to lose money? they have a perfectly good, profitable product but they choose to lose money... ok bud
Your point only makes sense if we agree the current models are still not good enough to make a profitable product and thus, they need to keep pushing
Yes, assuming a plateau in LLM capability the only reason you'd train on an updated corpus is to get fresh info. That's not worth it because:
Most of the improvement from new models isn't coming from expanding or updating the corpus, its coming from increasing the parameter size and reinforcement learning.
No, they are competing. If open AI decides to stop training new models right now then anthropic will and take all there business as the switching cost for models is low. That's why they want the government to regulate it, so they can have a ceasefire to start taking in profits from inference without worrying about their competitor making a new better model and eating there lunch.
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)
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.
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.
They're waiting for the to big to fail bailout like the banks in '08.
AI is becoming a pretty big problem where executives are challenging experts or subject matter experts on topics based on their Ai usage. The problem is because the answers sound really good, but often the prompts aren't quite right so then the experts need to do a bunch more work to explain and justify things that the executives just find rebuttals for through further ai prompting.
Cuz it doesn't work.
Their business is the LLMs. It's like asking if a loaf of bread is expensive, then why don't millers bake bread using their own flour
Yes, but selling the llms is not profitable either. They are burning through cash at extraordinary rates.
Even at highly subsidised rates, ai startups can’t make a profitable product. It’s nuts.
It's not profitable for the mill, yes, but the millers (board members and C-suite) are making Hella bank
...by lying to investors and engaging in accounting tricks that would make Enron blush.
Drawing a healthy salary while the company you work for hemorrhages money is just grifting.
Exactly! Now you're getting it 😁
If they were not profitable just selling the flour but saw the potential profitability of baking bread, I'm sure they would. It's just that they are profitable selling the flour so there's no need.
I bet some Miller's would vertically integrate in that case
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.
You're on to something …
Why does it cost so much to engineer new models? I thought AI can replace software engineers now, shouldn't the development cost of new models decrease over time?
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.
You can't avoid the compute requirements
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.
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.
Because you need to have idea that people agree to pay money for. AI companies have idea that is selling GPU (nvidia) computer generated chat ( OpenAI, Anthropics ). People don't really need GPU or computer chat but they are willing to pay for it because they believe it will help them to save time or money by spending time and money using this shit.
That's paradox of modern times. We are being sold time spending tools that bring nothing to our lives except turning our heads from the fact that planet is dying.
We all know why…
AI is highly subsidized for users so AI wrappers can be profitable. (Even though they are a net negative to the economy)
But ai companies burn trillions of dollars of investor money with fake promises. They can't make a reddit chatgpt bot that charges a user 10$ a month and make a profit.
Google seems to be figuring it out pretty quickly. Getting easier and better to simply use Gemini than it is to actually use Google's search. That's been the tech idea for years. Come in quick and disruptive, make it cheap on someone else's back, and then when people are hooked, wrack up the costs.
And why would a user of reddit need/want a chat bot: for what? And on top of that pay $10????
To make posts and comments that advertise their products.
That is the right question.
They want somebody else to be on the hook for their screw-ups. Doesn't mean they won't get sued if it's something bad enough or their meatshield business decides to make an issue out of it but this way, they've reduced their risks a little.
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
20162026. 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
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.
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.
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.
Self host on what? The way we're going 16GB of RAM to run the models will be a capital investment...
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
There's a lot of reasons;
That's like asking why doesn't Adobe make their own content and keep the tools internal.
Both open AI and anthropic are making a profit on inference / api usage. So if you're using Claude code and burning through millions of tokens they're making money off that. The revenue from this is also growing rapidly.
What's dragging down the bottom line is training, which is the big money sink. They have to do it though to make the next biggest model to compete with each other. They're hoping that they'll hit a plateau in capabilities, whether that be AGI or some government regulation, so they don't have to train any more. At that point they can sit back and collect billions from the inference money printer.
I could be wrong, but I don't think that's what the question was about.
It was "if people are trying to use Anthropic or OpenAI's services to build a profitable company, why wouldn't Anthropic or OpenAI just build that company themselves"
And the answer there would be lack of subject matter experts. You need people who know the industry they're building the product for if you want to have any fighting chance. AI can work as a force multiplier, trying to use it as a completely autonomous agent that gets near-zero human feedback is hopeless. I doubt any of the AI companies want to take on thousands of employees just to use their own AI to take risks on new industries when they could just sell the AI to people who take on the risk.
I imagine they tried, but it just kept saying the only way to win was not to play.
That's the neat part.
Why did the snake oil salesman grow old and die? Same reason.
They're selling hype, not technology
Because it's only capable of producing slop.
The only upside to this is that all of these actual idiots puting money into this will lose that money, and hopefully put this reigh of speculation to an end for dacades.
The plan is, broadly speaking, to commoditize intelligence. Instead of selling train cars filled with hogs, their train cars are filled with the next token, thought, or action.
Dunno why the parent comment is downvoted; it’s slightly reductive but it’s correct
Properly define "thought" as, "we made it reprompt itself with 'are you sure?' and that tooootally is the same thing as thinking, promise no backsies", and you'd be much closer to the truth.
The intelligence is indeed artificial... Artificially projected onto LLMs via the ELIZA effect. There is no intelligence here. Neither from the LLMs nor the executives pushing this shit.
You think google isn't a profitable business?
google is now a NET NEGATIVE on businesses ask ai about how much it inflates costs of product they said at least 15-30% of the product is inflated if you click on the google link to their product.
one would have thought google ads would account for 1-2% at most but since it now costs 15-30% of a product google has now become net NEGATIVE value on the world and should in fact be shut down same with meta and all ad corporations.