I share your feeling that LLM-based AI is a high-potential technology.

The issue is the objective dollars and cents financials of the situation. It’s literally the technology that is the money-losingest at this time.

The commercial utility of the technology can’t become viable just by being really useful.

There’s a good accounting argument to be made for AI IPOs happening out of a serious need for capital.

I wouldn’t bet money at a casino on this, but if OpenAI went completely out of business or was absorbed into irrelevancy within a calendar year, nobody with a finance background would be surprised. They objectively cannot exist in ~18 months without massive spending cuts or additional cash infusion. And they can’t make their models better and serve more tokens to build that future potential that justify their present valuation without additional capital, which becomes decreasingly efficient as data center build costs skyrocket.

AI has wonderful potential but no amazing product is guaranteed commercial viability. If Uber spends $1500 on tokens per employee they might as well spend $0 on AI and hire more real people to compensate.

I think about how the railroad barons went through a somewhat similar process. By the end of the American railroad buildout, numerous lines became financially unviable within a few short years or decades, some not even really making it into the automobile era. The only railroad business that ended up with any sort of long term profit viability was freight.