Nvidia this week announced a $100 billion investment to support OpenAI’s enormous build-out of data centers that use its chips. The next day, OpenAI said it had signed deals with SoftBank and Oracle to build five new data centers as part of the Stargate Project, a $500 billion plan for A.I. infrastructure. (The three companies unveiled it at the White House back in January.)
No, OpenAI is not currently profitable and has not been profitable since its 2019 transition to a “capped” for-profit structure, projecting significant losses in the coming years despite substantial revenue growth. The company’s focus is on massive growth and future market disruption, with a target of $125 billion in revenue by 2029, but it continues to lose billions of dollars annually.
AI Overview
OpenAI is projected to make $12.7 billion in revenue for 2025, a significant increase from the $3.7 billion it reported in 2024. This rapid growth is driven by the popularity of products like ChatGPT, which has millions of paying users and contributes billions in subscription and API revenue, though the company is not yet profitable and expects to remain so until 2029.
Artificial intelligence (AI) has not saturated the overall marketplace but is rapidly maturing in specific sectors, making it feel crowded in areas like digital content and entry-level jobs. While most companies are using AI in some capacity, the market is still considered to be in its early stages for large-scale, complex business integration.
This assessment is somewhat correct. The backfires based on AI have not been added up. Human rejection of information is always a factor. I would not read the MSN page at this point, it is AI gibberish.
The worse problem with the assessment, the costs will outstrip the revenues regardless.
Is AI a deflationary factor? Quick to say yes and then say on every front it could go either way. Not much of a Yes. More a not necessarily. It was clear from the get go that the PC spreadsheet was going to save a lot of money and increase productivity.
AI Overview
Yes, AI has significant potential to be economically deflationary by boosting productivity, reducing labor costs, and lowering the cost of goods and services, though the net effect on inflation remains uncertain due to potential increased demand from higher incomes and substantial AI-related investments. The ultimate inflationary or deflationary impact depends on the speed of adoption, market expectations, and how the aggregate effects of increased supply from AI are balanced against new demand pressures.
For corporate America the economics of hiring a worker versus using AI do not inspire much in most cases.
Facebook uses AI instead of human moderation. It is awful.