I buy 50 billion of hardware. Make 45 billion back in year 1. My losses are 5 billion. I Pay of all my creditors by year two. Then spend another 55 billion on hardware in the second half of year two. My profit is at this point zero.
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By year three I am printing money.
It's not a flippant comment. It's basic math.
In year three your competitors invest in making a better model and crush your business because you have no moat at all.
replyThe entire business requires massive ongoing investment because getting massive investments is the only thing resembling a competitive advantage that you can get.
The equivalent to anything you can do will be available as an open weight set in six months to a year. Sink or swim.
Sorry that's confusing cash flow with profits, where things get amortized
replyIt's not basic math when the numbers are this big. There's not going to be $50 billion coming in Year 3 if there's a market correction and lenders scale back financing. Borrowed money is how companies are paying for AI, and that's the first thing that disappears in a recession.
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