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> The US government basically has to nationalize AI and capture an outsize portion of the revenue from it in order to fix the economy, as the combination of debt burden and interest rate pressure from de-dollarization/global realignment is going to push us into a death spiral, and even if AI is a smash hit, the ~19% federal capture of corporate revenue isn't nearly enough to pull us out of it.

Any actual numbers to back this up? I don't see how nationalizing a very cutting edge technology outside of wartime is going to go super well. The leverage that these companies have is the same leverage that TSMC has: you can't just take over and expect things to rocket at the pace its going

by root-parent6 hours ago|

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>> The US government basically has to nationalize AI and capture an outsize portion of the revenue from it

Currently AI has generated no profit. And as it sits, is a non viable business.

I refuse to include the sellers of shovels as AI revenue.

If the companies buying the shovels are still losing money, then the tool supplier fortunes have nothing to do with the economics of the AI application layer, who is losing money on every prompt.

by aspenmartin1 hours ago|

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It's the most naive opinion that keeps getting shoveled around. You have a product that is viewed as essential by businesses, with revenue growing by 10x a year and geopolitical ramifications that have continued to rear their heads and your opinion is "this is all an unprofitable shill". It is extraordinary to me that people really believe this. Whether or not labs run at a loss today is absolutely irrelevant. There is of course steady state economics that make sense, and its currently not well known what the profitability picture is right now, so to say "Currently AI has generated no profit" is also just speculation and not a very insightful one at that.

by CuriouslyC5 hours ago|

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I've heard that the API calls by themselves are ~60% profit if you ignore capital expenditures. The labs haven't generated profit because they're constantly sinking money into the next generation of larger models to stay relevant. Dario has talked about the economics of this a lot, and I do believe him there.

There's clearly also a lot of pent up demand in the corporate world for inference, the problem is that it's currently expensive enough that enterprises are balking at the cost before they've had a chance to refine processes and see projects through to fruition. That's a tractable problem to solve though.

by bombcar2 hours ago|

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The number of capital-heavy businesses that are wildly profitable “if you ignore capital expenses” is too many to list.

Airlines, for example, which are so profitable they continually go bankrupt.

by CuriouslyC2 hours ago|

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That's true, but if the frontier doesn't advance there's no depreciation or ongoing capital expenditure. If all the frontier labs agreed to stop making stronger AI and just try to sell what they've already trained today, their books would turn green in a hurry.