"The AI emperor is not wearing any clothes - I mean, seriously, he's as naked as a jaybird. Or to be more precise, the big-name AI companies are burning through unprecedented amounts of money this year. With no clear plan to make a profit anytime soon. (Sure, Nvidia is coining cash with its chip foundries, but the AI software companies are another matter.)"
"For example, we now know - thanks to analysis from The Information - that OpenAI will burn $115 billion (that's billion with a capital B) by 2029. That's up $80 billion from previous estimates. On top of that, OpenAI has ordered $10 billion of Broadcom's yet-to-ship AI chips for its yet-to-break-ground proprietary data centers. Oh, and there's the $500 billion that OpenAI and friends SoftBank, Oracle, and MGX are already committed to spending on the Stargate Project AI data centers."
"It's not just OpenAI. Meta, Amazon, Alphabet, and Microsoft will collectively spend up to $320 billion in 2025 on AI-related technologies. Amazon alone aims to invest more than $100 billion on its AI initiatives, while Microsoft will dedicate $80 billion to datacenter expansion for AI workloads. And Meta's CEO has set an AI budget of around $60 billion for this year."
Major AI companies are committing unprecedented capital to AI infrastructure, chips, and proprietary datacenters. OpenAI faces projected burns of $115 billion by 2029 and has placed large chip orders while participating in a $500 billion Stargate Project commitment. Large tech firms including Meta, Amazon, Alphabet, and Microsoft plan collective AI-related spending of up to $320 billion in 2025, with individual commitments ranging from tens to over one hundred billion dollars. Revenue forecasts such as OpenAI's $12 billion in 2025 and $100+ billion by 2029 remain speculative. The scale of spending raises significant doubts about near-term profitability.
Read at Computerworld
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