"The ecosystem is incredibly unhealthy," said Kai-Fu Lee... referring to the profit disparity between, on the one hand, makers of AI infrastructure, including Nvidia and Google, and, on the other hand, the application developers and companies that are supposed to use AI to reinvent their operations. This stark contrast in profit margins is leading to an imbalanced growth in the AI sector, wherein a select few benefit greatly, while the majority struggle to sustain.
"If we continue in this inverse pyramid, it's going to be a problem," he said. The traditional tech model has flipped, where rather than application developers earning more than infrastructure companies, it's now the reverse. For instance, Nvidia and other chip makers garner substantial revenues from AI processing, while application developers lag significantly, earning far less in comparison. This trend raises concerns about the long-term viability and innovation within the industry.
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