I’ve been working for a company that have been burning money for over 10 years, it never became profitable, and its potential is way less disruptive than AI. No problem with funds, and it’s still burning money today.

Even if AI is just hype (I doubt it) the potential is so high that investors will throw money in for decades even with no return.

Yeah but AI is burning so much that there literally won’t be any VC money by 2027. Like, at all.

When we say “burning money” just keep in mind that money is not coal: you only transfer it to someone else. People are making money with AI right now, just not AI companies.

Burning money in this context does not mean that the money disappears, but that the thing you get for your money is worthless, but you pretend it isn’t. Here, it’s GPUs.

The problem is that how it should really work is that people make a product, they sell that product for money, and since the product they sold is worth as much as the money paid for it, that value is now twice in the economy, once in the shape of cash and once in the shape of the product. This is how economic growth should work.

Now you could say that if someone paid that much for that product, it should be worth that much. But if it’s just you and your friend passing it back and forth, that would feel fraudulent, as it isn’t worth as much to most people. All the AI money and growth, which is a significant portion of the US GDP growth, is money that’s passed between like 7 companies, in a circular way.

And the main valuable product in the whole AI boom is not even AI, but GPUs, as in that’s the only thing people actually pay for. GPUs have a lifetime of months to years at most, even if the demand for them does not crash.

This wave of AI gave virtually anyone a chance to build products for a very low cost and a decent quality that was out of reach even for small teams years ago. If you think that it’s all about selling GPUs you’re missing the point.