Silicon Valley has bet big on generative AI but it’s not totally clear whether that bet will pay off. A new report from the Wall Street Journal claims that, despite the endless hype around large language models and the automated platforms they power, tech companies are struggling to turn a profit when it comes to AI. As example, Microsoft, which has bet big on the generative AI boom with billions invested in its partner OpenAI, has been losing money on one of its major AI platforms.
A report from the Washington Post in June claimed that chatbots like ChatGPT lose money pretty much every time a customer uses them. The reasons why the AI business is struggling are diverse but one is quite well known: AI platforms are notoriously expensive to operate. Platforms like ChatGPT and DALL-E burn through an enormous amount of computing power and companies are struggling to figure out how to reduce that footprint.
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