According to a Wall Street Journal report, generative AI products aren’t generating enough revenue to turn a profit.
The report reveals that, unlike traditional software, AI doesn’t enjoy the same economies of scale. This is because each query and prompt for a user requires extreme amounts of processing power. This cost will come down as the cost to compute decreases, but in the meantime, the companies developing AI solutions will need to increase the cost of access. This has the downside of users turning away from the service. For example, Microsoft will charge an additional $30 for access to an AI-infused version of Microsoft Office 365, a service that costs $13 for the base version.
We are still in the early days of generative AI’s development, but already there is controversy surrounding how these platforms are trained, what data is used and how the technology will affect the employability of human beings.
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