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AI Isn’t Making Much Money

DukenukemX said:
This is largely because everyone expects this to take peoples jobs, which hasn't happened. At least, not yet.
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AI enhanced automation is rapidly transforming the workforce. Its not that AI can replace everyone, but tasks once requiring multiple people now need just one, like Jeff, who no longer needs Antoine, Earl, or Ahmer to help him by using AI tools. Even bloggers who defended automation saw layoffs when AI began efficiently gathering and reporting trends, producing the same kind of content they were at virtually no cost.

While the long-term benefits to society are immense, the short-term disruption is significant, akin to the industrial revolution. Jobs in customer service, driving, and even legal clerking face inevitable replacement. The real challenge is what work can be assigned to the 25% of the world population with an IQ at or under 80 in an AI-dominated world where repetitive tasks of that sophistication can be done by machines? With lidar based cheap vacuums and soon to be better and cheaper robot mowers, landscapers may be needed but not in the quantities they once were, and I can't imagine how big the impact will be for the transportation industry when we've perfected self-driving vehicles and drones in 20 years. This will leave a large portion of the workforce unable to contribute in any meaningful way while further concentrating wealth in the top 10%.
 
AI is not making enough ROI

According to the latest quarterly data, Microsoft's "Intelligent Cloud" segment had a profit margin of 40.6%, whereas its "Productivity and Business Processes" segment, which includes commercial software, boasted a much higher margin of 57.4%.

A similar pattern is evident at Google, where its cloud business reported a profit margin of 20.7%, significantly lower than the 40% margin of its "Google Services" segment, which is predominantly driven by advertising.


The issue is that for both companies, their lower-margin cloud businesses are growing at a much faster pace than their high-margin core operations.

Data shows that Microsoft's cloud business grew by 26% in the quarter, far outpacing the 16% growth of its software business.
Similarly, Google's cloud business expanded by 32%, well ahead of the 12% growth in its services segment.


The analysis suggests that as AI continues to drive enterprises toward the cloud, this "growth imbalance" will become more pronounced.

In the long term, this implies that the overall profit margins of both companies could be "diluted" by their expanding cloud businesses, gradually converging toward the margin levels of their cloud operations.
Furthermore, there is a potential risk that new AI products could cannibalize Microsoft's lucrative enterprise software and Google's search advertising businesses.

https://x.com/Jukanlosreve/status/1951952435372765543
 
embertmorton200 said:
AI hype is everywhere, but real monetization is still uneven. Most companies are pouring in cash without clear ROI. What’s worked for me is applying AI where it directly impacts revenue—like using Phonexa to automate lead scoring and attribution. That’s where AI starts making money: not in flashy demos, but in solving real operational problems.
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I think the issue here is that, unless you're running these models locally on your own hardware, then it's really impossible to know how AI tools are going to affect the bottom line.

Right now, every AI-as-a-service company is charging pennies, barely enough to cover electricity let alone hardware, real estate, Rnd, wages etc. Because we live in a world where companies will bleed themselves dry in order to be the default option in a market, then they worry about cost and actually making money later.
 
KazeoHin said:
I think the issue here is that, unless you're running these models locally on your own hardware, then it's really impossible to know how AI tools are going to affect the bottom line.

Right now, every AI-as-a-service company is charging pennies, barely enough to cover electricity let alone hardware, real estate, Rnd, wages etc. Because we live in a world where companies will bleed themselves dry in order to be the default option in a market, then they worry about cost and actually making money later.
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They charge enough to keep the lights on the valuable part is all the data people are volunteering for their system that they can better train off of and mine for actionable content.
 
Bigbacon said:
AI is dumb thats why.
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Doesn't help that AI has "Digital Hallucinations". Can't really use something that just makes up answers.
digital-hallucinations-digital-circus.gif

embertmorton200 said:
AI hype is everywhere, but real monetization is still uneven. Most companies are pouring in cash without clear ROI. What’s worked for me is applying AI where it directly impacts revenue—like using Phonexa to automate lead scoring and attribution. That’s where AI starts making money: not in flashy demos, but in solving real operational problems.
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I believe AI's future is to make it easier for artists to make art. I know this sounds crazy with artists boycotting AI, but the reality is that AI could be the best way for fewer people to make content and thus keeping the vision more on track with the creator. The worst AI can do is insert multiple fingers with it's "Digital Hallucinations", but that can easily be fixed. Some artists claimed to have made worse content that took months which can now be done better in a couple of weeks using AI. I say embrace it where it makes sense, but the problem is that companies are trying to embrace it where it doesn't. Like writing articles and talking to people while hoping it doesn't start becoming racist and incoherent.

View: https://youtu.be/TpTGe0psCEA?si=a7c-x9-rwy178JFB
 
erek said:
Ai = Bitcoin buzz 📲 imo

“There’s also a longer-term worry that AI could dent the software-as-a-service business altogether. Most computer applications are charged per user, so revenue growth is premised on corporate customers continuing to hire.

But one of the main pitches of AI is efficiency – you need fewer customer service reps to serve the same user base, for example. Not all companies will reinvest labor savings into hiring more people. Job losses will hurt future growth for software based on “seats,” the number of workers using it.

Kash Rangan, an analyst at Goldman Sachs, posed the question to Adobe’s management during an earnings call last week. “Will generative AI be so good that it’s the end of the creative process — so we don’t need creative folks,” he asked, noting it was a major point of debate for investors.


Since AI will make software easier to use, it will expand the customer base, replied Chief Executive Officer Shantanu Narayen. As for hardware and infrastructure getting all the attention in this wave of AI spending, the veteran Adobe CEO said that customer focus will eventually swing back to use of AI within applications, or else all that investment in chips and servers wouldn’t have been worth it.”

Source: https://www.bloomberg.com/news/news...struggle-to-make-money-from-boom-in-ai-demand



My take: Everyone is focused on the AI efficiency boom, but the transition phase is going to be rough for a lot of people in the workforce. When the economy shifts this fast, liquidity is king. If you find yourself needing to bridge a gap while the market rebalances or just want to keep your options open away from the big, slow-moving banks, I’ve found that services like sacramentoonlineloans.com are a much smarter, faster way to manage personal capital. You don't want to be tied to a rigid loan structure when the labor market is as volatile as this.
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I think there's some truth to both sides. AI will probably reduce demand for certain repetitive tasks, but history shows that major technology shifts also create new kinds of work. The question is whether those new roles appear quickly enough to offset the jobs that become more efficient.

On the SaaS point, I don't think the traditional "per seat" model is guaranteed forever. If one employee equipped with AI can do the work of several people, vendors may have to rethink pricing. We may see more usage-based or outcome-based pricing instead of simply charging by the number of users.
 
Liffir said:
AI will probably reduce demand for certain repetitive tasks,
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ai is non-deterministic

getting different results for repetitive tasks isn’t a win

fixed-function software engineering otherwise general automation is far more efficient, and optimized for this

i don’t want an ai to keep re-reasoning for every iteration. it’s non-deterministic and also will be expensive on token usage
 
erek said:
ai is non-deterministic

getting different results for repetitive tasks isn’t a win

fixed-function software engineering otherwise general automation is far more efficient, and optimized for this

i don’t want an ai to keep re-reasoning for every iteration. it’s non-deterministic and also will be expensive on token usage
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AI makes a program to do it just like a software developer would have.
 
Industrial scopes are a liability with AI. Augmenting workers for a complex task on legacy systems requires more budget that eats into profits, without guarantee of profits increasing from AI use. I think we will see companies that are built from the ground up with augmentation outpacing large companies reducing to compete and fall within budget.
 
AI is just like the electric car craze. It failed because consumers didn’t like the trade-offs and high cost. It led to really good hybrid vehicles.

AI isn’t making money, and the development/upkeep costs are insanely high with very little pay-off. The result will be excellent AI-assistant tools.
 
AI is like 3d movies, buying GPUs for mining... Everybody and their mama jumps in on a craze. Making things impossibly expensive for the rest of us and it cools off. To what degree? Who knows at this point. But I really dislike sheeple.
 
OFaceSIG said:
AI is like 3d movies, buying GPUs for mining... Everybody and their mama jumps in on a craze. Making things impossibly expensive for the rest of us and it cools off. To what degree? Who knows at this point. But I really dislike sheeple.
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Without mining, there'd be no Cryptocurrency, and what Crypto gave us, was the knowledge that people are greedy, and that you can't trust most of them. Rugpull is now a term mostly associated with Crypto.
 
DukenukemX said:
At least this guy makes the most sense of what this AI outcome will look like.
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the Ai made video telling us that AI is about to bust, there some mild irony to this.

El_Capitan said:
and what Crypto gave us, was the knowledge that people are greedy,
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As if consumer pattern always seeking the best price or the amount of hunting made everywhere human were new somewhere did not told us that for many millenia pre-crypto.

OFaceSIG said:
AI is like 3d movies, buying GPUs for mining... Everybody and their mama jumps in on a craze.
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Do they ? I do not know many people that bough GPU for AI (or 3d movies set), people jumped on claude, gemini, chatgpt and many online stuff, but local GPUs driven ? discrete gpu sales does not seem historically high. Making money out of gpu for mining was much easier than with LLMs
 
sharknice said:
AI makes a program to do it just like a software developer would have.
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i’m seeing people using ai to make new programs to do it every single execution

i asked about just capturing the first good iteration that the ai made and just running the produced code

people are saying the tasks are too complicated to capture all the nuances
 
Put on your tin foil hats for my input lol
-----------------------------------------------------------------

- AI is still in the groundbreaking / developing phase
- The ROI isn't there yet for most corporations/companies/elite
- AI agents, in-house LLM's, etc.. are being deployed in your own companies, workplaces, corporations around the world... along side all the other agents, screen/key loggers, trackers, etc...
- Require employees to "document" everything they do... write KB's... require employees to use Microsoft 365 apps... "You're uploading this to the team Sharepoint, right".. etc..
- Screen capturing / key loggers are probably capturing everything you do... from when you look into your ticketing system... or open your email .. etc.. capture your movements on how "you" complete a service request, etc...
- In-House agents/LLM's are "learning / training" all this into their dataset / chatbot / whatever'the'f
- The ROI will come at some point later in this AI hypetrain.. We're not there yet.. even though we are only seeing the major players (e.g. Microsoft, etc...) have layoffs and will state "redirecting resources to AI" as the excuse... etc...

Ultimately... whether that is in 5 more years.. 10 years.. or what... that is when the real pain will hit us peasants...


/ removing tin foil hat
 
LukeTbk said:
the Ai made video telling us that AI is about to bust, there some mild irony to this.


As if consumer pattern always seeking the best price or the amount of hunting made everywhere human were new somewhere did not told us that for many millenia pre-crypto.


Do they ? I do not know many people that bough GPU for AI (or 3d movies set), people jumped on claude, gemini, chatgpt and many online stuff, but local GPUs driven ? discrete gpu sales does not seem historically high. Making money out of gpu for mining was much easier than with LLMs
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The point was that AI is a craze. All the companies are doing it. Just like tons of people bought GPUs for mining. It doesn't matter if companies or people did it. The point is demand outstrips supply so the price skyrockets and availability craters.
 
OFaceSIG said:
The point was that AI is a craze. All the companies are doing it. Just like tons of people bought GPUs for mining. It doesn't matter if companies or people did it. The point is demand outstrips supply so the price skyrockets and availability craters.
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And anyone who knows history, is that few gold miners made money during the gold rush, but everyone who sold the tools to mine gold made lots of money.
 
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