Yea, I mean, if it can't show a return in the very short term, is it even worth doing? How could something possibly develop into being profitable after years of not being so?
All you have to do is point to bankrupt bookseller Amazon, whom that dumb Jeff Bezos ran into the ground with his money-losing strategy for years. Clearly it doesn't work!
There's growth focus and there's doing some of the largest fundraising rounds in the history of silicon valley during a time when debt is the most expensive it's been in decades and still barely keeping the lights on because your service is so unprofitable.
Interest rates are still well below their historical average right now.
And yes, venture capital investing involves high risk, of which all participants are fully aware, and intentionally looking for.
We're talking <2 years since ChatGPT went viral for the first time. Generally these stories take at least 10 years to play out. Uber was unprofitable for 15 years. Now they're profitable. Every VC-backed startup is unprofitable and barely keeping the lights on for many years. None have reached 100M active users in a matter of weeks like ChatGPT.
They absolutely might fail. But the level of pessimism here is just plain funny. How much money are you willing to bet against them ever getting profitable?
I think there's a big difference between companies like Google and Amazon that were operated unprofitably for years but did have the option to pivot in to profitability for a lot of that time. I would also consider Uber more of an outlier than the rule in terms of blitzscaling. Maybe OpenAI will be kept alive on life support for a while because there is so much in the industry riding on AI being the next big thing, but their problems are myriad and include terrible unit economics and a complete lack of moat in an environment full of bigger organizations that can pour nigh unlimited money into trying to outcompete them. Maybe it makes me a pessimist to point out basic business fundamentals in the face of unquestioning optimism.
>I think there's a big difference between companies like Google and Amazon that were operated unprofitably for years
How many years before they reached this point ?
chatgpt.com had 3.8B visits last month and was #8 in Internet worldwide traffic. It is the software product with by far the fastest adoption of any software product in history. "Some of the largest fundraising in Silicon Valley" you say ? Well, that sounds about right to me.
What part of unreasonable time frames do you not understand ?
What's so poor about the unit economics in the frame we're talking about ?
Open ai is one of the fastest growing in revenue and adoption. It's not like you even know to what degree free subs are being compensated by currently. Do you even realize how much Language model costs have gone down in just 2 years ?
You're the one who said, there's a difference between the likes of Uber and Google/Amazon who apparently could have pivoted to profitability much sooner but then conveniently ignore the question of when this pivot become possible.
Newsflash: almost everyone looks poor unit this soon out.
All you have to do is point to bankrupt bookseller Amazon, whom that dumb Jeff Bezos ran into the ground with his money-losing strategy for years. Clearly it doesn't work!