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When the vast majority of users see your product as Search+ they will value your product as Search+

Awshucks...hard times...sigh/lol

I hope OpenAI does this. I hope they're the first business to IPO with a -200% margin...

Our stuff literally can't scale so obviously we should cut out pricing to something something

It's like Walmart's famous "lost leaders" (high viz goods they lost money on but that gave the impression they were a discount store) except it's losses all the way down.

Wait Sam slow down I’m trying to take notes. “Costs…issue…in…biz…ness”

Getting "paid in exposure" on an enterprise scale

But probably more than that. I suspect the addressable market in Asia and Africa is... significantly less than 100%, especially since China has its own AI models, and there are a significant number of Americans who just aren't interested (at least, not enough to pay for it).

My assumption is that a few folks at the top will manage to float away on golden parachutes and retail investors will be left holding the bag.

I dunno I think they could probably get a bailout if they kept calling Trump a big strong man or whatever

Oh, *some* kind of bailout is an absolute certainty; but I won't try to predict exactly who will get it.

Also a bailout is typically a short term payment to help keep a business afloat until they can stabilize. AI companies have never been stable and won’t stop needing money any time soon. It would need a new record bailout every few months with the hope these companies eventually make profit.

i feel like it should be called something other than "profit margin" if it's in the negative. or at least "eroding profit margins" is clearly the wrong image to use in this context. more like "sweeping them out to sea, out of sight of the shoreline of profit margins" :p

Because VC money and their patience for throwing said money into an incinerator are both infinite as Sammy Altman knows. VCs would never ask "when do we start making a return on investment?" or cut off a clearly losing bet.

"an early test of the strength of both companies' business models" their business models seem to be burn investors money like there's no tomorrow until they magically make a profit. At least the Underpants Gnomes has something substantial when they stole the underwear and made no profit.

“Drastic price cuts could potentially erode the profit margins of both companies […]” …what profit margins?

Seems somewhat late for an "early test of their business models", no?

How do you write “erode profit margins” with a straight face?!?! When profit margins are negative, it’s called “increase losses.”

That's when the Donlad swoops in and "takes a stake" in these operations...

The idea that they even have a business model is laughable.

People who vaguely remember 2008 and the aftermath kept hearing about bailouts without remembering the details and have a trauma response like the bailouts are hiding under the bed or something

you're imagining scenarios because you don't want to think about the actual outcomes of what i'm saying, it allows you to intellectualize something that's actually very stupid and think the world runs on logic versus chaos and greed

And somehow he's convinced people to give him hundreds of billions of dollars on the strength of that plan.

Maybe one more ad spend...one more article to hype their stolen data piles like they are going to turn the world on its head, dolts.

I, for one, welcome the race to the bottom before the financial implosion. This will be a whacky case study. I'm not sure what the hell we are doing anymore. We have this Sword of Damocles around these IPOs, and I'd like to get it all over with. We saw the SPCX prospectus... Anyways.

Get a govt bailout I assume

“I would gladly pay you Tuesday for a hamburger today.” We’re living through the fucking dumbest timeline.

Ah I see we’ve hit the “destructive competition” part of the American railroad history comparison after “explosive buildout of unnecessary infrastructure”

www.wheresyoured.at/premium-ai-i...

This can be the only explanation and even then it doesn't work

The history of capital is this, yes

Alexa, play yakkity sax.

Its a bad strategy. They aren't known for patience

a race to the bottom with no margin is the end of it

Interesting take.

It's not a matter of if this explodes, it's when. And when is looking closer and closer as these companies begin to make panic decisions knowing there's no way out.

Rather undercuts the idea that "AI is so valuable and no one can exist without it" when you have to lower the price on an already losing venture to keep people interested.

And now coddling the tiny testicles of Trump so Trump, in turn, outlaws their superior competitor Anthropic, allowing ChatGPT to catch up for a bit and charge more.

Panic move.

That's the sound of a bubble popping

Sounds like a commodity. Hash tag no moats. This is going to hasten the end.

Why would it? The timeline to profitability has always been imaginary.