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Nowadays, it feels like a conversation about artificial intelligence (AI) is always a stone’s throw away. Whether deeply entrenched in technology or casually reading the news, you will likely come across headlines and stories about the latest companies and developments in the AI space. These stories talk about all the great things that AI can do locally and globally, for individuals and businesses, as well as the world’s anxieties about adopting AI systems in their homes or workplaces. However, what is not talked about as often is who is making money in the AI industry. Google’s (NASDAQ: GOOGL) latest earnings call brought this issue to the surface when the company revealed that its Q2 expenditure reached $13 billion, with most of that spending going toward data centers and services that support AI capabilities. During the call, many analysts questioned whether the company’s multi-billion dollar investments in AI would turn a profit anytime soon. Google CEO Sundar Pichai said that AI is a long-term investment and that it is better to overinvest in AI now than to underinvest and fall behind. However, it is unclear when Google will begin to profit from its significant investment in AI—and they aren’t the only company in that boat. OpenAI posted $540 million in losses the year it developed ChatGPT, attributing those losses to the spending required to train and develop GPT. Now, the company is allegedly on track to lose as much as $5 billion due to the costs associated with running the AI products it offers. The high cost of AI: OpenAI’s financial breakdown In OpenAI’s case, $4 billion has been earmarked for servers that maintain ChatGPT and the large-language models that power the chatbot. Another $3 billion is needed to cover the cost of training its AI models with new data, and…

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Filed under: News - @ August 1, 2024 7:24 am