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Will genAI businesses crash and burn?
The tech industry has been so excited about generative AI that everyone seems to miss a fundamental point: it’s not at all clear genAI firms can actually be profitable.
Despite soaring investments and rapid revenue growth in some sectors, many genAI businesses struggle with high operational costs and uncertain paths to long-term financial success. This means, as Ed Zitron, well-known tech maven and cynic, said that OpenAI loses money on every paying customer, burning billions annually despite rising subscription numbers. True, some smaller genAI companies such as Tempus AI, which applies the technology in precision medicine, show promising financial momentum.
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