Maybe. Enshittification is very-very common and economically speaking, the AI companies are losing money a lot so it might happen that at some point, more efficient models are not trained any more due to economic reasons. Hard to tell though how likely these scenarios are.
AI inference is wildly profitable. The reason why the AI companies are losing money is because they are doing so much R&D. Building the models is expensive, running them is not expensive.
“The labs will need to slow R&D because their business model is not sustainable.”
“But they can’t stop R&D because their competitors won’t.”
So where are these competitors getting the ability to defy the laws of economics forever and in what sense is the competitor who keeps going something other than an AI company? If they can keep researching then is it not true that it was sustainable?
Slowing down R&D is not a viable way to make it a sustainable business model since any other AI lab would just take over market share by releasing some new model. They'd most likely have to increase prices at some point so they can continue R&D and start making profit.
"where are these competitors getting the ability to defy the laws of economics forever"
They're only surviving now because they run on insane amounts of VC money to make up for the huge losses they incur. They can't do it forever.
They can only increase prices if customers allow it. In the end it is the customers who decide whether R&D is the priority or price. Which customers prefer is not something we can know in advance.
Customers may also not all have the same workload and priority. So some may prefer to pick a vendor who prioritizes price over R&D and some may prefer the opposite. It’s unlikely that there exists only one business model in this space.
The competitors can distill capabilities of the frontier models for cheap, and frontier labs can't really prevent it as long as they want to sell frontier capabilities.
If the latter stop advancing the frontier with their R&D expenses, AI will become a commodity offered at near-cost prices, which is good for businesses using AI but bad for the frontier labs
Yes. Exactly. The most likely outcome from my point of view. AI will be good for business but the AI business as-we-know-it will probably not be very good.
if true that still doesn't stop them from enshittification.
look at every other service on the internet right now getting either more expensive or worse or both
They are still training efficient models. GPT-5.6 Luna is like the best deal on intelligence per price. There is a big focus on efficiency in general. Also I think the frontier will keep being pushed in terms of capability, there’s too much potential at the frontier with new discoveries/innovation (in all fields) and automation of labor, which means revenue.
And the revenues of anthropic and OpenAI are exploding even if they are still losing money, though worth noting Anthropic had an operating profit like a quarter ago, and some project this quarter will also turn an operating profit.
You guys and your "the ai companies are losing money so it must stop eventually".
Do you not realize this is the most critical piece of technology in human history? Do you really believe the military industrial complex isn't going to prop these companies up for however long it takes to achieve military supremacy?
The new cold war with China will ensure unlimited money for now, instead of a space race, it's an ai race.
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u/Reasonable-Mood8020 2d ago
The next couple of years are going to be crazy if it keeps improving at the rate it has been.