On November 30, 2022, the emergence of OpenAI's ChatGPT sparked an AI arms race. More than 600 days later, the AI arms race continues, with massive capital expenditures failing to yield equivalent actual returns. The companies running fastest in AI technology have seen their financial performance dragged down by AI.
According to The Information, OpenAI may lose $5 billion this year and needs to raise more cash in the next 12 months to maintain operations. OpenAI's total operating costs this year could reach $8.5 billion, including $4 billion for inference costs, $3 billion for training costs, and $1.5 billion for personnel costs.
The tech giants' earnings season has begun. Google and Tesla's earnings reports failed to satisfy the market. Analysts believe that large tech stocks have not yet clearly answered questions about AI effectiveness and profit potential.
Wall Street analysts expect large tech companies to spend $60 billion annually on developing AI models by 2026, but only generate about $20 billion in revenue from AI each year. Goldman Sachs predicts that investments to expand AI infrastructure will exceed $1 trillion in the coming years, but it remains unknown what trillion-dollar problem AI can solve.
Nevertheless, tech giants continue to invest heavily in AI, mainly due to "Fear of Missing Out" (FOMO). Zuckerberg admits that AI may be overinvested but considers it a "rational" decision. Google CEO Pichai also stated that the risk of underinvestment far outweighs the risk of overinvestment.
In this "AI gold rush," Nvidia has emerged as the biggest winner. Since ChatGPT's debut, Nvidia's stock price has increased by over 600%. However, Nvidia already holds 82% of the global data center AI acceleration market and 95% of the AI training market, limiting future growth potential.
The core of this wave of AI investment lies in the expectation of AI's transformative potential. However, it remains uncertain whether AI infrastructure demand can be sustained if tech giants have sufficient servers and computing power, while customers reduce investments due to lack of returns.
The AI wave has passed its initial stage, and some startups have already fallen. After the dust settles, tech giants continue to battle in the AI arena. Every technological revolution is an industry baptism, and whoever gains dominance in key technologies will have the power to dominate the future.