Based on what? Spotify took what, 16 years to turn a profit?
Money stopped working like you expect it to a long time ago.
this post was submitted on 06 Jun 2026
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Exactly that. If they do an IPO, they either will continue to waste the new shareholders money like they did with their own, or they actually have to make money, which would imply to raise prices at least ten- to twentyfold while hoping to keep all customers on board.
I don't think either of these ways will go.
I'd like to know what they are promising in their IPO prospect...
It doesn't seem like you do anymore
I'm excited to see the PE Ratios after these IPOs. We're already well into dot.com absurdity, but throw in some multi-trillion market caps with negative earnings?
Even the street corner hustler knows you give the first rock out for free.
They also know not to spend trillions making the product.
Hey, cocaine and baking soda ain't cheap you know. Plus you got to have a microwave and shit. Overhead is crazy like that.
/s
Times running out? No, it’s out.
The market can remain irrational longer than you can remain solvent.
Really? Has anyone mentioned that to Tesla? Or to whoever is in the government that keeps giving him billion dollar contracts?
The only thing more guaranteed than a Tech Sector crash is the multi-trillion dollar government bailout.
Might as well walk in the door with a $1.5T valuation, because that's what the Feds are going to use to justify cutting you a check in another five years.
Oh you mean the Tesla with a PE Ratio of 382 (20 times the industry average), a PEG of 16, P/B to 18, massive insider stock dumps, and is still down YTD? Tesla still has power because of their stranglehold on charging. AI companies have insane costs and people souring on them as they either lose their jobs or see their companies’ costs go up as a result, all without solid ROIs and strong buyers remorse.
And Trump/Hegseth keep giving them contracts because they’re idiots
still down YTD
TSLA was at $297 this time last year and it's trading at $403 today. I'll spot you that it's off the $485 peak. But it's been on an absolute tear for the last six years.
And Trump/Hegseth keep giving them contracts because they’re idiots
Government contracts are the lifeblood of every big corporation. Half the reason why business execs at Fortune 100 firms are so slavishly loyal to whomever happens to be running the country at any given moment.
I don't think Trump/Hegseth are morons for giving Musk access to the unlimited money pump, given how much of Musk's money keeps overflowing into their own pockets. I think Biden and Obama were rubs for pumping up Silicon Valley stock over the last 18 years, fully ignoring how often they were getting in bed with outspoken fascists.
More broadly speaking, I think Hegseth has set the Pentagon up for failure over the next decade in the same way Rumsfeld did under Bush. But I also don't consider that a bad thing, broadly speaking. Just a shame that we're going to piss away trillions in blood, sweat, and tears at home so the US can finally get its nose busted properly in the Middle East.
And Trump/Hegseth keep giving them contracts because they’re idiots
Ironically, Trump said the same thing about Biden.
Agree with the sentiment. It's not like we are not in a bubble, but the old fashioned business and growth of the 20th century is gone. With technology things scale incredibly so winning the market share can put you on top for decades, and not just with finances. At this point the power and control of information means everything
Ah yes, the stable and sane business environment of the 20th century, which brought us totally sane and obviously correct investments like Xerox.
Xerox was a household name !
Is the real hope that AI will be a subscription service? Those subscription billionaires ain't got a clue. Let's change "At some point you've got to make money" to "At some point you've got to add value".
I think those IPOs are meant to bring in enough money to give the founders and managers golden parachutes before the whole system folds.
They don't make any money - on the contrary - and they won't miraculously start making it just because the IPO happened.
You're thinking too long term. IPOs are the C suite cashing out.
Here's the problem... He says AI was adopted beyond his expectations. Great.
But if somebody is using it at the current price point of super cheap or free, are they going to keep using it when it gets expensive?
You can make a basic chatbot run on a desktop PC, but nobody wants to pay for that. Once you get into things with useful generation and large context windows, or things like video generation, suddenly you need one or more $10,000+ pieces of hardware to run it. So the $10 a month you charge the user is basically an introductory price that doesn't cover your hardware fees let alone the software engineers to build your AI.
Eventually, the bill comes due. Eventually, you have to look at your customers and how much machine time they use each month and how much your r&d costs and figure out what the actual cost to the customer has to be. And then the customer rethinks how useful the AI is or isn't.
People will pay $10 a month for chat GPT to write their emails. Will they pay $100 a month?
What about the company that replaced all their software developers with AI. Suddenly the AI cost as much or more as the software developers. Only now the developers who understood the code base work for other companies.
There will be a fun correction when this happens.
Once you get into things with useful generation and large context windows, or things like video generation, suddenly you need one or more $10,000+ pieces of hardware to run it.
A Blackwell server with 72 GPUs costs about $3 million, plus requires 130 kW of power (about 3 residential homes' max rated power through a residential 200A circuit box, for about $600-$1000/day in electricity cost).
You're gonna need to sell a lot of $20/month subscriptions to get that paid for, assuming that the server is good for 5 years. If it's only good for 3 years, the economics are basically impossible.
If it’s only good for 3 years, the economics are basically impossible.
Also consider that as models improve, the newer frontier models that are doing actual useful work require significantly more compute and RAM than basic chat bots...
... assuming that the server is good for 5 years. If it's only good for 3 years, the economics are basically impossible.
And surely the big AI companies wouldn't decide that hardware rated for ~3 years should be amortized over 5-6 years in order to massively inflate their value on paper.
I'm sure Bernie Madoff's fund had an 'accounting puzzle' too.
I love how the publications call it a 'puzzle' rather than what it so obviously is- a bunch of people throwing $billions at tech they don't understand which has no serious road to profitability anytime soon.
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