country
EN
Top economist warns that the AI math doesn’t make sense: ‘Profits are currently being funded by investors rather than earned from customers’
['Sasha Rogelberg', 'Mon', 'August', 'At Am Gmt', 'Min Read']
Yahoo News - Latest News & Headlines
Here's something altogether more wired: The AI boom is paying off, but not in a way that the current equities market has accounted for.
Slok broke down AI companies into four categories: models and applications, cloud and compute, energy and grid, and silicon and equipment.
"AI boom's profits are currently being funded by investors rather than earned from customers," Slok said.
Should AI financing slow down, the lopsided profit margin structure threatens to topple the stability of the entire rapidly expanding industry, Slok warns.
"The bottom line is that the most profitable part of the AI value chain depends on the least profitable part continuing to grow revenue or raise capital," he concluded.