Peter Thiel sells his Nvidia and Tesla shares. Sign of things to come?

[Wargames]

The sad truth is the market is unstable and a bubble. Thiel wasn’t wrong to say “let me convert this shyt to cash”. He doesn’t need to risk money to make money.

 

[Ducktales]

AI being a bubble is talking about the stock market. Any of y’all who think AI is going anywhere is being ridiculous lol

 

[Treblemaka]

SIRI is nothing close to A.I/LLM’s breh.

I was never able to complete the knowledge work I can do right now with prompting Siri. Siri couldn’t make music, videos, new apps, etc.

Also we’re not talking about only A.I tech for drivers, but A.I helping make potentially better suspension systems, motors, turbulence stabilizers, etc.

It’s worth considering that smartphone sales are plateauing globally simply because hardware is "good enough" now, so the AI features might be acting more as a defensive moat to keep users from switching to Android rather than a tool for explosive growth. If Apple didn't add those features, the sales drop could have been significantly steeper since they would look obsolete next to Google and Samsung.

Additionally, Waymo, Tesla, etc. have made strides with their "Full Self-Driving" capability.

Regarding the internet comparison and B2C revenue, we are actually seeing brand new revenue streams in the form of "services as software." People are paying $20 a month for ChatGPT, Midjourney, or Claude to act as a tutor, illustrator, or coder, which is money that used to go to human service providers or didn't move at all. That isn't just enhancing a product; it's commoditizing human labor into a direct consumer subscription.

Apple lost mobile device market share regardless. Adding AI to keep them from losing as much marketshare doesnt help them increase profitability, it just made the cut less deep. Thats not a ringing endorsement of a profitable application of AI.

Making strides in developing a product thats not going to become profitable for at least 5 years after market saturation (Waymo) at best doesnt change much especially when consumers are still very skiddish of self driving cars (and will be for awhile). Thats assuming the product is ready (which its not)
Waymo has received 30B in investment over the past 16 years primarily from Alphabet (another successful market leader in a different segment). Even if every dollar over that time had been invested in AI (which isnt even close to the case) thats still only a little more than 1% of whats needed to break even on 2 trillion in investments.

Do you know how many people would need to be paying for chatGPT at $20 a month each year to even make up half the 2 trillion in investment into AI at this point?

4.2 Billion people.

Literally most of the humans on the planet people would need to have a yearly chat GPT subscription just to cover 50% of current investments. This isnt even possible on today's Ai infrastructure and still wouldn't technically possible if there were another 2 trillion invested just on the infrastructure.

Do you see the problem here?


So back to the AI bubble concern and questions no one is answering:

What's the profitability model?
How do the trillions in investment get recouped?

Whats the answer breh? Im addressing all your points with tangibles and you havent addressed these questions with any hard numbers yet.

 

[IIVI]

Apple lost mobile device market share regardless. Adding AI to keep them from losing as much marketshare doesnt help them increase profitability, it just made the cut less deep. Thats not a ringing endorsement of a profitable application of AI.

Making strides in developing a product thats not going to become profitable for at least 5 years after market saturation (Waymo) at best doesnt change much especially when consumers are still very skiddish of self driving cars (and will be for awhile). Thats assuming the product is ready (which its not)
Waymo has received 30B in investment over the past 16 years primarily from Alphabet (another successful market leader in a different segment). Even if every dollar over that time had been invested in AI (which isnt even close to the case) thats still only a little more than 1% of whats needed to break even on 2 trillion in investments.

Do you know how many people would need to be paying for chatGPT at $20 a month each year to even make up half the 2 trillion in investment into AI at this point?

4.2 Billion people.

Literally most of the humans on the planet people would need to have a yearly chat GPT subscription just to cover 50% of current investments. This isnt even possible on today's Ai infrastructure and still wouldn't technically possible if there were another 2 trillion invested just on the infrastructure.

Do you see the problem here?


So back to the AI bubble concern and questions no one is answering:

What's the profitability model?
How do the trillions in investment get recouped?

Whats the answer breh? Im addressing all your points with tangibles and you havent addressed these questions with any hard numbers yet.

Some flaws:
You are conflating market share with profit share. Apple has never needed to dominate global market share to dominate global profits. They routinely capture over 80% of the entire smartphone industry's profits while holding a fraction of the volume. Using AI to reduce churn and keep users in that high-margin ecosystem is absolutely a profitable move. It protects the services revenue, which is their actual growth engine. If AI stops a user from switching to Android, that preserves thousands of dollars in lifetime value. That is not just damage control; that is defensive profitability.

Your take on Waymo is outdated. You claim the product isn't ready, but people are hailing driverless Waymos in San Francisco, Phoenix, and Los Angeles right now. It is a live, revenue-generating product, not a concept car. The skittishness you mention is fading rapidly in the cities where it actually operates because the convenience is winning. Comparing Waymo's specific investment history to the unrelated 2 trillion dollar figure for the entire generative AI industry is a logic error. Waymo doesn't have to pay back Nvidia's market cap; it just has to pay back its own fleet costs, which drop every year as hardware gets cheaper.

The math you did regarding 4.2 billion people paying for ChatGPT is a massive straw man argument. You are assuming the only way to monetize AI investment is through a single B2C subscription model. That is completely wrong. The 2 trillion dollars in infrastructure isn't debt; it is capital expenditure buying tangible assets like data centers and GPUs. Those assets are then rented out to thousands of enterprise companies via AWS, Azure, and Google Cloud.

The recoupment doesn't come from just ChatGPT subscriptions. It comes from Microsoft charging an extra $30 per seat for Copilot to millions of corporate users. It comes from Meta using AI to make their ad targeting 10% more effective, which generates billions in ad revenue. It comes from coding assistants making developers 30% more efficient, saving companies billions in labor costs.

The profitability model is efficiency and rental fees. The big tech companies are landlords renting out the digital infrastructure to every other business on earth. They don't need 4 billion consumers to pay $20 a month; they need the Fortune 500 to shift their IT and labor spend into AI compute. That is already happening. You are looking for a single killer app to pay the bill when the reality is that AI is a utility layer that taxes every industry that uses it.

 

[Treblemaka]

Some flaws:
You are conflating market share with profit share. Apple has never needed to dominate global market share to dominate global profits. They routinely capture over 80% of the entire smartphone industry's profits while holding a fraction of the volume. Using AI to reduce churn and keep users in that high-margin ecosystem is absolutely a profitable move. It protects the services revenue, which is their actual growth engine. If AI stops a user from switching to Android, that preserves thousands of dollars in lifetime value. That is not just damage control; that is defensive profitability.

Your take on Waymo is outdated. You claim the product isn't ready, but people are hailing driverless Waymos in San Francisco, Phoenix, and Los Angeles right now. It is a live, revenue-generating product, not a concept car. The skittishness you mention is fading rapidly in the cities where it actually operates because the convenience is winning. Comparing Waymo's specific investment history to the unrelated 2 trillion dollar figure for the entire generative AI industry is a logic error. Waymo doesn't have to pay back Nvidia's market cap; it just has to pay back its own fleet costs, which drop every year as hardware gets cheaper.

The math you did regarding 4.2 billion people paying for ChatGPT is a massive straw man argument. You are assuming the only way to monetize AI investment is through a single B2C subscription model. That is completely wrong. The 2 trillion dollars in infrastructure isn't debt; it is capital expenditure buying tangible assets like data centers and GPUs. Those assets are then rented out to thousands of enterprise companies via AWS, Azure, and Google Cloud.

The recoupment doesn't come from just ChatGPT subscriptions. It comes from Microsoft charging an extra $30 per seat for Copilot to millions of corporate users. It comes from Meta using AI to make their ad targeting 10% more effective, which generates billions in ad revenue. It comes from coding assistants making developers 30% more efficient, saving companies billions in labor costs.

The profitability model is efficiency and rental fees. The big tech companies are landlords renting out the digital infrastructure to every other business on earth. They don't need 4 billion consumers to pay $20 a month; they need the Fortune 500 to shift their IT and labor spend into AI compute. That is already happening. You are looking for a single killer app to pay the bill when the reality is that AI is a utility layer that taxes every industry that uses it.

Ai right now doesnt have a decision matrix that reduces churn enough to justify its expense. Apple lost 12% of its market share on its flagship product. Do you think the AI spend will reverse that enough to make it worthwhile investment?

Waymo has already had recalls on over 1500 vehicles this year alone. Liability accidents have increased over time not decreased (including liability for fatal accidents). Rolling out it pilot markets doesnt mean its ready for a national roll out (which they need to be profitable). There's a reason they are called test markets.

You brought chatGPT subs as a valid revenue stream. I showed the math on why that revenue is a drop in the bucket compared to whats required to invest, now its a straw man argument to you?

You mentioned $30 dollars a seat to corporations. The chat Gpt subs math shows why thats just another drop in the massive AI bucket called ROI.

CapEx is debt when you cant recoup it and these guys havent show how they'll recoup it.

"The profitability model is in rentals and efficiency"

Really? Where's the actual profit part of that? Where they part where they make more money than they are spending from it?

Rentals are drop in the bucket. Do you believe the efficiencies made are going to generate 2 Trillion in growth over the next 5-10 years? The current investment would require AI product companies are generating 200B-400B minus expenses every year over the next 5-10 to cover the current investment. To put that in perspective AI companies need to generate 50B more in revenue than Microsoft's total yearly operating expenses every year for the 10 years just to break even, and thats if another dollar is never invested. Do you believe the current AI ecosystem system is capable of that kind of growth because it hasn't show it yet.

Its clear from the math Seat licenses for an AI assistant arent a path to profitability. Total revenue generated from them doesnt even cover base infrastructure costs.

Im not looking for a single killer app, im showing you why every example you mentioned wont contribute to profitability enough to matter.

AI isnt going away. But the level of investment isnt justified if the expectation is a return. There's a bubble, the math doesnt justify it and it isnt sustainable.

 

[ORDER_66]

So did peter win or lose?!!? I asked this before but no one answered me...

 

[O.Red]

AI will mainly be Google, Microsoft, and OpenAI. They will dominate because they can afford the energy costs and integrate their AI into all their products, phones etc. Others will die out or be super niche

Meta and Apple will continue to play on a smaller level.

Open AI is headed for a collapse and Sam Altman is reaching "found chopped up in the dumpster" territory

He can only do the "I just need 500 billion more mane" dream selling for so long

 

[O.Red]

Open AI has 1.5 Trillion in Spend commitments while only making ~13 Billion in revenue last year. Thats like someone who makes 100k a year buying a 10M home.
Those spend commitments will be reported on partner company balance sheets as revenue even tho Open AI has no way to ever pay that back without continued investment.

Another problem is the companies buying chips from Nvidia are reporting the chips will last an upwards of 6 years when Nvidia only has them lasting 3. What happens when these companies realize they have to spend 10s of Billions every couple of years to replace chips that dont even have a profitability model right now.

Palintir has an evaluation 500x higher than its yearly revenues. Thats literally 450x higher than the average high end tech company (M$, Meta) which many more tangible assets, a large diverse market share, and clients that arent just world governments. Thats sign the hype train has left the station and we are valuing some of these companies in a way that mars no financial sense.

The real danger is that no one has shown a way to make the money back. At least with smartphone tech you could sell them directly to consumers and can liquidate the used products to other markets or pivot the architectureto other uses. AI is a primarily commercial tool. For individual consumers its just making gimmicky videos and enhancing chat bots. No one has produced a profitability model that will recoup the investment. The once the chips are ran through they are practically useless as well so you dont have a resource liquidation model to decrease the initial cost of investment with a backend divestment strategy.



The dot Com was never responsible for 40%+ of Gdp growth and the majority of that investment wasn't consolidated to 7 or so companies like the dot Com boom was. The America economy at the time was much more diverse and consumers had a better investment portfolio (more home owners by %).

US Gdp wasn't dependent on the dot com bubble to grow. It is for AI. The US economy would technically be in a recession without AI investment. Thats a different danger.

If things are so good can you tell me what the model to profitability with these companies (outside Nvidia) to increase profitability in a way that doesnt complete wreck the American economy?

Because Sam Altman hasn't come up with one. Mark Zuckerbergs AI related ideas have all failed and Alex Karp brings up politics every time you ask him about his companies business fundamentals.

TLDR: "They'll figure it out" aint a plan or a strategy, breh. The American economy outside this spending frenzy isnt healthy. And if this doesnt work it'll tank the economy because Trillions have been spent on this and its responsible for most of the growth in the last 2 years.

Exactly this is crypto hype all over again.

Promising technology, but is at the mercy of bad actors over selling and under delivering