Posted 2/20/2024, 6:11:00 AM
Generative AI Startups Struggle to Survive Due to High Computing Costs
- Operational costs for AI startups are extremely high, making it difficult to sustain a profitable business model
- Generative AI relies on scarce, expensive AI chips leased from a few big tech companies like Microsoft and Amazon
- No generative AI startup has figured out a cost-effective way to scale up like the major tech firms
- Most AI startups take funding from VCs and pass it to cloud and chip providers like Microsoft, Amazon, Google, and Nvidia
- As a result, companies like Nvidia have seen massive stock growth, while most AI startups struggle to survive