This interest rate cut may have a positive impact on the AI direction of the crypto industry. Interest rate cuts usually lead to lower capital costs, encouraging more companies and investors to enter the field of innovation. Increased liquidity will also help attract more funds to AI projects in the crypto industry and promote the development and innovation of related technologies.
Author: Edward Zitron. Ported by: Bosen Quantitative Consultant Xiao Sun (bosen0722)
The end of the AI boom
The current generative AI craze is gradually becoming unsustainable and may lead to collapse in the future. OpenAI's internal problems, such as hastily released models, layoffs, rumors of price increases, and changes in leadership, are all warning signs. These phenomena not only pose a threat to large AI companies, but may also impact the entire technology industry and entrepreneurial ecosystem, leading to large-scale layoffs and a crisis of trust in the industry.
Funding difficulties and profit problems
OpenAI's funding problem is particularly evident. Although it is conducting a new round of financing with a valuation of $150 billion and plans to raise $5 billion in revolving credit, its long-term funding needs cannot cover up its huge operating losses. The company expects to lose $5 billion in 2024, and future models may require up to $100 billion in training costs. In addition, the high computing costs brought by its cooperation with Microsoft have also made the profit prospects even slimmer.
A complex situation for investors
OpenAI's financing model has also raised concerns among investors. Instead of traditional equity, participants receive a promise to share in the company's future profits. However, OpenAI continues to lose money, and the return on this investment is extremely uncertain. In addition, OpenAI's existing profit-sharing agreement with Microsoft further compresses investors' potential returns. The agreement signed by investors even explicitly states that the company "may never be profitable," making the investment even more risky.
Technical limitations and barriers to commercial application
The technical problems faced by generative AI remain severe, especially the phenomenon of "hallucination" - the model generates false or erroneous information, affecting its reliability in commercial applications. Even with technological breakthroughs, user acceptance of AI products is still low, especially Microsoft's AI-driven tools, for which only 0.1% to 1% of users are willing to pay. Excessive costs and limited practicality have weakened the role of AI in improving productivity and corporate efficiency.
in conclusion
Generative AI currently faces high operating costs, technical bottlenecks, and limited market demand. As investor confidence declines and capital inflows decrease, the AI industry may face more severe challenges. The future of this field is full of uncertainty and may face a crisis sooner than expected.
What should ordinary people do?
[No investment and financial advice, the cryptocurrency world is risky, so be careful when investing! ]
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