The Digital Press

AI companies are spending hundreds of billions on development but generating only a fraction of that in revenue, often relying on accounting tricks to appear profitable. Despite massive hype, AI remains a costly and unprofitable business that tech firms use mainly to maintain inflated valuations and growth narratives.

Why it matters: AI’s poor unit economics and huge losses threaten the sustainability of current tech investment models.

The big picture: Tech giants pump AI hype to sustain stock prices in a "growth" market, despite actual profitability plummeting.

Stunning stat: AI industry projects $327 billion in spending for 2025 but only about $18 billion in revenue and zero profits.

Commenters say: Many highlight AI’s unsustainable costs and question how companies like Cursor can offer services at a loss, skeptical about long-term viability.