There's a lot of AI companies and a lot of them are worth millions of dollar because an investor who has billions buys a small percentage for $10M. Now other investors feel like it has potential and follow. Now let's say the company is worth 50 Million dollar, but they have yet to have made any money or sign that the money will eventually come.
Theres a lot of companies like this, I work with these startups all the time, millions is unusual for me but often the investments are huge anyways, like 300k for some random startup. There's projects that are so fucking stupid, like making people be able to 'try clothes on sites with a scan of their own body'. Yeah it sounds cool but realistically 90% of customers dont want a private company having their fucking body scans and don't have the time to scan their body for this especially if it's 50$ a month.
Invastors used to invest in things that they at least realized the consumer would want, even if it sounds outlandish and new, and they thought about the details. It would create jobs and money would go round in a circle, the valuation considered the cash flow. But these companies don't create jobs because it's usually 3 people coding it with chat GPT. And in other cases when the product is successful, it usually involves taking people's jobs or automating them, and the value is still inflated because at the end of the year, just like OpenAI, they lose billions in actual revenue and are only kept alive by valuation.
The issue is the investors.
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