We wanted Her, instead we got Tinder
AI companies spend 25% of revenue on cloud costs alone, making them less profitable than traditional software businesses.
- AI companies face 15% additional costs for manual data processing, reducing gross margins compared to software companies.
- Unlike software scaling, AI models require custom work per client with no significant cost reduction from Moore's Law.
- Technical differentiation is difficult as data becomes commoditized, forcing AI companies toward expensive sales and marketing.
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