AI skeptics have long been concerned with the losses and small revenues of AI software companies. In June 2024, almost three years ago, Sequoia partner, David Cahn, estimated that the AI industry needed to generate roughly $600 billion in annual revenue to justify the money being spent on AI infrastructure including data centers and Nvidia GPUs. Last month, market research company, Gartner, said that AI companies need close to “$2 trillion per year in revenue by 2029”, token consumption of between 50,000 and 100,000 times its current rate by 2030, and “a 10% profit margin per token.” With huge losses and small revenues, it is not likely that AI companies will achieve these goals on time. What’s going on here? Usually, companies charge their customers enough money for them to pay their suppliers, and for those suppliers to pay their suppliers. This isn’t happening in AI, however. OpenAI and other AI companies have set prices much lower than their costs to spur demand under the hope that more companies will use AI and then the …