It shouldn’t be, but it is. 20 years ago, in the far-off year of 2005, a lot of tech companies more or less followed the same path, where it took decades for them to actually be profitable, if they were at all.
YouTube ran at a deficit for something close to 15 years. AI companies are likely following this trend, and running mostly on investment money, rather than being self-sufficient.
I don’t know about now, but Amazon ran a deficit for pretty much its entire existence. Amazon is a bit different though since it was part of an R&D strategy and they could’ve stepped off the gas at almost any point and been profitable.
That’s a long established myth. Amazon started out in 94, and became profitable in like 10 years. Most of their hardcore R&D is self-financed cause they generate just that much free cash.
Right. They spend their free cash (and sometimes more) on R&D and infrastructure, which by definition means they’re unprofitable. Profit is what’s left after expenses, so if you have nothing left, you’re unprofitable.
Thanks for clarifying that profit is calculated using a subtraction, but you’re missing the core of my comment. Amazon self-finance their R&D and STILL make a fuck load of profit. They made like 30B$ of free cash last year alone. In the last 15 years they’ve made >100B$ in overall profit and only been in the red twice.
They’re not just profitable they’re an insane money printing machine that doesn’t show any sign of slowing down.
It shouldn’t be, but it is. 20 years ago, in the far-off year of 2005, a lot of tech companies more or less followed the same path, where it took decades for them to actually be profitable, if they were at all.
YouTube ran at a deficit for something close to 15 years. AI companies are likely following this trend, and running mostly on investment money, rather than being self-sufficient.
Pretty sure youtube still runs on deficit. Storage costs alone would probably bankrupt some small countries.
I don’t know about now, but Amazon ran a deficit for pretty much its entire existence. Amazon is a bit different though since it was part of an R&D strategy and they could’ve stepped off the gas at almost any point and been profitable.
That’s a long established myth. Amazon started out in 94, and became profitable in like 10 years. Most of their hardcore R&D is self-financed cause they generate just that much free cash.
Right. They spend their free cash (and sometimes more) on R&D and infrastructure, which by definition means they’re unprofitable. Profit is what’s left after expenses, so if you have nothing left, you’re unprofitable.
Thanks for clarifying that profit is calculated using a subtraction, but you’re missing the core of my comment. Amazon self-finance their R&D and STILL make a fuck load of profit. They made like 30B$ of free cash last year alone. In the last 15 years they’ve made >100B$ in overall profit and only been in the red twice.
They’re not just profitable they’re an insane money printing machine that doesn’t show any sign of slowing down.
Tech companies were in that boat in the late 90s as well.
The dot com bust deflated it somewhat, but somehow the industry got right back to it within a couple of years.