How AI companies actually make money:
- Acquiring one grape costs Alex $2 billion. Alex offers to sell Mike one grape a month for the next 12 months for $1 billion per grape. Alex asks for the full $12 billion up front and provides Mike with one grape for the first month. Alex makes a $10 billion profit this month; his ARR is $120 billion, and his profits are trending up at an infinite rate. The Wall Street Journal’s business editor moves into Alex’s house, having accepted a part-time position as Alex’s human footstool. He never asks to see the books.
Very enlightening.