The New Business of AI (and How It’s Different From Traditional Software)

  • “Anecdotally, we have seen a surprisingly consistent pattern in the financial data of AI companies, with gross margins often in the 50-60% range – well below the 60-80%+ benchmark for comparable SaaS businesses.
  • The compute resources required to train state-of-the-art AI models has grown over 300,000x since 2012, while the transistor count of NVIDIA GPUs has grown only ~4x!
  • Training a single AI model can cost hundreds of thousands of dollars (or more) in compute resources. While it’s tempting to treat this as a one-time cost, retraining is increasingly recognized as an ongoing cost”

The New Business of AI (and How It’s Different From Traditional Software)

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