Cuban will turn out to be right that the coming decade will see a mass migration to AI-enabled apps and services — the much-prophesized New Platform Shift, like Mobile in the 2010s or The Internet before that. But unlike those waves of computing, AI will not cause a new deluge of profits pouring into the technology industry. It will just reduce our margins.

The root cause of this is that it’s much cheaper to train these things than anyone thought. Using Facebook’s numbers for LLaMa, you can back into a training cost in the $4 million range for the released model.[3] Maybe they had to try 10 times to get the right one. Maybe a hundred! But to put those figures in context of industry spending: Google Cloud is willing to lose six hundred million dollars a quarter to compete with Amazon, and Facebook is willing to lose tens of billions annually just to take a shot at building the metaverse. No analyst will ever bother asking a Big Tech exec about training costs on an earnings call.