11/13/2025

AI Companies Don't Have a Profitable Business Model

Here is why that may matter

This article was produced by Harvard Business School Working Knowledge and features the insights of faculty member Andy Wu.

In the race to dominate artificial intelligence, it seems there’s no such thing as too much. AI's next generation will take more terabytes of data, gigawatts of electricity and hundreds of billions of dollars in talent.

And yet, profits remain scarce; some economists are warning of an impending bubble. That won't stop leader OpenAI from striking multibillion-dollar chip deals with Nvidia, AMD and, most recently, Broadcom.

Harvard Business School's Andy Wu says that while AI's promise is clear, the potential return on these massive investments remains murky. While some people might be willing to pay a small monthly fee for ChatGPT, subscription revenues are unlikely to cover the costs to scale the technology.

Please select this link to read the complete article from Harvard Business Review.