The Weird Economics of Selling AI to Other AI Companies
A surprising amount of the AI economy is firms renting compute from each other to build things that rent compute. Follow the money.
Spend a day reading AI startup funding announcements and you notice a loop. Company A raises money to build a model. Company B sells Company A the GPUs. Company C sells both of them the observability tool to watch the GPUs. Everybody is somebody else's customer.
It is not fake. It is just concentrated. A meaningful slice of "AI revenue" is the AI industry paying itself to exist, with the consumer bill as the hoped-for exit.
The dangerous version is when the only proof a product works is that other AI companies bought it. That is a hallway full of mirrors.
Real businesses are out there too. Support bots, document tools, code assistants with paying non-AI customers. Those are the ones I would bet on.
When you evaluate an AI company, ask who pays and why. If the answer is "other AI companies," hold your wallet a little tighter.