Both Sides Now: Eye-Popping Artificial Intelligence Financials from Producers as Well as Suppliers, But…

Despite crashing public approval and incessant talk about a bubble, AI business results, and not only those from the gunrunners, are more stunning than ever.

In “Ads coming to ChatGPT for some US users as OpenAI seeks to generate new revenue” (Michael Sinkewicz, Fox Business, January 17^th), we saw something consistent with other online products, as “OpenAI plans to test advertisements in coming weeks for free and lower-tier subscribers ahead of (its) anticipated IPO.”  A company spokesperson said the pitches will appear “at the bottom of answers in ChatGPT when there’s a relevant sponsored product or service based on your current conversation,” they “will not be shown in accounts where the user is under the age of 18,” they “cannot appear near sensitive or regulated topics like health, mental health or politics,” and the company will “never sell your data to advertisers.”  Business as usual.

Riches for AI-making are relatively new, so there can still be headlines like “The A.I. Boom’s Uncertain Payoff” (Andrew Ross Sorkin et al., The New York Times, January 29^th), as “investors remain antsy about seeing results.”  However, “investors appeared worried” about the “payoff” from Microsoft spending “$37.5 billion in capital expenditures in its most recent quarter,” but less so about Meta planning on disbursing “$115 billion to $135 billion on capex this year,” and even Tesla, outside “making electric vehicles,” $20 billion.  The large questions still in the air are “how will investors feel if companies’ margins remain depressed for a long time amid all of their spending?” and “how will they ultimately measure success?”  Indeed, per “Microsoft Continues to Spend Big on A.I. While Profit Jumps 60%” (Natallie Rocha, The New York Times, January 28^th), despite the headline outcome along with a 17% quarterly revenue gain, its stock price later that day was “down more than 5 percent in after-hours trading.”

Next, we saw as “Nvidia’s Quarterly Profit Hits $43 Billion on Strong A.I. Chip Sales” (Tripp Mickle, The New York Times, February 25^th).  That was also $120 billion for the year.  The leading AI supplier - it “controls about 90 percent of the market for the cutting-edge semiconductors that power A.I. projects” - joined “only a handful of companies, including Alphabet, Microsoft and Apple” in profiting an annual $100 billion.  Yet, per the previous paragraph, its customers’ “spending is starting to unsettle Wall Street, and Nvidia’s share price has been relatively flat in recent months,” even if “demand for Nvidia’s chips was still growing at an astonishing rate.” 

Moving to this month and a new Nvidia competitor, “A.I. Chip Maker Soars 68% in Market Debut, as Tech I.P.O.s Ramp Up” (Natallie Rocha, also in the New York Times, May 14^th).  The company, Cerebras, which sold its first chips in 2019, made itself the largest IPO of the year so far, and closed that day with market capitalization of $67 billion.  It was profitable last year with $238 million net.  There will be more - which will survive?

We got another quarterly update, as “Nvidia’s Profit Hits $58.3 Billion as A.I. Boom Gathers More Steam” (Tripp Mickle, also in the Times, May 20^th).  That was over 35% higher, and as “Nvidia’s biggest problem appears to be meeting demand from its spendthrift tech industry customers,” there is plenty of room for the likes of Cerebras.  The stock market shrugged, though, as that day, Nvidia’s “share price fell 1 percent in after-hours trading, giving up most of its gains from earlier in the day.”

Since then, something has changed.  In “Why Memory Chips Are Dominating the A.I. Rally,” Andrew Ross Sorkin et al., still in the Times, reported that “Micron, Samsung and SK Hynix are now trillion-dollar companies,” all three of which among the firms that “dominate the memory chip supply chain.”  Those who invested in Micron or SK Hynix last year have been well rewarded, as their share values have increased threefold and tenfold thus far in 2026.  All of that meant “global stocks climbed to fresh records for a sixth straight session and US futures advanced as investors piled into tech shares” (Morning Briefing, Bloomberg, May 27^th).

We are now seeing companies creating AI products doing well, in some ways better than their suppliers.  That is a huge improvement.  Yet AI’s financial side, even if bilateral now, seems more like a protected cove than the state of the technology in general.  If American data center construction screeches to a halt or near-halt, and public dissatisfaction becomes more important in other ways, what will happen to AI profits, revenues, and market capitalization?  We will see, but it won’t be good.  AI may be soaring, but rough air may, as always, be just ahead.  Place your bets as you will, but don’t count on anything - we really don’t know artificial intelligence at all.