Google’s DeepMind can predict almost exactly where and when it’s going to rain, but for years, the artificial intelligence company couldn’t figure out how to stop drowning in debt.
On Tuesday, however, DeepMind said it has now actually eked out a profit. Finally: hope for all the plucky little start-ups with the backing of a $1.7 trillion parent company.
DeepMind, which is likely the largest AI research operation in the world, has a very unique revenue model: it makes 100% of its money selling the technologies it develops to other subsidiaries of Alphabet, Google’s parent company.
But while Alphabet brought in $182.5 billion in revenue last year, DeepMind was hemorrhaging money for years — losing more in both 2018 and 2019 (about $680 million each year) than Google paid for it in 2014 ($545 million). Alphabet also wrote off $1.5 billion in DeepMind’s debt in 2019.
So what changed?
Big Brains, Big Bucks: DeepMind’s costs are incredibly high because major tech companies are engaged in an all-out war to hire the top human…