# Warren Buffett's Lesson for Artificial Intelligence Investors

Rapid technological development does not automatically mean that all companies operating in this sector will be profitable. Warren Buffett cites the aviation industry to illustrate this point. According to him, despite the fact that aviation transformed the world, many companies operating in this sector have not proven successful for investors.

In 1989, Buffett invested in the airline USAir, but this decision was not successful. Later, he said that airlines had high expenses, and their services did not differ significantly from one another for consumers. Under such conditions, it was difficult for companies to raise prices and maintain profitability.

A similar risk exists today in the field of artificial intelligence. Companies like OpenAI and Anthropic spend large sums on creating and developing new models, while their products increasingly resemble one another over time. In such a situation, companies may need to reduce prices to attract consumers.

Nvidia and other chip manufacturers are currently benefiting significantly from increased demand for artificial intelligence, but their future results will also depend on whether companies creating artificial intelligence models will be able to cover expenses and generate profit.

According to Buffett, investors should pay attention not only to the prospects of technology, but also to the company's financial condition and its ability to generate profit.

Source: Yahoo Finance