4 ms·

Well I think you’re correct that they know the jig is up, but I would say they know the AI bubble is about to burst so they want to cash out before that happens

Well I think you’re correct that they know the jig is up, but I would say they know the AI bubble is about to burst so they want to cash out before that happens. There is little to no money to be made in GAI, it will never turn into AGI, and people like Altman know this, so now they’re looking for a greater fool before it is too late.

Jefro118 1y ago
They made $4 billion last year, not really "little to no money". I agree it's not clear they can justify their valuation but it's certainly not a bubble.
- mandevil 1y ago
  But didn't they spend $9 billion? If I have a machine that magically turns $9 billion of investor money into $4 billion in revenue, I need to have a pretty awesome story for how in the future I am going to be making enormous piles of money to pay back that investment. If it looks like frontier models are going to be a commodity and it is not going to be winner-take-all... that's a lot harder story to tell.
  - BosunoB 1y ago
    Most of that 9 billion was spent on training new models and on staff. If they stopped spending money on R&D, they would already be profitable.
    - PeterStuer 1y ago
      But only if everyone else stopped improving models as well. In this niche you can be irrellevant in months when your models drop behind.
    - ezekg 1y ago
      Says literally every startup ever i.r.t. R&D/marketing/ad spend yet that's rarely reality.
    - PUSH_AX 1y ago
      In a space that moves this fast and is defined by research breakthroughs, they’d be profitable for about 5 minutes.
    - ahtihn 1y ago
      > If they stopped spending money on R&D, they would already be profitable. The news that they did that would make them lose most of their revenue pretty fast.
    - JumpCrisscross 1y ago
      > if they stopped spending money on R&D, they would already be profitable OpenAI has claimed this. But Altman is a pathological liar. There are lots of ways of disguising operating costs as capital costs or R&D.
- nativeit 1y ago
  Cognitive dissonance is a psychological phenomenon that occurs when a person holds two contradictory beliefs at the same time.
- SirensOfTitan 1y ago
  I guarantee you that I could surpass that revenue if I started a business that would give people back $9 if they gave me $4. OpenAI models are already of the most expensive, they don’t have a lot of levers to pull.
  - tshaddox 1y ago
    > I started a business that would give people back $9 if they gave me $4 I feel like people overuse this criticism. That's not the only way that companies with a lot of revenue lose money. And this isn't at all what OpenAI is doing, at least from their customers' perspective. It's not like customers are subscribing to ChatGPT simply because it gives them something they were going to buy anyway for cheaper.
  - edmundsauto 1y ago
    There is a pretty significant different between “buy $9 for $4” and selling a service that costs $9 to build and run per year for $4 per year. Especially when some people think that service could be an absolute game changer for the species. It’s ok to not buy into the vision or think it’s impossible. But it’s a shallow dismissal to make the unnuanced comparison, especially when we’re talking about a brand new technology - who knows what the cost optimization levers are. Who knows what the market will bear after a few more revs. When the iPhone first came out, it was too expensive, didn’t do enough, and many people thought it was a waste of apples time when they should be making music players.
    - sumeno 1y ago
      > When the iPhone first came out, it was too expensive, didn’t do enough, and many people thought it was a waste of apples time when they should be making music players. This comparison is always used when people are trying to hype something. For every "iPhone" there are thousands of failures
    - SirensOfTitan 1y ago
      It's a commodity technology and VCs are investing as if this were still a winner-takes-all play. It's obviously not, if there were any doubt about that, Deepseek's R1 release should have made it obvious. > But it’s a shallow dismissal to make the unnuanced comparison, especially when we’re talking about a brand new technology - who knows what the cost optimization levers are. Who knows what the market will bear after a few more revs. You're acting as-if OpenAI is still the only player in this space. OpenAI has plenty of competitors who can deliver similar models for cheaper. Gemini 2.5 is an excellent and affordable model and Google has a substantially better capacity to scale because of a multi-year investment in its TPUs. Whatever first mover advantage OpenAI had has been quickly eliminated, they've lost a lot of their talent, and the chief hypothesis they used to attract the capital they've raised so far is utterly wrong. VCs would be mad to be continuing to pump money into OpenAI just to extend their runway -- at 5 Bln losses per year they need to actually consider cost, especially when their frontier releases are only marginal improvements over competitors. ... this is a bubble despite the promise of the technology and anyone paying attention can see it. For all of the dumb money employed in this space to make it out alive, we'll have to at least see a fairly strong form of AGI developed, and by that point the tech will be threatening the general economic stability of the US consumer.
atleastoptimal 1y ago
AI companies are already automating huge swaths of document analysis, customer service. Doctors are straight up using ChatGPT to diagnose patients. I know it’s fun to imagine AI is some big scam like crypto, but you’d have to be ignoring a lot of genuine non hype economic movement at this point to assume GAI isn’t making any money. Why does the forum of an incubator that now has a portfolio that is like 80% AI so routinely bearish on AI? Is it a fear of irrelevance?
- gscott 1y ago
  When the wright brothers made their plane they didn't expect today that there are thousands of planes flying at a time. When the Internet was developed they didn't imagine the world wide Web. When cars started to get popular people still thought there would be those who are going to stick with horses. I think you're right on the AI we're just on the cusp of it and it'll be a hundred times bigger than we can imagine. Back when oil was discovered and started to be used it was about equal to 500 laborers now automated. One AI computer with some video cards are now worth x number of knowledge workers. That never stop working as long as the electricity keeps flowing.
  - mplewis 1y ago
    They did actually imagine the World Wide Web at the time of developing the first computer networks. This is one of the most obvious outcomes of a system of networked devices. Even five years into this "AI revolution," the boosters haven't been able to paint a coherent picture of what AI could reasonably deliver – and they've delivered even less.
- paulddraper 1y ago
  Yes. The answer is yes. The world is changing and that is scary.
- sumeno 1y ago
  > Doctors are straight up using ChatGPT to diagnose patients This makes me want to invest in malpractice lawyers, not OpenAI

Jefro118 1y ago

They made $4 billion last year, not really "little to no money". I agree it's not clear they can justify their valuation but it's certainly not a bubble.

mandevil 1y ago
But didn't they spend $9 billion? If I have a machine that magically turns $9 billion of investor money into $4 billion in revenue, I need to have a pretty awesome story for how in the future I am going to be making enormous piles of money to pay back that investment. If it looks like frontier models are going to be a commodity and it is not going to be winner-take-all... that's a lot harder story to tell.
- BosunoB 1y ago
  Most of that 9 billion was spent on training new models and on staff. If they stopped spending money on R&D, they would already be profitable.
  - PeterStuer 1y ago
    But only if everyone else stopped improving models as well. In this niche you can be irrellevant in months when your models drop behind.
  - ezekg 1y ago
    Says literally every startup ever i.r.t. R&D/marketing/ad spend yet that's rarely reality.
  - PUSH_AX 1y ago
    In a space that moves this fast and is defined by research breakthroughs, they’d be profitable for about 5 minutes.
  - ahtihn 1y ago
    > If they stopped spending money on R&D, they would already be profitable. The news that they did that would make them lose most of their revenue pretty fast.
  - JumpCrisscross 1y ago
    > if they stopped spending money on R&D, they would already be profitable OpenAI has claimed this. But Altman is a pathological liar. There are lots of ways of disguising operating costs as capital costs or R&D.
nativeit 1y ago
Cognitive dissonance is a psychological phenomenon that occurs when a person holds two contradictory beliefs at the same time.
SirensOfTitan 1y ago
I guarantee you that I could surpass that revenue if I started a business that would give people back $9 if they gave me $4. OpenAI models are already of the most expensive, they don’t have a lot of levers to pull.
- tshaddox 1y ago
  > I started a business that would give people back $9 if they gave me $4 I feel like people overuse this criticism. That's not the only way that companies with a lot of revenue lose money. And this isn't at all what OpenAI is doing, at least from their customers' perspective. It's not like customers are subscribing to ChatGPT simply because it gives them something they were going to buy anyway for cheaper.
- edmundsauto 1y ago
  There is a pretty significant different between “buy $9 for $4” and selling a service that costs $9 to build and run per year for $4 per year. Especially when some people think that service could be an absolute game changer for the species. It’s ok to not buy into the vision or think it’s impossible. But it’s a shallow dismissal to make the unnuanced comparison, especially when we’re talking about a brand new technology - who knows what the cost optimization levers are. Who knows what the market will bear after a few more revs. When the iPhone first came out, it was too expensive, didn’t do enough, and many people thought it was a waste of apples time when they should be making music players.
  - sumeno 1y ago
    > When the iPhone first came out, it was too expensive, didn’t do enough, and many people thought it was a waste of apples time when they should be making music players. This comparison is always used when people are trying to hype something. For every "iPhone" there are thousands of failures
  - SirensOfTitan 1y ago
    It's a commodity technology and VCs are investing as if this were still a winner-takes-all play. It's obviously not, if there were any doubt about that, Deepseek's R1 release should have made it obvious. > But it’s a shallow dismissal to make the unnuanced comparison, especially when we’re talking about a brand new technology - who knows what the cost optimization levers are. Who knows what the market will bear after a few more revs. You're acting as-if OpenAI is still the only player in this space. OpenAI has plenty of competitors who can deliver similar models for cheaper. Gemini 2.5 is an excellent and affordable model and Google has a substantially better capacity to scale because of a multi-year investment in its TPUs. Whatever first mover advantage OpenAI had has been quickly eliminated, they've lost a lot of their talent, and the chief hypothesis they used to attract the capital they've raised so far is utterly wrong. VCs would be mad to be continuing to pump money into OpenAI just to extend their runway -- at 5 Bln losses per year they need to actually consider cost, especially when their frontier releases are only marginal improvements over competitors. ... this is a bubble despite the promise of the technology and anyone paying attention can see it. For all of the dumb money employed in this space to make it out alive, we'll have to at least see a fairly strong form of AGI developed, and by that point the tech will be threatening the general economic stability of the US consumer.

atleastoptimal 1y ago

AI companies are already automating huge swaths of document analysis, customer service. Doctors are straight up using ChatGPT to diagnose patients. I know it’s fun to imagine AI is some big scam like crypto, but you’d have to be ignoring a lot of genuine non hype economic movement at this point to assume GAI isn’t making any money. Why does the forum of an incubator that now has a portfolio that is like 80% AI so routinely bearish on AI? Is it a fear of irrelevance?

gscott 1y ago
When the wright brothers made their plane they didn't expect today that there are thousands of planes flying at a time. When the Internet was developed they didn't imagine the world wide Web. When cars started to get popular people still thought there would be those who are going to stick with horses. I think you're right on the AI we're just on the cusp of it and it'll be a hundred times bigger than we can imagine. Back when oil was discovered and started to be used it was about equal to 500 laborers now automated. One AI computer with some video cards are now worth x number of knowledge workers. That never stop working as long as the electricity keeps flowing.
- mplewis 1y ago
  They did actually imagine the World Wide Web at the time of developing the first computer networks. This is one of the most obvious outcomes of a system of networked devices. Even five years into this "AI revolution," the boosters haven't been able to paint a coherent picture of what AI could reasonably deliver – and they've delivered even less.
paulddraper 1y ago
Yes. The answer is yes. The world is changing and that is scary.
sumeno 1y ago
> Doctors are straight up using ChatGPT to diagnose patients This makes me want to invest in malpractice lawyers, not OpenAI