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This can be technically true without being actually true. IE OpenAI invests in Cursor/Windsurf/Startups that give away credits to users and make heavy use of i

This can be technically true without being actually true. IE OpenAI invests in Cursor/Windsurf/Startups that give away credits to users and make heavy use of inference API. Money flows back to OpenAI then OpenAI sends it back to those companies via credits/investment $. It's even more circular in this case because nvidia is also funding companies that generate significant inference. It'll be quite difficult to figure out whether it's actually profitable until the new investment dollars start to dry up.

milesskorpen 1y ago
While this could be true, I don't think OpenAI is investing the $hundreds of millions-to-billions that would be required otherwise make it actually true. OpenAI's fund is ~$250-300mm Nvidia reportedly invested $1b last year - still way less than Open AI revenue
onlyrealcuzzo 1y ago
It's even more circular, because Microsoft and Amazon also fund ChatGPT and Anthropic with Azure and AWS credits.
citizenpaul 1y ago
There a journalist ed zittron https://www.wheresyoured.at/ https://www.wheresyoured.at/ That is an openai skeptic. His research if correct says not only is openai unprofitable but it likely never will be. Can't be ,its various finance ratios make early uber, amazon ect look downright fiscally frugal. He is not a tech person for what that means to you.
- oblio 1y ago
  Amazon was very frugal. If you look at Amazon losses for the first 10 years, they were all basically under 5% of revenue and many years were break even or slightly net positive. Uber burnt through a lot of money and even now I'm not sure their lifetime revenue is positive (it's possible that since their foundation they've lost more money than they've made).
  - citizenpaul 1y ago
    Exactly Zittrons point.
- dcre 1y ago
  Zitron is not a serious analyst. https://bsky.app/profile/davidcrespo.bsky.social/post/3lxale3qjfc2q https://bsky.app/profile/davidcrespo.bsky.social/post/3lxale... https://bsky.app/profile/davidcrespo.bsky.social/post/3lo22kjde2c2q https://bsky.app/profile/davidcrespo.bsky.social/post/3lo22k... https://bsky.app/profile/davidcrespo.bsky.social/post/3lwhhzlbxrk2u https://bsky.app/profile/davidcrespo.bsky.social/post/3lwhhz... https://bsky.app/profile/davidcrespo.bsky.social/post/3lv2dxyvxnk27 https://bsky.app/profile/davidcrespo.bsky.social/post/3lv2dx...
  - jrflowers 1y ago
    Ed Zitron: I don’t think OpenAI will become profitable The link you posted: I think it is very plausible that it will be hard for OpenAI to become profitable
    - dcre 1y ago
      Are you referring to the post where I listed 4 claims and marked one ridiculous, one wrong, one unlikely, and one plausible? He is not wrong about everything. For example, after Sam Altman said in January that OpenAI would introduce a model picker, Zitron was able to predict in March that OpenAI would introduce a model picker. And he was right about that.
      - jrflowers 1y ago
        Yes. In this thread about the profitability (or lack thereof) of OpenAI’s business model, I pointed out the part where you appeared to agree with Ed Zitron about the profitability (or lack thereof) of OpenAI’s business model. Like it seems like all of those posts were pretty clearly motivated by wanting to poke holes in Zitron’s criticism, their lack of profitability (which is central to his criticism) is where you declined to push back with any real argument.
  - jcranmer 1y ago
    Since only the first one responds to any of Zitron's content that I've actually read, I'll respond only to that one: It's not responsive at all to Zitron's point. Zitron's broader contention is that AI tools are not profitable because the cost of AI use is too high for users to justify spending money on the output, given the quality of output. And furthermore, he argues that this basic fact is being obscured by lots of shell games around numbers to hide the basic cash flow issue. For example, focusing on cost in terms of cost per token rather than cost per task. And finally, there's an implicit assumption that the AI just isn't getting tremendously better, as might be exemplified by... burning twice as money tokens on the task in the hopes the quality goes up. And in that context, the response is "Aha, he admits that there is a knob to trade off cost and quality! Entire argument debunked!" The existence of a cost-quality tradeoff doesn't speak to whether or not that line will intersect the quality-value tradeoff. I grant that a lot turns on how good you think AI is and/or will shortly be, and Zitron is definitely a pessimist there.

milesskorpen 1y ago

While this could be true, I don't think OpenAI is investing the $hundreds of millions-to-billions that would be required otherwise make it actually true. OpenAI's fund is ~$250-300mm Nvidia reportedly invested $1b last year - still way less than Open AI revenue

onlyrealcuzzo 1y ago

It's even more circular, because Microsoft and Amazon also fund ChatGPT and Anthropic with Azure and AWS credits.

citizenpaul 1y ago

There a journalist ed zittron https://www.wheresyoured.at/ https://www.wheresyoured.at/ That is an openai skeptic. His research if correct says not only is openai unprofitable but it likely never will be. Can't be ,its various finance ratios make early uber, amazon ect look downright fiscally frugal. He is not a tech person for what that means to you.

oblio 1y ago
Amazon was very frugal. If you look at Amazon losses for the first 10 years, they were all basically under 5% of revenue and many years were break even or slightly net positive. Uber burnt through a lot of money and even now I'm not sure their lifetime revenue is positive (it's possible that since their foundation they've lost more money than they've made).
- citizenpaul 1y ago
  Exactly Zittrons point.
dcre 1y ago
Zitron is not a serious analyst. https://bsky.app/profile/davidcrespo.bsky.social/post/3lxale3qjfc2q https://bsky.app/profile/davidcrespo.bsky.social/post/3lxale... https://bsky.app/profile/davidcrespo.bsky.social/post/3lo22kjde2c2q https://bsky.app/profile/davidcrespo.bsky.social/post/3lo22k... https://bsky.app/profile/davidcrespo.bsky.social/post/3lwhhzlbxrk2u https://bsky.app/profile/davidcrespo.bsky.social/post/3lwhhz... https://bsky.app/profile/davidcrespo.bsky.social/post/3lv2dxyvxnk27 https://bsky.app/profile/davidcrespo.bsky.social/post/3lv2dx...
- jrflowers 1y ago
  Ed Zitron: I don’t think OpenAI will become profitable The link you posted: I think it is very plausible that it will be hard for OpenAI to become profitable
  - dcre 1y ago
    Are you referring to the post where I listed 4 claims and marked one ridiculous, one wrong, one unlikely, and one plausible? He is not wrong about everything. For example, after Sam Altman said in January that OpenAI would introduce a model picker, Zitron was able to predict in March that OpenAI would introduce a model picker. And he was right about that.
    - jrflowers 1y ago
      Yes. In this thread about the profitability (or lack thereof) of OpenAI’s business model, I pointed out the part where you appeared to agree with Ed Zitron about the profitability (or lack thereof) of OpenAI’s business model. Like it seems like all of those posts were pretty clearly motivated by wanting to poke holes in Zitron’s criticism, their lack of profitability (which is central to his criticism) is where you declined to push back with any real argument.
- jcranmer 1y ago
  Since only the first one responds to any of Zitron's content that I've actually read, I'll respond only to that one: It's not responsive at all to Zitron's point. Zitron's broader contention is that AI tools are not profitable because the cost of AI use is too high for users to justify spending money on the output, given the quality of output. And furthermore, he argues that this basic fact is being obscured by lots of shell games around numbers to hide the basic cash flow issue. For example, focusing on cost in terms of cost per token rather than cost per task. And finally, there's an implicit assumption that the AI just isn't getting tremendously better, as might be exemplified by... burning twice as money tokens on the task in the hopes the quality goes up. And in that context, the response is "Aha, he admits that there is a knob to trade off cost and quality! Entire argument debunked!" The existence of a cost-quality tradeoff doesn't speak to whether or not that line will intersect the quality-value tradeoff. I grant that a lot turns on how good you think AI is and/or will shortly be, and Zitron is definitely a pessimist there.