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These numbers are pretty ugly. You always expect new tech to operate at a loss initially but the structure of their losses is not something one easily scales ou
by JCM9 1y ago
These numbers are pretty ugly. You always expect new tech to operate at a loss initially but the structure of their losses is not something one easily scales out of. In fact it gets more painful as they scale. Unless something fundamentally changes and fast this is gonna get ugly real quick.
- spacebanana7 1y agoThe real answer is in advertising/referral revenue. My life insurance broker got £1k in commission, I think my mortgage broker got roughly the same. I’d gladly let OpenAI take the commission if ChatGPT could get me better deals.
- lkramer 1y agoThis could be solved with comparison websites which seems to be exactly what those brokers are using anyway. I had a broker proudly declare that he could get me the best deal, which turned out to be exactly the same as what moneysavingexperts found for me. He wanted £150 for the privilege of searching some DB + god knows how much commission he would get on top of that...
- spacebanana7 1y agoEven if ChatGPT becomes the new version of a comparison site over its existing customer base, that’s a great business.
- ecommerceguy 1y agoInsurance agents—unlike many tech-focused sales jobs—are licensed and regulated, requiring specific training, background checks, and ongoing compliance to sell products that directly affect customers’ financial stability and wellbeing. Mortgage brokers also adhere to licensing and compliance regulations, and their market expertise, negotiation ability, and compliance duties are not easily replaced by AI tools or platforms. t. perplexity ai
- stogot 1y agoYeah, I don’t want my mortgage recommendations to come from a prompt injection
- anthonypasq 1y agothey could keep the current model in chatGPT the same forver and 99% of users wouldnt know or care, and unless you think hardware isnt going to improve, the cost of that will basically decrease to 0.
- jampa 1y agoThe enterprise customers will care, and they probably are the ones that bring significant revenue.
- sarchertech 1y agoAssuming they have 0 competition.
- toshinoriyagi 1y agoThe cost of old models decreases a lot, but the cost of frontier models, what people use 99% of the time, is hardly decreasing. Plus, many of the best models rely on thinking or reasoning, which use 10-100x as many tokens for the same prompt. That doesn't work on a fixed cost monthly subscription.
- anthonypasq 1y agoim not sure that you read what i just said. Almost no one using chatgpt would care if they were still talking to gpt5 2 years from now. If compute per watt doubles in the next 2 years, then the cost of serving gpt5 just got cut in half. purely on the hardware side, not to mention we are getting better at making smaller models smarter.
- adventured 1y agoThere is an exceptionally obvious solution for OpenAI & ChatGPT: ads. In fact it's an unavoidable solution. There is no future for OpenAI that doesn't involve a gigantic, highly lucrative ad network attached to ChatGPT. One of the dumbest things in tech at present is OpenAI not having already deployed this. It's an attitude they can't actually afford to maintain much longer. Ads are a hyper margin product that are very well understood at this juncture, with numerous very large ad platforms. Meta has a soon to be $200 billion per year ad system. There's no reason ChatGPT can't be a $20+ billion per year ad system (and likely far beyond that). Their path to profitability is very straight-forward. It's practically turn-key. They would have to be the biggest fools in tech history to not flip that switch, thinking they can just fund-raise their way magically indefinitely. The AI spending bubble will explode in 2026-2027, sharply curtailing the party; it'd be better for OpenAI if they quickly get ahead of that (their valuation will not hold up in a negative environment).
- thewebguyd 1y ago> They would have to be the biggest fools in tech history to not flip that switch As much as I don't want ads infiltrating this, it's inevitable and I agree. OpenAI could seriously put a dent into Google's ad monopoly here, Altman would be an absolute idiot to not take advantage of their position and do it. If they don't, Google certainly will, as will Meta, and Microsoft. I wonder if their plan for the weird Sora 2 social network thing is ads. Investors are going to want to see some returns..eventually. They can't rely on daddy Microsoft forever either, now with MS exploring Claude for Copilot they seem to have soured a bit on OpenAI.
- JCM9 1y agoFor using GenAI as search I’d agree with you but I don’t think it’s as easy/obvious for most other use cases.
- flyinglizard 1y agoI'm sure lots of ChatGPT interactions are for making buying decisions, and just how easy would it be to prioritize certain products to the top? This is where the real money is. With SEO, you were making the purchase decision and companies paid to get their wares in front of you; now with AI, it's making the buy decision mostly on its own.
- deepnotderp 1y agoNew hardware could greatly reduce inference and training costs and solve that issue
- samtp 1y agoThat's extremely hopeful and also ignores the fact that new hardware will have incredibly high upfront costs.
- leptons 1y agoGreat, so they just have to spend another ~$10 billion on new hardware to save how many billion in training costs? I don't see a path to profitability here, unless they massively raise their prices to consumers, and nobody really needs AI that badly.
- whizzter 1y agoI've said it before and I'll say it again.. if I was able to know the time it takes for bubbles to pop I would've shorted many of the players long ago.
- Esophagus4 1y agoEh, this seems like a cop out. It’s so easy for people to shout bubble on the internet without actually putting their own money on the line. Talk is cheap - it doesn’t matter how many times you say it, I think you don’t have conviction if you’re not willing to put your own skin in the game. (Which is fine, you don’t have to put your money on the line. But it just annoys me when everyone cries “bubble” from the sidelines without actually getting in the ring.) After all, “a bubble is just a bull market you don’t have a position in.”
- zoul 1y agoBelieve it or not, many people just don’t care about the stock market. But they may still care about the economy that could crash badly if the AI bubble gets too big before it pops.
- Esophagus4 1y agoPeople find all kinds of things to worry about if it gives them something to do, I guess. In the same way that my elderly grandmother binge watches CNN to have something to worry about. But the commenter I responded to DID care about the stock market, despite your attempt to grandstand. And my point was, and still is, if you really believe it’s a bubble and you don’t actually have a short position, then you don’t actually believe it’s a bubble deep down. Talk is cheap - let’s see your positions. It would be like saying “I’ve got this great idea for a company, I’m sure it would do really well, but I don’t believe it enough to actually start a company.” Ok, then what does that actually say about your belief in your idea?
- lawn 1y agoYou can correctly identify a bubble without being able to identify when it'll burst (which is arguably the much harder problem). The statistically correct play is therefore not to do this (and just keep buying).
- mannyv 1y agoNo, they're not. $4.3B in revenue is tremendous. What are you comparing them to?