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OpenAI probably can't make ends meet. That's where you come in
- mvdtnz 11mo ago"You" as in Americans. Not me.
- curt15 11mo agoIs Google also deep in the hole with Gemini, or is it just OpenAI that can't make ends meet?
- ekelsen 11mo agoGoogle has the revenue to cover their spending and then some.
- stuartjohnson12 11mo agoDepends what you mean by deep in the hole. Given how liberal Gemini is with free access it hardly seems like moneymaking is the end goal. Amongst AI labs, I've personally found Deepmind to be consistently the least sensationalist and least concerned with marketing. I think they're doing a great job of commoditising their complement. https://gwern.net/complement https://gwern.net/complement
- studmuffin650 11mo agoAlso important to remember that Google is years ahead of most other AI shops in that they're running on custom silicon. This makes their inference (and maybe training) cheaper then almost any other company. People don't realize this when compared to OpenAI/Anthropic where most folks are utilizing NVIDIA GPUs, Google is completely different in that aspect with their custom TPU platform.
- xnx 11mo ago> Also important to remember that Google is years ahead of most other AI shops in that they're running on custom silicon. Not just the chips, Google's entire datacenter setup seems much more mature (e.g. liquid cooling, networking, etc.). I saw some video of new Amazon datacenter (https://www.youtube.com/watch?v=vnGC4YS36gU https://www.youtube.com/watch?v=vnGC4YS36gU) and it looks like a bunch of server racks in a warehouse.
- stego-tech 11mo agoGoogle’s datacenters are excellent, from what I’ve seen in my career. They genuinely had so many amazingly talented SMEs pushing boundaries for decades without executive intervention or deterrence, and that’s paid dividends in the subsequent tenure under Pichai and external shareholders (in that they have “infinite” runway and cash reserves to squander on moonshots before risking the company’s core businesses). That said, nothing lasts forever, and if their foray into LLMs don’t pay off, their shareholders are going to be pissed.
- lokar 11mo agoAnd not just pushing the boundaries, working with the HW vendors to define them, asking for features and design elements that others don't really even see the point of.
- cma 11mo agoAnthropic uses TPUs as well as nvidia. Compiler bugs in the tooling around the platform caused most of their quality issues and customer churn this year, but I think they've since announced a big expansion in use: https://www.anthropic.com/engineering/a-postmortem-of-three-recent-issues https://www.anthropic.com/engineering/a-postmortem-of-three-...
- darth_avocado 11mo agoGoogle has a massive ad revenue that’s funding its AI habit. The difference between Google and OpenAI is that of a rich guy buying an expensive car that he can easily afford and a working class guy having a mid life crisis.
- 827a 11mo agoIt cannot be stressed or even succinctly elaborated how far ahead Google is compared to every other organization doing anything remotely like this, anywhere on the planet. Practically speaking there is no "catching up" to Google; you can only hope to capitalize on any mistakes that they make.
- HWR_14 11mo agoGoogle has enough income that they can self fund Gemini at a loss on whatever timespan they want. OpenAI does not.
- warkdarrior 11mo agoChatGPT has replaced Google Search for many people. If ChatGPT can also replace Gmail, Maps, and YouTube (by generating content for each of these), Google is done.
- fernmyth 11mo agoReplace Gmail? Meaning instead of real emails from my actual contacts, I’ll read AI generated emails?
- Maxatar 11mo agoWhy not? I already use LLMs to generate summaries of my emails, search emails, and perform a host of email related operations as do many people. No reason OpenAI couldn't release their own email service that tightly integrates their LLM with email directly. What's interesting about your comment is that back in 2004 people were like "Google releasing an email service? Why on Earth would they do that, that makes no sense!"
- Maxatar 11mo agoYes but ChatGPT has not replaced Google Search at a profit. ChatGPT loses revenue per user. Certainly the hope is that at some point they become profitable but the concern is that might not happen.
- FromOmelas 11mo agothe "If you owe the bank 1M, you have a problem. If you owe the bank 1B, the bank has a problem" adagium scaled up ?
- wavemode 11mo agoIf you owe the bank $1B, the bank has a problem (they will work with you on repayment terms). If you owe the bank $1T, the government has a problem (you're too big to fail and will get bailed out).
- cluckindan 11mo ago[flagged]
- phillipcarter 11mo agoWouldn't be a gary marcus post without congratulating himself for tweeting something that all but confirms a disaster that hasn't happened yet. Anyways, OpenAI is not in profit-seeking mode, and there's no economic incentives to do so right now.
- woeirua 11mo agoIs that why they just changed to become a for-profit company?
- stanleykm 11mo agoNot being in profit seeking mode is one thing. Being so far away from profit seeking mode that you need a government bailout is an entirely different thing.
- aeonfox 11mo agoAccording to this[0] podcast some captains of industry in SV consider that bubbles are good, actually. At least, that is the thesis of this[1] book published by Stripe Press. Not because they'll deliver returns for their investors, but because they drive innovation in the long run. But obviously, if they are perceived to have terrible ROI, they aren't getting over the line, which leads to a dilemma – how do we reach that moonshot without fooling a bunch of people and destroying the economy along the way? All that said, anyone who spends a lot of time with AI knows the current direction of generative AI isn't really that moonshot. But the scale of compute that is being unlocked right now, along with technologies like photonics, might be what's key to AGI. [0] https://shows.acast.com/the-david-mcwilliams-podcast/episodes/the-ai-bubble-boom-bust-baked-in-nimbin https://shows.acast.com/the-david-mcwilliams-podcast/episode... [1] https://www.stripe.press/boom https://www.stripe.press/boom
- y0eswddl 11mo agothey have 2-5 years... then we're gonna need to replace all those GPUs
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- esafak 11mo agoHe's defensive but not agitated: https://www.youtube.com/watch?v=WEnBCfzsgyE https://www.youtube.com/watch?v=WEnBCfzsgyE
- csours 11mo agoI feel like inferred tokens are a commodity and will be subject to commodity pricing pressure. Which indicates to me that the value add will come from somewhere else, which would seem to be whales and addicts.
- kevindamm 11mo agowhich is a real problem if a significant part of being in the population of whale or addict involves AI psychosis
- zerolayers 11mo agoHere's an entertaining take that flows with this topic: https://syntheticauth.ai/posts/synthetic-auth-the-power-problem https://syntheticauth.ai/posts/synthetic-auth-the-power-prob...
- Awesomedonut 11mo ago>When reality writes better satire than satirists can invent, perhaps it's time to ask some harder questions. Oof
- red-iron-pine 11mo agomore like: it's time to get torches and pitchforks
- onemoresoop 11mo agohttps://officechai.com/ai/microsoft-has-ai-chips-sitting-unused-because-it-doesnt-have-access-to-electricity-microsoft-ceo-satya-nadella/ https://officechai.com/ai/microsoft-has-ai-chips-sitting-unu...
- xyzal 11mo agoTime to sell shares and buy bonds?
- torpfactory 11mo agoI'm just going to copy my comment on a previous post about this topic: You think that Trump won't demand something in return for this? I keep telling everyone I know that AI will be enshitified just like every other internet business. Tell me why the incentives will be different this time around. Putting yourself in hock to an aspiring authoritarian is certainly one way to supercharge that process. What do you think OpenAI's output about Jan 6 will be one year from now if this goes through?
- gdulli 11mo agoLLM technology is the endgame and holy grail of advertising and propaganda.
- bgwalter 11mo agoThe China "AI" threat? Xi has warned of a bubble, has shut down the Internet during exam time and is in no hurry at all to push this nonsense. Perhaps the government should loan OpenAI $1 billion so it can donate to a four times larger ballroom, upon which it will receive $100 billion in public money to fund the TikTok Sora videos.
- Havoc 11mo agoThere is certainly some concern around what is effectively a giant bet but I’m finding Gary’s aggressive doomer takes a little tiresome lately. Just like Sam can’t know for sure that the bet will work, Gary can’t know it won’t. Conviction levels should reflect that Every startup begins with lots of debt and little revenue and a all in bet that it’ll change. Sam’s company unsurprisingly follow same playbook
- foldr 11mo agoAlmost all of those startups fail. Doomerism is the objectively correct outlook on any given startup in the absence of strong countervailing evidence. This isn’t “glass half full vs glass half empty”, it’s “wild optimism vs sober consideration”. Your use of the word ‘bet’ is a useful clue here. If I bet on a horse, then neither of us knows if the horse will win or not. That doesn’t mean that optimists and pessimists about my prospects as a professional gambler have equally justifiable positions.
- Havoc 11mo ago>Almost all of those startups fail. Funding model aside this has little in common with them. The average SaaS isn't in the right spot at the right time for a once in a lifetime general-purpose technology (along with money to execute at scale) >doesn’t mean [..] equally justifiable positions. Indeed. And I'm not confident it'll be enough to cover Sam's 1 trillion either but the range of possible outcomes here seem very wide to me and a good chunk of it being positive. Seems entirely plausible to me that the odds are 60% in favour here or whatever. We don't really know, but we're reading an article that seems very certain.
- foldr 11mo agoEvery startup says that it’s not like other startups. If the founder of the company’s response to being asked how they’re going to obtain one trillion dollars in revenue is (fluff aside) essentially equivalent to “trust me bro”, then I am very comfortable putting long odds on this happening (unlesss via some kind of government bailout). And yes, obviously there is a wide range of possible outcomes. However, there is not a uniform probability distribution over them.
- ChrisArchitect 11mo agoRelated: OpenAI asks U.S. for loan guarantees to fund $1T AI expansion https://news.ycombinator.com/item?id=45830380 https://news.ycombinator.com/item?id=45830380
- darth_avocado 11mo agoAbsolutely not. Why should taxpayers bail out a company that is actively putting people out of jobs?
- Insanity 11mo agoBecause “China”. Also because the people in charge of that in the government won’t understand the technology, and only listen to the PR.
- lokar 11mo agoAnd the people in government and their cronies are getting a cut
- ToucanLoucan 11mo agoSame reason we bailed out the auto industry: nvidia and co now comprise 1/4 of our goddamned economy, and are thusly wearing a C4 vest in the middle of our money system and threatening to blow it to bits if we don't pay up. The most rational economic system strikes again. The rich get richer. Everyone else gets fucked. Socialism for corporations, capitalism for the workers. Edit: upon further thought, this has less in common with the bailout of the auto industry, and far more in common with the 2008 housing crash, and subsequent bailouts which went to the bankers, of course, while workers lost their homes in droves. The meat of my point remains unchanged though. I just sometimes forget which once-in-a-lifetime economic collapse is which, side effect of being alive right now.
- miltonlost 11mo agoAt least auto industry produced tangible things of value (even though america's car culture is itself a problem). AI firms can't even point to that
- dwa3592 11mo ago"Socialism for corporations, capitalism for the workers." ../n this was in my mind but couldn't phrase it. thank you
- spaceman_2020 11mo agoWhy should we bail out OAI again? It’s hardly sota anymore. Replacing it with a (more) competitive model made by a trillion dollar company with tons of cash is as easy as replacing an API key
- SV_BubbleTime 11mo agoThere is a difference between a model, a product, and a network. OAI has a solid handle on the latter two. 800,000,000 users a month last I saw them report. 10% of the world population a month is no joke. That isn’t to say they are worth it, I am commenting that “the model” isn’t the important part. There is more to a car than its engine. Even among our people, no one really cares about engines anymore.
- BeetleB 11mo agoIf they go out of business tomorrow, those 800M users aren't going to just stop using LLMs. They'll shift to other providers.
- moralestapia 11mo ago>If they go out of business [...] Hold your breath, then.
- spaceman_2020 11mo agoIf Google stops working tomorrow, will we all just go back to looking up stuff in the library, or switch to Bing?
- daemonologist 11mo agoThe idea is that they're too big to fail, or at least trying to become so - that if they go down, they'll take Nvidia, AMD, Microsoft, and Oracle down with them. (Maybe not literally, but at least in terms of share price, which of course is the only thing that really matters.) Obviously this is not a good reason to bail out a company, but I wouldn't be surprised...
- stego-tech 11mo agoLet them fail, and take the overhyped tech economy with them I say. After the utter disaster that were the 9/11 Airline bailouts, the 2008 Bank bailouts, and the COVID bailouts, I am sick and fucking tired of tax dollars supporting rich sociopaths who can’t make rational financial decisions beyond the scope of their personal wealth. Let. It. Burn.
- mrandish 11mo agoI just hope it's very soon. The longer they go on propping up the house of cards, the more it seeps into the broader economy making the inevitable crash deeper and longer.
- mrguyorama 11mo agoToo bad, you elected the guy that is best friends with all the people who will profit from an AI bailout. What did you expect?
- TrackerFF 11mo agoIf banks were too big to fail back in '08, it makes total sense that the current AI bubble is also too big to fail, given that it is many multiples of the financial crisis. Not to mention that it is propping up the stock market. Ain't no way the current admin will allow the biggest financial crisis to unfold on their watch.
- ModernMech 11mo agosama showed a really bad side of himself in that answer to Brad Gerstner. You can tell Gerstner thought Altman was kidding at first, but when it became apparent he was lashing out, the answer became less about the answer and more about why Sam Altman was so injured by the (very fair) question. Which, if you haven't read TFA or seen it, the question was "How are you going to make money given how much you borrowed" but Sam's answer was essentially "How dare you ask me that question, we're happy to take back your shares if you have a problem with the way things are going". That was my read on it anyway. Corporate leadership in America has a megalomania problem. Billionaires in general have a megalomania problem. OpenAI specifically, apparently, has a megalomania problem.
- Meneth 11mo agoHow can I help destroy the company?
- tim333 11mo agoWrite to your congressman? No government guarantees for OpenAI?
- _vaporwave_ 11mo agoIt looks like they might not get the bailout they're hoping for - https://x.com/DavidSacks/status/1986476840207122440 https://x.com/DavidSacks/status/1986476840207122440
- ungovernableCat 11mo agoWhat an amazing financial innovation. If the government involves itself now it'll actually be much cheaper then if the government involves themselves after they've entangled the entire stock market and financial sector into their bet. Maybe we can call it the pre-bailout. They also propose that their services will be so key to some sectors (like pharma) that they'll also seek revenue sharing as part of the companies getting the privilege to use the most cutting edge intelligence. Insane stuff honestly. All I'm going to say is I'm actually really hoping that China stays competitive in this field. Just like they are delivering EVs for $25k to the world it'd be great for all consumers and companies if they can also deliver 90% of the AI performance for 1/10 of the cost.
- _lex 11mo agoThe buildout is already taxpayer funded: see the big beautiful bill, which seems like it was engineered to make this effectively free. They can blend leverage, 100% 1st year depreciation with using the hardware itself as a financing asset and dozens more financial engineering steps - Their actual cost of financing is probably incredibly low already. I worry that they are thinking of trying to run the company just ahead of debt/lease payments or something, otherwise this is just a distraction So they want even more?
- lokar 11mo agoDepreciation only helps if you have revenue of the same basic scale to offset (to avoid a paper profit).
- zer0tonin 11mo agoGlad I'm not american!
- pimeys 11mo agoMm, I'm not sure if we're saved outside the US from this crash either...
- keeda 11mo agoWait, if I reading the original article (https://news.ycombinator.com/item?id=45830380 https://news.ycombinator.com/item?id=45830380) correctly, this is not a bailout? It's more that the US government acts as a guarantor for loans from other parties, and only steps in if the debt is defaulted on. Also this is not a loan for what has already been done so far, this is what will be built out in the future, so the US is getting something in return: huge amounts of infrastructure, most of which would be datacenters, chips, and power. (In an alternate timeline this would be clean power, or at least be built out in Australia, cf https://news.ycombinator.com/item?id=45836104 https://news.ycombinator.com/item?id=45836104 -- but sadly this is not that timeline.) Worst case, when the bubble pops, we get a glut of power and compute which (ideally) should reduce overall electricity and the obscenely bloated cloud bills. However, at the rates that demand is growing, this seems unlikely. So to rephrase: The real problem is that the infra needed to support the forecasted growth is very expensive, and requires trillions in funding, which gets very expensive to borrow. And so the US government is being asked to provide loan guarantees, because who better to appreciate what interest payments on trillions of debt look like?
- mrbungie 11mo ago> Worst case, when the bubble pops, we get a glut of power and compute which (ideally) should reduce overall electricity and the obscenely bloated cloud bills. However, at the rates that demand is growing, this seems unlikely. You are making it sound like there is no opportunity cost to using money for this instead of, I don't know, welfare and social issues; or even other kinds of infrastructure projects altogether.
- keeda 11mo agoThat's totally fair, but then that is the discussion we should be having, instead of "OMG bailouts!" which is a highly misleading and unproductive distraction. That said, money going towards welfare or social issues is another thing I don't expect to happen in this timeline...
- deleted 11mo ago[deleted]
- svenmalvik 11mo agoAmerican tech giants like OpenAI and Nvidia borrow and spend far beyond what they can realistically earn back for decades. Now, short on cash, they’re framing AI as a national security race — warning that without government backing, China will win. The real play is to socialize their risk while keeping profits private. When markets call this “innovation,” it’s worth remembering: that’s not capitalism working — that’s capture.
- tim333 11mo agoNvidia shows total liabilities of $32bn, annual profit $73bn. I think they'll be ok. OpenAI is a much more interesting question. $1.4 tn is 4.7% of US GDP or about 1% of global. It's a lot of money to extract to pay your debt back. Short of full AGI I'm not sure how that happens. And although I think AGI will happen my thoughts are it'll need algorithmic breakthroughs which are probably best achieved by a lot of different people trying things rather than all the money going to Altman.
- maxglute 11mo agoHow much more has openAI actually spend on capex vs competitors? I don't find openAI noticably better in any of my use cases but it does feel significantly snappier than others.