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> An innovative product with no means of significant revenue generation. OpenAI has annualized revenue of $20bn. That's not Google, but it's not insignificant

by ascorbic 10mo ago

> An innovative product with no means of significant revenue generation. OpenAI has annualized revenue of $20bn. That's not Google, but it's not insignificant.

cheald 10mo ago
And a $115b burn rate. They're toast if they can't figure out how to stay on top.
- nfRfqX5n 10mo ago
  Could say that about any AI company that isn’t at the top as well
  - hbn 10mo ago
    Google and Microsoft have existing major money printing businesses to keep their AI business afloat and burn money for a while. That's how Microsoft broke into gaming (and then squandered it years later for unrelated incompetence) OpenAI doesn't have that.
  - elAhmo 10mo ago
    You can say it about the AI companies, but Google or Microsoft are far from AI companies.
    - tartoran 10mo ago
      That's a good point. Google was sleeping on AI and wasn't able to come up with a product before OpenAI and they only scrambled to come out with something when OpenAi became all the rage. Big companies are hard to budge and move in a new direction.
echelon 10mo ago
Every F500 CEO told their team "have an AI strategy ASAP". In a year, when the economy might be in worse shape, they'll ask their team if the AI thing is working out. What do you think happens to all the enterprise OpenAI contracts at that point? (Especially if the same tech layperson CEOs keep reading Forbes and hearing Scott Galloway dump on OpenAI and call the AI thing a "bubble"?)
- riku_iki 10mo ago
  > What do you think happens to all the enterprise OpenAI contracts at that point? they will go to google if it wins the AI race.
- raw_anon_1111 10mo ago
  I will change a few lines of code and use another AI model?
  - echelon 10mo ago
    Are all of their sales their code gen model? And isn't there a lot of competition in the code gen space from Google and Anthropic? I'd imagine they sold these to enterprise: https://openai.com/business/ https://openai.com/business/ "ChatGPT for Business", sold per seat "API Platform" I could see the former getting canned if AI isn't adding value. Developers can change the models they use frequently, especially with third party infrastructure like OpenRouter or FAL.
  - bangaladore 10mo ago
    Yeah- given all top AI models are more and more generalists, as time goes on there is less and less reason to use one over another.
    - raw_anon_1111 10mo ago
      It’s really even easier than that. I already do all my work on AWS and use Bedrock that hosts every popular model and its own except for OpenAIs closed source models. I have a reusable library that lets me choose between any of the models I choose to support or any new model in the same family that uses the same request format. Every project I’ve done, it’s a simple matter of changing a config setting and choosing a different model. If the model provider goes out of business, it’s not like the model is going to disappear from AWS the next day.
      - echelon 10mo ago
cmiles8 10mo ago
We live in crazy times, but given what they’ve spent and committed to that’s a drop in the bucket relative to what they need to be pulling in. They’re history if they can’t pump up the revenue much much faster. Given that we’re likely at peak AI hype at the moment they’re not well positioned at all to survive the coming “trough of disillusionment” that happens like clockwork on every hype cycle. Google, by comparison, is very well positioned to weather a coming storm.
- XorNot 10mo ago
  Google survives because I still Google things, and the phone I'm typing this on is a Google product. Whereas I haven't opened the ChatFPT bookmark in months and will probably delete it now that I think about it.
  - scrollop 10mo ago
    RIP privacy. Hello Stasi Google and its full personalised file on XorNot. Google knows when you're about to sneeze.
Spooky23 10mo ago
Google is embedding Gemini into Chrome Developer Tools. You can ask for an analysis of individual network calls in your browser by clicking a checkbox. That's just an example of the power of platform. They seem to be better at integration than Microsoft. OpenAI has this amazing technology and a great app, but the company feels like some sort of financial engineering nightmare.
- cruffle_duffle 10mo ago
  To be fair the CEO of OpenAI is also a crypto bro. Financial engineering is right up their wheelhouse.
ethin 10mo ago
It is insignificant when they're spending more than $115bn to offer their service. And yes, I say "more than," not because I have any inside knowledge but because I'm pretty sure $115bn is a "kind" estimate and the expenditure is probably higher. But either way, they're running at a loss. And for a company like them, that loss is huge. Google could take the loss as could Microsoft or Amazon because they have lots of other revenue sources. OAI does not.

> An innovative product with no means of significant revenue generation. OpenAI has annualized revenue of $20bn. That's not Google, but it's not insignificant.

cheald 10mo ago

And a $115b burn rate. They're toast if they can't figure out how to stay on top.

nfRfqX5n 10mo ago
Could say that about any AI company that isn’t at the top as well
- hbn 10mo ago
  Google and Microsoft have existing major money printing businesses to keep their AI business afloat and burn money for a while. That's how Microsoft broke into gaming (and then squandered it years later for unrelated incompetence) OpenAI doesn't have that.
- elAhmo 10mo ago
  You can say it about the AI companies, but Google or Microsoft are far from AI companies.
  - tartoran 10mo ago
    That's a good point. Google was sleeping on AI and wasn't able to come up with a product before OpenAI and they only scrambled to come out with something when OpenAi became all the rage. Big companies are hard to budge and move in a new direction.

echelon 10mo ago

Every F500 CEO told their team "have an AI strategy ASAP". In a year, when the economy might be in worse shape, they'll ask their team if the AI thing is working out. What do you think happens to all the enterprise OpenAI contracts at that point? (Especially if the same tech layperson CEOs keep reading Forbes and hearing Scott Galloway dump on OpenAI and call the AI thing a "bubble"?)

riku_iki 10mo ago
> What do you think happens to all the enterprise OpenAI contracts at that point? they will go to google if it wins the AI race.
raw_anon_1111 10mo ago
I will change a few lines of code and use another AI model?
- echelon 10mo ago
  Are all of their sales their code gen model? And isn't there a lot of competition in the code gen space from Google and Anthropic? I'd imagine they sold these to enterprise: https://openai.com/business/ https://openai.com/business/ "ChatGPT for Business", sold per seat "API Platform" I could see the former getting canned if AI isn't adding value. Developers can change the models they use frequently, especially with third party infrastructure like OpenRouter or FAL.
- bangaladore 10mo ago
  Yeah- given all top AI models are more and more generalists, as time goes on there is less and less reason to use one over another.
  - raw_anon_1111 10mo ago
    It’s really even easier than that. I already do all my work on AWS and use Bedrock that hosts every popular model and its own except for OpenAIs closed source models. I have a reusable library that lets me choose between any of the models I choose to support or any new model in the same family that uses the same request format. Every project I’ve done, it’s a simple matter of changing a config setting and choosing a different model. If the model provider goes out of business, it’s not like the model is going to disappear from AWS the next day.
    - echelon 10mo ago

cmiles8 10mo ago

We live in crazy times, but given what they’ve spent and committed to that’s a drop in the bucket relative to what they need to be pulling in. They’re history if they can’t pump up the revenue much much faster. Given that we’re likely at peak AI hype at the moment they’re not well positioned at all to survive the coming “trough of disillusionment” that happens like clockwork on every hype cycle. Google, by comparison, is very well positioned to weather a coming storm.

XorNot 10mo ago
Google survives because I still Google things, and the phone I'm typing this on is a Google product. Whereas I haven't opened the ChatFPT bookmark in months and will probably delete it now that I think about it.
- scrollop 10mo ago
  RIP privacy. Hello Stasi Google and its full personalised file on XorNot. Google knows when you're about to sneeze.

Spooky23 10mo ago

Google is embedding Gemini into Chrome Developer Tools. You can ask for an analysis of individual network calls in your browser by clicking a checkbox. That's just an example of the power of platform. They seem to be better at integration than Microsoft. OpenAI has this amazing technology and a great app, but the company feels like some sort of financial engineering nightmare.

cruffle_duffle 10mo ago
To be fair the CEO of OpenAI is also a crypto bro. Financial engineering is right up their wheelhouse.

ethin 10mo ago

It is insignificant when they're spending more than $115bn to offer their service. And yes, I say "more than," not because I have any inside knowledge but because I'm pretty sure $115bn is a "kind" estimate and the expenditure is probably higher. But either way, they're running at a loss. And for a company like them, that loss is huge. Google could take the loss as could Microsoft or Amazon because they have lots of other revenue sources. OAI does not.