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OpenAI's cash burn will be one of the big bubble questions of 2026
- dredmorbius 10mo agoArchive/Paywall: <https://archive.is/rHPk3 https://archive.is/rHPk3>
- bariswheel 10mo agothank you!
- laweijfmvo 10mo agowhy does the article used words like burn and incinerate, implying that OpenAI is somehow making money disappear or something? They’re spending it; someone is profiting here, even if it’s not OpenAI. Is it all Nvidia?
- zaphar 10mo agoBecause that's normal language idioms in financial analysis reporting?
- popalchemist 10mo agoBecause typically one expect a return on investment with that level of spending. Not only have they run at a loss for years, their spending is expected to increase, with no path to profitability in sight.
- bdangubic 10mo agonot that I disagree but would it be fair to say though that we have seen this before where it turned out OK? say Uber? Amazon?
- oh_my_goodness 10mo agoTo become the next Uber, do I just need to run huge losses?
- bdangubic 10mo agoI wouldn’t but path to success can clearly come from running 10-digit losses for a loooong time, no?
- oh_my_goodness 10mo agoI think you're saying that just running up huge losses is sufficient to create a successful company? But that you personally wouldn't want to run up huge losses? Not sure.
- bdangubic 10mo agonah, I am saying that many (super) successful businesses ran in red financially for a very long time. I would not run a business that way but I am also (fortunately) not a CEO of a multibillion dollar company
- jcranmer 10mo agoIIRC, current estimates are that OpenAI is losing as much money a year as Uber or Amazon lost in their entire lifetime of unprofitability. Also, both Uber and Amazon spent their unprofitable years having a clear roadmap to profitability. OpenAI's roadmap to profitability is "???"
- bdangubic 10mo agoI have lived through Amazon’s rags to riches and there was never a clear plan to profitability. Vast majority of people were questioning sanity of anyone investing in Amazon. I am not saying OpenAI is Amazon but am saying I have seen this before where masses are going “oh business is bad, losses are huge, where is path to profitability…”
- throw1235435 10mo agoTbh this whole AI thing is probably a negative ROI but it will pay off. Even if the debt is written off the AI enhancements that this whole misallocation of capital created are now "sunk" and are here to stay - the assets and techniques have been built. There's an element of arms race between players, and the genie is out of the bottle now so have to move with it. Game theory is more driving this than economics in the short term. Marginal gains on top of these investments probably have a ROI now (i.e. new investments from this point).
- simonw 10mo agoYour burn is the money you spend that exceeds the money you earn, see also "burn rate".
- wat10000 10mo ago“Burn rate” is a standard financial term for how much money a startup is losing. If you have $1 cash on hand and a burn rate of $2 a year, then you have six months before you either need to get profitable, raise more money, or shut down.
- lexicality 10mo agoI suspect most of it is going to utilities for power, water and racking. That being said, if I was Sam Altman I'd also be stocking up on yachts, mansions and gold plated toilets while the books are still private. If there's $10bn a year in outgoings no one's going to notice a million here and there.
- slashdave 10mo agoHow many gold toilets do you need? I mean, I don't even own one.
- lexicality 10mo agoTragically I don't make CEO money so I also don't have one but I presume you'd want to have at least one per mansion and another one in the office. Maybe a separate one for special occasions.
- nutjob2 10mo ago> They’re spending it That's what the words mean in this context.
- andsoitis 10mo agoIn a parallel universe, governments invest in the compute/datacenters (read: infra), and let model makers compete on the same playing field.
- websiteapi 10mo agowhy would they do that? not to mention governments are already doing that indirectly by taking equity stakes in some of the companies.
- candiddevmike 10mo agoSame reason they should own access lines: everyone needs rackspace/access, it should be treated like a public service to avoid rent seeing. Having a data center in every city where all of the local lines terminate into could open the doors to a lot of interesting use cases, really help with local resiliency/decentralization efforts, and provide a great alternative to cloud providers that doesn't break the bank.
- websiteapi 10mo agoshould the government own all types of "public services"? e.g. search index, video serving infra, etc?
- toxic72 10mo agoPublic ownership of public services hmm?
- paulryanrogers 10mo agoSmells like socialism. Around here we privatize the profits and only socialize the costs. Like the impending bailout of the most politically connected AI companies.
- simonw 10mo ago
- mvkel 10mo agoThe fact is nobody has any idea what OpenAI's cash burn is. Measuring how much they're raising is not an adequate proxy. For all we know, they could be accumulating capital to weather an AI winter. It's also worth noting that OpenAI has not trained a new model since gpt4o (all subsequent models are routing systems and prompt chains built on top of 4), so the idea of OpenAI being stuck in some kind of runaway training expense is not real.
- micromacrofoot 10mo agothey're paying million dollar salaries to engineers and building data centers, it's not a huge mystery where their expenses are
- deleted 10mo ago[deleted]
- wahnfrieden 10mo agowasn't 4.5 new
- FergusArgyll 10mo agoYes it was, op didn't read the reporting closely enough. It said something to the effect of "Didn't pretrain a new broadly released, generally available model"
- mvkel 10mo agoThat's what I meant, though. That's the expensive part.
- Taek 10mo agoWasn't 4.5 before 4o?
- Imustaskforhelp 10mo agoDidn't they create Sora and other models and literally burned so much money with their AI video app which they wanted to make a social media but what ended up happening was that they burned billions of dollars.
- adriand 10mo agoThis article doesn’t add anything to what we know already. It’s still an open question what happens with the labs this coming year, but I personally think Anthropic’s focus on coding represents the clearest path to subscriber-based success (typical SaaS) whereas OpenAI has a clear opportunity with advertising. Both of these paths could be very lucrative. Meanwhile I expect Google will continue to struggle with making products that people actually want to use, irrespective of the quality of its models.
- esel2k 10mo agoWhere does google struggle to make products people don’t want to use? Is it a personal opinion?
- deleted 10mo ago[deleted]
- _ache_ 10mo agoBart was a flop. Google search is losing market share to other LLM providers. Gemini adoption is low, people around me prefer OpenAI because it is good enough and known. But on the contrary, Nano Banana is very good, so I don't know. And in the end, I'm pretty confident Google will be the AI race winner, because they got the engineers, they tech background and the money. Unless Google Adsense die, they can continue the race forever.
- agentifysh 10mo agowhat are you talking about Gemini adoption has tripled in a few months alone and have around 18% of marketshare and its accelerating.
- robkop 10mo agoI’ve heard too many rumors that much of that adoption is from copying ms i.e. bundling gemini into their office suite
- gip 10mo agoThere is no doubt that OpenAI is taking a lot of risks by betting that AI adoption will translate into revenues in the very short term. And that could really happen imo (with a low probability sure, but worth the risk for VCs? Probably).
- Alconicon 10mo agoApparently we all have enough money to put it into OpenAI. Some players have to play, like google, some players want to play like USA vs. China. Besides that, chatting with an LLM is very very convincing. Normal non technical people can see what 'this thing' can already do and as long as the progress is continuing as fast as it currently is, its still a very easy to sell future.
- bigyabai 10mo ago> Some players have to play, like google I don't think you have the faintest clue of what you're talking about right now. Google authored the transformer architecture, the basis of every GPT model OpenAI has shipped. They aren't obligated to play any more than OpenAI is, they do it because they get results. The same cannot be said of OpenAI.
- Alconicon 10mo ago[dead]
- agentifysh 10mo agoIt's mathematically impossible what OpenAI is promising. They know it. The goal is to be too big to fail and get bailed out by US taxpayers who have been groomed into viewing AI as a cold war style arms race that America cannot lose.
- senshan 10mo ago> It's mathematically impossible what OpenAI is promising Citation is needed
- Avicebron 10mo agoOn the radio they mentioned that the total global chocolate market is ~100B, I googled it when I was home and it seems to be about ~135B. Apparently that is ... all chocolate, everywhere.. OpenAI's valuation is about 500B. Maybe going up to like 835B. I'd love to see the rationale that OpenAI (not "AI" everywhere) is more valuable than chocolate globally. ... so crash early 2026?
- NewJazz 10mo agoWait, aren't you comparing revenue and market cap? People take old things for granted often. Explains the Coolidge effect, and why plenty of people cheat.
- vegabook 10mo agoyes. stock v flow error again ("company X cap bigger than country Y GDP" another all too common version).
- kyyt 10mo agoI love AI, and ChatGPT has been transformative for me. But would I give it up for chocolate? I honestly don't think I could.
- cameronh90 10mo agoIgnoring that those numbers aren't directly comparable, it did make me wonder, if I had to give up either "AI" or chocolate tomorrow, which would I pick? Even as an enormous chocolate lover (in all three senses) who eats chocolate several times a week, I'd probably choose AI instead. OpenAI has alternatives, but also I do spend more money on OpenAI than I do on chocolate currently.
- hervature 10mo agoI am just trying to help you write better. Your writing says "if I had to give up either AI or chocolate [...] I would probably choose AI". However, your language and intent seems to be that you would give up chocolate.
- GannaIlinykh 10mo agoBurn rate often gets treated as a hard signal, but it is mostly about expectations. Once people get used to the idea of cheap intelligence, any slowdown feels like failure, even if the technology is still moving forward. That gap is usually where bubbles begin.
- password54321 10mo agoNot sure why they put so much investment into videoSlop and imageSlop. Anthropic seems to be more focused at least.
- SAI_Peregrinus 10mo agoBecause their main use is for advertising/propaganda, which is largely videoSlop & imageSlop even without AI.
- password54321 10mo agoOutside of this: https://openai.com/index/disney-sora-agreement/ https://openai.com/index/disney-sora-agreement/ I don't think there has been much of a win for them even in advertising for image/video slop.
- anomaly_ 10mo agoIt's like half the poster on here live in some parallel universe. I am making real money using generated image/video advertising content for both B2C and B2B goods. I am using Whisper and LLMs to review customer service call logs at scale and identity development opportunities for staff. I am using GPT/Gemini to help write SQL queries and little python scripts to do data analysis on my customer base. My business's productivity is way up since GenAI become accessible.
- bdangubic 10mo agothat (very vocal) half tried it once and it didn’t work :)
- piskov 10mo agoBecause as with the internet 99% of the usage won’t be for education, work, personal development, what have you. It will be for effing kitten videos and memes.
- 10mo ago
- geldedus 10mo agopaywall, no upvote
- Skyy93 10mo agoSomeone posted already the non-paywall version: https://news.ycombinator.com/item?id=46438679 https://news.ycombinator.com/item?id=46438679
- jeffbee 10mo agoFor what I use them for, the LLM market has become a two player game, and the players are Anthropic and Google. So I find it quite interesting that OpenAI is still the default assumption of the leader.
- acoustics 10mo agoChatGPT dominates the consumer market (though Nano Banana is singlehandedly breathing some life into consumer Gemini). A small anecdote: when ChatGPT went down a few months ago, a lot of young people (especially students) just waited for it to come back up. They didn't even think about using an alternative.
- jeffbee 10mo agoThat's pretty nuts. With the models changing so much and so often, you have to switch it up sometimes just to see what the other company is offering.
- adastra22 10mo agoHow often do you or people you know use a search engine other than google?
- jeffbee 10mo agoThat is different because all of the players I mentioned have credible, near-leading products in the AI model market, whereas nobody other than Google has search results worth a damn. I wouldn't recommend anyone squander their time by checking Kagi or DDG or Bing more than once.
- adastra22 10mo agoI don't use google. Believe it or not, I get better results via Bing (usually via DDG, which is a frontend for Bing). But I asked the rhetorical question expecting the answer you gave. These people use ChatGPT only for the same reason you exclusively use Google.
- agentifysh 10mo ago2008: US Banks pump stocks -> market correction -> taxpayer bailout 2026: US AI companies pump stocks -> market correction -> taxpayer bailout Mark my words. OpenAI will be bailed out by US taxpayers.
- senshan 10mo agoNot really. It was not about stocks. It was the collapse of insurance companies at the core of 2008 crisis. The same can happen now on the side of private credit that gradually offloads its junk to insurance companies (again): As a result, private credit is on the rise as an investment option to compensate for this slowdown in traditional LBO (Figure 2, panel 2), and PE companies are actively growing the private credit side of their business by influencing the companies they control to help finance these operations. Life insurers are among these companies. For instance, KKR’s acquisition of 60 percent of Global Atlantic (a US life insurer) in 2020 cost KKR approximately $3billion. https://www.imf.org/en/Publications/global-financial-stability-notes/Issues/2023/12/13/Private-Equity-and-Life-Insurers-541437 https://www.imf.org/en/Publications/global-financial-stabili...
- smj-edison 10mo agoIn 2008 the US government ended up making more money then they spent though (at least with the tarp), because they invested a ton of money after everything collapsed, and thus was extremely cheap. Once the markets recovered, they made a hefty sum selling all the derivatives they got at the lowest point. Seems like the epitome of buy when low and sell when high tbh.
- bjt 10mo agoI'll take that bet. Banks get bailed out because if confidence in the banking system disappears and everyone tries to withdraw their money at once, the whole economy seizes up. And whoever is Treasury Secretary (usually an ex Wall Street person) is happy to do it. I don't see OpenAI having the same argument about systemic risk or the same deep ties into government.
- zozbot234 10mo ago
- HardCodedBias 10mo agoOpenAI has #5 traffic levels globally. Their product-market fit is undeniable. The question is monetization. Their cost to serve each request is roughly 3 orders of magnitude higher than conventional web sites. While it is clear people see value in the product, we only know they see value at today’s subsidized prices. It is possible that inference prices will continue their rapid decline. Or it is possible that OAI will need to raise prices and consumers will be willing to pay more for the value.
- pclmulqdq 10mo agoIt's easy to get product-market fit when you give away dollars for the price of pennies.
- PeterHolzwarth 10mo agoYes, but that is the standard methodology for startups in their boost phase. Burn vast piles of cash to acquire users, then find out at the end if a profitable business can be made of it.
- EA-3167 10mo agoIt’s also the standard methodology for a number of scams.
- mjamesaustin 10mo agoScams are our entire economy now. Do whatever you can to own a market, then squeeze your customers miserably once you have their loyalty. Cash out, kick the smoking remains of the company to the curb, use your payout to buy into another company, and repeat.
- lotsofpulp 10mo agoKind of like paying more and more to Social Security and Medicare and getting less and less. And the backstop on asset prices at the expense of the currency's purchasing power.
- avalys 10mo agoAI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic, Google, Meta, Deepseek, etc. There's no evidence of a technological moat or a competitive advantage in any of these companies. The conclusion? AI is a world-changing technology, just like the railroads were, and it is going to soon explode in a huge bubble - just like the railroads did. That doesn't mean AI is going to go away, or that it won't change the world - railroads are still here and they did change the world - but from a venture investment perspective, get ready for a massive downturn.
- ares623 10mo agoJust in time for a Government guaranteed backstop.
- bee_rider 10mo agoMassive upfront costs and second place is just first loser. It’s like building fabs but your product is infinitely copyable. Seems pretty rough.
- gerdesj 10mo agoWhat exactly is "second" place? No-one really knows what first place looks like. Everyone is certain that it will cost an arm, a leg and most of your organs. For me, I think that, the possible winners will be close to fully funded up front and the losers will be trying to turn debt into profit and fail. The rest of us self hoster types are hoping for a massive glut of GPUs and RAM to be dumped in a global fire sale. We are patient and have all those free offerings to play with for now to keep us going and even the subs are so far somewhat reasonable but we will flee in droves as soon as you try to ratchet up the price. It's a bit unfortunate but we are waiting for a lot of large meme companies to die. Soz!
- 10mo ago
- siliconc0w 10mo agoThe best case I can see is they integrate shopping and steal the best high-intent cash cow commercial queries from G. It's not really about AI, it's about who gets to be the next toll road.
- therobots927 10mo agoGoogle already puts AI summaries at the top of search. It would be trivial for them to incorporate shopping. And they have infinitely more traffic than OpenAI does. I just don’t see how OpenAI could possibly compete with that. What are you seeing that I’m not?
- sothatsit 10mo agoChatGPT has already won a lot of people away from Google like my mum, who now defaults to ChatGPT when she has a question. I was just talking to one of their friends last night who is in his 90s and he loves using Perplexity to learn about cooking and gardening. A lot of people now reach for ChatGPT by default instead of Google, even with the AI summaries. I wonder whether they just prefer the interface of the chat apps to Google that can be a bit cluttered in comparison.
- thimabi 10mo ago> A lot of people now reach for ChatGPT by default instead of Google, even with the AI summaries. I’m one of those people, and the reason for that is that Google’s AI summaries are awful more times than not. With ChatGPT I can (kind of) set how much “thinking” to do for each query and guide the model into producing better results via prompting.
- siliconc0w 10mo agoI can see users preferring GPT for big ticket items like cars, travel or service companies where you don't have a rec and want something a bet better curated than sponsored results. Especially if they improve the integration so you can book your entire iterary through the chat interface.
- moezd 10mo agoIn other words, OpenAI is a freight train without functioning brakes. There I said it.
- throw-12-16 10mo agoAnd thats brave.
- deadbabe 10mo agoWhat does it mean for the AI bubble to pop? Everyone stops using AI en masse and we go back to the old ways? Cloud based AI no longer becomes an available product?
- stephen_g 10mo agoI think it mostly just means a few hundred billion dollars of value wiped from the stock market - all the models that have been trained will still exist, as well as all the datacentres, even if the OpenAI entity itself and some of the other startups shut down and other companies else get their assets for pennies on the dollar. But it might mean that LLMs don't really improve much from where they are today, since there won't be the billions of dollars to throw at training for small incremental improvements that consumers mostly don't care to pay anything for.
- deadbabe 10mo agoSounds like a big nothingburger then. I don’t really have faith the current LLMs will improve dramatically anyway, not without totally new approaches to AI.
- andrewflnr 10mo agoIt probably means a price correction on cloud based AI, rather than it disappearing entirely.
- aurareturn 10mo agoIt's a good question. Sad that you're downvoted.
- deadbabe 10mo agoIt happens a lot. People here just want to silence voices that don’t fit their agenda.
- cmiles8 10mo agoAI is turning into the worst possible business setup for AI startups. A commodity that requires huge capital investment and ongoing innovation to stay relevant. There’s no room for someone to run a small but profitable gold mine or couple of oil wells on the side. The only path to survival is investing crazy sums just to stay relevant and keep up. Meanwhile customers have virtually zero brand loyalty so if you slip behind just a bit folks will swap API endpoints and leave you in the dust. It’s a terrible setup business wise. There’s also no real moat with all the major models converging to be “good enough” for nearly all use cases. Far beyond a typical race to the bottom. Those like Google with other products will just add AI features and everyone else trying to make AI their product will just get completely crushed financially.
- mizzao 10mo agoIf you think of it like cloud, where it's a commodity that reaches competitive prices, then you can use it to build products and applications, instead of competing for infrastructure (see also: railroads, optical fiber) There is tons of money to be made at the application layer, and VCs will start looking at that once the infrastructure layer collapses. Here's a blog post I wrote about that: https://parsnip.substack.com/p/models-arent-moats https://parsnip.substack.com/p/models-arent-moats
- cmiles8 10mo agoNot really though. The cloud has some stickiness. It’s pretty hard to move once you’ve settled in. For a lot of AI integrations though it’s just swapping some API endpoints and maybe tweaking the prompting a bit. For probably 95% of AI use cases there almost no barrier to switching.
- r0b05 10mo agoIt's a good take. I think both trajectories are occurring simultaneously. OpenAI challenging Google search is a winner takes all situation, not to mention the vast amounts of user data. On the other hand, us lesser mortals can leverage AI like a commoditized service to build applications with it.
- 10mo ago
- g-unit33 10mo agoWell they got $40B more to burn lol
- Abh1Works 10mo agoI think I super important aspect that people are overlooking, is that every VC wants to invest in the next "big" AI company, and the probability is in your favor to only give funding to AI companies, bc any one of them could be the next big thing. I think, with a downturn of VC investment, we will see some more investment in companies that arent AI native, but use AI as a tool in the toolbox to deliver insights.
- camillomiller 10mo agoIt’s like watching a train wreck waiting to happen, while everyone praise the madman conduct or who’s operating the locomotor at full steam.
- neilv 10mo agoI don't think that's diagnosis (as a clinical term); closer to defamation. Is it necessary to a point you want to make? You can just point to behavior of a given entity, such as to conclude it's untrustworthy, without the problematic area of armchair psychoanalysis.
- camillomiller 10mo agoI redacted the comment because you’re right. I need a better form to express the point.
- neilv 10mo agoGood move. We all have second thoughts on occasion. You might want to include an "Edit:" when substantially changing or replacing a comment.
- amkharg26 10mo agoThe comparison to railroad bubble economics is apt. OpenAI's infrastructure costs are astronomical - training runs, inference compute, and scaling to meet demand all burn through capital at an incredible rate. What's interesting is the strategic positioning. They need to maintain leadership while somehow finding a sustainable business model. The API pricing already feels like it's in a race to the bottom as competition intensifies. For startups building on top of LLM APIs, this should be a wake-up call about vendor lock-in risks. If OpenAI has to dramatically change their pricing or pivot their business model to survive, a lot of downstream products could be impacted. Diversifying across multiple model providers isn't just good engineering - it's business risk management.
- deleted 10mo ago[deleted]
- aurareturn 10mo agoRailroad peaked at 6% of GDP in the US. AI is at 1% of total US GDP right now. We have 6x more to go.
- zackify 10mo agoSurprised they burn cash advertising on Reddit to “make a mini me” version of yourself where you hold your body in your hand. What a waste of AI lol
- aurareturn 10mo agoI believe in OpenAI but they were running turn your cat into studio ghibili ads on Reddit up until a week or 2 ago. They need a better marketing strategy.
- jillesvangurp 10mo agoI don't see a bubble, I see a rapidly growing business case. MS Office has about 345 million active users. Those are paying subscriptions. IMHO that's roughly the totally addressable market for OpenAI for non coding users. Coding users is another few 20-30 million. If OpenAI can convert double digit percentages of those onto 20$ and 50$ per month subscriptions by delivering good enough AI that works well, they should be raking in cash by the billions per month adding up to close to the projected 2030 cash burn per year. That would be just subscription revenue. There is also going to be API revenue. And those expensive models used for video and other media creation are going to be indispensable for media and advertising companies which is yet more revenue. The office market at 20$/month is worth about 82 billion per year in subscription revenue. Add maybe a few premium tiers to that at 50$/month and 100$/month and that 2030 130 billion per year in cash burn suddenly seems quite reasonable. I've been quite impressed with Codex in the last few months. I only pay 20$/month for that currently. If that goes up, I won't loose sleep over it as it is valuable enough to me. Most programmers I know are on some paid subscription to that, Anthropic's Claude, or similar. Quite a few spend quite a bit more than that. My Chat GPT Plus subscription feels like really good value to me currently. Agentic tooling for business users is currently severely lacking in capability. Most of the tools are crap. You can get models to generate text. But forget about getting them to format that text correctly in a word processor. I'm constantly fixing bullets, headings and what not in Google docs for my AI assisted writings. Gemini is close to ff-ing useless both with the text and the formatting. But I've seen enough technology demos of what is possible to know that this is mostly a UX and software development problem, not a model quality problem. It seems companies are holding back from fully integrating things mainly for liability reasons (I suspect). But unlocking AI value like that is where the money is. Something similarly useful as codex for business usage with full access to your mail, drive, spread sheets, slides, word processors, CRMs, and whatever other tools you use running in YOLO mode (which is how I use codex in a virtual machine currently, --yolo). That would replace a shit ton of manual drudgery for me. It would be valuable to me and lots of other users. Valuable as in "please take my money". Currently doing stuff like this is a very scary thing to do because it might make expensive/embarrassing mistakes. I do it for code because I can contain the risk to the vm. It actually seems to be pretty well behaved. The vm is just there to make me feel good. It could do all sorts of crazy shit. It mostly just does what I ask it to. Clearly the security model around this needs work and instrumentation. That's not a model training problem though. Something like this for business usage is going to be the next step in agent powered utility that people will pay for at MS office levels of numbers of users and revenue. Google and MS could do it technically but they have huge legal exposure via their existing SAAS contracts and they seem scared shitless of their own lawyers. OpenAI doing something aggressive in this space in the next year or so is what I'm expecting to happen. Anyway, the bubble predictors seem to be ignoring the revenue potential here. Could it go wrong for OpenAI? Sure. If somebody else shows up and takes most of the revenue. But I think we're past the point where that revenue is not looking very realistic. Five years is a long time for them to get to 130 billion per year in revenue. Chat GPT did not exist five years ago. OpenAI can mess this up by letting somebody else take most of that revenue. The question is who? Google, maybe but I'm underwhelmed so far. MS, seems to want to but unable to. Apple is flailing. Anthropic seems increasingly like an also ran. There is a hardware cost bubble though. I'm betting OpenAI will get a lot more bang for its buck in terms of hardware by 2030. It won't be NVidia taking most of that revenue. They'll have competition and enter a race to the bottom in terms of hardware cost. If OpenAI burning 130 billion per year, it will probably be getting a lot more compute for it than currently projected. IMHO that's a reasonable cost level given the total addressable market for them. They should be raking in hundreds of billions by then.
- WhereIsTheTruth 10mo agoThe Microsoft effect, everything they touch turns to shit
- gorgoiler 10mo agoA second, less likely bubble?: IP rights enforcement. While the existing content hosters might have a neatly sewn up content agreement with their users such that all their group chats and cat photos can be used for training, I am a lot less confident that OAI came by its training data legitimately. (Adjacent to this is how crazy it was that Meta were accused of torrenting ebooks. Did they need them for the underlying knowledge? I can’t imagine they needed them for natural langauge examples.)
- singingwolfboy 10mo agohttps://archive.ph/rHPk3 https://archive.ph/rHPk3
- oliwarner 10mo ago[dead]
- john61 10mo agoI would call it the ELIZA bubble. https://en.wikipedia.org/wiki/ELIZA_effect https://en.wikipedia.org/wiki/ELIZA_effect
- Zenst 10mo agoit is a large spinning plate that can only keep spinning with more money, so the plate gets bigger and bigger, with everyone betting that it would carry on spinnning by itself to the stage that it has become too big to fail, due to the fallout, the impact on the stock market upon others companies would wipe out more than the sum of their debts. It's kinda at that stage now as when one domino falls, the impact on others will follow. Just a case of too many companies have skin in OpenAI's game for it to be allowed to fail now.
- christkv 10mo agoHow much of this capital is cheap printed credit from the covid area?
- Gud 10mo agoPersonally I use ChatGPT a lot, it is a wonderful service. I use it in conjunction with Claude. I’ve gotten pretty good results using both of them in tandem. However on a principal basis I prefer to self host, I wonder if an advantage of OpenAI imploding wouldn’t generate basement level prices of useful chips? Ideally I want to run my LLM and train it on my data.
- AbstractH24 10mo agoIt’ll be interesting to see if and how the latest release of Gemini is seen in the story that is this bubble
- otikik 10mo agoThe bubble is not at question. What's at question is how big will the pop be.
- ulfw 10mo agoCan't wait for this stupid bubble to finally burst so we can all move on
- duxup 10mo agoTheir acquisition of Jony Ive's organization for a ton of money and that creepy webpage https://openai.com/sam-and-jony/ https://openai.com/sam-and-jony/ makes me think OpenAI is just racing for headlines and groping in the dark for some magic fairy dust. ChatGPT isn't bad, I use it for some things / pay for it, but their spend and moves make me think that they don't seem confidant in it ... Is all the doomer-ism about AI companies not being profitable right? Do the AI companies believe it? Seems like it sometimes.
- 650REDHAIR 10mo agoThis is such a bizarre page. Thanks for sharing!
- mrbungie 10mo agoSam wants so bad for OpenAI to be a proper big tech company, probably one that's more culturally similar to Apple-y than Google/MSFT-y so I guess they are cargo-culting some parts of Apple. That website reminds me of a very low quality version of Apple's myth-making ala Think Different. Ive is obviously also a big part of the cargo cult.