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> Wheras only profit should matter Profit is money you couldn’t figure out how to spend. During growth, you want positive operating margins with nominal profit
by Swizec 6mo ago
> Wheras only profit should matter
Profit is money you couldn’t figure out how to spend. During growth, you want positive operating margins with nominal profits. When the company/market matures, you want pure profits because shareholders like money. If you can find a way to invest those profits in new areas of growth, that’s better.
- aurareturn 6mo agoNot sure why you’re downvoted. Everyone wants to treat OpenAI like a car wash business where they need to make a profit almost immediately. I don’t know why people can’t understand that the industry is in a rapid growth stage and investing the money is more important than making a profit now. The profits will come later.
- troupo 6mo ago"Profits will come later" https://news.ycombinator.com/item?id=47597480 https://news.ycombinator.com/item?id=47597480
- nutjob2 6mo ago> The profits will come later. The nearly $1T hand wave. Forgive me if I ask how. Might give it some credence if Anthropic and Google weren't pulling even with or surpassing them in various way or markets. Whats worse is they mostly seem to have retail market name recognition which is arguably the hardest, or maybe the impossible market to make money from.
- aurareturn 6mo agoWhats worse is they mostly seem to have retail market name recognition which is arguably the hardest, or maybe the impossible market to make money from. That doesn't seem to be the case at all. Meta and Google are two of the most profitable companies in history, off the backs of free users. Apple is another one that focuses almost exclusively on retail and is also one of the most profitable in history.
- FatherOfCurses 6mo ago> profits will come later Holy crap, is it the year 2000 again?
- aurareturn 6mo ago2000s, 2010s, and 2020s. This is how tech companies work, especially in a new industry.
- troupo 6mo ago> Profit is money you couldn’t figure out how to spend. Profit is the money showing your business is sustainable. Ever since the ZIRP era US companies keep haemorrhaging money at a rate that is physically impossible to recoup. If OpenAI plans to lose 100+ billion dollars per year for half a decade, what profits are you talking about to offset the losses? > When the company/market matures, you want pure profits because shareholders like money. Ah yes. Shareholders like money. And not, you know, basic accounting like "we need money to actually pay salaries, pay for equipment and offices etc. without perpetually relying on seeming endless investor money".
- chronc6393 6mo ago> what profits are you talking about to offset the losses? You don’t need profit to offset the losses. You can simply reduce spending / expenses.
- CraigRood 6mo agoIn principle yes, but all metrics so far suggest they are losing money every user interaction. There is very little network effect with these tools so It's not like they can start cutting back on staff and feature deployment.
- LaGrange 6mo agolol that’s a line so incredibly naive it hurts. One does not “simply” reduce spending.
- chronc6393 6mo ago> One does not “simply” reduce spending. Why does stock price go up after mass layoffs?
- bumby 6mo agoWhat happens when the only way to reduce spending is to reduce your assets? Seems like circular logic at that point. I suppose the market isn’t expected to be rational all the time, but eventually it is.
- badpun 6mo agoA lot of investments gets amortized over many years so even if you're investing all your free cash you'll still show a lot of profit.