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OpenAI Misses Key Revenue, User Targets in High-Stakes Sprint Toward IPO

88 points by ksherlock 5mo ago

ksherlock 5mo ago
unlocked gift link: https://www.wsj.com/tech/ai/openai-misses-key-revenue-user-targets-in-high-stakes-sprint-toward-ipo-94a95273?st=8H7UTR&reflink=desktopwebshare_permalink https://www.wsj.com/tech/ai/openai-misses-key-revenue-user-t...
kingstnap 5mo ago
There would need to be another paradigm shift if they wanna keep inflating AI usage. We went from simple chatbots to thinking models which massively exploded token utilization. We then went from simple thinking models to tool calls and agents. Agents, and particularly long horizon agents, burn truly insane numbers of tokens blowing thinking models well out of the water. People are trying to do agentic swarms as the next step but I don't think those make sense as of right now. Particularly they are just too insanely expensive and not that useful. Plus right now the models just aren't good at it. It's like early agents when they first started making tool calls. Agents are really quite bad at using subagents. They don't really internalize how to deploy them and they also don't utilize them in the ways that make sense (produce planning documents, have verifiable artifacts, break down tasks in ways that minimize risk, recognize model limitations in instruction following, iterate on results, etc).
- layer8 5mo ago
  So there needs to be a new paradigm shift every few months or so? Because I remember people hailing AI reaching a new level of capability less than half a year ago, and saying it’d still be so much worth it even at ten times the price. And that already has lost momentum? If that’s the case, then AI companies are hugely overvalued. These contrasts are just wild to me. Your last paragraph is also striking in that it exemplifies how far away from general intelligence they still are.
  - kingstnap 5mo ago
    > AI companies are hugely overvalued Most of everything tends to suck. Most projects go nowhere, most companies fail, most scientific papers are garbage. > how far away from general intelligence they still are Economically the real question is to what extent can these systems replace or augment human labour. And I think right now the extent is pretty shocking if not currently very well integrated. Scientifically the fact they are bad at using subagents is sort of expected. How to use agents effectively is still a bit of an open question. A human from mid 2025 would be bad at it. Why should a model trained on data from 2025 be good at it? If these things were to be generally intelligent they need feedback and retraining. Which persumable the Labs will do once these sorts of questions start having good answers and we can create good benchmarks and measures for meta orchestration.
    - yfw 5mo ago
      > Most of everything tends to suck. Most projects go nowhere, most companies fail, most scientific papers are garbage. Umm, whats your point? We arent spending 1.4t on other shitty things that are tipping to fail
  - rendaw 5mo ago
    I just started trying these out. Claude uses up its 6 hour or whatever quota in a couple coding prompts. Buying extra credits for the same amount as a monthly subscription and it's used up in 3 hours. Kimi gives me about double what Claude does per window but uses up its entire weekly quota in the same time, for the same price as Claude. And I get worse results. Gemini worked OK for a day or two and now is running one tool every 30m and getting nothing done, apparently they've been in constant outage status for for nearly a month: https://aistudio.google.com/status https://aistudio.google.com/status I haven't tried ChatGPT because of ethical issues but well, I'm not sure that makes any sense. Four prompts a day isn't something where I go, wow, this has revolutionized my programming. I might very well be getting more done if I wasn't fighting with the constant CLI bugs and work left half finished for 3h to 5 days when my quota is used up.
latentframe 5mo ago
It's a big upfront capex with unknown monetization timelines : it's fine when the capital is cheap but it's much harder when it isn’t
pharos92 5mo ago
Misses key revenue, what a surprise.
etempleton 5mo ago
OpenAI was already projected to burn money at a ludicrous rate and now the news is they are going to burn it even faster. I just don’t see how this ends well for anyone. Regardless of what you think of AI it is apparently entirely too expensive to run. Maybe costs will come down dramatically, but is that at the cost of stagnation in the models? And if that is the case is AI a failure to investors? At some point in the next few years investors are going to want their returns. The only way I see that happening is though an IPO and then… I don’t know if they have a sustainable business model or one in sight.
- nextaccountic 5mo ago
  Or, they crash and burn, maybe taking Anthropic with them too Which doesn't mean an end to the AI race, since China is unlikely to care whether US companies secure financing Also, if this happens OpenAI will probably bailed out with taxpayer money
  - therobots927 5mo ago
    Why would they be bailed out? They aren’t a bank.
    - nextaccountic 5mo ago
      Auto companies were bailed out in 2008, so that's not exclusive to banks As to why.. it's corruption. They would be bailed out as an act of corruption, to use the public machine for private gains.
      - therobots927 5mo ago
        That would sink the Republican Party.
        etempleton 5mo ago
        I am sure buying OpenAI would be the thing that does it.
therobots927 5mo ago
I’m sure they’re TOTALLY on track to spend $850 billion by 2030. AGI for 20 bucks is right around the corner! Naysaying luddites!!
twoodfin 5mo ago
Why isn’t the obvious story right? Anthropic is capturing exploding enterprise demand via their agentic tools, OpenAI is failing (relatively) to do so. They’re stuck trying to squeeze more $$ out of consumer chatbots that have reached the second knee of the S-curve.
- kloop 5mo ago
  That doesn't seem like the obvious story to me. Normies and even most (non-tech) companies don't really know the difference between chatgpt and claude yet. And they generally don't have opinions or ideas on agentic X. The obvious story seems to be that OpenAI was reckless and got way ahead of their revenue assuming it would keep hockey-sticking
kk_mors 5mo ago
[flagged]

88 points by ksherlock 5mo ago

unlocked gift link: https://www.wsj.com/tech/ai/openai-misses-key-revenue-user-targets-in-high-stakes-sprint-toward-ipo-94a95273?st=8H7UTR&reflink=desktopwebshare_permalink https://www.wsj.com/tech/ai/openai-misses-key-revenue-user-t...

kingstnap 5mo ago

There would need to be another paradigm shift if they wanna keep inflating AI usage. We went from simple chatbots to thinking models which massively exploded token utilization. We then went from simple thinking models to tool calls and agents. Agents, and particularly long horizon agents, burn truly insane numbers of tokens blowing thinking models well out of the water. People are trying to do agentic swarms as the next step but I don't think those make sense as of right now. Particularly they are just too insanely expensive and not that useful. Plus right now the models just aren't good at it. It's like early agents when they first started making tool calls. Agents are really quite bad at using subagents. They don't really internalize how to deploy them and they also don't utilize them in the ways that make sense (produce planning documents, have verifiable artifacts, break down tasks in ways that minimize risk, recognize model limitations in instruction following, iterate on results, etc).

layer8 5mo ago
So there needs to be a new paradigm shift every few months or so? Because I remember people hailing AI reaching a new level of capability less than half a year ago, and saying it’d still be so much worth it even at ten times the price. And that already has lost momentum? If that’s the case, then AI companies are hugely overvalued. These contrasts are just wild to me. Your last paragraph is also striking in that it exemplifies how far away from general intelligence they still are.
- kingstnap 5mo ago
  > AI companies are hugely overvalued Most of everything tends to suck. Most projects go nowhere, most companies fail, most scientific papers are garbage. > how far away from general intelligence they still are Economically the real question is to what extent can these systems replace or augment human labour. And I think right now the extent is pretty shocking if not currently very well integrated. Scientifically the fact they are bad at using subagents is sort of expected. How to use agents effectively is still a bit of an open question. A human from mid 2025 would be bad at it. Why should a model trained on data from 2025 be good at it? If these things were to be generally intelligent they need feedback and retraining. Which persumable the Labs will do once these sorts of questions start having good answers and we can create good benchmarks and measures for meta orchestration.
  - yfw 5mo ago
    > Most of everything tends to suck. Most projects go nowhere, most companies fail, most scientific papers are garbage. Umm, whats your point? We arent spending 1.4t on other shitty things that are tipping to fail
- rendaw 5mo ago
  I just started trying these out. Claude uses up its 6 hour or whatever quota in a couple coding prompts. Buying extra credits for the same amount as a monthly subscription and it's used up in 3 hours. Kimi gives me about double what Claude does per window but uses up its entire weekly quota in the same time, for the same price as Claude. And I get worse results. Gemini worked OK for a day or two and now is running one tool every 30m and getting nothing done, apparently they've been in constant outage status for for nearly a month: https://aistudio.google.com/status https://aistudio.google.com/status I haven't tried ChatGPT because of ethical issues but well, I'm not sure that makes any sense. Four prompts a day isn't something where I go, wow, this has revolutionized my programming. I might very well be getting more done if I wasn't fighting with the constant CLI bugs and work left half finished for 3h to 5 days when my quota is used up.

latentframe 5mo ago

It's a big upfront capex with unknown monetization timelines : it's fine when the capital is cheap but it's much harder when it isn’t

pharos92 5mo ago

Misses key revenue, what a surprise.

etempleton 5mo ago

OpenAI was already projected to burn money at a ludicrous rate and now the news is they are going to burn it even faster. I just don’t see how this ends well for anyone. Regardless of what you think of AI it is apparently entirely too expensive to run. Maybe costs will come down dramatically, but is that at the cost of stagnation in the models? And if that is the case is AI a failure to investors? At some point in the next few years investors are going to want their returns. The only way I see that happening is though an IPO and then… I don’t know if they have a sustainable business model or one in sight.

nextaccountic 5mo ago
Or, they crash and burn, maybe taking Anthropic with them too Which doesn't mean an end to the AI race, since China is unlikely to care whether US companies secure financing Also, if this happens OpenAI will probably bailed out with taxpayer money
- therobots927 5mo ago
  Why would they be bailed out? They aren’t a bank.
  - nextaccountic 5mo ago
    Auto companies were bailed out in 2008, so that's not exclusive to banks As to why.. it's corruption. They would be bailed out as an act of corruption, to use the public machine for private gains.
    - therobots927 5mo ago
      That would sink the Republican Party.
      - etempleton 5mo ago
        I am sure buying OpenAI would be the thing that does it.

therobots927 5mo ago

I’m sure they’re TOTALLY on track to spend $850 billion by 2030. AGI for 20 bucks is right around the corner! Naysaying luddites!!

twoodfin 5mo ago

Why isn’t the obvious story right? Anthropic is capturing exploding enterprise demand via their agentic tools, OpenAI is failing (relatively) to do so. They’re stuck trying to squeeze more $$ out of consumer chatbots that have reached the second knee of the S-curve.

kloop 5mo ago
That doesn't seem like the obvious story to me. Normies and even most (non-tech) companies don't really know the difference between chatgpt and claude yet. And they generally don't have opinions or ideas on agentic X. The obvious story seems to be that OpenAI was reckless and got way ahead of their revenue assuming it would keep hockey-sticking

kk_mors 5mo ago

[flagged]