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From the very link your HN submission points to: > Research and Development: $19.18 billion. Loss from Operations: $20.92 billion OpenAI isn't profitable even

by stymaar 2mo ago

From the very link your HN submission points to: > Research and Development: $19.18 billion. Loss from Operations: $20.92 billion OpenAI isn't profitable even if you discount R&D entirely. Google search on the other hand has had ridiculous margin from the beginning, allowing the company to be highly profitable while financing significant R&D investment. These two businesses models are as different as it can be. If ads were the solutions for profitability these companies would have used ads as their source of income from the very beginning.

famouswaffles 2mo ago
>OpenAI isn't profitable even if you discount R&D entirely. They have a billion weekly active users, almost all free (Not Google search free. Free free) with about ~50M subscriptions. Of course they're not profitable even without R&D. Low cost isn't no cost. Take away the huge R&D and they become hugely profitable with a robust ad business like Google Search. >If ads were the solutions for profitability these companies would have used ads as their source of income from the very beginning. You've said this a couple times and it doesn't make any more sense the more you say it. Just admit you're wrong about inference costs and move on.
- stymaar 2mo ago
  It's funny because > Take away the huge R&D and they become hugely profitable with a robust ad business like Google Search. Is refuted by the sentence that comes immediately before : > They have a billion weekly active users, almost all free (Not Google search free. Free free) with about ~50M subscriptions. Of course they're not profitable even without R&D. Low cost isn't no cost. Please explain why have OpenAI been actively not trying to “hugely profitable with a robust ads business” for the past 3 and a half year then? Or at least make a profit that can cover some of there R&D expenses, instead of losing money from their operations? > Just admit you're wrong about inference costs and move on. Unfortunately I'm not. And again, none of your links above says otherwise.
  - deleted 2mo ago
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  - famouswaffles 2mo ago
    >Is refuted by the sentence that comes immediately before No. "They're unprofitable while serving almost everyone for free" does not refute "they could be profitable if those users were monetized with ads." That's the entire distinction. >why have OpenAI been actively not trying to “hugely profitable with a robust ads business” for the past 3 and a half year then? Because "they didn't do it early enough" is not evidence. They may have prioritized growth, product adoption, subscriptions, or simply delayed ads for strategic reasons. >Unfortunately I'm not. And again, none of your links above says otherwise. They show that "LLM inference which is significantly costlier than web search." is unsupported. Imagine dismissing numbers over "but why no ads earlier".
    - stymaar 2mo ago
      > They may have prioritized growth, Prioritizing growth? When OpenAI had saturated the market by year one and has only been losing market share for the past 18 months! Again that's basically assuming Sam Altman is a complex idiot. No board in existence will let you move away from the most obvious business model in the Silicon Valley if this model was the obvious solution you think it is. > They show that "LLM inference which is significantly costlier than web search." is unsupported It's not unsupported, the price per million token of frontier model is public, as well as the cost of running open source models, which gives us a rough idea of how much those frontier models cost to run, and it's significantly higher than what it costs to run a web search. > Imagine dismissing numbers But you're just making those “numbers” up: there's simply no cost numbers at all in these papers. They are just about energy, and you jump from there forgetting that consuming a kWh of electricity on a server from 19 years ago is substantially cheaper in capex than doing so on a H100, let alone doing so on newer hardware.

by stymaar 2mo ago

famouswaffles 2mo ago

>OpenAI isn't profitable even if you discount R&D entirely. They have a billion weekly active users, almost all free (Not Google search free. Free free) with about ~50M subscriptions. Of course they're not profitable even without R&D. Low cost isn't no cost. Take away the huge R&D and they become hugely profitable with a robust ad business like Google Search. >If ads were the solutions for profitability these companies would have used ads as their source of income from the very beginning. You've said this a couple times and it doesn't make any more sense the more you say it. Just admit you're wrong about inference costs and move on.

stymaar 2mo ago
It's funny because > Take away the huge R&D and they become hugely profitable with a robust ad business like Google Search. Is refuted by the sentence that comes immediately before : > They have a billion weekly active users, almost all free (Not Google search free. Free free) with about ~50M subscriptions. Of course they're not profitable even without R&D. Low cost isn't no cost. Please explain why have OpenAI been actively not trying to “hugely profitable with a robust ads business” for the past 3 and a half year then? Or at least make a profit that can cover some of there R&D expenses, instead of losing money from their operations? > Just admit you're wrong about inference costs and move on. Unfortunately I'm not. And again, none of your links above says otherwise.
- deleted 2mo ago
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- famouswaffles 2mo ago
  >Is refuted by the sentence that comes immediately before No. "They're unprofitable while serving almost everyone for free" does not refute "they could be profitable if those users were monetized with ads." That's the entire distinction. >why have OpenAI been actively not trying to “hugely profitable with a robust ads business” for the past 3 and a half year then? Because "they didn't do it early enough" is not evidence. They may have prioritized growth, product adoption, subscriptions, or simply delayed ads for strategic reasons. >Unfortunately I'm not. And again, none of your links above says otherwise. They show that "LLM inference which is significantly costlier than web search." is unsupported. Imagine dismissing numbers over "but why no ads earlier".
  - stymaar 2mo ago
    > They may have prioritized growth, Prioritizing growth? When OpenAI had saturated the market by year one and has only been losing market share for the past 18 months! Again that's basically assuming Sam Altman is a complex idiot. No board in existence will let you move away from the most obvious business model in the Silicon Valley if this model was the obvious solution you think it is. > They show that "LLM inference which is significantly costlier than web search." is unsupported It's not unsupported, the price per million token of frontier model is public, as well as the cost of running open source models, which gives us a rough idea of how much those frontier models cost to run, and it's significantly higher than what it costs to run a web search. > Imagine dismissing numbers But you're just making those “numbers” up: there's simply no cost numbers at all in these papers. They are just about energy, and you jump from there forgetting that consuming a kWh of electricity on a server from 19 years ago is substantially cheaper in capex than doing so on a H100, let alone doing so on newer hardware.