3 ms·

Here's an analogy (as far as I understand the situation...) Let's say I own a lemonade stand. I sell you a 20% stake. My stand loses $10. When I report my fin

by npilk 2mo ago

Here's an analogy (as far as I understand the situation...) Let's say I own a lemonade stand. I sell you a 20% stake. My stand loses $10. When I report my financial results, I report losing $10. Then I report that your share of those losses is $2, and my share is $8. This creates transparency. So OpenAI really did lose $8.8B or whatever, but some of those losses are 'attributed' to other shareholders/owners of their subsidiaries, because they have a complicated corporate structure. So they report both numbers - the total loss, and then the part they 'own'. So when Ed says "It’s unclear what this means", he's either terribly uninformed or intentionally misleading his readers into thinking something fishy is going on when it isn't. Either way, it's bad journalism - if you don't know what it means, shouldn't you try to find out or ask an expert or something and then inform your readers? (And the thing is, it would easy enough to dunk on them for losing $8 billion, without adding these weird insinuations!)

beepbooptheory 2mo ago
OK got it. I guess this is a good call out or whatever then from you all, but, I gotta say, the point can't help but feel a little incommensurate to the $8.8 billion elephant in the room.. Like even in the original article, this is like a passing point to the overall thing, right? Like its you want to both say that you agree with the overall point here, but also can't trust that very same conclusion because one part in the article reveals an obvious ignorance. Except no one has been able to actually state the exact ignorance here other than the suggestion that Microsoft is in fact the one losing $3 billion dollars, which doesn't really feel very far from Zitron's original implication anyway given all the stuff he writes!
- ElProlactin 2mo ago
  The problem is that you can't be considered a credible critic of this stuff when you either don't understand accounting or are dishonest to make a point. Zitron makes too many "mistakes" like this to be taken seriously. In other words, he just isn't the right person to make the "huge AI bubble" argument because he doesn't understand (or he's being dishonest about) the financials. I wouldn't consider OpenAI's financials to be pretty. There's circularity in the market that is a bit concerning. And while OpenAI's unit economics have improved it's still questionable as to whether the R&D and capex expenditure ever aligns to the business. But Zitron is too sure of his argument (without the credibility to support that confidence) and is trying to pretend that there's absolutely nothing of value here. My best guess: there's some "irrational exuberance" and malinvestment but there is something real here and the unwind of the irrational exuberance and malinvestment won't be nearly as painful as Zitron believes for a variety of reasons, including the fact that there just isn't enough leverage in play.
  - beepbooptheory 2mo ago
    I guess I am just in a different world here... I didn't realize the stakes were about who is the one who is gonna take up the mantle of having the platform and voice to make one argument or another, and I guess there is maybe some cultural context here I am missing. Like I just don't know how to trace this almost moralistic fixation everyone has just about this particular guy.. Everyday we see articles exactly like his by different people (or at least I do), but none attract the same kind of distinct attention. What even leads you to the concern? Like, why should we think he will be the one conquering the narrative here?
    - dwohnitmok 2mo ago
      > Everyday we see articles exactly like his by different people (or at least I do), but none attract the same kind of distinct attention. Who else does a detailed financial breakdown like Zitron and thinks things are as corrupt/fishy as him (in particular make specific claims about certain unexplained sums of money)? All the articles I see ultimately just trace back to Zitron. Curious who else you've found.
      - ElProlactin 2mo ago
        > ... detailed financial breakdown like Zitron... Except his financial breakdowns almost always get basic points wrong, treat as mysteries things that are clear, cast simple accounting practices in a conspiratorial light, etc. He's not an accountant or financial analyst and it seems obvious to me that he doesn't even care to educate himself.
        dwohnitmok 2mo ago
        Sure. I'm mainly curious who beepbooptheory is thinking of.
      - beepbooptheory 2mo ago
        Feels maybe a little specific but I have seen a number of pieces just on HN in the past month that feel at least adjacent: - https://io-fund.com/ai-stocks/nvidia-coreweave-nebius-circular-financing-gpu-boom https://io-fund.com/ai-stocks/nvidia-coreweave-nebius-circul... - https://archive.ph/kTjLr https://archive.ph/kTjLr - https://www.bloomberg.com/news/articles/2026-08-05/microsoft-s-ai-sales-mostly-come-from-openai-disclosures-show https://www.bloomberg.com/news/articles/2026-08-05/microsoft... Cory Doctorow's feed gives me some pretty diverse but certainly Zitron-adjacent articles every week, one example: https://pluralistic.net/2026/08/01/dare-snot https://pluralistic.net/2026/08/01/dare-snot Oh this guy! https://prospect.org/2026/08/03/ai-bailout-could-be-baked-into-bubble-private-equity-life-insurers-loans/ https://prospect.org/2026/08/03/ai-bailout-could-be-baked-in... I can hear the response now that these are all not exactly repeating what Zitron is saying, but I will just leave it up to you all to decide if that is a good faith thing to retort here or not :). Godspeed!

by npilk 2mo ago

beepbooptheory 2mo ago

OK got it. I guess this is a good call out or whatever then from you all, but, I gotta say, the point can't help but feel a little incommensurate to the $8.8 billion elephant in the room.. Like even in the original article, this is like a passing point to the overall thing, right? Like its you want to both say that you agree with the overall point here, but also can't trust that very same conclusion because one part in the article reveals an obvious ignorance. Except no one has been able to actually state the exact ignorance here other than the suggestion that Microsoft is in fact the one losing $3 billion dollars, which doesn't really feel very far from Zitron's original implication anyway given all the stuff he writes!

ElProlactin 2mo ago
The problem is that you can't be considered a credible critic of this stuff when you either don't understand accounting or are dishonest to make a point. Zitron makes too many "mistakes" like this to be taken seriously. In other words, he just isn't the right person to make the "huge AI bubble" argument because he doesn't understand (or he's being dishonest about) the financials. I wouldn't consider OpenAI's financials to be pretty. There's circularity in the market that is a bit concerning. And while OpenAI's unit economics have improved it's still questionable as to whether the R&D and capex expenditure ever aligns to the business. But Zitron is too sure of his argument (without the credibility to support that confidence) and is trying to pretend that there's absolutely nothing of value here. My best guess: there's some "irrational exuberance" and malinvestment but there is something real here and the unwind of the irrational exuberance and malinvestment won't be nearly as painful as Zitron believes for a variety of reasons, including the fact that there just isn't enough leverage in play.
- beepbooptheory 2mo ago
  I guess I am just in a different world here... I didn't realize the stakes were about who is the one who is gonna take up the mantle of having the platform and voice to make one argument or another, and I guess there is maybe some cultural context here I am missing. Like I just don't know how to trace this almost moralistic fixation everyone has just about this particular guy.. Everyday we see articles exactly like his by different people (or at least I do), but none attract the same kind of distinct attention. What even leads you to the concern? Like, why should we think he will be the one conquering the narrative here?
  - dwohnitmok 2mo ago
    > Everyday we see articles exactly like his by different people (or at least I do), but none attract the same kind of distinct attention. Who else does a detailed financial breakdown like Zitron and thinks things are as corrupt/fishy as him (in particular make specific claims about certain unexplained sums of money)? All the articles I see ultimately just trace back to Zitron. Curious who else you've found.
    - ElProlactin 2mo ago
      > ... detailed financial breakdown like Zitron... Except his financial breakdowns almost always get basic points wrong, treat as mysteries things that are clear, cast simple accounting practices in a conspiratorial light, etc. He's not an accountant or financial analyst and it seems obvious to me that he doesn't even care to educate himself.
      - dwohnitmok 2mo ago
        Sure. I'm mainly curious who beepbooptheory is thinking of.
    - beepbooptheory 2mo ago
      Feels maybe a little specific but I have seen a number of pieces just on HN in the past month that feel at least adjacent: - https://io-fund.com/ai-stocks/nvidia-coreweave-nebius-circular-financing-gpu-boom https://io-fund.com/ai-stocks/nvidia-coreweave-nebius-circul... - https://archive.ph/kTjLr https://archive.ph/kTjLr - https://www.bloomberg.com/news/articles/2026-08-05/microsoft-s-ai-sales-mostly-come-from-openai-disclosures-show https://www.bloomberg.com/news/articles/2026-08-05/microsoft... Cory Doctorow's feed gives me some pretty diverse but certainly Zitron-adjacent articles every week, one example: https://pluralistic.net/2026/08/01/dare-snot https://pluralistic.net/2026/08/01/dare-snot Oh this guy! https://prospect.org/2026/08/03/ai-bailout-could-be-baked-into-bubble-private-equity-life-insurers-loans/ https://prospect.org/2026/08/03/ai-bailout-could-be-baked-in... I can hear the response now that these are all not exactly repeating what Zitron is saying, but I will just leave it up to you all to decide if that is a good faith thing to retort here or not :). Godspeed!