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How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

nytimes.com

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Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#171

Post by DenisM »

delis-thumbs-7e wrote: post #131
simgt wrote: post #106

Earlier quoted context omitted.

> This will be true if (as I believe) AI will plateau as we run out of training data. Why would they run out of training data? They needed external data to bootstrap, now it's going directly to them through chatgpt or codex.

As much ChatGPT says I’m basically a genius for asking it a good Vegan cake recipes, I don’t think that is providing it any data it doesn’t already have that makes it anyway better. Also at this point the massive increases in data and computing power seem to bring ever decreasing improvements (and sometimes just decline), so it seems we are simply hitting a limit this kind of architecture can achieve no matter what y…

ChatGPT chat logs contain massive amount of data teased out of people’s brains. But much of it is lore, biases, misconceptions, memes. There are nuggets of gold in there but it’s not at all clear if there’s a good way to extract them, and until then chat logs will make things worse, not better.

I’m thinking they eventually figure out who is the source of good data for a given domain, maybe.

Even if that is solved, models are terrible at long tail.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#172

Post by accrual »

guywithahat wrote: post #140
nova22033 wrote: post #117

Related https://www.theregister.com/2025/10/29/microsoft_earnings_q1... Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter

It's incredible how Tesla used to lose a few hundred million a year and analysis shows would freak out claiming they'd never be profitable. Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft still backs them. I do think this is going to be a deeply profitable industry, but this feels a little like the WeWork CEO flying couches to offices…

> like the WeWork CEO flying couches to offices in private jets

I found there was more than just couches on the WeWork private jets:

https://www.inverse.com/input/tech/weworks-adam-neumann-got-...

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#173

Post by Workaccount2 »

anonymousiam wrote: post #153
randomNumber7 wrote: post #145

Earlier quoted context omitted.

The winner takes it all, so it is reasonable to bet big to be the one.

The one what? What is the secret sauce that will distinguish one LLM from another? Is it patentable? What's going to prevent all of the free LLMs from winning the prize? An AI crash seems inevitable.

The goal isn't to be the best LLM, the goal is to be the first self-improving LLM.

On paper, whoever gets there first, along with the needed compute to hand over to the AI, wins the race.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#174

Post by chii »

aaronblohowiak wrote: post #156
randomNumber7 wrote: post #145

Earlier quoted context omitted.

The winner takes it all, so it is reasonable to bet big to be the one.

Do you have any reasoning to support the notion that this market is winner takes all?

With enough money to lobby, they can make it a winner takes all market (ala, a regulated monopoly).

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#175

Post by throwaway106382 »

danans wrote: post #99
throwaway106382 wrote: post #26

Isn't paying a company to dig a hole who then pays you the same amount to fill said hole illegal?

Only if you defraud investors in hole-digging corp and hole-filling corp by that by doing this you will be able to extract Unobtanium, which will make both companies 1000x profitable.

This is just starting to sound more and more like "we're almost at AGI I promise bro just need one more round of investment bro please just one trillion more dollars please bro".

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#176

Post by h2zizzle »

jcheng wrote: post #123
trollbridge wrote: post #76

Earlier quoted context omitted.

Odd how they are simultaneously having large layoffs even as reporting record revenues. The question is where the profits are.

The layoffs at Amazon and Microsoft are not due to lack of profits. They’re massively profitable right now. https://www.macrotrends.net/stocks/charts/MSFT/microsoft/ebi... https://www.macrotrends.net/stocks/charts/AMZN/amazon/ebitda

They're "massively profitable" because they're laying off large portions of a major cost center - labor - and backloading uncoming data center construction costs. As those come due, and labor needs rise again, that profit disappears.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#177

Post by chermi »

brazukadev wrote: post #147
chermi wrote: post #138

Earlier quoted context omitted.

Yes, but what does that have to do with this situation? The hole served no purpose. The companies are using the GPUs.

99% of code I generated using genAI served no purpose at the end of the day

Ok. Maybe use it better? Or don't use it at all. Doesn't mean it's not being used to some end, unlike a hole.

Keep in mind also that the models are going to continue improving, if only on cost. Just a significant cost reduction allows for more "thinking" mode use.

Most of the reports about how useless LLMs are were from older models being used by people that don't know how to use LLMs. I'm not someone that thinks they're perfect or even great yet, but their not dirt.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#180

Post by chii »

DenisM wrote: post #152
Arkhaine_kupo wrote: post #61

Earlier quoted context omitted.

> they’re using their equity to buy compute that is critical to improving their core technology But we know that growth in the models is not exponential, its much closer to logarithmic. So they spend =equity to get >results. The ad spend was a merry go round, this is a flywheel where the turning grinds its gears until its a smooth burr. The math of the rising stock prices only begins to make sense if there is a possi…

OpenAI invests heavily into integration with other products. If model development stalls they just need to be not worse than other stalled models while taking advantage of brand recognition and momentum to stay ahead in other areas. In that sense it makes sense to keep spending billions even f model development is nearing diminishing return - it forces competition to do the same and in that game victory belongs to th…

The bigger threat is if their models "stall", while a new up-start discovers an even better model/training method.

What _could_ prevent this from happening is the lack of available data today - everybody and their dog is trying to keep crawlers off, or make sure their data is no longer "safe"/"easy" to be used to train with.

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