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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

#241

Post by mamonster »

parineum wrote: post #221
suddenlybananas wrote: post #170

Earlier quoted context omitted.

>infinite number of options between two outcomes so the odds are overwhelmingly in the favor that the truth lies somewhere in between This is totally fallacious.

It isn't. "AI is a bubble" and "AI is going to replace all human jobs" is, essentially, the two extremes I'm seeing. AI replacing some jobs (even if partially) and the bubble-ness of the boom are both things that exist on a line between two points. Both can be partially true and exist anywhere on the line between true and false. No jobs replaced All jobs replaced Bubble crashes the economy and we all end up dead in a…

It is completely fallacious.

For one, in higher dimensions, most of the volume of a hypersphere is concentrated near the border.

Secondly, and it is somewhat related, you are implicitly assuming some sort of convexity argument (X is maybe true, Y is maybe true, 0.5X + 0.5 Y is maybe true). Why?

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

#242

Post by bigwheels »

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…

> this feels a little like the WeWork CEO flying couches to offices in private jets

Fascinating! I unearthed the TL;DR for anyone else interested:

* WeWork purchased a $60 million Gulfstream G650ER private jet for Neumann's use.

* The G650ER was customized with two bedrooms and a conference table.

* Neumann used the jet extensively for global travel, meetings, and family trips.

* The jet was also used to transport items like a "sizable chunk" of marijuana in a cereal box, which might be worse and more negligent than couches.

Sources:

https://www.vanityfair.com/hollywood/2022/03/adam-neumann-re...

https://nypost.com/2021/07/17/the-shocking-ways-weworks-ex-c...

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

#243

Post by llbbdd »

brazukadev wrote: post #142
OldGreenYodaGPT wrote: post #121

[flagged]

have you not been here for long enough? HN crowd is treating genAI the same way it treats blockchain, nothing new.

Worse, honestly. There was a strong case to be made that crypto was absent of a real problem to solve. Meanwhile people use GenAI for real work every day and a disturbing cut of HN has their ears plugged, insisting it's a bubble and that everyone is lying about it working.

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

#244

Post by api »

delis-thumbs-7e wrote: post #113
api wrote: post #95

Earlier quoted context omitted.

The assumption is that they have a large moat. If they don't then they're spending a ton of money to level up models and tech now, but others will eventually catch up and their margins will vanish. This will be true if (as I believe) AI will plateau as we run out of training data. As this happens, CPU process improvements and increased competition in the AI chip / GPU space will make it progressively cheaper to train…

Apple new M5 can run models over 10B parametres and if they give their new Studio next year enough juice, it can run maybe 30B local model. How long is it that you can run a full GPT-5 on your laptop or homeserver with few grands worth of hardware? What is going to happen to all these GPU farms, since as I understood they are fairly useless for anything else?

Quantized, a top-end Mac can run models up to about 200B (with 128GiB of unified RAM). They'll run a little slow but they're usable.

This is a pricey machine though. But 5-10 years from now I can imagine a mid-range machine running 200-400B models at a usable speed.

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

#245

Post by _heimdall »

slashdev wrote: post #122
_heimdall wrote: post #111

Earlier quoted context omitted.

I think that, at best, that description boils down to Nvidia, Oracle, etc inventing fake wealth to build something and OpenAI building their own fake wealth by getting to use that new compute effectively for free. There are physical products involved, but the situation otherwise feels very similar to ads prior to dotcom.

The same way the stock market invents a trillion dollars of fake wealth on a strong up day? That's capital markets working as intended. It's not necessarily doomed to end in a fiery crash, although corrections along the way are a natural part of the process. It seems very bubbly to me, but not dotcom level bubbly. Not yet anyway. Maybe we're in 1998 right now.

The stock market isn't inventing money. Those investing in the stock market might be, those buying on leverage for example.

Capital markets weren't intended for round trip schemes. If a company on paper hands 100B to another company who gives it back to the first company, that money never existed and that is capital markets being defrauded rather than working as expected.

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

#247

Post by api »

DenisM wrote: post #171
delis-thumbs-7e wrote: post #131

Earlier quoted context omitted.

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, mo…

When I say models will plateau I don't mean there will be no progress. I mean progress will slow down since we'll be scraping the bottom of the barrel for training data. We might never quite run out but once we've sampled every novel, web site, scientific paper, chat log, broadcast transcript, and so on, we've exhausted the rich sources for easy gains.

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

#248

Post by _heimdall »

slashdev wrote: post #235
teiferer wrote: post #202

Earlier quoted context omitted.

> It seems very bubbly to me, but not dotcom level bubbly. Not? Money is thrown after people without really looking at the details, just trying to get in on the hype train? That's exactly how the dotcom bubble felt like.

Nvidia has a trailing PE of 50. Cisco was 200 At the height of the dotcom bubble. Nowhere near that level. There’s real demand and real revenue this time. It won’t grow as fast as investors expect, which makes it a bubble if I’m right about that. But not comparable to the dotcom bubble. Not yet anyway.

We shouldn't judge whether an indicator is stable or okay only by looking to see if its the highest historical value.

PE ratios of 50 make no sense, there is no justification for such a ratio. At best we can ignore the ratio and say PE ratios are only useful in certain situations and this isn't one of them.

Imagine if we applied similar logic to other potential concerns. Is a genocide of 500,000 people okay because others have done drastically more?

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

#249

Post by sigbottle »

Weird angle, but isn't "believing there will be a crash" sort of framing it as if this were still normal market dynamics?

OpenAI and AI in general has posed itself as an existential threat and tightly integrated itself (how well? let's argue later) with so many facts of society, especially government, that like, realistically there just can't be a crash, no?

Or is this too doomsday / conspiratorial?

I just find it weird that we're framing it as crash/not crash when it seems pretty clear to me they really genuinely believe in AGI, and if you can get basically all facets of society to buy in... well, airlines don't "crash" anymore, do they?

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

#250

Post by lokar »

Iulioh wrote: post #223
lokar wrote: post #193

Earlier quoted context omitted.

Very few industries are “deeply profitable” absent the illegal abuse of monopoly power

And as we saw, once a model is trained you need very little compute to run it and there is very little advantage in begin the 1st model and the 10th model. Monopoly in this field is impossible, your product won't ever be so good that the competition does not make sense Add to this that AGI is impossible with LLMs...

I’m not so sure. Look for more gov regulations that make it hard for startups. Look for stricter enforcement of copyright (or even updates to laws) once the big players have secured licensing deals, to cut off the supply of cheap training data.
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