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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

#261

Post by kurisufag »

forgetfulness wrote: post #207
kurisufag wrote: post #191

Earlier quoted context omitted.

The moment properly self-improving AI (that doesn't run into some logistic upper bound of performance) is released, the economy breaks. The AI, having theoretically the capacity to do anything better than everyone else, will not need support (in resources or otherwise) from any other business except perhaps once to kickstart its exponential growth. If it's guarded, every other company becomes instantly worthless on t…

The machine god would still need resources provided by humans on their terms to run; the AI wouldn’t sweat having to run, for instance, 5 years straight of its immortality just to figure out a 10 years plan to eventually run at 5% less power than now, but humans may not be willing to foot the bill for this. There’s no guarantee that the singularity makes economic sense for humans.

Presuming the kind of runaway superintelligence people usually discuss, the sort with agency, this just turns into a boxing problem.

Are we /confident/ a machine god with `curl` can't gain its own resilient foothold on the world?

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

#262

Post by gausswho »

FloorEgg wrote: post #251
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

Edit: the following is incorrect. I didn't know that the change to IRC § 174 was cancelled this summer. ------ What's crazy is that with the 2021 changes to IRC § 174 most software r&d spending is considered capital investment and can't be immediately expensed. Has to be amortized over 5 years. I don't know how that 11.5B number was derived, but I would wager that the net loss on income statement is a lot lower than…

Wasn't that change cancelled this summer?

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

#264

Post by camdenreslink »

otherjason wrote: post #162
DenisM wrote: post #152

Earlier quoted context omitted.

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…

But, if model development stalls, and everyone else is stalled as well, then what happens to turn the current wildly-unprofitable industry into something that "it makes sense to keep spending billions" on?

If model development stalls, then the open weight free models will eventually totally catch up. The model itself will become a complete commodity.

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

#265

Post by barbazoo »

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.

My team has shipped now heavily used features that are built with GenAI under the hood. I have a hard time not seeing the value in that technology.

Personally I haven’t seen blockchain make any impact whatsoever but maybe it’s just a little more niche or just a different one.

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

#267

Post by d-moon »

gausswho wrote: post #262
FloorEgg wrote: post #251

Earlier quoted context omitted.

Edit: the following is incorrect. I didn't know that the change to IRC § 174 was cancelled this summer. ------ What's crazy is that with the 2021 changes to IRC § 174 most software r&d spending is considered capital investment and can't be immediately expensed. Has to be amortized over 5 years. I don't know how that 11.5B number was derived, but I would wager that the net loss on income statement is a lot lower than…

Wasn't that change cancelled this summer?

It was

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

#268

Post by butlike »

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…

That was back in the mid 2010s right? Companies had yet to reach 1T valuation. 5bil against 1T is a drop in the bucket

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

#269

Post by saulpw »

whimsicalism wrote: post #234
philipwhiuk wrote: post #48

Earlier quoted context omitted.

If they're too-important-to-fail they're too important not to be broken up or nationalised.

I’m curious if those of you calling for nationalization have worked for the government or a state-owned enterprise like Amtrak. People should witness the effects of long-term public sector ownership on productivity and effectiveness in a workplace.

Yeah, like IBM and Intel and GE and GM are shining examples of how effectively the private sector runs companies. Maybe large enterprises are by their nature inefficient. Maybe productivity isn't the best metric for a utility. We could, for instance, prioritize resiliency, longevity, accessibility, and environmental concerns.

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

#270

Post by boringg »

jacquesm wrote: post #17

These kinds of deals were very much a la mode just prior to the .com crash. Companies would buy advertising, then the websites and ad agencies would buy their services and they'd spend it again on advertising. The end result is immense revenues without profits.

The original "Tech" boom was an infrastructure boom by the telecoms funded by leveraged debt. It was an overbuild mismatch with the market timing. If you brought forward the timeline to when that infrastructure was used (late 2000s) you probably would never have had the crash.

This boom is a data center boom with AI being the software layer/driver. This one potentially has a lot longer to run even though everyone is freaking out now. If you believe the AI is rebuilding compute then this changes our compute paradigm in the future. As well as long as we don't get an over leveraged build out without revenue coming in the door. I think we are seeing a lot of revenue come in for certain applications.

The companies that are all smoke and mirrors built on chatGPT with little defensibility are probably the same as the ones you are referring to in the current era. Or the AI tooling companies.

To be clear circular deal flow is not a good look.

I can see the both sides of bull and bear at this moment.

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