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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

#271

Post by wyre »

camdenreslink wrote: post #259
schnitzelstoat wrote: post #164

Earlier quoted context omitted.

It could end up like Search did, at first you had Lycos, AskJeeves, Altavista etc. and then Google became absolutely dominant. They want to be the Google in this scenario.

Google was by far the best product. Maybe an LLM provider will emerge in that way, but it seems they are all very similar in capability right now.

I don't believe google won the search engine wars because they had the best product, while it may be true, the won because the of the tools they provided to their users. Email, cloud storage, docs/sheets/drive, Chrome, etc

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

#272

Post by noosphr »

embedding-shape wrote: post #204
NBJack wrote: post #47

Earlier quoted context omitted.

Read up a bit on the effort needed to get a fab going, and the yield rates. While engineers are crucial in the setup, the fab itself is not as 'fungible' as the employees involved. I can spin up a strong ML team through hiring in probably 6-12 months with the right funding. Building a chip fab and getting it to a sensible yield would take 3-5 years, significantly more funding, strong supply lines, etc.

> I can spin up a strong ML team through hiring in probably 6-12 months with the right funding Not sure what to call this except "HN hubris" or something. There are hundreds of companies who thought (and still think) the exact same thing, and even after 24 months or more of "the right funding" they still haven't delivered the results. I think you're misunderstanding how difficult all of this is, if you think it's mer…

>Otherwise we'd see SOTA models from new groups every month

We do.

It's just that startups don't go after the frontier models but niche spaces which are under served and can be explored with a few million in hardware.

Just like how open AI made gpt2 before they made gpt3.

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

#274

Post by whimsicalism »

saulpw wrote: post #269
whimsicalism wrote: post #234

Earlier quoted context omitted.

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.

Even those problematic companies exemplify the difference: when enterprises are mismanaged and fail, capital is reallocated away from them.

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

#275

Post by boringg »

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…

You can't honestly be comparing a shitty real estate play like WeWork to the real functional benefits people get out of ChatGPT.

ChatGPT was mind blowing when you first used it. WeWork is a real estate play fronted by a self aggrandizing self dealing CEO.

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

#276

Post by weregiraffe »

Workaccount2 wrote: post #173
anonymousiam wrote: post #153

Earlier quoted context omitted.

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.

Self-improving LLM is as probable as a perpetual motion machine.

Practically, LLMs train on data. Any output of an LLM is a derivative of the training data and can't teach it anything new.

Conceptually, if a stupid AI can build a smart AI, it would mean that the stupid AI is actually smart, otherwise it wouldn't have been able too.

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

#277

Post by overfeed »

slashdev wrote: post #232
staticautomatic wrote: post #143

Earlier quoted context omitted.

I sell you a cat for $1B and you sell me a dog for $1B and now we’re both billionaires! Whether the capital markets “want” that or not it’s still silly.

If we’re both willing to pay that in a free market economy, then we both leave the deal happy. Things are worth what people are willing to pay for them. And that can change over time. Sentiment matters more than fundamental value in the short term. Long term, on a timescale of a decade or more, it’s different.

> If we’re both willing to pay that in a free market economy

The thing is: you've paid nothing - all you did was trade pets and played an accounting trick to make them seem more valuable than they are.

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

#278

Post by daedrdev »

solarwindy wrote: post #87
pols45 wrote: post #65

Earlier quoted context omitted.

Yup. Not just Nvidia. Just look at the quarterly results reported by Amazon, Google, Meta, Microsoft and Apple. Each one is reporting revenues never before seen in history. If you make 100 Billion a quarter you have to spend it on something. These guys are running hyper optimized cash extraction mega machines. There is no comparison to previous bubbles, cause so no such companies ever existed in the past.

100 billion a quarter is Alphabet, right? Given how much click fraud there is, and that every org and business under the sun is held to ransom to feature on the SERP for their own name even — it’s tempting to say Google’s become a private tax on everything.

No, Apple also has 100 billion dollars in revenue despite floundering AI and running a very hardware dependent business.

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

#280

Post by embedding-shape »

noosphr wrote: post #272
embedding-shape wrote: post #204

Earlier quoted context omitted.

> I can spin up a strong ML team through hiring in probably 6-12 months with the right funding Not sure what to call this except "HN hubris" or something. There are hundreds of companies who thought (and still think) the exact same thing, and even after 24 months or more of "the right funding" they still haven't delivered the results. I think you're misunderstanding how difficult all of this is, if you think it's mer…

>Otherwise we'd see SOTA models from new groups every month We do. It's just that startups don't go after the frontier models but niche spaces which are under served and can be explored with a few million in hardware. Just like how open AI made gpt2 before they made gpt3.

> We do.

> It's just that startups don't go after the frontier models but niche spaces

But both of "New SOTA models every month" and "Startups don't go for SOTA" cannot be true at the same time. Either we get new SOTA models from new groups every month (not true today at least) or we don't, maybe because the labs are focusing on non-SOTA instead.

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