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

Post by zemvpferreira » Fri, Oct 31, 2025, 5:10 PM UTC

some_guy_nobel wrote: post #284

zemvpferreira wrote: post #44

Earlier quoted context omitted.

There’s one key difference in my opinion: pre-.com deals were buying revenue with equity and nothing else. It was growth for growth’s sake. All that scale delivered mostly nothing. OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go anot…

> OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go another way. I'm commenting here in case a large crash occurs, to have a nice relic of the zeitgeist of the time.

Post by DenisM » Fri, Oct 31, 2025, 5:11 PM UTC

chii wrote: post #180

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…

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.

Post by jgalt212 » Fri, Oct 31, 2025, 5:17 PM UTC

boringg wrote: post #290

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

Real question -- how else is OpenAI supposed to fund itself? It has capital requirements that the most moneyed business companies can't provide. So it has to come up with ways to get access to money while de-risking the terms. Not saying the circularity works but I don't know how else you raise at their scale. This money is well beyond VC capability. Either this lets them build to net positive without dying from pain…

Post by ASinclair » Fri, Oct 31, 2025, 5:18 PM UTC

boringg wrote: post #290

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

Real question -- how else is OpenAI supposed to fund itself? It has capital requirements that the most moneyed business companies can't provide. So it has to come up with ways to get access to money while de-risking the terms. Not saying the circularity works but I don't know how else you raise at their scale. This money is well beyond VC capability. Either this lets them build to net positive without dying from pain…

Post by cs702 » Fri, Oct 31, 2025, 5:22 PM UTC