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OpenAI declares 'code red' as Google catches up in AI race

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Re: OpenAI declares 'code red' as Google catches up in AI race

#361

Post by spiralpolitik »

echelon wrote: post #168
achow wrote: post #146

WSJ: Altman said OpenAI would be pushing back work on other initiatives, such as advertising, AI agents for health and shopping, and a personal assistant called Pulse. These plus working with Jony Ive on hardware, makes it sound like they took their eyes off the ball.

I don't think this is about Google. This is about advertising being the make or break moment for OpenAI. The problem with ChatGPT advertising is that it's truly a "bet the farm" situation, unlike any of their projects in the past: - If it works and prints money like it should, then OpenAI is on a path to become the next Mag 7 company. All the money they raised makes sense. - If it fails to earn the expected revenue n…

There is no moat in the models. The moat is in the UX. The problem is that OpenAI is far away from where the user is and not going to get there anytime soon. Google meanwhile is exactly where the user is.

OpenAI IMHO is a dead company at this point. They are overvalued relative to the fundamentals and don't appear to have any way of getting the numbers to work in the timeframe that their investors will expect. They are throwing stuff against the wall in the hope something sticks.

They are almost certainly looking for a bag holder. This will either be the retail investor via an IPO or the Federal government via "we are too big to fail".

Re: OpenAI declares 'code red' as Google catches up in AI race

#362

Post by raw_anon_1111 »

echelon wrote: post #335
raw_anon_1111 wrote: post #320

Earlier quoted context omitted.

It’s really even easier than that. I already do all my work on AWS and use Bedrock that hosts every popular model and its own except for OpenAIs closed source models. I have a reusable library that lets me choose between any of the models I choose to support or any new model in the same family that uses the same request format. Every project I’ve done, it’s a simple matter of changing a config setting and choosing a…

> Bedrock This sounds so enterprise. I've been wanting to talk to people that actually use it. Why use Bedrock instead of OpenRouter, Fal, etc.? Doesn't that tie you down to Amazon forever? Isn't the API worse? Aren't the p95 latencies worse? The costs higher?

Given a choice between being “locked in” to a major cloud provider and trusting your business to a randomish little company, you are never going to get a compliance department to go for the latter. “no one ever got fired for choosing AWS”.

This is the API - it’s basically the same for all supported languages

https://docs.aws.amazon.com/code-library/latest/ug/python_3_...

Real companies aren’t concerned about cost as much as working with other real companies, compliance, etc and are comparing cost or opportunities between doing a thing and not doing a thing.

One of my specialties is call centers. Every call deflected by using AI vs talking to a human agent can save from $5 - $15.

Even saving money by allowing your cheaper human agents to handle a problem where they are using AI in the background, can save money. $15 saved can buy a lot of inference.

And the lock in boogeyman is something only geeks care about. Migrations from one provider to another costs so much money at even a medium scale they are hardly ever worth it between the costs, distractions from doing value added work, and risks of regressions and downtime.

Re: OpenAI declares 'code red' as Google catches up in AI race

#363

Post by runako »

postflopclarity wrote: post #292
stack_framer wrote: post #247

Earlier quoted context omitted.

I can generate $20 billion in ARR this year too! I just need you to give me $100 billion and allow me to sell each of your dollars for 0.2 dollars.

very clever! I hadn't seen anybody make this point before in any of these threads /s obviously the nature of OpenAIs revenue is very different than selling $1 for $0.2 because their customers are buying an actual service, not anything with resale value or obviously fungible for $

FWIW the selling $1 for $0.2 is widely applied to any business that is selling goods below cost.

For example: free shipping at Amazon does not have resale value and is not obviously fungible, but everyone understands they are eating a cost that otherwise would be borne by their customers. The suggestion is that OpenAI is doing similar, though it is harder to tease out because their books are opaque.

Re: OpenAI declares 'code red' as Google catches up in AI race

#364

Post by tartoran »

p1necone wrote: post #334
jdoliner wrote: post #274

I've seen a rumor going around that OpenAI hasn't had a successful pre-training run since mid 2024. This seemed insane to me but if you give ChatGPT 5.1 a query about current events and instruct it not to use the internet it will tell you its knowledge cutoff is June 2024. Not sure if maybe that's just the smaller model or what. But I don't think it's a good sign to get that from any frontier model today, that's 18 m…

Every so often I try out a GPT model for coding again, and manage to get tricked by the very sparse conversation style into thinking it's great for a couple of days (when it says nothing and then finishes producing code with a 'I did x, y and z' with no stupid 'you're absolutely' right sucking up and it works, it feels very good). But I always realize it's just smoke and mirrors - the actual quality of the code and t…

I'm starting with Claude at work but did have an okay experience with OpenAi so far. For clearly delimited tasks it does produce working code more often than not. I've seen some improvement on their side compared to say, last year. For something more complex and not clearly defined in advance, yes, it does produce plausible garbage and it goes off the rails a lot. I was migrating a project and asked ChatGPT to analyze the original code base and produce a migration plan. The result seemed good and encouraging because I didn't know much about that project at that time. But I ended up taking a different route and when I finished the migration (with bits of help from ChatGPT) I looked at the original migration plan out of curiosity since I had become more familiar with the project by now. And the migration plan was an absolutely useless and senseless hallucination.

Re: OpenAI declares 'code red' as Google catches up in AI race

#365

Post by scrollop »

XorNot wrote: post #347
cmiles8 wrote: post #237

Earlier quoted context omitted.

We live in crazy times, but given what they’ve spent and committed to that’s a drop in the bucket relative to what they need to be pulling in. They’re history if they can’t pump up the revenue much much faster. Given that we’re likely at peak AI hype at the moment they’re not well positioned at all to survive the coming “trough of disillusionment” that happens like clockwork on every hype cycle. Google, by comparison…

Google survives because I still Google things, and the phone I'm typing this on is a Google product. Whereas I haven't opened the ChatFPT bookmark in months and will probably delete it now that I think about it.

RIP privacy.

Hello Stasi Google and its full personalised file on XorNot.

Google knows when you're about to sneeze.

Re: OpenAI declares 'code red' as Google catches up in AI race

#366

Post by scrollop »

lateforwork wrote: post #228

OpenAI has already lined up enormous long-term commitments — over $500 billion through initiatives like Stargate for U.S. data centers, $250 billion in spending on Microsoft Azure cloud services, and tens of billions on AMD’s plan to deliver 6 GW of Instinct GPUs. Meanwhile, Oracle has financed its role in Stargate with at least $18 billion in corporate bonds plus another $9.6 billion in bank loans, and analysts expe…

This is all based on the LLM architecture that likely can't reach AGI.

If they aren't developing in parallel an alternative architecture than can reach AGI, when a/some companies develop such a new model, OpenAI are toast and all those juicy contracts are kaput.

Re: OpenAI declares 'code red' as Google catches up in AI race

#367

Post by simianparrot »

jdoliner wrote: post #274

I've seen a rumor going around that OpenAI hasn't had a successful pre-training run since mid 2024. This seemed insane to me but if you give ChatGPT 5.1 a query about current events and instruct it not to use the internet it will tell you its knowledge cutoff is June 2024. Not sure if maybe that's just the smaller model or what. But I don't think it's a good sign to get that from any frontier model today, that's 18 m…

Any data after that is contaminated with vast amount of AI slop. Is anyone training on anything newer..?

Re: OpenAI declares 'code red' as Google catches up in AI race

#368

Post by School-Cotton »

stack_framer wrote: post #247
edouard-harris wrote: post #226

Earlier quoted context omitted.

> with no means of significant revenue generation. OpenAI will top $20 billion in ARR this year, which certainly seems like significant revenue generation. [1] [1] https://www.cnbc.com/2025/11/06/sam-altman-says-openai-will-...

I can generate $20 billion in ARR this year too! I just need you to give me $100 billion and allow me to sell each of your dollars for 0.2 dollars.

This analogy only really works for companies whose gross margin is negative, which as far as I know isn’t the case for OpenAI (though I could be wrong).

It’s an especially good analogy if there is no plausible path to positive gross margin (e.g. the old MoviePass) which I think is even less likely to be true for OpenAI.

Re: OpenAI declares 'code red' as Google catches up in AI race

#369

Post by watwut »

willis936 wrote: post #230
an0malous wrote: post #176

Earlier quoted context omitted.

> for these companies They’re absolutely going to get bailed out and socialize the losses somehow. They might just get a huge government contract instead of an explicit bailout, but they’ll weasel out of this one way or another and these huge circular deals are to ensure that.

This would trigger something that people in power would rather not trigger.

Nah, people in power are openly and blatantly corrupt and it does a little. People in power dont care and dont have to care.

Re: OpenAI declares 'code red' as Google catches up in AI race

#370

Post by tartoran »

bgirard wrote: post #290
stack_framer wrote: post #247

Earlier quoted context omitted.

I can generate $20 billion in ARR this year too! I just need you to give me $100 billion and allow me to sell each of your dollars for 0.2 dollars.

It's a fun trope to repeat but that's not what OpenAI is doing. I get a ton of value from ChatGPT and Codex from my subscription. As long as the inference is not done at a lost this analogy doesn't hold. They're not paying me to use it. They are generating output that is very valuable to me. Much more than my subscription cost. I've been able to help setup cross app automation for my partner's business, remodel my ho…

There's no doubt you're getting a lot of value from OpenAI, I am too. And yes the subscription is a lot more value than what you pay for. That's because they're burning investor's money and it's not something that is sustainable. Once the money runs out they'll have to jack up prices and that's the moment of truth, we'll see what users are willing to pay for what. Google or another company may be able to provide all that much cheaper.
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