OpenAI declares 'code red' as Google catches up in AI race • Hacker News Board

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

#871

Post by gbalduzzi » Wed, Dec 03, 2025, 4:50 PM UTC

usef- wrote: post #572

bloppe wrote: post #318

Earlier quoted context omitted.

To be fair, I would get a ton of value out of someone selling dollars for 20 cents apiece. But ya, OAI is clearly making a ton of revenue. That doesn't mean it's a good business, though. Giving them a 20 year horizon, shareholders will be very upset unless the firm can deliver about a trillion in profit , not revenue, to justify the 100B (so far) in investment, and that would barely beat the long term s&p 500 average…

People did say the same thing about Youtube, which was unprofitable and extremely expensive to run in the early years. I remember thinking everyone would leave once ads were added. At youtube's ad income rate (~$13/year), the current (but growing) ~800 million chatgpt users would add ~$10 billion. At facebook's rate (~$40-50/year) $32-40 billion. Potentially, an assistant would be more integrated into your life than…

Youtube didn't have a significant competitor, once the quality started declining and the ads started creeping up, there were no alternatives to switch to (as a user) because the content creators were in on the profit.

The same isn't true about ChatGPT.

Anthropic and Google provides a similar product, and switching to a better/cheaper platform is fairly easy as it only depends on you and not on others (content creators or friends) doing the same.

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

#872

Post by hollerith » Wed, Dec 03, 2025, 4:55 PM UTC

Eggpants wrote: post #870

OccamsMirror wrote: post #834

Earlier quoted context omitted.

Yeah I'm not convinced Microsoft can do software anymore. I think they're a shambling mess of a zombie software company with enough market entropy to keep going for a long time.

Yeah the fact they had to resort to forking Chrome because they couldn’t engineer a browser folks wanted to use is pretty telling.

I don't think that tells us anything.

Maintaining a web browser requires about 1000 full-time developers (about the size of the Chrome team at Google) i.e., about $400 million a year.

Why would Microsoft incur that cost when Chromium is available under a license that allows Microsoft to do whatever it wants with it?

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

#873

Post by gbalduzzi » Wed, Dec 03, 2025, 4:55 PM UTC

HDThoreaun wrote: post #789

NBJack wrote: post #733

Earlier quoted context omitted.

This assumes your model is static and never needs to be improved or updated. Inference is cheap because the final model, despite its size, is ridiculously less resource intensive to use than it is to produce. ChatGPT in its latest form isn't bad by any means, but it is falling behind. And that requires significant overhead, both to train and to iterate on model architecture. It is often a variable cost as well.

As long as revenue rises faster than training costs and inference remains profitable I dont think this is an issue. Eventually theyll be able to profitably amortize training across all the users.

> As long as revenue rises faster than training costs

And this is definitely not happening. They are covering training costs with investors money, and they can't really stop it without their competitors catching up

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

#874

Post by literalAardvark » Wed, Dec 03, 2025, 5:00 PM UTC

raw_anon_1111 wrote: post #269

riku_iki wrote: post #250

Earlier quoted context omitted.

> Altman says that OpenAI will top $20 billion in ARR this year, which certainly seems like significant revenue generation. [1] fixed this for you

And lose how much money doing it?

They make up for it in volume

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

#875

Post by aprilthird2021 » Wed, Dec 03, 2025, 5:07 PM UTC

mrwrong wrote: post #805

bgirard wrote: post #290

Earlier quoted context omitted.

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…

> I've been able to help setup cross app automation for my partner's business, remodel my house, plan a trip of Japan and assist with the cultural barrier, vibe code apps, technical support and so much more. you could have done all of this without a chatbot.

Yeah. Imagine if anyone listed all the stuff Google helped them do. It would seem pretty similar. Maybe only vibe code an app is not in there

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

#876

Post by golfer » Wed, Dec 03, 2025, 5:07 PM UTC

margorczynski wrote: post #458

asdfman123 wrote: post #427

Earlier quoted context omitted.

I know it's been said before but it's slightly insane they're trying to compete on a hot new tech with a company with 1) a top notch reputation for AI and 2) the largest money printer that has ever existed on the planet. Feel like the end result would always be that while Google is slow to adjust, once they're in the race they're in it it.

The problem for Google is that there is no sensible way to monetize this tech and it undercuts their main money source which is search. On top of that the Chinese seem to be hellbent to destroy any possible moat the US companies might create by flooding the market with SOTA open-source models. Although this tech might be good for software companies in general - it does reduce the main cost they have which is personne…

Ads are already appearing in Google search AI overviews [1]. AI overviews have 2 billion users at the moment.

[1] https://support.google.com/google-ads/answer/16297775?hl=en

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

#877

Post by aprilthird2021 » Wed, Dec 03, 2025, 5:10 PM UTC

TechRemarker wrote: post #84

Heard all the news how Gemini 3 is passing everyone on benchmarks, so quickly tested and still find it a far cry from ChatGPT in real world use when testing questions on both platforms. But importantly the ChatGPT app experience at least for iPhone/Mac users is drastically superior vs Google which feels very Google still. So Gemini would have to be drastically better answer wise than ChatGPT to lure users from a bett…

> But importantly the ChatGPT app experience at least for iPhone/Mac users is drastically superior vs Google which feels very Google still. So Gemini would have to be drastically better answer wise than ChatGPT to lure users from a better UI/UX experience to Gemini.

Opposite is true for a larger market. Gemini is great and available with one button click on most consumer phones. OpenAI will never crack most Android users by this logic of yours

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

#878

Post by johncolanduoni » Wed, Dec 03, 2025, 5:17 PM UTC

alephnerd wrote: post #661

johncolanduoni wrote: post #657

Earlier quoted context omitted.

Pointing to Solow’s Paradox is kind of weird to me. Productivity growth accelerated in the 90s and 2000s, so it’s easy to tell a story where the computer age simply didn’t accelerate things until it had sufficiently penetrated the economy. If AI follows the same pattern, betting big on it still makes sense: China would probably be the predominant superpower if the computing developments of the 70s and 80s were center…

The point is that just like in the US, Chinese decision-makers are increasingly voicing concerns about unrealistic assumptions, valuations, and expectations around the capabilities of AI/ML. You can be optimistic about the value of agentic workflows or domain specific applications of LLMs but at the same time recognize that something like AGI is horseshit techno-millenarianism. I myself have made a pretty successful…

> The point about Solow's Paradox is that the gains of certain high productivity technologies do not provide society-wide economic benefit

Some people certainly argue that about the computer age, and it’s not totally unsupported. But I don’t think the evidence for that interpretation (as opposed to a delayed effect) is strong enough that I’d want to automatically generalize it to a new information technology advance.

To be clear, I don’t think China’s reticence is necessarily wrongheaded. But “we will usher in an age of undisputed dominance in a decade or two instead of right now from this investment” is a weird argument, especially from a government as ostensibly long-term focused as China.

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

#879

Post by johncolanduoni » Wed, Dec 03, 2025, 5:23 PM UTC

immibis wrote: post #748

johncolanduoni wrote: post #652

Earlier quoted context omitted.

The shenanigans that set off the GFC were much more nakedly corrupt and didn’t have even a fig leaf of potential usefulness to anybody to justify them. The revolution failed to materialize then. If the AI bust isn’t worse for the median person than 2008, I don’t think people in power have anything to fear.

Why do we think it won't be worse? If you exclude the circular trading of AI companies from metrics, we're already in a pretty big recession, and that will only get worse if the AI companies collapse.

I’m circumspect that anyone knows how it’ll play out. I think there’s strong evidence a correction is coming, but some talking head is predicting it’s going to be this week every week, and have been for a while. Nobody has convinced me it’s likely to look like the Great Depression yet.

I also think the circular dealing fears in particular are overstated. Debt financing that looks like this is common in semicon, and I doubt there are any serious investors that haven’t already priced it in. If the bust is fatal for AI investment, it’ll just be bankrupt companies owing money to other bankrupt companies.

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

#880

Post by verdverm » Wed, Dec 03, 2025, 5:23 PM UTC

rsanek wrote: post #752

verdverm wrote: post #712

Earlier quoted context omitted.

ChatGPT is losing their brand positioning to Google, Anthropic, and Chinese Open Source Altman knows this and why he called code red. If OpenAI hasn't produce a fully new model in 1.5 years, how much longer can they hang on before people will turn to alternatives that are technically better? How long before they could feasibly put out a new model if they are having issues in pre-training?

They're losing their benchmark lead to those companies. But no chance that your average user is even aware of Anthropic, much less OSS models. The brand is mostly fine IMO, it's the product that needs to catch up.

The problem for the brand is that the product is lagging, I've already heard it from people IRL

Their brand is not ok based on what I've heard, certainly no moat