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OpenAI's cash burn will be one of the big bubble questions of 2026

economist.com

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Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#51

Post by jcranmer »

bdangubic wrote: post #18
popalchemist wrote: post #8

Earlier quoted context omitted.

Because typically one expect a return on investment with that level of spending. Not only have they run at a loss for years, their spending is expected to increase, with no path to profitability in sight.

not that I disagree but would it be fair to say though that we have seen this before where it turned out OK? say Uber? Amazon?

IIRC, current estimates are that OpenAI is losing as much money a year as Uber or Amazon lost in their entire lifetime of unprofitability. Also, both Uber and Amazon spent their unprofitable years having a clear roadmap to profitability. OpenAI's roadmap to profitability is "???"

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#52

Post by MagicMoonlight »

ta9000 wrote: post #38
mvkel wrote: post #27

The fact is nobody has any idea what OpenAI's cash burn is. Measuring how much they're raising is not an adequate proxy. For all we know, they could be accumulating capital to weather an AI winter. It's also worth noting that OpenAI has not trained a new model since gpt4o (all subsequent models are routing systems and prompt chains built on top of 4), so the idea of OpenAI being stuck in some kind of runaway training…

How are they updating the data then? Wouldn’t the cutoff date be getting further away from today?

They’re just feeding a little bit of slop in every so often. Fine tuning rather than training a new one.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#53

Post by wat10000 »

inerte wrote: post #35
magpi3 wrote: post #28

Earlier quoted context omitted.

Healthcare, schools, roads, generative AI. One of these things is not like the others.

We gave incentives to broadband, why not generative AI?

Last-mile services like roads, electricity, water, and telecommunications are natural monopolies. Normal market forces fail somewhat and you want some government involvement to keep it running smoothly.

This is not at all true of generative AI.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#54

Post by SAI_Peregrinus »

password54321 wrote: post #49

Not sure why they put so much investment into videoSlop and imageSlop. Anthropic seems to be more focused at least.

Because their main use is for advertising/propaganda, which is largely videoSlop & imageSlop even without AI.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#55

Post by wahnfrieden »

zdragnar wrote: post #45
inerte wrote: post #19

Earlier quoted context omitted.

That's like every government initiative. Same as healthcare? School? I mean if you don't have children why do you pay taxes... and roads if you don't drive? I mean the examples are so many... why do you bring this argument that if it doesn't benefit you directly right now today, it shouldn't be done?

There are arguments aplenty that schooling and a minimum amount of healthcare are public goods, as are roads built on public land (the government owns most roads after all). What is the justification for considering data centers capable of running LLMs to be a public good? There are many counter examples of things many people use but are still private. Clothing stores, restaurants and grocery stores, farms, home appl…

a distinction: the data centers have become the means of production, unlike clothing from a store

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#56

Post by doctaj »

adriand wrote: post #30

This article doesn’t add anything to what we know already. It’s still an open question what happens with the labs this coming year, but I personally think Anthropic’s focus on coding represents the clearest path to subscriber-based success (typical SaaS) whereas OpenAI has a clear opportunity with advertising. Both of these paths could be very lucrative. Meanwhile I expect Google will continue to struggle with making…

What Google AI products do people not want to use? Gemini is catching up to chatpt from a MAU perspective, ai overviews in search are super popular and staggeringly more used than any other ai-based product out there, a Google ai mode has decent usage, and Google Lens has surprisingly high usage. These products together dwarf everyone else out there by like 10x.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#57

Post by toxic72 »

bdangubic wrote: post #18
popalchemist wrote: post #8

Earlier quoted context omitted.

Because typically one expect a return on investment with that level of spending. Not only have they run at a loss for years, their spending is expected to increase, with no path to profitability in sight.

not that I disagree but would it be fair to say though that we have seen this before where it turned out OK? say Uber? Amazon?

To my knowledge Amazon never debt financed their ops like this

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#60

Post by nialv7 »

aucisson_masque wrote: post #12
andsoitis wrote: post #5

In a parallel universe, governments invest in the compute/datacenters (read: infra), and let model makers compete on the same playing field.

I’d rather stay far away from this parallel universe. Why would you want my money to be used to build datacenter that won’t benefit me ? I might use a LLM once a month, many people never use it. Let the one who use it pay for it.

if datacenters are built by the government, then i think it's fair to assume there will be some level of democratic control of what those datacenters will be used for.
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