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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

#121

Post by PeterHolzwarth »

pclmulqdq wrote: post #112
HardCodedBias wrote: post #107

OpenAI has #5 traffic levels globally. Their product-market fit is undeniable. The question is monetization. Their cost to serve each request is roughly 3 orders of magnitude higher than conventional web sites. While it is clear people see value in the product, we only know they see value at today’s subsidized prices. It is possible that inference prices will continue their rapid decline. Or it is possible that OAI w…

It's easy to get product-market fit when you give away dollars for the price of pennies.

Yes, but that is the standard methodology for startups in their boost phase. Burn vast piles of cash to acquire users, then find out at the end if a profitable business can be made of it.

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

#122

Post by orbital-decay »

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…

>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)

At the very least they made GPT 4.5, which was pretty clearly trained from scratch. It was possibly what they wanted GPT-5 to be but they made a wrong scaling prediction, people simply weren't ready to pay that much money.

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

#123

Post by PeterHolzwarth »

dom96 wrote: post #109
acoustics wrote: post #96

Earlier quoted context omitted.

ChatGPT dominates the consumer market (though Nano Banana is singlehandedly breathing some life into consumer Gemini). A small anecdote: when ChatGPT went down a few months ago, a lot of young people (especially students) just waited for it to come back up. They didn't even think about using an alternative.

When ChatGPT starts injecting ads or forcing payment or doing anything else that annoys its userbase then the young people won't have a problem looking for alternatives This "moat" that OpenAI has is really weak

They took early steps to do so (ads) just recently. User response was as you'd expect.

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

#124

Post by glial »

wg0 wrote: post #115
esel2k wrote: post #42

Earlier quoted context omitted.

Where does google struggle to make products people don’t want to use? Is it a personal opinion?

Anti Gravity is a flop. I mean it uses Gemini under the hood. But you cannot use it with an API key. If you're on a workspace account, you can't have normal individual plan. You have to have the team plan with $100/month or nothing. Google's product management tier is beyond me.

OK, but Gmail, Google Maps, Google Docs, and Google Search etc are ubiquitous. `Google' has even become a verb. Google might take a shotgun approach, but it certainly does create widely used products.

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

#125

Post by kaoD »

adastra22 wrote: post #118
password54321 wrote: post #91

Earlier quoted context omitted.

>Also if you want to have more semantics, you add image, video and audio to your model. It gets smarter because of it. I think you are confusing generation with analysis. As far I am aware your model does not need to be good at generating images to be able to decode an image.

It is, to first approximation, the same thing. The generative part of genAI is just running the analysis model in reverse. Now there are all sorts of tricks to get the output of this to be good, and maybe they shouldn't be spending time and resources on this. But the core capability is shared.

> The generative part of genAI is just running the analysis model in reverse.

I think that hasn't been the case since DeepDream?

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

#126

Post by adastra22 »

jeffbee wrote: post #108
acoustics wrote: post #96

Earlier quoted context omitted.

ChatGPT dominates the consumer market (though Nano Banana is singlehandedly breathing some life into consumer Gemini). A small anecdote: when ChatGPT went down a few months ago, a lot of young people (especially students) just waited for it to come back up. They didn't even think about using an alternative.

That's pretty nuts. With the models changing so much and so often, you have to switch it up sometimes just to see what the other company is offering.

How often do you or people you know use a search engine other than google?

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

#127

Post by doug_durham »

reissbaker wrote: post #74
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…

The GPT-5 series is a new model, based on the o1/o3 series. It's very much inaccurate to say that it's a routing system and prompt chain built on top of 4o. 4o was not a reasoning model and reasoning prompts are very weak compared to actual RLVR training. No one knows whether the base model has changed, but 4o was not a base model, and neither is 5.x. Although I would be kind of surprised if the base model hadn't als…

Prior to 5.2 you couldn’t expect to get good answers to questions prior to March 2024. It was arguing with me that Bruno Mars did not have two hit songs in the last year. It’s clear that in 2025 OpenAI used the old 4.0 base model and tried to supercharge it using RLVR. That had very mixed results.

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

#128

Post by sod22 »

yojo wrote: post #65
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…

They have not successfully trained a new model since 4o. That doesn’t mean they haven’t burned a pile of cash trying. I know sama says they aren’t trying to train new models, but he’s also a known liar and would definitely try to spin systemic failure.

lol the typical AI boosters are down voting you.

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

#129

Post by bigyabai »

Alconicon wrote: post #87
gip wrote: post #31

There is no doubt that OpenAI is taking a lot of risks by betting that AI adoption will translate into revenues in the very short term. And that could really happen imo (with a low probability sure, but worth the risk for VCs? Probably).

Apparently we all have enough money to put it into OpenAI. Some players have to play, like google, some players want to play like USA vs. China. Besides that, chatting with an LLM is very very convincing. Normal non technical people can see what 'this thing' can already do and as long as the progress is continuing as fast as it currently is, its still a very easy to sell future.

> Some players have to play, like google

I don't think you have the faintest clue of what you're talking about right now. Google authored the transformer architecture, the basis of every GPT model OpenAI has shipped. They aren't obligated to play any more than OpenAI is, they do it because they get results. The same cannot be said of OpenAI.

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

#130

Post by anomaly_ »

password54321 wrote: post #69
SAI_Peregrinus wrote: post #54

Earlier quoted context omitted.

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

Outside of this: https://openai.com/index/disney-sora-agreement/ I don't think there has been much of a win for them even in advertising for image/video slop.

It's like half the poster on here live in some parallel universe. I am making real money using generated image/video advertising content for both B2C and B2B goods. I am using Whisper and LLMs to review customer service call logs at scale and identity development opportunities for staff. I am using GPT/Gemini to help write SQL queries and little python scripts to do data analysis on my customer base. My business's productivity is way up since GenAI become accessible.
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