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OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

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Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#31

Post by saberience »

simianwords wrote: post #20

What is the right way to deal with Ed Zitron articles because he’s historically extremely inaccurate and makes wild claims. People ignore all his horrendous takes from last year and still eat this years “analyses” like it’s Gods words. He has been predicting the doom for years and years now and it is strange to see HN still putting credence here. This is what he said around a week back “ One of my sources has come fo…

Yeah he has zero credentials and authority and an agenda to push. Not to mention most of his articles are financially and technically illiterate and full of mistakes and inaccuracies.

No idea why his shit keeps getting submitted.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#32

Post by Schiendelman »

JumpCrisscross wrote: post #5
muglug wrote: post #4

Revenue went from $3.7B to $13.07B — roughly 3.5x. Operating loss went from ~$8.8B to ~$20.9B — roughly 2.4x. Doesn't seem like a domesday scenario.

> Doesn't seem like a domesday scenario Ceteris paribus , those figures imply a $45bn loss this year, $90bn loss next year and $110bn loss in 2028 before breakeven in 2029. That's $250bn of losses to be financed from 2026 onwards. (They raised ~$120bn, $25bn up front and the rest based on milestones. So Another ~$125bn uncovered.) That only works if OpenAI stays a fundraising darling. So not a doomsday sceanario. But…

You're adding absolute dollars rather than using percentages - that usually isn't how that works.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#33

Post by simianwords »

JumpCrisscross wrote: post #27
simianwords wrote: post #25

Earlier quoted context omitted.

The guy who wrote the post we are discussing

Oh! What’s his reputation?

Poor but that doesn't stop innocent from taking his thesis seriously and leaning on to the doom scenario. What do you think of his reputation?

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#34

Post by simianwords »

saberience wrote: post #31
simianwords wrote: post #20

What is the right way to deal with Ed Zitron articles because he’s historically extremely inaccurate and makes wild claims. People ignore all his horrendous takes from last year and still eat this years “analyses” like it’s Gods words. He has been predicting the doom for years and years now and it is strange to see HN still putting credence here. This is what he said around a week back “ One of my sources has come fo…

Yeah he has zero credentials and authority and an agenda to push. Not to mention most of his articles are financially and technically illiterate and full of mistakes and inaccuracies. No idea why his shit keeps getting submitted.

I think there's some fundamental thing in his writing that speaks to people -- they want AI to fail and they want a prophet to give them reasons to think so.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#35

Post by disgruntledphd2 »

lelanthran wrote: post #28
JumpCrisscross wrote: post #27

Earlier quoted context omitted.

Oh! What’s his reputation?

> Oh! What’s his reputation? The people who are completely sold on the belief that AI providers are running at a profit believe him to be utterly, totally and completely wrong in every one of his predictions. The people who are completely sold on the belief that AI providers are running at a loss they can never recover from believe him to be utterly, totally and completely correct in every one of his predictions. The…

> The reality is that it's not his predictions that matter, but his data, which is almost always correct as of time of writing. If you ignore his opinions, the data presented on liabilities, spend, revenue, loans, commitments, etc across Coreweave, Stargate, Oracle and all of the usual AI companies is, as far as I can tell, correct.

Yeah, I think that he does well with sources and data. I also think that his editorialising can be off-putting for lots of people. I kinda enjoy it, but accept that I have niche tastes.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#36

Post by disgruntledphd2 »

thepasch wrote: post #30
JumpCrisscross wrote: post #27

Earlier quoted context omitted.

Oh! What’s his reputation?

Up until this post, I thought he was someone with good financial insight, analytical chops, and business sense, stuck with an audience that thinks it's still 2023 and ChatGPT 3 is still the pinnacle of the technology, and that he therefore has to pander to in order to pay the bills. After this supposedly being the reveal for his bubble-bursting massive revelation that will send the industry flying and lead to journal…

> After this supposedly being the reveal for his bubble-bursting massive revelation that will send the industry flying and lead to journalists kicking in his door for interview requests and exposés

I mean, the fact that lots of expenses are not scaling with revenue (sales and marketing 5xed versus revenue 3xing) and that the losses are very very large is important. More importantly, these are audited figures which haven't been seen before.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#37

Post by disgruntledphd2 »

simianwords wrote: post #21
Certhas wrote: post #19

Earlier quoted context omitted.

The Uber comparison makes no sense. This is the opposite situation. Uber lost money on rides, OpenAI is (possibly) making money on inference. Uber used an R+D moonshot to autonomous driving to justify capturing an established industry without reducing costs meaningfully. OpenAI has a core product that risks becoming a commodity with open source models only 6 months behind.

Uber didn’t lose money on rides other than some edge cases. What’s your source for this claim?

The vast, vast amounts of money they spent on driver incentives city by city would seem to support the OPs claim (source: I was familiar with their spend on ads in the US approximately 10 years ago).

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#38

Post by lelanthran »

matusp wrote: post #22
muglug wrote: post #4

Revenue went from $3.7B to $13.07B — roughly 3.5x. Operating loss went from ~$8.8B to ~$20.9B — roughly 2.4x. Doesn't seem like a domesday scenario.

The AI companies also have a lot of space to grow their income (more ads, price hikes, ...). It seems realistic for them to turn profitable. But the market expected much more from these companies.

> The AI companies also have a lot of space to grow their income (more ads, price hikes, ...).

Ads, maybe, but not only are they already walking back recent price hikes, the paying customers were hitting the brakes even on the original price.

Note that this data you see (their increased revenue) came from a period where they were onboarding customers who were competing to see who used the most tokens.

IOW, this is the best-case scenario for them - customers with no cap on token spend.

But... the caps from customers came in before they hiked prices. Then they hiked prices. That resulted in a short-term boost to revenue to compensate for the caps. Now they are talking about walking back those hikes. That means they are going to find an equilibrium lower than their best-case scenario.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#39

Post by simianwords »

disgruntledphd2 wrote: post #35
lelanthran wrote: post #28

Earlier quoted context omitted.

> Oh! What’s his reputation? The people who are completely sold on the belief that AI providers are running at a profit believe him to be utterly, totally and completely wrong in every one of his predictions. The people who are completely sold on the belief that AI providers are running at a loss they can never recover from believe him to be utterly, totally and completely correct in every one of his predictions. The…

> The reality is that it's not his predictions that matter, but his data, which is almost always correct as of time of writing. If you ignore his opinions, the data presented on liabilities, spend, revenue, loans, commitments, etc across Coreweave, Stargate, Oracle and all of the usual AI companies is, as far as I can tell, correct. Yeah, I think that he does well with sources and data. I also think that his editoria…

> Yeah, I think that he does well with sources and data

He's not even good at that, here's him not understanding what ARR means and fumbling a simple calculation and refusing to fix it.

https://x.com/binarybits/status/2031392856401666362

Not only not understanding ARR, he simply doesn't do data analysis properly - he misses some few months and days in his calculation to prop up his point. This is a mistake chatgpt would have caught.

https://x.com/binarybits/status/2034377838883700953

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#40

Post by simianwords »

disgruntledphd2 wrote: post #37
simianwords wrote: post #21

Earlier quoted context omitted.

Uber didn’t lose money on rides other than some edge cases. What’s your source for this claim?

The vast, vast amounts of money they spent on driver incentives city by city would seem to support the OPs claim (source: I was familiar with their spend on ads in the US approximately 10 years ago).

There is no evidence that Uber was systemically losing money per ride instead of at edge cases. Share your evidence please.
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