Musk hiding is Ai inside spacex seems strategic now. Ai forward companies can’t hide losses, but a conglomerate can hide that. Might give grokursor new life.
Leaked OpenAI financials show $38.5B loss and compute burn
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Re: Leaked OpenAI financials show $38.5B loss and compute burn
#72Why would revenue continue to grow at this rate? Enterprises are becoming increasingly aware that the best models can be used for planning and then cheaper models for execution - all the way to local models for some tasks. Add in increasing competition from Chinese models… I’m not convinced this revenue growth is guaranteed.
global gdp is over 100 trillion. Something like 50-60% is paid to labor. If you assume AI takes a good chunk of labor, the market is gigantic. Really really really gigantic.
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#73The R&D expenditure seems reasonable, and the revenue numbers seem realistic. I have no trouble believing they can be profitable by 2030 or much sooner. What I don't get is how you get from $30B in revenue to a nearly $1T valuation, but that seems almost level-headed compared to SpaceX, and it's not like any of the big tech companies' valuations make much sense in the context of their revenue.
It's easy actually. If it grows a lot, with decent margins. Grow 30B at 40% pa for 10 years and you arrive at around $850B in revenue, assume 25% operating margins, that's slightly over 200B of operating income, and it all makes a lot of sense. You can debate the assumptions, but it isn't witchcraft. The math is simple.
I think what PEOPLE are saying IT is very difficult to sustain that level of growth.
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#74It’s a big number. I wonder what steps we will see to raise revenue leading up to an IPO, and specifically if they’ll cut off the OpenAI subscription that is powering my Open claw install. They have been quite friendly with using the oauth tokens in various harnesses.
They will most certainly cut subscription access, same as Anthropic. It is inevitable that they will go down the same lockin+squeeze route. I unsubscribed from Claude a couple of weeks ago, on gpt now. However, Openai will have to make a similar move.
At that point however open weight model providers will start to shine. All eyes on China.
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#75> The reported 2025 figures include $7.5 billion in cost of revenue, $19.18 billion in research and development, $5.73 billion in sales and marketing, and $1.57 billion in general and administrative expense Does training of new models go into RnD or cost? And subscription plans' subsidies, are those cost or sales and marketing?
> Does training of new models go into RnD
Pretty likely R&D, but obviously would need to be confirmed by OpenAI.
The original reporting includes this:
> The documents revealed how much OpenAI paid Microsoft for services. In the 2025 calendar year, OpenAI paid Microsoft $10.59 billion for “Research and development” expenses. We believe this most likely refers to the cost of training OpenAI’s models.
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#76The R&D expenditure seems reasonable, and the revenue numbers seem realistic. I have no trouble believing they can be profitable by 2030 or much sooner. What I don't get is how you get from $30B in revenue to a nearly $1T valuation, but that seems almost level-headed compared to SpaceX, and it's not like any of the big tech companies' valuations make much sense in the context of their revenue.
The market is pricing in the potential for future revolutionary shifts which seem fairly likely. For instance if there ends up being substantial labor disruption due to LLMs then the economy as we know it is going to end up being reshaped in ways that are difficult to imagine beyond the fact that the LLM providers would likely play a critical role in it.
Similarly, SpaceX has already brought the cost of getting things to space down by a couple of orders of magnitude, and Starship is rapidly progressing with the potential to bring them down a couple more. The aspirational goals there are being able to get things to space on the order of $10-$20/kg. That would dramatically reshape not only space but even transport as we know it, very likely in a way analogous to how the ability to quickly send a 0 or 1 signal long distances for cheap reshaped the world in ways that would be essentially impossible to predict prior to its happening.
I'm bearish on the LLM revolution and bullish on the space one, which generally seems to also be the market consensus.
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#77so they could stop development and research right now and be profitable, considering that gpt 5.5 is often regarded as one of the best models for writing code this is looking pretty good. Let's take another example: If OpenAI grows to 10 times their current size and continue spending the same amount on research and development they would be profitable today without any other changes to their organizational structure.…
The moment they‘d stop development would put marketing and sales in a very dire position, regardless of how good gpt 5.5 is.
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#78so they could stop development and research right now and be profitable, considering that gpt 5.5 is often regarded as one of the best models for writing code this is looking pretty good. Let's take another example: If OpenAI grows to 10 times their current size and continue spending the same amount on research and development they would be profitable today without any other changes to their organizational structure.…
I heard from Ed Zitron that you can't really turn off "training" on these models even after they have been released because they need continuous re-training to keep up with the changes in the world and the language etc.
Is this correct? if it is, can we even say that research can be turned off entirely?
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#79> The reported 2025 figures include $7.5 billion in cost of revenue, $19.18 billion in research and development, $5.73 billion in sales and marketing, and $1.57 billion in general and administrative expense Does training of new models go into RnD or cost? And subscription plans' subsidies, are those cost or sales and marketing?
Your comment made we wonder what happens when the AI company's new model does not have a dramatic improvement and have just knowledge updates, and majority of the users does not upgrade? Given the enormous cost of training, would it be worth training new models then?
> Given the enormous cost of training, would it be worth training new models then?
I'm not an expert, but is this even an option? I mean models must be refreshed with latest knowldge base periodically even without algo/design improvements, otherwise the lag become too noticeable and it will hurt users and their use-case.
Re: Leaked OpenAI financials show $38.5B loss and compute burn
#80Earlier quoted context omitted.
That's only true once they become public. As a private entity they can calculate COR any reasonable way that their investors are okay with. (For tax purposes for most businesses it doesn't matter whether an expense is CORS or not.)
To expand on this slightly - startups often argue that marketing expenses should not be reported as part of cost of revenue because they are temporary and will change as they grow and the market becomes more aware of them. There are arguments for and against this - awareness is an issue for startups, but most large companies continue to market. It is true that it is fairly easy to change the amount a company spends o…
No, they argue they shouldn't be counted as operating expenses because they are basically capex dollars. It's a completely reasonable argument. If I spend $100 million on s&m to get a bunch of customers to my saas, it's not different economically to drilling 20 oil wells at $5 million a pop.