Leaked OpenAI financials show $38.5B loss and compute burn • Hacker News Board

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#91

Post by ted_dunning » Wed, Jun 17, 2026, 5:11 AM UTC

JSR_FDED wrote: post #50

Why 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.

Add in the fact that they claim 900 million weekly uniques. Pretending the growth and cost rates compound as described in the article, they will need to generate about 100x current revenue to growth out of their current hole. That sort of implies that they will have 10x the entire world's population as weekly uniques at that time.

That seems unlikely.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#92

Post by niemandhier » Wed, Jun 17, 2026, 5:12 AM UTC

danielmarkbruce wrote: post #68

lukeschlather wrote: post #12

The 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 the reasoning should be the other way around:

If you limit yourself to simple math, than you get this result.

Assuming linear growth into a market with competition and an unclear ability to absorb that growth is a gamble.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#93

Post by danielmarkbruce » Wed, Jun 17, 2026, 5:12 AM UTC

HlessClaudesman wrote: post #62

These numbers show that OpenAI is boned. They have no path to profitability and if they raise prices or cut services they will strangle their golden goose. They could have existed indefinitely as a service layer that was reliant on other companies feeling charitable, like Firefox, but they also wanted to get rich.

No, they show they just need to keep growing. Not a crazy assumption.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#94

Post by claw-el » Wed, Jun 17, 2026, 5:12 AM UTC

nl wrote: post #48

gamblor956 wrote: post #38

Earlier 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…

For publicly listed company, isn’t marketing expense in the ‘Selling & Marketing Expense’ part under ‘Operating Expense’ and not part of ‘Cost of Revenue’ as well?

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#95

Post by sho » Wed, Jun 17, 2026, 5:13 AM UTC

N_Lens wrote: post #42

Ed Zitron was right all along?!

Ed Zitron certainly was right that a constant firehose of denialist AI doom would get him clicks and views from the type of audience who yearns to have their biases confirmed and their fears validated. He's made a lot of hay off that excellent prediction.

Can't really think of anything else he's been right about, though. I don't think "right" is what he's going for anyway, it's all about that validation and a coherent, testable hypothesis takes a very distant second place.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#96

Post by spongebobstoes » Wed, Jun 17, 2026, 5:13 AM UTC

slow_typist wrote: post #69

bgirard wrote: post #43

Earlier quoted context omitted.

You're missing the point. There was a lot of debate around if inference was subsidized or not. And that's a huge point to confirm in the public discourse.

Sure, but being able to pay for inference and nothing but inference out of revenue leads to what end?

they have 6B left over after paying for inference, that's a lot of money

R&D is a leading expense, a good portion of that is probably R&D for 2026 models

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#97

Post by spongebobstoes » Wed, Jun 17, 2026, 5:14 AM UTC

backend_dev82 wrote: post #78

himata4113 wrote: post #13

so 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?

it's completely false

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#98

Post by missedthecue » Wed, Jun 17, 2026, 5:14 AM UTC

Ritewut wrote: post #34

BosunoB wrote: post #11

13 billion in revenue, 7.5 in cost of revenue. Can we finally put to bed the idea that inference is subsidized?

It is subsidized by gov contracts. Everyone who has common sense immediately said the real money is Altman getting into the governments pants which is why he and Brockman lobby so hard. You take away those contracts and OpenAI is dead in the water.

What? You believe that if you remove government contracts they're selling tokens below cost?

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#99

Post by raincole » Wed, Jun 17, 2026, 5:14 AM UTC

simonw wrote: post #19

"OpenAI generated $13.07 billion in revenue in 2025" Considering just four years ago they were a research lab with hardly any revenue at all, and no corporate muscles for earning revenue, I think that is a very impressive number. (Sure, they're losing a whole lot of money too. Same goes for almost every other hyper-growth company in the history of tech.)

> Same goes for almost every other hyper-growth company in the history of tech

Except it's not true. No one lost $38.5B in a year just to 'hyper-grow' or whatever it means. Uber accumulated ~$30B loss over a decade.

Edit: I read it wrong. The loss was mostly caused by one-time event[0]:

> Before OpenAI’s switch late last year to become a public benefit corporation, investors in the company received convertible interest rights rather than conventional equity. Under US accounting rules, those interests were treated as liabilities and periodically revalued as the company’s valuation increased.

It looks like that OpenAI is actually quite in line with other companies that lost money to grow.

[0]: https://www.ft.com/content/e15b0d7e-ff6b-4f16-ba7a-4068feddb...

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#100

Post by vkou » Wed, Jun 17, 2026, 5:15 AM UTC

danielmarkbruce wrote: post #80

nl wrote: post #48

Earlier quoted context omitted.

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.

An oil well doesn't disappear once you put it in the ground (The oil might).

If the marketing and promotions and discounts stopped tomorrow, that revenue will drop.