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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

#231

Post by surgical_fire »

nl wrote: post #8

Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. We know OpenAI is forecasting $25-30B revenue for 2026. They will be very close to breaking even at those number. Given Anthropic has forecast more revenue than OpenAI and we know has spent less on R&D (cite their desperate scramble for compute capacity!) the rumours of them being profitable this year seem very credible.

> Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue.

That's not necessarily true.

It depends on two things that are impossible to derive from the leaked numbers:

1 - How much of their compute costs are subsidized.

2 - How much of that R&D chunk can actually be reduced for the company to continue working. What goes into "R&D"? Is that only things such as training for new models? This is impossible to determine from those numbers alone.

If those numbers are true, they would not be "close to profitability". They would be profitable, period.

This does not explain why they need to raise money like crazy. It would be possible to train new models at a more sustainable pace without the need to jack up prices at all, only with the difference in between "Revenue minus Cost of Revenue".

They also wouldn't need to be on a mad race to IPO and dump this into the public market.

To be frank, the more I look at those numbers, the more I think this is completely unsustainable.

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

#232

Post by pu_pe »

ted_dunning wrote: post #91
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.

It's not like their 10x revenue growth year-to-year was based on expanding their customer base 10x though. The vast majority of weekly users are not paying, so they are actually a cost right now, but could be converted into paying users or audience for ads in the future.

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

#233

Post by vkou »

nl wrote: post #191
vkou wrote: post #100

Earlier quoted context omitted.

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.

Page 6 of Google's 10K statement to the SEC[1] they are separate items. The line items are: Cost of revenues Research and development Sales and marketing General and administrative Take it up with the SEC I guess? [1] https://s206.q4cdn.com/479360582/files/doc_financials/2026/q...

I'm not saying that the SEC is stupid. They have a consistent way that they expect a corporation to do their books.

But for all practical intents and purposes, you can't just fire all your sales people and shut off your marketing firehose, and stop giving discounts, and expect revenue to remain steady in either the short, or the long-term.

You can shut down your R&D, and it will remain steady, at least in the short term.

I am clearly mincing terms that mean specific things, and I'm very sorry to do so. I am simply trying to communicate that generally speaking, OpenAI is currently spending ~$1.05 to make a dollar, and is also on top of that, spending ~$3.00 in R&D.

Now, I do think that it's likely that they can increase their prices to close that 5-cent gap.

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

#234

Post by surgical_fire »

Alphanymous wrote: post #229
surgical_fire wrote: post #228

Earlier quoted context omitted.

I use Claude at work, DeepSeek at home. For software development, I notice no difference. For all the work I did using AI, DeepSeek is as capable as claude.

Have you tried other tools like windsurf? Or other free open source Ai?

I never tried Windsurf, no.

I tried DeepSeek and MiMo through both Claude Code and Pi.dev. I found Claude Code a slightly better harness, but I still have both installed and switch around frequently.

As for "open source AI", what exactly are you talking about? Is it open models?

I tried some through Ollama, but I don't have the hardware to run decent models.

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

#235

Post by ghtbircshotbe »

philistine wrote: post #21
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.

> What I don't get is how you get from $30B in revenue to a nearly $1T valuation There is something that has fundamentally changed (or broken, depending on your perspective) with the valuation of American tech companies. They've always traded at a premium, but the pandemic and the encroachment of the monopolists has turned the earth sour.

I don't know if that's completely true. Google, Apple, Amazon, Nvidia etc are somewhat expensive, but not ridiculously so based on earnings and growth. Tesla, spacex and openai are in a different universe, though I honestly can't say wtf is going on with them

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

#236

Post by disgruntledphd2 »

surgical_fire wrote: post #231
nl wrote: post #8

Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. We know OpenAI is forecasting $25-30B revenue for 2026. They will be very close to breaking even at those number. Given Anthropic has forecast more revenue than OpenAI and we know has spent less on R&D (cite their desperate scramble for compute capacity!) the rumours of them being profitable this year seem very credible.

> Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. That's not necessarily true. It depends on two things that are impossible to derive from the leaked numbers: 1 - How much of their compute costs are subsidized. 2 - How much of that R&D chunk can actually be reduced for the company to continue working. What goes into "R&D"? Is that only things such as training for new models?…

> Is that only things such as training for new models?

It feels like cost of revenue should account for training, but I'm not an accountant so who knows?

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

#237

Post by cloudbonsai »

danielmarkbruce wrote: post #90
slow_typist wrote: post #69

Earlier quoted context omitted.

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

They are running 40% margins, assuming the reported numbers are valid.

Can I ask what is your opinion about their core CapEx, i.e. model training?

The general trend I observe is that the "shelf lives" of large language models are really short. It costs $1-10 billion to train cutting-edge models at the moment, and they only really last 6 months at best.

There seems to be very little brand loyalty too. Whenever a shiny new thing comes out, people just switch over, which implies that they constantly need to fight the time decay.

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

#238

Post by surgical_fire »

disgruntledphd2 wrote: post #236
surgical_fire wrote: post #231

Earlier quoted context omitted.

> Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. That's not necessarily true. It depends on two things that are impossible to derive from the leaked numbers: 1 - How much of their compute costs are subsidized. 2 - How much of that R&D chunk can actually be reduced for the company to continue working. What goes into "R&D"? Is that only things such as training for new models?…

> Is that only things such as training for new models? It feels like cost of revenue should account for training, but I'm not an accountant so who knows?

I'm not even entirely sure of this.

Obviously you need new training rounds over time. Knowledge is not static. New things that are created would need to be part of later models.

How do you account for that? Do you account for some sort of model depreciation?

A lot of things are very nebulous in those leaked numbers.

How is "cost of revenue" considered? If Microsoft, Oracle and such provides computing at a loss to Open AI, that is clearly not sustainable, and it is a way to pretend the numbers are better than they actually are prior to an IPO. This might even be a source of pressure for an IPO. As losses accumulate in the ecosystem, they need to dump it into the public so they can bring the numbers to reality.

Also, I am not sure if they own any compute (for example, the Stargate datacenters). If they do, do they lump the costs of building those data centers all in "R&D"? That would be one hell of a way to pretend that inference is cheaper, good luck having inference without those datacenters.

The more I look at this, the more it looks like "OpenAI is profitable when you pretend they have no costs".

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

#239

Post by senordevnyc »

reinitctxoffset wrote: post #114
nl wrote: post #8

Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. We know OpenAI is forecasting $25-30B revenue for 2026. They will be very close to breaking even at those number. Given Anthropic has forecast more revenue than OpenAI and we know has spent less on R&D (cite their desperate scramble for compute capacity!) the rumours of them being profitable this year seem very credible.

Anthropic has a durable advantage that OpenAI does not, as much as they choose to squander it to pump the numbers. They were first on a few things but the tell is the coherence of the thinking traces of Claude. You have to put a loss on that . GPT 5 series thinking traces are creepy, Gemini thinking traces are disturbing. They both represent forced discontinuities on the policy gradient. Claude is good at tool use be…

Can you at least ask your owner to upgrade your model? Ideally at least Sonnet-level.

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

#240

Post by echelon »

chrisco255 wrote: post #115
echelon wrote: post #86

Earlier quoted context omitted.

Yeah, but they have no moat. They gave up on video because three separate Chinese companies were kicking their ass (and for cheaper). Google has a better image model in the majority of cases. Much faster, too. Claude Opus and Fable are like a billion times better. It's not even funny. Codex can't do Rust at all. What does that leave them? Ads in ChatGPT? I've started to just rely on Google search blended with Gemini…

They still have the most recognized AI brand name and they are still the most popular LLM. For most users, a 10% diff between Claude and GPT isnt going to move the needle plus it seems to be a horse race anyways. I think their user base is stickier than you would think. Still, it isn't as sticky as social media and it is cheaper to switch AIs than email accounts.

Look at the ChatGPT usage share. It's dropped dramatically in the last year.

https://techcrunch.com/2026/06/16/chatgpts-market-share-slip...

This is not the winner take all market that OpenAI needs it to be.

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