OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B • Hacker News Board

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

#101

Post by mike_hearn » Wed, Jun 17, 2026, 4:41 PM UTC

deepdarkforest wrote: post #80

thewebguyd wrote: post #77

Earlier quoted context omitted.

Compounding revenue & operating loss at those same rates (3.5x and 2.4x respectfully) puts those two lines meeting at around 2031. That'd be about 9-10 years to profitability, that seems pretty normal. Amazon took 9 years, Uber took 14 years before its first profitable year.

both amazon and uber used that spending to deliver a network effect moat/almost monopoly. But openai's chance of a moat on model quality is dropping as we go, not increasing

Neither Amazon nor Uber have monopolies nor much of a network effect. Amazon retail is or was famously low or near zero margin with their profits driven by AWS. Uber's margins are not much better than any average business.

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

#102

Post by hollerith » Wed, Jun 17, 2026, 4:50 PM UTC

mike_hearn wrote: post #100

nstart wrote: post #81

Earlier quoted context omitted.

I tend not to focus on that future too much. I used to do so long ago. For example, how could Facebook possibly justify their losses while asking for such a big valuation? Same for Uber. Same for any number of big companies. And it turns out that growth in the future is impossible to predict accurately. Shopify is a good example where at the time the addressable market of online stores was tiny. But it turned out tha…

I don't think Uber was a great ROI for investors though. It lost almost all the money they gave it in return for a business with entirely average profit margins (average across all industries, far lower than average for a SaaS app).

Since Uber's never paid dividends, ROI is easy to calculate.

At the end of its first day of trading (in May 2019), Uber's price was $41.57 per share, and it is currently $72–73 per share for a compound annual growth rate (CAGR) of roughly 8.2% per year.

In comparison, the BVP Nasdaq Emerging Cloud Index earned roughly 22–25% CAGR over the same time interval.

So (as usual) Mike Hearn is correct.

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

#103

Post by jgalt212 » Wed, Jun 17, 2026, 4:53 PM UTC

simianwords wrote: post #96

jgalt212 wrote: post #95

Earlier quoted context omitted.

I don't think reasoning and agentic is an improvement over what came before. It's like going back to batch processing once you've had access to an interactive terminal.

> I don't think reasoning and agentic is an improvement over what came before. Respectfully, it shows that you haven't been using agentic models or reasoning models. I would advice you to go and use them and make an opinion afterwards. If you have come to this conclusion after extensively using these models then I don't know what to say. I guess you are the audience for Ed Zitron.

So the Ed Zitron audience like the REPL and the hypesters like the compiler?

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

#104

Post by lokar » Wed, Jun 17, 2026, 5:08 PM UTC

simianwords wrote: post #54

disgruntledphd2 wrote: post #36

Earlier quoted context omitted.

> 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 ha…

Part of the losses are because of valuation increase and the real operating losses are much lower. https://www.ft.com/content/e15b0d7e-ff6b-4f16-ba7a-4068feddb... this uses the same sources and answers more honestly and Ed Zitron doesn't touch on this. > As OpenAI’s worth rose, the increased value of those investor rights created a roughly $30bn charge, added the person. The charge is not expected to recur following…

Ignoring stock comp is not the same as the other non-cash expenditures and is very dishonest.

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

#105

Post by dgellow » Wed, Jun 17, 2026, 5:50 PM UTC

simianwords wrote: post #99

dgellow wrote: post #98

Earlier quoted context omitted.

That's really not convincing. I personally don't care much about predictions, nobody is an oracle who can predict the future. If someone looks at SpaceX, talk about the financial engineering that went in the stock, then predict incorrectly that the price will go down, the meaningful information isn't the prediction, it's the analysis. The price might never go down due to how insane and detached from reality the stock…

> I personally don't care much about predictions I don't know what to say other than I now know the audience Ed Zitron writes for.

Are you aware he's not an investor or stock analyst? His short term predictions of the market and the industry are irrelevant and doesn't invalidate the general thesis or his reported data. Have you seen mistakes and inaccuracies that aren't related to predictions?

As a side note I do personally have a thing for caustic writing, even if I wouldn't agree with his analysis I would still be happy reading some of his articles. Reminds me of blog writers from 2010

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

#106

Post by dgellow » Wed, Jun 17, 2026, 5:53 PM UTC

minimaxir wrote: post #16

At the end of his previous article ( https://www.wheresyoured.at/ai-is-slowing-down/ ), Ed hyped this news as "a story that will possibly burst the AI bubble" and "imagine what the worst possible thing for me to get would be and you’re probably close." This news doesn't fit either criteria: OpenAI losing billions of dollars isn't shocking news and both AI boosters and AI skeptics have likely assumed that. If anything…

> I had assumed it would be evidence that inference/Codex is fundamentally unprofitable (as Ed often blogs about)

Ed's claim is that they haven't shown inference to be profitable. Which is true? And that he personally believe it is unprofitable (his personal opinion, not what his data report).

I think that's a meaningful distinction with your statement

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

#107

Post by themafia » Wed, Jun 17, 2026, 9:51 PM UTC

I'm a simple guy and I don't understand the "sales and marketing" cost.

I don't like these products. I have several negative opinions on them. To the extent they work and there is a customer base what marketing could you /possibly/ be engaged in? Doesn't the product sort of market itself? Or another way is this a product that you can market to expand your MAUs?

It's so polarizing I can't imagine how that $5.7B is being spent.

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

#108

Post by dylan604 » Wed, Jun 17, 2026, 9:54 PM UTC

themafia wrote: post #107

I'm a simple guy and I don't understand the "sales and marketing" cost. I don't like these products. I have several negative opinions on them. To the extent they work and there is a customer base what marketing could you /possibly/ be engaged in? Doesn't the product sort of market itself? Or another way is this a product that you can market to expand your MAUs? It's so polarizing I can't imagine how that $5.7B is bei…

It costs money to get influencers to set up kool-aid stands on their platforms.

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

#109

Post by iaaan » Wed, Jun 17, 2026, 9:55 PM UTC

themafia wrote: post #107

I'm a simple guy and I don't understand the "sales and marketing" cost. I don't like these products. I have several negative opinions on them. To the extent they work and there is a customer base what marketing could you /possibly/ be engaged in? Doesn't the product sort of market itself? Or another way is this a product that you can market to expand your MAUs? It's so polarizing I can't imagine how that $5.7B is bei…

I've seen physical billboards in the Portland, OR area for OpenAI, so I guess that accounts for at least part of it. Not really sure what kind of return they're getting on those but apparently they can just do whatever they want, even if they're losing money.

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

#110

Post by hedgehog » Wed, Jun 17, 2026, 9:56 PM UTC

themafia wrote: post #107

I'm a simple guy and I don't understand the "sales and marketing" cost. I don't like these products. I have several negative opinions on them. To the extent they work and there is a customer base what marketing could you /possibly/ be engaged in? Doesn't the product sort of market itself? Or another way is this a product that you can market to expand your MAUs? It's so polarizing I can't imagine how that $5.7B is bei…

I didn't look at the financials but the subscription product is heavily discounted relative to the API pricing and that difference could well be booked as a marketing expense. They also have a string of grant and similar initiatives (like $50M each) that could be marketing. There's a lot of stuff they could assign at least partially to marketing, and it sounds like they spend money pretty freely.