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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

#171

Post by windexh8er »

deepsun wrote: post #156
smashed wrote: post #138

If these numbers are right, it's actually not that bad. Cut r&d costs and they are mostly profitable.

I bet any FAANG spend is mostly R&D. If it's not materials, not energy or taxes, not manufacturing, not licensing or rental fees, then I can only think of R&D.

People keep overlooking the fact that costs for these providers scale along with customer acquisition. Most startups don't have that linear expense. Also, training costs are accelerating to get new models out faster. One doesn't simply "get rid of R&D" costs as a comment upstream mentioned. I can't actually imagine R&D goes down anytime soon unless you're willing to play third fiddle.

Unless these frontier providers feel some type of squeeze or constraint the Chinese are well positioned to leave the US bag holders of an NVidia bound system. And if anyone has to wonder how one provider for a critical piece of infrastructure will go, well...

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

#173

Post by dj_axl »

LaurensBER wrote: post #144
vb-8448 wrote: post #132

Almost 6 bln in sales in marketing? It looks an enormous amount given that they used to have the best models and used to give-aways tokens.

6bn seems excessive but despite GPT 5.5 arguably being better than Claude I don't see a lot of adoption of Codex yet. Some of my coworkers even use Sonnet (the default in Claude Code for the 20 USD subscription) and see no reason to change even though that model is definitely "outdated" compared to current SOTA.

Marketing might help at some workplaces, presumably that are dedicated to Microsoft, for example our network blocks Claude (and DeepSeek) and is slowly rolling out Codex team by team. They should encourage Amazon/AWS to market for them.

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

#174

Post by darth_avocado »

fearmerchant wrote: post #169
darth_avocado wrote: post #159

Earlier quoted context omitted.

So you’re saying if you cut all the cost centers a company would only have profit centers? If you ignore all the losses you’ll only have profits?

It's more like once you figure out how to make a really good lamp then producing lots of lamps will be profitable. But the lamps are currently suboptimal so we'll be in the red until that time.

And then someone will come up with lamp pro max and you’ll be out of business. You realize why R&D exists in tech companies even though it’s a cost center right?

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

#176

Post by trhway »

mvkel wrote: post #150

My takeaway from this is that it's incredibly validating as a business model. Inference is _highly_ profitable. Of course, like any company that has ever tried to grow at breakneck pace, you run at a loss until you "win."

Yes, it is like a new era - the startups have huge direct revenue on real products instead of "users" which yet to be monetized.

And the network effect which ruled for the last 20 years seems to have relaxed its death grip just a bit (of course it is still there as having more customers using your tools and models provides more training data, etc., yet the current network effect doesn't seem to have that high exponential value like before)

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

#178

Post by root-parent »

mvkel wrote: post #150

My takeaway from this is that it's incredibly validating as a business model. Inference is _highly_ profitable. Of course, like any company that has ever tried to grow at breakneck pace, you run at a loss until you "win."

>> Inference is _highly_ profitable.

Totally untrue.

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

#180

Post by taneq »

cmiles8 wrote: post #170
smashed wrote: post #138

If these numbers are right, it's actually not that bad. Cut r&d costs and they are mostly profitable.

Yes if you ignore all the reasons why they’re horribly unprofitable, they’re profitable. R&D costs are hurting profit side and while you can cut that one just becomes irrelevant overnight in this space if you do, hence the problem.

> R&D costs are hurting profit

That’s quite the hot take, considering it’s literally an R&D company that got to where it is by doing R&D.

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