Is this surprising to anyone? I thought that was a given. I'm getting de-facto unlimited use of a model more expensive than Opus 4.8 for $20 a month.
OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
191–200 of 425 posts
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#192Everyone's financial literacy seems to evaporate when discussing AI companies. They assume that companies need to be profitable or they're a bubble waiting to burst.
The whole point of the company is that they are investing a huge amount of money upfront in order to make models that are better and better, and thus have a higher productivity multiplier.
They are very profitable on inference, they just know that the race to AGI requires a huge amount of investment, compute, getting the best researchers, etc.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#193If 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.
Not to mention they will need to research how to make their models faster and cheaper to run in order to fit some margin within what people are actually willing to pay.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#194I'm really curious about something: how far will you go to support AI? Clearly they'll need to monetize things further, would you still use [whatever AI you are paying for] if the price was doubled? Tripled? Where would you stop and would you stop using AI altogether or would you look at competitors?
I make an important distinction between cloud services and local AI. My lifetime spending on cloud AI is probably less than $500, and I don't intend to spend any more. But I've already dropped $2.5k on new hardware for local inference, and could easily see myself spending more in the future. In fact, I'm regularly browsing for deals. I would also be open to paying for local models, if there was a way to make that compatible with fully open models.
AI is so important, I want to have it under my control. Even if I have to pay a penalty in terms of capabilities.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#195”The company reports over 900 million weekly active users of ChatGPT, though only about 50 million of those are paid subscribers.” With so many free models available the ai companies are going to struggle to convert active free users to paid.
None of the free models offer anything even remotely close to the output you can get on a relatively inexpensive model. I think that AI is going to become just another utility people pay to stay relevant. Same as their internet, electricity or gas.
Will they do it at utility / commodity prices though, or the inflated costs we see now?
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#196Is this surprising to anyone? I thought that was a given. I'm getting de-facto unlimited use of a model more expensive than Opus 4.8 for $20 a month.
I feel like I have a different $20 plan than everyone else. I have no problem hitting my 5 hour and weekly limits. Don’t get me wrong, it’s a great deal compared to API pricing, but it’s a far cry from “unlimited”.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#197So... 50% operational costs and about $100 spent on sales for each paying customer.
If they manage to keep those customers for several years without more sales, that bit looks like a normal "high-touch" business.
They shouldn't look like a "high-touch" business, but their unitary numbers look way better than I expected. They just need to grow some 10 times to star making a profit... Maybe 100 to cover the opportunity cost of their capital.
It's just a matter of finding 5 billion people willing to pay US prices :)
But it is still better than I expected.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#198Everyone's financial literacy seems to evaporate when discussing AI companies. They assume that companies need to be profitable or they're a bubble waiting to burst. The whole point of the company is that they are investing a huge amount of money upfront in order to make models that are better and better, and thus have a higher productivity multiplier. They are very profitable on inference, they just know that the ra…
I think that the issue most people have is that the degree to which they would need to be profitable in order to pay back their debt is not realistic. It is unlikely that they would be able to get that large a portion of US GDP and if they did then there will likely be riots in the streets.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#199Earlier 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.
OpenAI won't be able to cut R&D spend and collect rent on their existing models as long as the Chinese models keep up the pace of being ~6 months behind them for a fraction of the price.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#200Napkin maths. Alphabet: ~$4.5T value / ~$403B revenue ≈ 11× revenue Microsoft: ~$2.9T value / ~$282B revenue ≈ 10× revenue OpenAI: ~$850B value / ~$13B revenue ≈ 65× revenue Can someone explains that logic?
SpaceX: ~$2.5T value / ~$18.7B revenue ≈ 133× revenue