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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

#241

Post by [deleted] »

vlovich123 wrote: post #231
apatheticonion wrote: post #209

Seeing that R&D costs are the lion's share, I wonder if we are at a point where the focus can shift to improving the cost of inference. Unless we are genuinely pushing to find AGI, at which point nothing matters, LLMs in their current form don't replace knowledge workers but are an effective force multiplier. How good is enough? For instance, I pay about $1-2 a month for DeepSeek. It's not as sophisticated as Claude,…

> I wonder if we are at a point where the focus can shift to improving the cost of inference. There's always working on improving the cost of inference, but I don't think this is an area of R&D that will slow down. The reason is: 1. A better competitor model risks eating away at how much they can charge for inference (i.e. revenue) 2. Whoever unlocks AGI will unlock even more growth 3. Even when you unlock AGI, you'l…

[deleted]

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

#242

Post by bhelkey »

ignoramous wrote: post #214
margalabargala wrote: post #189

Earlier quoted context omitted.

Let's say Company 1 has $1B revenue and has grown 5x in the last year, and 20x the last 2 years.. Let's say Company 2 has $1B revenue and that's the same as it was last year and the year before. Should these companies be valued the same?

> Should these companies be valued the same By who? Public money is looking for dividends (profits) not growth?

If indeed the public is looking for dividends, why is Amazon, a company that has never paid a dividend, such a valuable company?

Amazon has ~10 Billion outstanding shares and the current market price for one of those shares is ~$240.

If folks only care about dividends, why would anyone buy an Amazon share at that price?

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

#243

Post by bko »

apatheticonion wrote: post #209

Seeing that R&D costs are the lion's share, I wonder if we are at a point where the focus can shift to improving the cost of inference. Unless we are genuinely pushing to find AGI, at which point nothing matters, LLMs in their current form don't replace knowledge workers but are an effective force multiplier. How good is enough? For instance, I pay about $1-2 a month for DeepSeek. It's not as sophisticated as Claude,…

Let's put it this way, how much is 5% productivity bump worth to you?

If you're in the US and you're making 100k a year, that's worth 5k or $416/m. So you can buy two of the most expensive plans on the frontier models.

This focus on cost optimization is insane. Just use the frontier models. Even a marginal bump is worth whatever the hell they're charging, at least for now.

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

#244

Post by qntmfred »

dogecoinbase wrote: post #240
qntmfred wrote: post #223

Earlier quoted context omitted.

I'd be cool with that. YouTube premium is one of the best value subscriptions I have. Steering people toward paying instead of ads-by-default is a net good imo

I think we can all understand the ways in which embedded advertisement in LLMs will be fundamentally different than view-based advertisement.

the AI providers will experiment with sustainable ad models and users will demand transparency and responsibility. An equilibrium will be reached, I'm sure.

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

#245

Post by bombcar »

bko wrote: post #243
apatheticonion wrote: post #209

Seeing that R&D costs are the lion's share, I wonder if we are at a point where the focus can shift to improving the cost of inference. Unless we are genuinely pushing to find AGI, at which point nothing matters, LLMs in their current form don't replace knowledge workers but are an effective force multiplier. How good is enough? For instance, I pay about $1-2 a month for DeepSeek. It's not as sophisticated as Claude,…

Let's put it this way, how much is 5% productivity bump worth to you? If you're in the US and you're making 100k a year, that's worth 5k or $416/m. So you can buy two of the most expensive plans on the frontier models. This focus on cost optimization is insane. Just use the frontier models. Even a marginal bump is worth whatever the hell they're charging, at least for now.

The problem is it might be worth it to the company, but likely not to you - a 5% productivity bump likely results in $100k a year.

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

#246

Post by quantumwannabe »

Barrin92 wrote: post #221
dtnewman wrote: post #201

Earlier quoted context omitted.

They won't try to. ChatGPT is already starting with ads, which is potentially far more profitable (as evidenced by the fact that the most profitable company of all time makes 90%+ of their revenue through ads).

>as evidenced by the fact that the most profitable company of all time makes 90%+ of their revenue through ads the biggest reason for this is that the digital ad market is a duopoly (charitably a triopoly if you count Amazon in), if all of the LLM companies start to go into ads that's going to be a much more competitive market for ad buyers. It's not going to be so straight forward when both customers and merchants h…

That’s why I don’t understand why Google’s stock has gone up so much recently. They already have maximum market share of digital ads; they can only lose share to competitors like OpenAI. The only way they can make more money is through paid subscriptions.

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

#247

Post by cwillu »

bko wrote: post #243
apatheticonion wrote: post #209

Seeing that R&D costs are the lion's share, I wonder if we are at a point where the focus can shift to improving the cost of inference. Unless we are genuinely pushing to find AGI, at which point nothing matters, LLMs in their current form don't replace knowledge workers but are an effective force multiplier. How good is enough? For instance, I pay about $1-2 a month for DeepSeek. It's not as sophisticated as Claude,…

Let's put it this way, how much is 5% productivity bump worth to you? If you're in the US and you're making 100k a year, that's worth 5k or $416/m. So you can buy two of the most expensive plans on the frontier models. This focus on cost optimization is insane. Just use the frontier models. Even a marginal bump is worth whatever the hell they're charging, at least for now.

Companies aren't paying for tokens so that their employees can capture the gains.

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

#248

Post by romaniv »

The fact that people here are looking at these numbers and saying "this is fine" is absolutely bonkers.

Basically, it's a company that's not sustainable for two separate reasons. The first one is that they have an extremely high overhead. SG&A of 55% is really bad. The seconds reason is that their R&D costs are truly astronomical. They could probably cut those costs to some extent, but they're not going to cut them to nothing. They're already losing ground to Anthropic even with this much R&D.

To put it differently, even if OpenAI cut its R&D and inference costs by half, they would still be leaking money like a sieve.

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

#249

Post by bruce343434 »

bko wrote: post #243
apatheticonion wrote: post #209

Seeing that R&D costs are the lion's share, I wonder if we are at a point where the focus can shift to improving the cost of inference. Unless we are genuinely pushing to find AGI, at which point nothing matters, LLMs in their current form don't replace knowledge workers but are an effective force multiplier. How good is enough? For instance, I pay about $1-2 a month for DeepSeek. It's not as sophisticated as Claude,…

Let's put it this way, how much is 5% productivity bump worth to you? If you're in the US and you're making 100k a year, that's worth 5k or $416/m. So you can buy two of the most expensive plans on the frontier models. This focus on cost optimization is insane. Just use the frontier models. Even a marginal bump is worth whatever the hell they're charging, at least for now.

Everyone else will be 5% more productive. Then no one is "more" productive. So everyone has a higher output, but the same wages and hours worked. There was only a gap when usable AI first came out, some contractors could do the same quantity of work in less time and enjoy time off or do more jobs. Now the gap has closed or is closing. And using AI now is more about not being less productive than peers who do use it.
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