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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

#11

Post by HlessClaudesman »

pinkmuffinere wrote: post #10
HlessClaudesman wrote: post #8

“I had a guaranteed military sale with ED 209, renovation program, spare parts for twenty-five years… Who cares if it worked or not?!?”

It's possible that I'm just not up to date with current news, but I'm having trouble connecting this quote to the article. Or really even understanding the quote at all. Can you elaborate?

The commenter above seems to be describing late stage capitalism, where businesses exist mainly to milk investors, as told by bad boy tech executive Dick Jones in the 1980's action movie RoboCop.

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

#12

Post by nstart »

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this to the industry as a whole, this seems more positive than negative. Am I reading this incorrectly? Unless there's an assumption that R&D costs have to forever go up in order to increase revenue, I feel like this shows that the AI industry is actually on a path to profitability in the long term.

Whether it can physically be as all encompassing as it makes itself out to be or whether it will just be healthily profitable remains to be seen. Kind of like how Uber went from "We'll autonomously drive the world" to "Look, we deliver food, goods, and people to locations and we figured out how to do that in a way that makes profits. Also, ads".

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

#13

Post by HlessClaudesman »

minimaxir wrote: post #7
HlessClaudesman wrote: post #6

Earlier quoted context omitted.

This news matters because investors should prefer safer investments than: well at least it's not a "doomsday scenario" grade.

Tell that to the SpaceX investors.

Challenge accepted:

Facebook: https://www.facebook.com/share/v/1DC1GotK2F/

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

#14

Post by Refreeze5224 »

nstart wrote: post #12

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this…

How in the world could you read that article and think there is anything positive about OpenAI's prospects? We've been hearing for months that these companies need to make trillions of dollars in a handful of years, growing at record rates in order to break even and justify their massive outlay.

It's not going to happen.

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

#15

Post by grey-area »

nstart wrote: post #12

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this…

Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here

What is counted as R&D is completely arbitrary. These figures are just playing accounting games to attempt to hide the massive ongoing costs.

We’ll see a little better when they IPO and are forced to attempt to make money but I wouldn’t invest in this business.

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

#16

Post by minimaxir »

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, the news that OpenAI has $25B on hand in cash as reported here, plus the $122B raised in March, show that OpenAI won't implode for another year or two if it does...and that doesn't say anything about the AI bubble. There's also the confounder that Codex wasn't released until this year which turbocharged revenue with an uncertain increase in operating costs, so it will be difficult to extrapolate 2025 finances to 2026 and beyond.

When I read "the worst possible thing for me to get" I had assumed it would be evidence that inference/Codex is fundamentally unprofitable (as Ed often blogs about) but there isn't enough information here to support that argument either: revenue is still greater than cost of revenue, and the major losses are clearly delineated.

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

#17

Post by besterman23 »

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…

Yeah, this pretty much seals it for me that Ed has basically nothing. Sure OpenAI isn’t currently profitable, but this doesn’t say to me that they can’t become so soon(ish).

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

#18

Post by simianwords »

grey-area wrote: post #15
nstart wrote: post #12

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this…

Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here What is counted as R&D is completely arbitrary. These figures are just playing accounting games to attempt to hide the massive ongoing costs. We’ll see a little better when they IPO and are forced to attempt to make money but I wouldn’t invest in this business.

[flagged]

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

#19

Post by Certhas »

nstart wrote: post #12

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this…

The Uber comparison makes no sense. This is the opposite situation. Uber lost money on rides, OpenAI is (possibly) making money on inference. Uber used an R+D moonshot to autonomous driving to justify capturing an established industry without reducing costs meaningfully. OpenAI has a core product that risks becoming a commodity with open source models only 6 months behind.

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

#20

Post by simianwords »

What is the right way to deal with Ed Zitron articles because he’s historically extremely inaccurate and makes wild claims.

People ignore all his horrendous takes from last year and still eat this years “analyses” like it’s Gods words.

He has been predicting the doom for years and years now and it is strange to see HN still putting credence here.

This is what he said around a week back

“ One of my sources has come forward and brought me a story that will possibly burst the AI bubble. The reason they brought this to me is that I’ve shown — and will continue to show — that I actually give a shit about this industry and the people in it.

If you’re wondering what the story is, know that it’s the information I’ve wanted for years, delivered as I have always wanted it, and I will treat it with the reverence it deserves. Imagine what the worst possible thing for me to get would be and you’re probably close.

I expect it to be out in the next two weeks, and you’ll know exactly when it runs. There’ll be a podcast and a newsletter, and very likely follow-on coverage elsewhere.

I can guarantee you it’ll be worth it, and you’ll be stunned by what I report.”

This is qanon tier stuff. He’s been pulling this shtick for a while and people still haven’t caught on.

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