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OpenAI's H1 2025: $4.3B in income, $13.5B in loss

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Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#101

Post by Havoc »

indymike wrote: post #63
Havoc wrote: post #34

I'd be pretty worried as a shareholder. Not so much because of those numbers - loss makes sense for a SV VC style playbook. ...but rather that they're doing that while Chinese competitors are releasing models in vaguely similar ballpark under Apache license. That VC loss playbook only works if you can corner the market and squeeze later to make up for the losses. And you don't corner something that has freakin apache…

> but rather that they're doing that while Chinese competitors are releasing models in vaguely similar ballpark under Apache license. The LLM isn't 100% of the product... the open source is just part. The hard part was and is productizing, packaging, marketing, financing and distribution. A model by itself is just one part of the puzzle, free or otherwise. In other words, my uncle Bill and my mother can and do use Ch…

>my uncle Bill and my mother can and do use ChatGPT.

They have the name brand for sure. And that is worth a lot.

Notice how Deepseek went from a nobody to making mainstream news though. The only thing people like more than a trusted thing is being able to tell their friends about this amazing cheap good alternative they "discovered".

It's good to be #1 mind share wise but without network effect that still leave you vulnerable

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#103

Post by leptons »

deepnotderp wrote: post #53
JCM9 wrote: post #8

These numbers are pretty ugly. You always expect new tech to operate at a loss initially but the structure of their losses is not something one easily scales out of. In fact it gets more painful as they scale. Unless something fundamentally changes and fast this is gonna get ugly real quick.

New hardware could greatly reduce inference and training costs and solve that issue

Great, so they just have to spend another ~$10 billion on new hardware to save how many billion in training costs? I don't see a path to profitability here, unless they massively raise their prices to consumers, and nobody really needs AI that badly.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#104

Post by jhallenworld »

adventured wrote: post #25
JCM9 wrote: post #8

These numbers are pretty ugly. You always expect new tech to operate at a loss initially but the structure of their losses is not something one easily scales out of. In fact it gets more painful as they scale. Unless something fundamentally changes and fast this is gonna get ugly real quick.

There is an exceptionally obvious solution for OpenAI & ChatGPT: ads. In fact it's an unavoidable solution. There is no future for OpenAI that doesn't involve a gigantic, highly lucrative ad network attached to ChatGPT. One of the dumbest things in tech at present is OpenAI not having already deployed this. It's an attitude they can't actually afford to maintain much longer. Ads are a hyper margin product that are ve…

Google didn't have inline ads until 2010, but they did have separate ads nearly from the beginning. I assume ads will be inline for OpenAI- I mean the only case they could be separate is in ChatGPT, but I doubt that will be their largest use case.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#105

Post by lovecg »

munk-a wrote: post #27
darth_avocado wrote: post #20

Earlier quoted context omitted.

They have to compete with Zuckerberg throwing $100M comps to poach people. I think $830k per person is nothing in comparison.

Both numbers are entirely ludicrous - highly skilled people are certainly quite valuable. But it's insane that these companies aren't just training up more internally. The 50x developer is a pervasive myth in our industry and it's one that needs to be put to rest.

Do other professionals (lawyers, finance etc.) argue for reducing their own compensation with the same fervor that software engineers like to do? The market is great for us, let’s enjoy it while it lasts. The alternative is all those CEOs colluding and pushing the wages down, why is that any better?

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#106

Post by abaymado »

simonw wrote: post #58

I think the most interesting numbers in this piece (ignoring the stock compensation part) are: $4.3 billion in revenue - presumably from ChatGPT customers and API fees $6.7 billion spent on R&D $2 billion on sales and marketing - anyone got any idea what this is? I don't remember seeing many ads for ChatGPT but clearly I've not been paying attention in the right places. Open question for me: where does the cost of ru…

> $2 billion on sales and marketing - anyone got any idea what this is?

I used to follow OpenAI on Instagram, all their posts were reposts from paid influencers making videos on "How to X with ChatGPT." Most videos were redundant, but I guess there are still billions of people that the product has yet to reach.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#107

Post by JCM9 »

stephc_int13 wrote: post #75

Everyone is trying to compare AI companies with something that happened in the past, but I don't think we can predict much from that. GPUs are not railroads or fiber optics. The cost structure of ChatGPT and other LLM based services is entirely different than web, they are very expensive to build but also cost a lot to serve. Companies like Meta, Microsoft, Amazon, Google would all survive if their massive investment…

Businesses are different but the fundamentals of business and finance stay consistent. In every bubble that reality is unavoidable, no matter how much people say/wish “but this time is different.”

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#108

Post by onlyrealcuzzo »

yieldcrv wrote: post #93
onlyrealcuzzo wrote: post #21

Earlier quoted context omitted.

Spreading illiquid wealth *

private secondary markets are pretty liquid for momentum tech companies, there is an entire cottage industry of people making trusts to circumvent any transfer restrictions employees are very liquid if they want to be, or wait a year for the next 10x in valuation

Oh, yes, next year OpenAI will be worth $5T, sure

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#109

Post by lbreakjai »

xnx wrote: post #47

The only way OpenAI survives is that "ChatGPT" gets stuck in peoples heads as being the only or best AI tool. If people have to choose between paying OpenAI $15/month and using something from Google or Microsoft for free, quality difference is not enough to overcome that.

Do people at large even care, or do they use "chatGPT" as a generic term for LLM?

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#110

Post by SeanAnderson »

I dunno. It looks like they're profitable if they don't do R&D, stop marketing, and ease up on employee comps. That's not the worst place to be. Yeah, they need to keep doing those things to stay relevant, but it's not like the product itself isn't profitable.
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