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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

#111

Post by potatolicious »

wood_spirit wrote: post #89
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…

Unlike railroads and fibre, all the best compute in 2025 will be lacklustre in 2027. It won’t retain much value in the same way as the infrastructure of previous bubbles did?

Yep, we are (unfortunately) still running on railroad infrastructure built a century ago. The amortization periods on that spending is ridiculously long.

Effectively every single H100 in existence now will be e-waste in 5 years or less. Not exactly railroad infrastructure here, or even dark fiber.

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

#112

Post by Fade_Dance »

JCM9 wrote: post #61
codegeek wrote: post #44

I am curious to see how this compares against where Amazon was in 2000. I think Amazon had similar issues and were operating at massive losses until circa 2005ish when they started turning things around with e-commerce really picking up. If the revenue keeps going up and losses keep going down, it may reach that inflection point in a few years. For that to happen, the cost of AI datacenter have to go down massively.

Fundamentally different business models. Amazon had huge capital investments that got less painful as it scaled. Amazon also focuses on cash flow vs profit. Even early on it generated a lot of cash, it just reinvested that back into the business which meant it made a “loss” on paper. OpenAI is very different. Their “capital” expense depreciation (model development) has a really ugly depreciation curve. It’s not like…

OpenAI is raising at 500 billion and has partnerships with all of the trillion dollar tech corporations. They simply aren't going to have trouble with working capital for their core business for the foreseeable future, even if AI dies down as a narrative. If the hype does die down, in many ways it makes their job easier (the ridiculous compensation numbers would go way down, development could happen at a more sane pace, and the whole industry would lean up). They're not even at the point where they're considering an IPO, which could raise tens of billions in an instant, even assuming AI valuations get decimated.

The exception is datacenter spend since that has a more severe and more real depreciation risk, but again, if the Coreweave of the world run into to hardship, it's the leading consolidators like OpenAI that usually clean up (monetizing their comparatively rich equity for the distressed players at firesale prices).

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

#113

Post by xhrpost »

> OpenAI paid Microsoft 20% of its revenue under an existing agreement.

Wow that's a great deal MSFT made, not sure what it cost them. Better than say a stock dividend which would pay out of net income (if any), even better than a bond payment probably, this is straight off the top of revenue.

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

#114

Post by infecto »

rdtsc wrote: post #91
infecto wrote: post #79

Earlier quoted context omitted.

Does DeepSeek have any market penetration in the US? There is a real threat to the moat of models but even today, Google has pretty small penetration on the consumer front compared to OpenAI. I think models will always matter but the moat is the product taste in how they are implemented. Imo from a consumer perspective, OAI has been doing well in this space.

> Does DeepSeek have any market penetration in the US? Does Google? What about Meta? Claude is popular with developers, too. Amazon? There I am not sure what they are doing with the LLMs. ("Alexa, are you there?"). I guess they are just happy selling shovels, that's good enough too. The point is not that everyone is throwing away their ChatGPT subscriptions and getting DeepSeek, the point is that DeepSeek was the fir…

Maybe my point went over the fence.

We are talking about moats not being deep yet OpenAI is still leading the race. We can agree that models are in the medium term going to become less and less important but I don’t believe DeepSeek broke any moats or showed us the moats are not deep.

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

#115

Post by toshinoriyagi »

anthonypasq wrote: post #28
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.

they could keep the current model in chatGPT the same forver and 99% of users wouldnt know or care, and unless you think hardware isnt going to improve, the cost of that will basically decrease to 0.

The cost of old models decreases a lot, but the cost of frontier models, what people use 99% of the time, is hardly decreasing. Plus, many of the best models rely on thinking or reasoning, which use 10-100x as many tokens for the same prompt. That doesn't work on a fixed cost monthly subscription.

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

#117

Post by a4isms »

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.

> The 50x developer is a pervasive myth in our industry

Doesn't it depend upon how you measure the 50x? If hiring five name-brand AI researchers gets you a billion dollars in funding, they're probably each worth 1,000x what I'm worth to the business.

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

#118

Post by hedayet »

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?

enterprise sales are expensive. And selling to the US government is on a very different level.

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

#119

Post by [deleted] »

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…

[deleted]

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

#120

Post by moojacob »

lbreakjai wrote: post #109
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?

They call it chat.
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