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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

#121

Post by layoric »

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?

> Unlike railroads and fibre, all the best compute in 2025 will be lacklustre in 2027.

I definitely don't think compute is anything like railroads and fibre, but I'm not so sure compute will continue it's efficiency gains of the past. Power consumption for these chips is climbing fast, lots of gains are from better hardware support for 8bit/4bit precision, I believe yields are getting harder to achieve as things get much smaller.

Betting against compute getting better/cheaper/faster is probably a bad idea, but fundamental improvements I think will be a lot slower over the next decade as shrinking gets a lot harder.

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

#122

Post by dreamcompiler »

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…

Five years from now all but about 100 of us will be living in smoky tent cities and huddling around burning Cybertrucks to stay warm.

But there will still be thousands of screens everywhere running nonstop ads for things that will never sell because nobody has a job or any money.

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

#123

Post by mattmanser »

Analemma_ wrote: post #100
wood_spirit wrote: post #89

Earlier quoted context omitted.

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?

Exactly: when was the last time you used ChatGPT-3.5? Its value deprecated to zero after, what, two-and-a-half years? (And the Nvidia chips used to train it have barely retained any value either) The financials here are so ugly: you have to light truckloads of money on fire forever just to jog in place.

But is it a bit like a game of musical chairs?

At some point the AI becomes good enough, and if you're not sitting in a chair at the time, you're not going to be the next Google.

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

#124

Post by anthonypasq »

toshinoriyagi wrote: post #115
anthonypasq wrote: post #28

Earlier quoted context omitted.

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.

im not sure that you read what i just said. Almost no one using chatgpt would care if they were still talking to gpt5 2 years from now. If compute per watt doubles in the next 2 years, then the cost of serving gpt5 just got cut in half. purely on the hardware side, not to mention we are getting better at making smaller models smarter.

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

#126

Post by avbanks »

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…

I don't think people fully realize how good the open source models are and how easy it is to switch.

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

#127

Post by fred_is_fred »

zurfer wrote: post #60

The $13.5B net loss doesn't mean they are in trouble, it's a lot of accounting losses. Actual cash burn in H1 2025 was $2.5B. With ~$17.5B on hand (based on last funding), that’s about 3.5 years of runway at current pace.

Deprecation only gets worse for them as they build-out, not better.

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

#128

Post by whizzter »

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.

I've said it before and I'll say it again.. if I was able to know the time it takes for bubbles to pop I would've shorted many of the players long ago.

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

#129

Post by whizzter »

hgomersall wrote: post #96
throwacct wrote: post #48

At this point, every LLM startup out there is just trying to stay in the game long enough before VC money runs out or others fold. This is basically a war of attrition. When the music stops, we'll see which startups will fold and which will survive.

Will any survive?

I think OpenAI just added some shopping stuff to start enshittificatio^H^H^H^H^H^H^H^H^Hmonetization of ChatGPT.

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

#130

Post by whizzter »

cs702 wrote: post #45

Correction: 4.3B in revenues . Other than Nvidia and the cloud providers (AWS, Azure, GCP, Oracle, etc.), no one is earning a profit with AI, so far. Nvidia and the cloud providers will do well only if capital spending on AI, per year, remains at current rates.

I really hope NVidia doesn't get too comfortable with the AI incomes, would be sad to see all progress in gaming disappear.
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