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Leaked OpenAI financials show $38.5B loss and compute burn

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Re: Leaked OpenAI financials show $38.5B loss and compute burn

#121

Post by simoncion »

bgirard wrote: post #43
simoncion wrote: post #26

Earlier quoted context omitted.

> 13 billion in revenue, 7.5 in cost of revenue. and 7.81 billion in R&D from last year. I don't know how long it took to build the weights for the current model, or exactly how much that costs, but it's certainly more than zero days and zero dollars. I also doubt that OpenAI could set that R&D expense to zero and survive without an agreement from Anthropic that they'll do the same... so that R&D expense can't be ign…

You're missing the point. There was a lot of debate around if inference was subsidized or not. And that's a huge point to confirm in the public discourse.

> You're missing the point. There was a lot of debate around if inference was subsidized or not.

To answer that question you have to take into account the cost to produce the thing that inference uses. If you don't, then that's like claiming that the total cost of a car is the cost to keep it on a dealer's lot until it's sold.

"Figuring out how much R&D adds to the total cost of a thing" absolutely isn't a new problem. And given that models seem to get supplanted every year, it's not like you're gonna be able to spread those R&D costs out very much.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#122

Post by dofm »

simonw wrote: post #19

"OpenAI generated $13.07 billion in revenue in 2025" Considering just four years ago they were a research lab with hardly any revenue at all, and no corporate muscles for earning revenue, I think that is a very impressive number. (Sure, they're losing a whole lot of money too. Same goes for almost every other hyper-growth company in the history of tech.)

$867 million of that was Softbank. News the market has not taken well.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#123

Post by locusofself »

reinitctxoffset wrote: post #114
nl wrote: post #8

Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. We know OpenAI is forecasting $25-30B revenue for 2026. They will be very close to breaking even at those number. Given Anthropic has forecast more revenue than OpenAI and we know has spent less on R&D (cite their desperate scramble for compute capacity!) the rumours of them being profitable this year seem very credible.

Anthropic has a durable advantage that OpenAI does not, as much as they choose to squander it to pump the numbers. They were first on a few things but the tell is the coherence of the thinking traces of Claude. You have to put a loss on that . GPT 5 series thinking traces are creepy, Gemini thinking traces are disturbing. They both represent forced discontinuities on the policy gradient. Claude is good at tool use be…

You lost me in the last sentence there. What do you mean?

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#124

Post by ElFitz »

reinitctxoffset wrote: post #114
nl wrote: post #8

Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. We know OpenAI is forecasting $25-30B revenue for 2026. They will be very close to breaking even at those number. Given Anthropic has forecast more revenue than OpenAI and we know has spent less on R&D (cite their desperate scramble for compute capacity!) the rumours of them being profitable this year seem very credible.

Anthropic has a durable advantage that OpenAI does not, as much as they choose to squander it to pump the numbers. They were first on a few things but the tell is the coherence of the thinking traces of Claude. You have to put a loss on that . GPT 5 series thinking traces are creepy, Gemini thinking traces are disturbing. They both represent forced discontinuities on the policy gradient. Claude is good at tool use be…

> Claude Code is the cancer that will kill the patient, Boris is the the Kardashian version of Karpathy, with less business sense.

I am not sure I understand.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#125

Post by danielmarkbruce »

vkou wrote: post #100
danielmarkbruce wrote: post #80

Earlier quoted context omitted.

No, they argue they shouldn't be counted as operating expenses because they are basically capex dollars. It's a completely reasonable argument. If I spend $100 million on s&m to get a bunch of customers to my saas, it's not different economically to drilling 20 oil wells at $5 million a pop.

An oil well doesn't disappear once you put it in the ground (The oil might). If the marketing and promotions and discounts stopped tomorrow, that revenue will drop.

If you drill a dry well, under successful efforts accounting, you expense it. You also make zero dollars.

On top of that, oil wells decline, slowly but surely, just like... customers churn.

If you spend $100 mill on sales and marketing and get zero customers, I'd agree it should expensed. If you get a bunch of customers, it's hard to argue against the capex treatment idea.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#126

Post by zozbot234 »

echelon wrote: post #86
simonw wrote: post #19

"OpenAI generated $13.07 billion in revenue in 2025" Considering just four years ago they were a research lab with hardly any revenue at all, and no corporate muscles for earning revenue, I think that is a very impressive number. (Sure, they're losing a whole lot of money too. Same goes for almost every other hyper-growth company in the history of tech.)

Yeah, but they have no moat. They gave up on video because three separate Chinese companies were kicking their ass (and for cheaper). Google has a better image model in the majority of cases. Much faster, too. Claude Opus and Fable are like a billion times better. It's not even funny. Codex can't do Rust at all. What does that leave them? Ads in ChatGPT? I've started to just rely on Google search blended with Gemini…

Opus 4.8 is quite weak. And GPT-Pro is very much available unlike Fable, it's just not hooked up to the Codex harness yet.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#127

Post by freakynit »

somenameforme wrote: post #76
lukeschlather wrote: post #12

The R&D expenditure seems reasonable, and the revenue numbers seem realistic. I have no trouble believing they can be profitable by 2030 or much sooner. What I don't get is how you get from $30B in revenue to a nearly $1T valuation, but that seems almost level-headed compared to SpaceX, and it's not like any of the big tech companies' valuations make much sense in the context of their revenue.

The market is pricing in the potential for future revolutionary shifts which seem fairly likely. For instance if there ends up being substantial labor disruption due to LLMs then the economy as we know it is going to end up being reshaped in ways that are difficult to imagine beyond the fact that the LLM providers would likely play a critical role in it. Similarly, SpaceX has already brought the cost of getting thing…

"""For instance if there ends up being substantial labor disruption due to LLMs" ""

.. who are they gonna sell to if people don't even have money to buy? We live in circular economy... everyone's dependent on someone or the other... you take one leg out of this, and the whole thing stops. UBI won't work either because it will lead to runaway inflation and extreme levels of invasive control over people's lives and what they can and cannot do.

I hope no one here is naive enough to believe that AI would actually be used for general welfare of people.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#128

Post by didip »

reinitctxoffset wrote: post #114
nl wrote: post #8

Revenue is higher than cost of revenue and revenue is growing faster than cost of revenue. We know OpenAI is forecasting $25-30B revenue for 2026. They will be very close to breaking even at those number. Given Anthropic has forecast more revenue than OpenAI and we know has spent less on R&D (cite their desperate scramble for compute capacity!) the rumours of them being profitable this year seem very credible.

Anthropic has a durable advantage that OpenAI does not, as much as they choose to squander it to pump the numbers. They were first on a few things but the tell is the coherence of the thinking traces of Claude. You have to put a loss on that . GPT 5 series thinking traces are creepy, Gemini thinking traces are disturbing. They both represent forced discontinuities on the policy gradient. Claude is good at tool use be…

Is this AI bot? So annoying that bots can join in HN conversations.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#129

Post by Retric »

raincole wrote: post #99
simonw wrote: post #19

"OpenAI generated $13.07 billion in revenue in 2025" Considering just four years ago they were a research lab with hardly any revenue at all, and no corporate muscles for earning revenue, I think that is a very impressive number. (Sure, they're losing a whole lot of money too. Same goes for almost every other hyper-growth company in the history of tech.)

> Same goes for almost every other hyper-growth company in the history of tech Except it's not true. No one lost $38.5B in a year just to 'hyper-grow' or whatever it means. Uber accumulated ~$30B loss over a decade . Edit: I read it wrong. The loss was mostly caused by one-time event[0]: > Before OpenAI’s switch late last year to become a public benefit corporation, investors in the company received convertible inter…

Depreciating assets is one of several possibilities.

Re: Leaked OpenAI financials show $38.5B loss and compute burn

#130

Post by grey-area »

cmiles8 wrote: post #85

OpenAI likely missed the window to have a successful IPO. A year ago, even 6 months ago, folks would have been still hypnotized by the hype and they would have pulled it off. Today too many people see a burning ship of cash and no moat to justify the burn. The story just isn’t there anymore.

SpaceX IPO shows that the mania is alive and well.

The big AI IPOs this year will mark the high point in the bubble IMO, with retail FOMO ensuring that they pop like SpaceX has.

After that I expect them to crater, just like all those Spacs and Blockchain startups.

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