$2.5B in stock comp for about 3,000 employees. that’s roughly $830k per person in just six months. Almost 60% of their revenue went straight back to staff.
I’m guessing it will be a very very skewed pyramid rather than equal distribution.
OpenAI's H1 2025: $4.3B in income, $13.5B in loss
151–160 of 720 posts
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#152Earlier 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?
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.
> Yep, we are (unfortunately) still running on railroad infrastructure built a century ago.
That which survived, at least. A whole lot of rail infrastructure was not viable and soon became waste of its own. There was, at one time, ten rail lines around my parts, operated by six different railway companies. Only one of them remains fully intact to this day. One other line retained a short section that is still standing, which is now being used for car storage, but was mostly dismantled. The rest are completely gone.
When we look back in 100 years, the total amortization cost for the "winner" won't look so bad. The “picks and axes” (i.e. H100s) that soon wore down, but were needed to build the grander vision won't even be a second thought in hindsight.
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#153> Operating losses reached US$7.8 billion, and the company said it burned US$2.5 billion in cash.
I wonder what the non-cash losses consist of?
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#154Earlier 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.
> And the Nvidia chips used to train it have barely retained any value either
Oh, I'd love to get a cheap H100! Where can I find one? You'll find it costs almost as much used as it's new.
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#155These 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…
ChatGPT chatting ads halfway through its answer is going to be totally rad.
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#156One negative signal, no matter how small, will send the market into a death spiral. That will happen in a matter of hours.
There’s been loads of these signals and the market keeps ignoring them.
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#157Earlier quoted context omitted.
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.
> money on fire forever just to jog in place. Why? I don't see why these companies can't just stop training at some point. Unless you're saying the cost of inference is unsustainable? I can envision a future where ChatGPT stops getting new SOTA models, and all future models are built for enterprise or people willing to pay a lot of money for high ROI use cases. We don't need better models for the vast majority of cha…
They aren't. They are obsequious. This is much worse than it seems at first glance, and you can tell it is a big deal because a lot of effort going into training the new models is to mitigate it.
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#158Earlier quoted context omitted.
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.
> Yep, we are (unfortunately) still running on railroad infrastructure built a century ago. That which survived, at least. A whole lot of rail infrastructure was not viable and soon became waste of its own. There was, at one time, ten rail lines around my parts, operated by six different railway companies. Only one of them remains fully intact to this day. One other line retained a short section that is still standin…
If 1/10 investment lasts 100 years that seems pretty good to me. Plus I'd bet a lot of the 9/10 of that investment had a lot of the material cost re-coup'd when scrapping the steel. I don't think you're going to recoup a lot of money from the H100s.
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#159Earlier quoted context omitted.
Marketing != advertising. Although this budget probably does include some traditional advertising. It is most likely about building the brand and brand awareness, as well as partnerships etc. I would imagine the sales team is probably quite big, and host all kinds of events. But I would say a big chunk of this "sales and marketing" budget goes into lobbying and government relations. And they are winning big time on t…
I agree - they're winning big and booking big revenue. If you discount R&D and "sales and marketing", they've got a net loss of "only" $500 million. They're trying to land grab as much surface area as they can. They're trying to magic themselves into a trillion dollar FAANG and kill their peers. At some point, you won't be able to train a model to compete with their core products, and they'll have a thousand times th…
> If you discount R&D and "sales and marketing"
If you discount sales & marketing, they will start losing enterprise deals (like the US government). The lack of a free tier will impact consumer/prosumer uptake (free usage usually comes out of the sales & marketing budget).
If you discount R&D, there will be no point to the business in 12 months or so. Other foundation models will eclipse them and some open source models will likely reach parity.
Both of these costs are likely to increase rather than decrease over time.
> ChatGPT is already a new default "pane of glass" for normal people.
OpenAI should certainly hope this is not true, because then the only way to scale the business is to get all those "normal" people to spend a lot more.
Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss
#160Earlier 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?
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.
> Yep, we are (unfortunately) still running on railroad infrastructure built a century ago. The amortization periods on that spending is ridiculously long.
Are we? I was under the impression that the tracks degraded due to stresses like heat/rain/etc. and had to be replaced periodically.