Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

techinasia.com

Post reply on HN
Print view View original

171–180 of 720 posts

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

#171

Post by palmotea »

layoric wrote: post #121
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?

> 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…

>> 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.

I'm no expert, buy my understanding is that as feature sizes shrink, semiconductors become more prone to failure over time. Those GPUs probably aren't going to all fry themselves in two years, but even if GPUs stagnate, chip longevity may limit the medium/long term value of the (massive) investment.

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

#172

Post by chermi »

diggan wrote: post #66
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? Not sure where/how I read it, but remember coming across articles stating OpenAI has some agreements with schools, universities and even the US government. The cost of making those happen would probably go into "sales & marketing".

So probably just write-offs of tokens they give away?

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

#173

Post by manquer »

xhrpost wrote: post #113

> 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.

Is it a great deal?

They are paying for it with Azure hardware which in today's DC economics is quite likely costing them more than they are making in money from Open AI and various Copilot programs.

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

#174

Post by palmotea »

9rx wrote: post #152
potatolicious wrote: post #111

Earlier 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…

> 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.

How long did it take for 9 out of 10 of those rail lines to become nonviable? If they lasted (say) 50 years instead of 100, because that much rail capacity was (say) obsoleted by the advent of cars and trucks, that's still pretty good.

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

#175

Post by stackskipton »

Fade_Dance wrote: post #112
JCM9 wrote: post #61

Earlier quoted context omitted.

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 pa…

Depends on raise terms but most raises are not 100% guaranteed. I was at a company that said, we have raised 100 Million in Series B (25 over 4 years) but Series B investors decided in year 2 of 4 year payout that it was over, cancelled remaining payouts and company folded. It was asked "Hey, you said we had 100 Million?" and come to find out, every year was an option.

Alot of finances for non public company is funny numbers. It's based on numbers the company can point to but amount of asterisks in those numbers is mind-blowing.

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

#176

Post by 9rx »

palmotea wrote: post #174
9rx wrote: post #152

Earlier quoted context omitted.

> 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…

> 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 comple…

> How long did it take for 9 out of 10 of those rail lines to become nonviable?

Records from the time are few and far between, but, from what I can tell, it looks like they likely weren't ever actually viable.

The records do show that the railways were profitable for a short while, but it seems only because the government paid for the infrastructure. If they had to incur the capital expenditure themselves, the math doesn't look like it would math.

Imagine where the LLM businesses would be if the government paid for all the R&D and training costs!

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

#177

Post by manquer »

hmate9 wrote: post #5

$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.

Stock compensation is not cash out, it just dilutes the other shareholders, so current cash flow should not have anything do to the amount of stock issued[1]

While there is some flexibility in how options are issued and accounted for (see FASB - FAS 123), typically industry uses something like a 4 year vesting with 1 year cliffs.

Every accounting firm and company is different, most would normally account for it for entire period upfront the value could change when it is vests, and exercised.

So even if you want to compare it to revenue, then it should be bare minimum with the revenue generated during the entire period say 4 years plus the valuation of the IP created during the tenure of the options.

---

[1] Unless the company starts buying back options/stock from employees from its cash reserves, then it is different.

Even secondary sales that OpenAI is being reported to be facilitating for staff worth $6.6Billion has no bearing on its own financials directly, i.e. one third party(new investor) is buying from another third party(employee), company is only facilitating the sales for morale, retention and other HR reasons.

There is secondary impact, as in theory that could be shares the company is selling directly to new investor instead and keeping the cash itself, but it is not spending any existing cash it already has or generating, just forgoing some of the new funds.

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

#178

Post by ralph84 »

SJC_Hacker wrote: post #160
potatolicious wrote: post #111

Earlier 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. 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.

The track bed, rails, and ties will have been replaced many times by now. But the really expensive work was clearing the right of way and the associated bridges, tunnels, etc.

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

#179

Post by fxtentacle »

fooker wrote: post #149
potatolicious wrote: post #111

Earlier 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.

> Effectively every single H100 in existence now will be e-waste in 5 years or less. This remains to be seen. H100 is 3 years old now, and is still the workhorse of all the major AI shops. When there's something that is obviously better for training, these are still going to be used for inference. If what you say is true, you could find a A100 for cheap/free right now. But check out the prices.

Yeah, I can rent an A100 server for roughly the same price as what the electricity would cost me.

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

#180

Post by fragmede »

anthonypasq wrote: post #124
toshinoriyagi wrote: post #115

Earlier quoted context omitted.

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.

People cared enough about GPT-5 not being 4o that OpenAI brought 4o back.

https://arstechnica.com/information-technology/2025/08/opena...

Post reply on HN