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OpenAI's cash burn will be one of the big bubble questions of 2026

economist.com

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Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#181

Post by brokencode »

doug_durham wrote: post #127
reissbaker wrote: post #74

Earlier quoted context omitted.

The GPT-5 series is a new model, based on the o1/o3 series. It's very much inaccurate to say that it's a routing system and prompt chain built on top of 4o. 4o was not a reasoning model and reasoning prompts are very weak compared to actual RLVR training. No one knows whether the base model has changed, but 4o was not a base model, and neither is 5.x. Although I would be kind of surprised if the base model hadn't als…

Prior to 5.2 you couldn’t expect to get good answers to questions prior to March 2024. It was arguing with me that Bruno Mars did not have two hit songs in the last year. It’s clear that in 2025 OpenAI used the old 4.0 base model and tried to supercharge it using RLVR. That had very mixed results.

That just means their pretraining data set was older. You can train as many models as you want on the same data.

I’m sure all these AI labs have extensive data gathering, cleanup, and validation processes for new data they train the model on.

Or at least I hope they don’t just download the current state of the web on the day they need to start training the new model and cross their fingers.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#182

Post by fooblaster »

nateb2022 wrote: post #178
fooblaster wrote: post #170

Earlier quoted context omitted.

If you think they are going to catch up with Google's software and hardware ecosystem on their first chip, you may be underestimating how hard this is. Google is on TPU v7. meta has already tried with MTIA v1 and v2. those haven't been deployed at scale for inference.

I don't think many of them will want to, though. I think as long as Nvidia/AMD/other hardware providers offer inference hardware at prices decent enough to not justify building a chip in-house, most companies won't. Some of them will probably experiment, although that will look more like a small team of researchers + a moderate budget rather than a burn-the-ships we're going to use only our own hardware approach.

Well, anthropic just purchased a million TPUs from Google because even with a healthy margin from Google, it's far more cost effective because of Nvidia's insane markup. That speaks for itself. Nvidia will not drop their margin because it will tank their stock price. it's half of the reason for all this circular financing - lowering their effective margin without lowering it on paper.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#183

Post by krupan »

doctorpangloss wrote: post #152
agentifysh wrote: post #103

Earlier quoted context omitted.

It's mathematically impossible what OpenAI is promising. They know it. The goal is to be too big to fail and get bailed out by US taxpayers who have been groomed into viewing AI as a cold war style arms race that America cannot lose.

on the one hand, i understand you are making a stylized comment, on the other hand, as soon as i started writing something reasonable, i realized this is an "upvote lame catastrophizing takes about" (checking my notes) "some company" thread, which means reasonable stuff will get downvoted... for example, where is there actual scarcity in their product inputs? for example, will they really be paying retail prices to i…

They've already spent so much money that even if they get any new hardware at a deep discount they will have a very hard time breaking even

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#184

Post by CharlieDigital »

fooblaster wrote: post #163
fooblaster wrote: post #160

Earlier quoted context omitted.

There is a pretty big moat for Google: extreme amounts of video data on their existing services and absolutely no dependence on Nvidia and it's 90% margin.

And yes, all their competitors are making custom chips. Google is on TPU v7. absolutely nobody is going to get this right on the first try among their competitors - Google didn't.

Bigger problem for late starts now is that it will be hard to match the performance and cost of Google/Nvidia. It's an investment that had to have started years ago to be competitive now.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#185

Post by brokencode »

orbital-decay wrote: post #122
mvkel wrote: post #27

The fact is nobody has any idea what OpenAI's cash burn is. Measuring how much they're raising is not an adequate proxy. For all we know, they could be accumulating capital to weather an AI winter. It's also worth noting that OpenAI has not trained a new model since gpt4o (all subsequent models are routing systems and prompt chains built on top of 4), so the idea of OpenAI being stuck in some kind of runaway training…

>It's also worth noting that OpenAI has not trained a new model since gpt4o (all subsequent models are routing systems and prompt chains built on top of 4) At the very least they made GPT 4.5, which was pretty clearly trained from scratch. It was possibly what they wanted GPT-5 to be but they made a wrong scaling prediction, people simply weren't ready to pay that much money.

People would have paid it if it was actually significantly better. It was a huge cost increase for a pretty minor performance increase.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#186

Post by andrekandre »

JumpCrisscross wrote: post #135
Alconicon wrote: post #85

Earlier quoted context omitted.

Because OpenAI stands for AI leader. If Gemini can create or edit an image, chatgpt needs to be able to do this too. Who wants to copy&paste prompts between ai agents? Also if you want to have more semantics, you add image, video and audio to your model. It gets smarter because of it. OpenAI is also relevant bigger than antropic and is known as a generic 'helper'. Antropic probably saw the benefits of being more focu…

> Who wants to copy&paste prompts between ai agents? An AI! The specialist vs generalist debate is still open. And for complex problems, sure, having a model that runs on a small galaxy may be worth it. But for most tasks, a fleet of tailor-made smaller models being called on by an agent seems like a solidly-precedented (albeit not singularity-triggering) bet.

  > But for most tasks, a fleet of tailor-made smaller models being called on by an agent seems like a solidly-precedented (albeit not singularity-triggering) bet.
not an expert by any means, but wouldn't smaller but highly refined models also output more reproducible results?

intuitively it sounds akin to the unix model...

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#187

Post by CharlieDigital »

senshan wrote: post #150
testing22321 wrote: post #146

Earlier quoted context omitted.

Don’t that have to make more money in the next 10 years than any company ever has… and that is just to break even. It’s going to crash, guaranteed

It is the term "mathematically impossible" that caught my attention. Since it is about the future promise of OpenAI, one could debate the likelihood or "statistically improbable", but "mathematically impossible" implies some calculation, proof and certainty. Hence my curiosity.

I've seen some calculation I think from an HSBC analyst that it would take a monthly subscription of $200/mo. from some large portion of the US population for some insane number of years to break even.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#188

Post by woooooo »

robkop wrote: post #140
agentifysh wrote: post #105

Earlier quoted context omitted.

what are you talking about Gemini adoption has tripled in a few months alone and have around 18% of marketshare and its accelerating.

I’ve heard too many rumors that much of that adoption is from copying ms i.e. bundling gemini into their office suite

Gemini adoption via search is legit, though. I had a question, I got an answer, its not forced, fake adoption in that case.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#189

Post by CryptoBanker »

Avicebron wrote: post #44

On the radio they mentioned that the total global chocolate market is ~100B, I googled it when I was home and it seems to be about ~135B. Apparently that is ... all chocolate, everywhere.. OpenAI's valuation is about 500B. Maybe going up to like 835B. I'd love to see the rationale that OpenAI (not "AI" everywhere) is more valuable than chocolate globally. ... so crash early 2026?

I spend a lot more time using AI for work than I do eating chocolate

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#190

Post by bloppe »

_ache_ wrote: post #62
esel2k wrote: post #42

Earlier quoted context omitted.

Where does google struggle to make products people don’t want to use? Is it a personal opinion?

Bart was a flop. Google search is losing market share to other LLM providers. Gemini adoption is low, people around me prefer OpenAI because it is good enough and known. But on the contrary, Nano Banana is very good, so I don't know. And in the end, I'm pretty confident Google will be the AI race winner, because they got the engineers, they tech background and the money. Unless Google Adsense die, they can continue t…

> Gemini adoption is low, people around me prefer OpenAI because it is good enough and known.

Gemini is built into Android and Google search. People may not be going to gemini.google.com, but that does not mean adoption is low.

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