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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

#191

Post by gizmodo59 »

whizzter wrote: post #133
avbanks wrote: post #126

Earlier quoted context omitted.

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

My input to our recent AI strategy workshop was basically: - OpenAI,etc will go bankrupt (unless one manages to capture search from a struggling Google) - We will have a new AI winter with corresponding research slowdown like in the 1980s when funding dries up - Opensource LLM instances will be deployed to properly manage privacy concerns.

99% of the world doesn’t care a dime about oss. It’s all saas and what you host behind the saas is only a concern for enterprise (and not every enterprise). And openai or Anthropic can just stop training and host oss models as well.

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

#192

Post by tim333 »

dcchambers wrote: post #131

I definitely don't "get" Silicon Valley finances that much - but how does any investor look at this and think they're ever going to see that money back? Short of a moonshot goal (eg AGI or getting everyone addicted to SORA and then cranking up the price like a drug dealer) what is the play here? How can OpenAI ever start turning a profit? All of that hardware they purchase is rapidly depreciating. Training cost are g…

Probably AGI. I can't see them making the money back on chatbots.

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

#193

Post by gizmodo59 »

Havoc wrote: post #73
beepbopboopp wrote: post #42

Earlier quoted context omitted.

Eh, distribution of the model is the real moat, theyre doing 700m WAU of the most financially valuable users on earth. If they truly become search, commerce and can use their model either via build or license across b2b, theyre the largest company on earth many times over.

>distribution of the model is the real moat, theyre doing 700m WAU of the most financially valuable users on earth. Distribution isn't a moat if the thing being distributed is easily substitutable. Everything under the sun is OAI API compatible these days. 700 WAU are fickle AF when a competitor offers a comparable product for half the price. Moat needs to be something more durable. Cheaper, Better, some other value…

Not necessarily. I’m sure there is many cheaper android phones that are technically better in specs but many users won’t change. Once you are familiar, bought into the ecosystem getting rid of it is very hard. I’m lazy myself compared to how I was several years ago. The curious and experimental folks are a minority and the majority ll stick with what works initially instead of constantly analyzing what’s best all the time

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

#194

Post by yunwal »

whizzter wrote: post #133
avbanks wrote: post #126

Earlier quoted context omitted.

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

My input to our recent AI strategy workshop was basically: - OpenAI,etc will go bankrupt (unless one manages to capture search from a struggling Google) - We will have a new AI winter with corresponding research slowdown like in the 1980s when funding dries up - Opensource LLM instances will be deployed to properly manage privacy concerns.

Barring a complete economic collapse, one of the big tech cos will 100% buy ChatGPT if OpenAI goes bankrupt

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

#196

Post by Spooky23 »

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 1875, we have Saudi and other tillion/billionaires willing commit almost any amount to own the future of business.

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

#197

Post by LarsDu88 »

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…

If you build the actual datacenter, less than half the cost is the actual compute. The other half is the actual datacenter infrastructure, power infrastructure, and cooling.

So in that sense it's not that much different from Meta and Google which also used server infrastructure that depreciated over time. The difference is that I believe Meta and Google made money hand over fist even in their earliest days.

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

#198

Post by Spooky23 »

potatolicious wrote: post #111
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?

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.

How was your trip down the third Avenue El? Did your goods arrive via boxcar to 111 8th Ave?

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

#199

Post by the_duke »

xnx wrote: post #47

The only way OpenAI survives is that "ChatGPT" gets stuck in peoples heads as being the only or best AI tool. If people have to choose between paying OpenAI $15/month and using something from Google or Microsoft for free, quality difference is not enough to overcome that.

Google has massive levers to push their own product onto users, like how they did it with Chrome. Just integrate it everywhere, have it installed by default on all Android phones, plaster Google results with adds.

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

#200

Post by Spooky23 »

9rx wrote: post #176
palmotea wrote: post #174

Earlier quoted context omitted.

> 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 d…

Railroads were pretty profitable for a long time. The western long haul routes were capitalized by land transfers.

What killed them was the same thing that killed marine shipping — the government put the thumb on the scale for trucking and cars to drive postwar employment and growth of suburbs, accelerate housing development, and other purposes.

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