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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

#191

Post by smj-edison »

agentifysh wrote: post #95

2008: US Banks pump stocks -> market correction -> taxpayer bailout 2026: US AI companies pump stocks -> market correction -> taxpayer bailout Mark my words. OpenAI will be bailed out by US taxpayers.

In 2008 the US government ended up making more money then they spent though (at least with the tarp), because they invested a ton of money after everything collapsed, and thus was extremely cheap. Once the markets recovered, they made a hefty sum selling all the derivatives they got at the lowest point. Seems like the epitome of buy when low and sell when high tbh.

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

#192

Post by andrekandre »

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 is in basically everything from google now, from google docs to firebase to android studio so i wouldn't be surprised...

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

#193

Post by phyzix5761 »

avalys wrote: post #139

AI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic,…

I, personally, use chatGPT for search more than I do Google these days. It, more often than not, gives me more exact results based on what I'm looking for and it produces links I can visit to get more information. I think this is where their competitive advantage lies if they can figure out how to monetize that.

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

#194

Post by margalabargala »

nateb2022 wrote: post #168
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.

I have yet to be convinced the broader population has an appetite for AI produced cinematography or videos. Independence from Nvidia is no more of a liability than dependence on electricity rates; it's not as if it's in Nvidia's interest to see one of its large customers fail. And pretty much any of the other Mag7 companies are capable of developing in-house TPUs + are already independently profitable, so Google isn'…

It's in Nvidia's interest to charge the absolute maximum they can without their customers failing. Every dollar of Nvidia's margin is your own lost margin. Utilities don't do that. Nvidia is objectively a way bigger liability than electricity rates.

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

#195

Post by andrekandre »

nateb2022 wrote: post #174
glial wrote: post #124

Earlier quoted context omitted.

OK, but Gmail, Google Maps, Google Docs, and Google Search etc are ubiquitous. `Google' has even become a verb. Google might take a shotgun approach, but it certainly does create widely used products.

I will add that there's also Gemini in Chrome. With Chrome being the largest browser by market share, that's a powerful de facto default.

  > With Chrome being the largest browser by market share, that's a powerful de facto default.
where art thou anti-trust enforcement...

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

#196

Post by amelius »

wat10000 wrote: post #10
andsoitis wrote: post #5

In a parallel universe, governments invest in the compute/datacenters (read: infra), and let model makers compete on the same playing field.

That seems like a terrible idea. Data centers aren’t a natural monopoly. Regulate the externalities and let it flourish.

Don't forget that the internet exists because of government agencies.

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

#197

Post by bloppe »

agentifysh wrote: post #103
gip wrote: post #31

There is no doubt that OpenAI is taking a lot of risks by betting that AI adoption will translate into revenues in the very short term. And that could really happen imo (with a low probability sure, but worth the risk for VCs? Probably).

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.

Bailing out OAI would be entirely unnecessary (crowded field) and political suicide (how many hundreds of billions that could have gone to health care instead?)

If it happens in the next 3 years, tho, and Altman promises enough pork to the man, it could happen.

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

#198

Post by mark_l_watson »

nateb2022 wrote: post #162
avalys wrote: post #139

AI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic,…

> AI is going to be a highly-competitive, extremely capital-intensive commodity market It already is. In terms of competition, I don't think we've seen any groundbreaking new research or architecture since the introduction of inference time compute ("thinking") in late 2024/early 2025 circa GPT-o4. The majority of the cost/innovation now is training this 1-2 year old technology on increasingly large amounts of conten…

> in 5-10 years, most entry-level laptops will be able to manage a local 30B sized model

I suspect most of the excitement and value will be on edge devices. Models sized 1.7B to 30B have improved incredibly in capability in just the last few months and are unrecognizably better than a year ago. With improved science, new efficiency hacks, and new ideas, I can’t even imagine what a 30B model with effective tooling available could do in a personal device in two years time.

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

#199

Post by CodingJeebus »

thisgetsit wrote: post #165
Ginden wrote: post #132

Earlier quoted context omitted.

Because almost everyone involved in AI race grew up in "winner takes it all" environments, typical for software, and they try really hard to make it reality. This means your model should do everything to just take 90% of market share, or at least 90% of specific niche. The problem is, they can't find the moat, despite searching very hard, whatever you bake into your AI, your competitors will be able to replicate in f…

> copyright provides such a moat. Been saying this since the 2016 Alice case. Apple jumped into content production in 2017. They saw the long term value of copyright interests. https://arstechnica.com/information-technology/2017/08/apple... Alice changed things such that code monkeys algorithms were not patentable (except in some narrow cases where true runtime novelty can be established.) Since the transformers pape…

Totally agree, people love to talk about how hopelessly behind Apple is in terms of AI progress when they’re in a better position to compete directly against Nvidia on hardware than anyone else.

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

#200

Post by airstrike »

nateb2022 wrote: post #162
avalys wrote: post #139

AI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic,…

> AI is going to be a highly-competitive, extremely capital-intensive commodity market It already is. In terms of competition, I don't think we've seen any groundbreaking new research or architecture since the introduction of inference time compute ("thinking") in late 2024/early 2025 circa GPT-o4. The majority of the cost/innovation now is training this 1-2 year old technology on increasingly large amounts of conten…

> One could say that the introduction of the personal computer became a "race to the bottom." But it was only the start of the dot-com bubble era, a bubble that brought about a lot of beneficial market expansion.

I think the comparison is only half valid since personal computers were really just a continuation of the innovation that was general purpose computing.

I don't think LLMs have quite as much mileage to offer, so to continue growing, "AI" will need at least a couple step changes in architecture and compute.

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