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As long as investors are willing to pay for it.
I can’t help but feel their push to go public is driven by their having milked the private markets dry.
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Alphabet (Google) made $102.35 billion in revenue last quarter, not $100bn in profit.
Also most of it is from ads, not from their AI or cloud products. I wonder when OpenAI will start to serve ads as much as Google does, they certainly have people's attention a lot of times throughout the day looking at how people around me use their services.
By the time OAI even figures it out, they will have run out of funding. All they can do now is prop up usage numbers to signal to investors that their market position is durable.
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Forever, tech has become a never ending sequence of bubbles and hype cycles.
The duration of this hype-cycle/bubble has exceeded my expectations.
Their revenue in the entire first half per the article was $4.3B, even if we assume it was backloaded in Q2 that’s a -500% profit margin. I’m very excited to review their S-1. Like, for every dollar you give them they spend $5 to deliver the product. They’re selling $10 bills for $2. They seem to have taken the joke about making up losses with scale pretty seriously.
What Theo claims on YouTube is that each model they make is profitable over its lifetime and the weird numbers for the company are because they keep training more models, having to pay up front to buy a bunch of future profit each time basically
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Forever, tech has become a never ending sequence of bubbles and hype cycles.
The duration of this hype-cycle/bubble has exceeded my expectations.
Contrast this with Google who made $100Bn profit last quarter and on the side has Gemini with 650MAU and does 7B tokens/minute. It makes it clear that neither MS nor OAI know what they are doing.
Not a single AI company is cash flow positive, not even Google's AI part of the business. It's unclear if they even can be, since commodity models you can use for free catch up to them pretty close to yearly.
>We are seeing AI now driving real business results across the company. We delivered our first ever $100 billion quarter. Five years ago, our quarterly revenue was at $50 billion. Our revenue number has doubled since then, and we are firmly in the generative AI era.
They also do a lot of different stuff in AI, like they make their own TPUs and "Anthropic recently shared plans to access up to 1 million TPUs". So some of the business is a bit Nvidia like.
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The problem is that OpenAI will have to keep doing this basically indefinitely, as otherwise open-source commodity models will catch up with them and offer an equivalent product at a much lower cost. If the company is reliant on having to keep paying more than it's making on its current model to train new models, I don't see how it can ever become a sustainable business.
Not even just open source models - other commercial LLM models as well. All of the big LLM companies (Google, Anthropic, OpenAI) are basically ocked in a cold war of having to continuously outspend the other providers or risk becoming irrelevant. The big question for me is if people will ever be happy with a model that is "good enough", and can thus be optimized and run profitably over time without faling behind. Tim…
OpenAI may implode and absorbed by MSFT. Anthropic may implode and be absorbed by Amazon.
Nvidia may not have the same demand of chips once the datacenters have been built out, but the hyperscalers are reaaaaaaally huge.
May as well say US economy depends on being the planet’s datacenter.
How long can this go on for?