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OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

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Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#21

Post by simianwords »

Certhas wrote: post #19
nstart wrote: post #12

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this…

The Uber comparison makes no sense. This is the opposite situation. Uber lost money on rides, OpenAI is (possibly) making money on inference. Uber used an R+D moonshot to autonomous driving to justify capturing an established industry without reducing costs meaningfully. OpenAI has a core product that risks becoming a commodity with open source models only 6 months behind.

Uber didn’t lose money on rides other than some edge cases. What’s your source for this claim?

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#22

Post by matusp »

muglug wrote: post #4

Revenue went from $3.7B to $13.07B — roughly 3.5x. Operating loss went from ~$8.8B to ~$20.9B — roughly 2.4x. Doesn't seem like a domesday scenario.

The AI companies also have a lot of space to grow their income (more ads, price hikes, ...). It seems realistic for them to turn profitable. But the market expected much more from these companies.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#23

Post by besterman23 »

simianwords wrote: post #20

What is the right way to deal with Ed Zitron articles because he’s historically extremely inaccurate and makes wild claims. People ignore all his horrendous takes from last year and still eat this years “analyses” like it’s Gods words. He has been predicting the doom for years and years now and it is strange to see HN still putting credence here. This is what he said around a week back “ One of my sources has come fo…

Yeah if this is his “information he wanted for years” it’s pretty abysmal in terms of crashing the “ai bubble”.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#24

Post by JumpCrisscross »

simianwords wrote: post #18
grey-area wrote: post #15

Earlier quoted context omitted.

Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here What is counted as R&D is completely arbitrary. These figures are just playing accounting games to attempt to hide the massive ongoing costs. We’ll see a little better when they IPO and are forced to attempt to make money but I wouldn’t invest in this business.

[flagged]

Ed?

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#28

Post by lelanthran »

JumpCrisscross wrote: post #27
simianwords wrote: post #25

Earlier quoted context omitted.

The guy who wrote the post we are discussing

Oh! What’s his reputation?

> Oh! What’s his reputation?

The people who are completely sold on the belief that AI providers are running at a profit believe him to be utterly, totally and completely wrong in every one of his predictions.

The people who are completely sold on the belief that AI providers are running at a loss they can never recover from believe him to be utterly, totally and completely correct in every one of his predictions.

The reality is that it's not his predictions that matter, but his data, which is almost always correct as of time of writing. If you ignore his opinions, the data presented on liabilities, spend, revenue, loans, commitments, etc across Coreweave, Stargate, Oracle and all of the usual AI companies is, as far as I can tell, correct.

IOW, when it comes to his opinions, it's all about your priors. His data is good, though.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#29

Post by lelanthran »

muglug wrote: post #4

Revenue went from $3.7B to $13.07B — roughly 3.5x. Operating loss went from ~$8.8B to ~$20.9B — roughly 2.4x. Doesn't seem like a domesday scenario.

> Revenue went from $3.7B to $13.07B — roughly 3.5x.

> Operating loss went from ~$8.8B to ~$20.9B — roughly 2.4x.

> Doesn't seem like a domesday scenario.

Those two lines are moving up and to the right, but are not parallel.

It all depends on where those two lines meet (the break-even point): too far in the future and the company will be dead anyway. Almost all companies will eventually be profitable; the problem is that the majority of them will need constant cash injections to keep the lights on.

Like the old aviation saying: even a brick will fly if it has enough thrust. doesn't make the brick a plane, though.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#30

Post by thepasch »

JumpCrisscross wrote: post #27
simianwords wrote: post #25

Earlier quoted context omitted.

The guy who wrote the post we are discussing

Oh! What’s his reputation?

Up until this post, I thought he was someone with good financial insight, analytical chops, and business sense, stuck with an audience that thinks it's still 2023 and ChatGPT 3 is still the pinnacle of the technology, and that he therefore has to pander to in order to pay the bills.

After this supposedly being the reveal for his bubble-bursting massive revelation that will send the industry flying and lead to journalists kicking in his door for interview requests and exposés, I think... well, not that anymore. I thought "the frontier labs are losing money" was rather universally understood, and this really isn't even as bad as the stuff that's publicly visible; the fact that they keep raising hundreds of billions of dollars that they'll one day supposedly be required to show returns on?

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