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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

#211

Post by reilly3000 »

jeffbee wrote: post #88

For what I use them for, the LLM market has become a two player game, and the players are Anthropic and Google. So I find it quite interesting that OpenAI is still the default assumption of the leader.

codex cli with gpt-5.2-codex is so reliably good, it earns the default position in my book. I had cancelled my subscription in early 2024 but started back up recently and have been blown away at how terse, smart, and effective it is. Their CLI harness is top-notch and it manages to be extremely efficient with token usage, so the little plan can go for much of the day. I don’t miss Claude’s rambling or Gemini’s random refactorings.

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

#212

Post by raw_anon_1111 »

gerdesj wrote: post #173
bee_rider wrote: post #149

Earlier quoted context omitted.

Massive upfront costs and second place is just first loser. It’s like building fabs but your product is infinitely copyable. Seems pretty rough.

What exactly is "second" place? No-one really knows what first place looks like. Everyone is certain that it will cost an arm, a leg and most of your organs. For me, I think that, the possible winners will be close to fully funded up front and the losers will be trying to turn debt into profit and fail. The rest of us self hoster types are hoping for a massive glut of GPUs and RAM to be dumped in a global fire sale.…

First place looks a lot like Google…

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

#213

Post by sod22 »

phyzix5761 wrote: post #193
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.

I personally know people that used ChatGPT a lot but have recently moved to using Gemini.

There’s a couple of things going on but put simply - when there is no real lock in, humans enjoy variety. Until one firm creates a superior product with lock in, only those who are generating cash flows will survive.

OAI does not fit that description as of today.

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

#214

Post by Aurornis »

CharlieDigital wrote: post #187
senshan wrote: post #150

Earlier quoted context omitted.

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.

> from some large portion of the US population

What a silly calculation.

OpenAI’s customer base is global. Using US population as the customer base is deliberately missing the big picture. The world population is more than 20X larger than the US population.

It’s also obvious that they’re selling heavily to businesses, not consumers. It’s not reasonable to expect consumers to drive demand for these services.

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

#215

Post by ralph84 »

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'…

The value of YouTube for AI isn't making AI videos, it's that it's an incredibly rich source for humanity's current knowledge in one place. All of the tutorials, lectures, news reports, etc. are great for training models.

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

#216

Post by Mountain_Skies »

andy99 wrote: post #50
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 could make sense in some steady state regime where there were stable requirements and mature tech (I wouldn’t vote for it but I can see an argument). I see no argument why the government would jump into a hype cycle and start building infra that speculative startups are interested in. Why would they take on that risk compared to private investors, and how would they decide to back that over mammoth cloning infra…

Given where we are posting, the motive is obvious: to socialize the riskiest part of AI while the investors retain all the potential upside. These people have no sense of shame so they'll loudly advocate for endless public risk and private rewards.

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

#217

Post by bdangubic »

margalabargala wrote: post #194
nateb2022 wrote: post #168

Earlier quoted context omitted.

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.

it is in every business’s best interest to charge the maximum…

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

#218

Post by Mountain_Skies »

amelius wrote: post #196
wat10000 wrote: post #10

Earlier quoted context omitted.

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.

Cool. Time for the government to seize Amazon.

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

#219

Post by energy123 »

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,…

  > There's no evidence of a technological moat or a competitive advantage in any of these companies.
I disagree based on personal experience. OpenAI is a step above in usefulness. Codex and GPT 5.2 Pro have no peers right now. I'm happy to pay them $200/month.

I don't use my Google Pro subscription much. Gemini 3.0 Pro spends 1/10th of the time thinking compared to GPT 5.2 Thinking and outputs a worse answer or ignores my prompt. Similar story with Deepseek.

The public benchmarks tell a different story which is where I believe the sentiment online comes from, but I am going to trust my experience, because my experience can't be benchmaxxed.

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

#220

Post by raw_anon_1111 »

dktp wrote: post #176
password54321 wrote: post #49

Not sure why they put so much investment into videoSlop and imageSlop. Anthropic seems to be more focused at least.

OpenAI is (was?) extremely good at making things that go viral. The successful ones for sure boost subscriber count meaningfully Studio Ghibli, Sora app. Go viral, juice numbers then turn the knobs down on copyrighted material. Atlas I believe was a less successful than they would've hoped for. And because of too frequent version bumps that are sometimes released as an answer to Google's launch, rather than a meaning…

Selling a bunch of $20 a month subscriptions isn’t going to make a dent in OpenAI losses. Going viral for a day or two doesn’t help.

Normal people are already getting tired of AI Slop

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