Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

economist.com

Post reply on HN
Print view View original

221–230 of 777 posts

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

#221

Post by adventured »

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,…

Your premise is wrong in a very important way.

The cost of entry is far beyond extraordinary. You're acting like anybody can gain entry, when the exact opposite is the case. The door is closing right now. Just try to compete with OpenAI, let's see you calculate the price of attempting it. Scale it to 300, 500, 800 million users.

Why aren't there a dozen more Anthropics, given the valuation in question (and potential IPO)? Because it'll cost you tens of billions of dollars just to try to keep up. Nobody will give you that money. You can't get the GPUs, you can't get the engineers, you can't get the dollars, you can't build the datacenters. Hell, you can't even get the RAM these days, nor can you afford it.

Google & Co are capturing the market and will monetize it with advertising. They will generate trillions of dollars in revenue over the coming 10-15 years by doing so.

The barrier to entry is the same one that exists in search: it'll cost you well over one hundred billion dollars to try to be in the game at the level that Gemini will be at circa 2026-2027, for just five years.

Please, inform me of where you plan to get that one hundred billion dollars just to try to keep up. Even Anthropic is going to struggle to stay in the competition when the music (funding bubble) stops.

There are maybe a dozen or so companies in existence that can realistically try to compete with the likes of Gemini or GPT.

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

#222

Post by zozbot234 »

airstrike wrote: post #200
nateb2022 wrote: post #162

Earlier quoted context omitted.

> 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…

I don't think anyone knows for sure how much mileage/scalability LLMs have. Given what we do know, I suspect if you can afford to spend more compute on even longer training runs, you can still get much better results compared to SOTA, even for "simple" domains like text/language.

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

#223

Post by adastra22 »

jeffbee wrote: post #156
adastra22 wrote: post #126

Earlier quoted context omitted.

How often do you or people you know use a search engine other than google?

That is different because all of the players I mentioned have credible, near-leading products in the AI model market, whereas nobody other than Google has search results worth a damn. I wouldn't recommend anyone squander their time by checking Kagi or DDG or Bing more than once.

I don't use google. Believe it or not, I get better results via Bing (usually via DDG, which is a frontend for Bing). But I asked the rhetorical question expecting the answer you gave. These people use ChatGPT only for the same reason you exclusively use Google.

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

#224

Post by sod22 »

bee_rider wrote: post #153
_ache_ wrote: post #62

Earlier quoted context omitted.

Bart was a flop. Google search is losing market share to other LLM providers. Gemini adoption is low, people around me prefer OpenAI because it is good enough and known. But on the contrary, Nano Banana is very good, so I don't know. And in the end, I'm pretty confident Google will be the AI race winner, because they got the engineers, they tech background and the money. Unless Google Adsense die, they can continue t…

If Google is producing very good models and they aren’t gaining much traction, that seems like a pretty bad sign for them, right? If they were failing with bad models, the solution would be easy: math and engineer harder, make better models (I mean, this is obviously very hard but it is a clear path). Failing with good models is… confusing, it indicates there’s some unknown problem.

It’s irrelevant, Google needs to focus on performance enhancements that the enterprise market segment demands - who only operate in the air of objectivity.

If they can achieve that they will cut off a key source of blood supply to MSFT+OAI. There is not much money in the consumer market segment from subscribers and entering the ad-business is going to be a lot tougher than people think.

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

#225

Post by gizmodo59 »

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.

Only in HN and some reddit subs I even see the name claude. In many countries AI=ChatGPT.

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

#226

Post by johnnyanmac »

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,…

>That doesn't mean AI is going to go away, or that it won't change the world - railroads are still here and they did change the world - but from a venture investment perspective, get ready for a massive downturn.

I don't know why people always imply that "the bubble will burst" means that "literally all Ai will die out and nothing will remain that is of use". The Dotcom bubble didn't kill the internet. But it was a bubble and it burst nonetheless, with ramifications that spanned decades.

All it really means when you believe a bubble will pop is "this asset is over-valued and it will soon, rapidly deflate in value to something more sustainable" . And that's a good thing long term, despite the rampant destruction such a crash will cause for the next few years.

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

#227

Post by Nextgrid »

ralph84 wrote: post #215
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'…

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.

Is that actually a moat? Seems like all model providers managed to scrape the entire textual internet just fine. If video is the next big thing I don’t see why they won’t scrape that too.

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

#228

Post by raw_anon_1111 »

_ache_ wrote: post #62
esel2k wrote: post #42

Earlier quoted context omitted.

Where does google struggle to make products people don’t want to use? Is it a personal opinion?

Bart was a flop. Google search is losing market share to other LLM providers. Gemini adoption is low, people around me prefer OpenAI because it is good enough and known. But on the contrary, Nano Banana is very good, so I don't know. And in the end, I'm pretty confident Google will be the AI race winner, because they got the engineers, they tech background and the money. Unless Google Adsense die, they can continue t…

I mean it’s a simple Google search to show that Google isn’t loosing much market share to ChatGPT and most ChatGPT users still use Google.

https://searchengineland.com/nearly-all-chatgpt-users-visit-...

But even more importantly, it obviously isn’t losing money from advertisers to ChatGPT. You can look at their quarterly results.

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

#229

Post by zozbot234 »

adventured wrote: post #221
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,…

Your premise is wrong in a very important way. The cost of entry is far beyond extraordinary. You're acting like anybody can gain entry, when the exact opposite is the case. The door is closing right now. Just try to compete with OpenAI, let's see you calculate the price of attempting it. Scale it to 300, 500, 800 million users. Why aren't there a dozen more Anthropics, given the valuation in question (and potential…

> Just try to compete with OpenAI, let's see you calculate the price of attempting it. Scale it to 300, 500, 800 million users.

Apparently the DeepSeek folks managed that feat. Even with the high initial barriers to entry you're talking about, there will always be ways to compete by specializing in some underserved niche and growing from there. Competition seems to be alive and well.

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

#230

Post by bjt »

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.

I'll take that bet.

Banks get bailed out because if confidence in the banking system disappears and everyone tries to withdraw their money at once, the whole economy seizes up. And whoever is Treasury Secretary (usually an ex Wall Street person) is happy to do it.

I don't see OpenAI having the same argument about systemic risk or the same deep ties into government.

Post reply on HN