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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

#221

Post by Barrin92 »

dtnewman wrote: post #201
fsuts wrote: post #175

”The company reports over 900 million weekly active users of ChatGPT, though only about 50 million of those are paid subscribers.” With so many free models available the ai companies are going to struggle to convert active free users to paid.

They won't try to. ChatGPT is already starting with ads, which is potentially far more profitable (as evidenced by the fact that the most profitable company of all time makes 90%+ of their revenue through ads).

>as evidenced by the fact that the most profitable company of all time makes 90%+ of their revenue through ads

the biggest reason for this is that the digital ad market is a duopoly (charitably a triopoly if you count Amazon in), if all of the LLM companies start to go into ads that's going to be a much more competitive market for ad buyers. It's not going to be so straight forward when both customers and merchants have ten different places to go.

Also not to forget that ChatGPT has zero moat, unlike social Facebook and Google.

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

#223

Post by qntmfred »

ignoramous wrote: post #211
marcosdumay wrote: post #197

So... 50% operational costs and about $100 spent on sales for each paying customer. If they manage to keep those customers for several years without more sales, that bit looks like a normal "high-touch" business. They shouldn't look like a "high-touch" business, but their unitary numbers look way better than I expected. They just need to grow some 10 times to star making a profit... Maybe 100 to cover the opportunity…

> just a matter of finding 5 billion people willing to pay US prices This is how you know ads are inevitable. YouTube is probably a good indicator of how BigLabs will operate for free users.

I'd be cool with that. YouTube premium is one of the best value subscriptions I have. Steering people toward paying instead of ads-by-default is a net good imo

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

#225

Post by defrost »

throwaway85825 wrote: post #217
Gigachad wrote: post #136

Earlier quoted context omitted.

OpenAI will make fully autonomous killing machines while Anthropic wont.

Land mines are my favorite fully autonomous killing machine. They've also been around for a while.

The worst ones looked like brightly coloured children's toys.

There's perhaps a metaphor or two lurking about bait and switch tactics.

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

#226

Post by lbrito »

I wonder how effective the marketing is (not much it seems).

I was watching a World Cup match last week and one of the TV ads during half time was something to the tune of ChatGPT being used by kids to improve their street soccer skills. This was Brazilian TV. Anyone even remotely familiar with Brazil would find this ad deeply, thoroughly out of touch. I can't think of a worse chatbot pitch than that.

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

#227

Post by fuzzfactor »

themafia wrote: post #107

I'm a simple guy and I don't understand the "sales and marketing" cost. I don't like these products. I have several negative opinions on them. To the extent they work and there is a customer base what marketing could you /possibly/ be engaged in? Doesn't the product sort of market itself? Or another way is this a product that you can market to expand your MAUs? It's so polarizing I can't imagine how that $5.7B is bei…

>It's so polarizing I can't imagine how that $5.7B is being spent.

In every way imaginable and then more, looks like beyond the imagination :)

>I don't like these products. I have several negative opinions on them.

You're not alone, and the crowd seems to be building at the same time enthusiasts are proliferating too.

So much widespread negativity I would guess that's about what it's expected to cost to fully overcome resistance and objections. Which must be bigger than we think, they sure have more information than us.

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

#229

Post by jaynate »

apatheticonion wrote: post #209

Seeing that R&D costs are the lion's share, I wonder if we are at a point where the focus can shift to improving the cost of inference. Unless we are genuinely pushing to find AGI, at which point nothing matters, LLMs in their current form don't replace knowledge workers but are an effective force multiplier. How good is enough? For instance, I pay about $1-2 a month for DeepSeek. It's not as sophisticated as Claude,…

For clarity, inference is typically a COGS and therefore hits Gross Margin vs model training which would typically be in OpEx (where R&D lives) and would hit operating margin.

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

#230

Post by wxw »

This title is not how I'd actually interpret the results.

Glad to see more sane takes in the comments. All these articles on their current financials are missing the point.

OpenAI is doing pretty well.

Capital expenditure is required to deliver on 1) better models 2) better infra and 3) better products. Insane CapEx is required to do all the above + compete with Google, Meta, Microsoft, Apple, Anthropic, etc. etc. etc. who are all trying to do the same. These financials are sane, considering the scenario.

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