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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

#251

Post by avalys »

energy123 wrote: post #219
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 ignore…

I’m not saying that no company will ever have an advantage. But with the pace of advances slowing, even if others are 6-12 months behind OpenAI, the conclusion is the same.

Personally I find GPT 5.2 to be nearly useless for my use case (which is not coding).

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

#252

Post by liamconnell »

Aurornis wrote: post #208
agentifysh wrote: post #103

Earlier quoted context omitted.

It's mathematically impossible what OpenAI is promising. They know it. The goal is to be too big to fail and get bailed out by US taxpayers who have been groomed into viewing AI as a cold war style arms race that America cannot lose.

> The goal is to be too big to fail and get bailed out by US taxpayers I know this is the latest catastrophizion meme for AI companies, but what is it even supposed to mean? OpenAI failing wouldn’t mean AI disappears and all of their customers go bankrupt, too. It’s not like a bank. If OpenAI became insolvent or declared bankruptcy, their intellectual property wouldn’t disappear or become useless. Someone would purch…

> Someone would purchase it and run it again under a new company.

That happened a long time ago! Microsoft already owns the model weights!

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

#253

Post by aaronblohowiak »

gerdesj wrote: post #203
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,…

"AI is going to be a highly-competitive" - In what way? It is not a railroad and the railroads did not explode in a bubble (OK a few early engines did explode but that is engineering). I think LLM driven investments in massive DCs is ill advised.

Your view is ahistorical.

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

#254

Post by thom »

zozbot234 wrote: post #229
adventured wrote: post #221

Earlier quoted context omitted.

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.

DeepSeek certainly managed that on the training side but in terms of inference, the actual product was unusably slow and unreliable at launch and for several months after. I have not bothered revisiting it.

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

#255

Post by johnnyanmac »

adriand wrote: post #30

This article doesn’t add anything to what we know already. It’s still an open question what happens with the labs this coming year, but I personally think Anthropic’s focus on coding represents the clearest path to subscriber-based success (typical SaaS) whereas OpenAI has a clear opportunity with advertising. Both of these paths could be very lucrative. Meanwhile I expect Google will continue to struggle with making…

What "we" know already is hard to add to, as a forum that has a dozen AI articles a day on every little morsel of news.

>whereas OpenAI has a clear opportunity with advertising.

Personally, having "a clear opportunity with advertising" feels like a last ditch effort for a company that promised the moon in solving all the hard problems in the world.

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

#256

Post by yoyohello13 »

energy123 wrote: post #219
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 ignore…

There is always a comment like this in these threads. It’s just 50-50 whether it’s Claude or OpenAI.

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

#257

Post by johnnyanmac »

Aurornis wrote: post #208
agentifysh wrote: post #103

Earlier quoted context omitted.

It's mathematically impossible what OpenAI is promising. They know it. The goal is to be too big to fail and get bailed out by US taxpayers who have been groomed into viewing AI as a cold war style arms race that America cannot lose.

> The goal is to be too big to fail and get bailed out by US taxpayers I know this is the latest catastrophizion meme for AI companies, but what is it even supposed to mean? OpenAI failing wouldn’t mean AI disappears and all of their customers go bankrupt, too. It’s not like a bank. If OpenAI became insolvent or declared bankruptcy, their intellectual property wouldn’t disappear or become useless. Someone would purch…

>I know this is the latest catastrophizion meme for AI companies, but what is it even supposed to mean?

Someone else put it succintly.

"When A million dollar company fails, it's their problem. When a billion dollar company fails, it's our problem"

In essence, there's so much investment in AI that it's a significant part of the US GDP. If AI falters, that is something that the entire stock market will feel, and by effect, all Americans. No matter how detached from tech they are. In other words, the potential for the another great depression.

In that regard, the government wants to avoid that. So they will at least give a small bailout to lessen the crash. But more likely (as seen with the Great Financial Crisis), they will likely supply billions upon billions to prop up companies that by all business logic deserved to fail. Because the alternative would be too politically damaging to tolerate.

----

That's the theory. These all aren't certain and there are arguments to suggest that a crash in AI wouldn't be as bad as any of the aforementioned crashes. But that's what people mean by "become too big to fail and get bailed out".

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

#258

Post by guluarte »

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,…

Also that open source models are just months behind

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

#260

Post by guluarte »

energy123 wrote: post #219
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 ignore…

codex is sooo slow but it is good at planning, opus is good at coding but not at good at seeing the big picture
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