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

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

wheresyoured.at

Post reply on HN
Print view View original

251–260 of 425 posts

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

#251

Post by robocat »

romaniv wrote: post #248

The fact that people here are looking at these numbers and saying "this is fine" is absolutely bonkers. Basically, it's a company that's not sustainable for two separate reasons. The first one is that they have an extremely high overhead. SG&A of 55% is really bad. The seconds reason is that their R&D costs are truly astronomical. They could probably cut those costs to some extent, but they're not going to cut them t…

> SG&A

= SG&A stands for Selling, General, and Administrative expenses

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

#252

Post by manwithopinions »

minimaxir wrote: post #16

At the end of his previous article ( https://www.wheresyoured.at/ai-is-slowing-down/ ), Ed hyped this news as "a story that will possibly burst the AI bubble" and "imagine what the worst possible thing for me to get would be and you’re probably close." This news doesn't fit either criteria: OpenAI losing billions of dollars isn't shocking news and both AI boosters and AI skeptics have likely assumed that. If anything…

I think Ed would argue that if 90% of your customers are only using your product because their usage is subsidised and the money to cover that subsidisation is coming from unsustainable customers tokenmaxxing then you are “fundamentally unprofitable”.

The question is, can OpenAI survive if customers start tokenminning? A pure inference business could be profitable but that’s not the business OpenAI are in. OpenAI has a billion users that OpenAI loses money on.

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

#253

Post by lenerdenator »

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,…

> 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?

There's a non-negligible percentage of the industry who have a pseudo-religious belief in AGI, so I wouldn't be surprised if that was, in fact, the goal.

Who knows, maybe they'll stop once the money dries up.

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

#254

Post by ihsw »

romaniv wrote: post #248

The fact that people here are looking at these numbers and saying "this is fine" is absolutely bonkers. Basically, it's a company that's not sustainable for two separate reasons. The first one is that they have an extremely high overhead. SG&A of 55% is really bad. The seconds reason is that their R&D costs are truly astronomical. They could probably cut those costs to some extent, but they're not going to cut them t…

[dead]

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

#255

Post by timacles »

tomlockwood wrote: post #111
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…

I've seen lots of ads saying I should use chatgpt to plan a workout or give me recipes. Thats apparently the killer app for 95% of the population at this point.

The irony being that the majority of the American population doesn’t work out or cook

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

#256

Post by CPLX »

romaniv wrote: post #248

The fact that people here are looking at these numbers and saying "this is fine" is absolutely bonkers. Basically, it's a company that's not sustainable for two separate reasons. The first one is that they have an extremely high overhead. SG&A of 55% is really bad. The seconds reason is that their R&D costs are truly astronomical. They could probably cut those costs to some extent, but they're not going to cut them t…

These companies are clearly calling things that are R&D that aren't R&D.

If you're building a model that lasts a few months before it's no longer the most current one, and maybe a year before it's completely unusable by anybody, then that should just be COGS.

Doing that, however, would betray the real problem with this business model.

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

#259

Post by rapind »

jmalicki wrote: post #213
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…

The win for something like OpenAI isn't getting a ton of customers to pay $10-100/mo. It's getting businesses to pay $2k/mo or more per professional employee, like a lot of Anthropic customers. Anthropic is ahead of them there, but that is how they win.

> Anthropic is ahead of them there, but that is how they win.

Isn't Anthropic currently killing that market though? I've been hearing about a lot of businesses pulling back after having experienced the reality.

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

#260

Post by rolls-reus »

bko wrote: post #243
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,…

Let's put it this way, how much is 5% productivity bump worth to you? If you're in the US and you're making 100k a year, that's worth 5k or $416/m. So you can buy two of the most expensive plans on the frontier models. This focus on cost optimization is insane. Just use the frontier models. Even a marginal bump is worth whatever the hell they're charging, at least for now.

large companies aren’t buying subscription plans. my org has a 2k per month token budget per person and starting to explore optimizations like automatic model routing.
Post reply on HN