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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

#261

Post by johnnyanmac »

bloppe wrote: post #197
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.

Bailing out OAI would be entirely unnecessary (crowded field) and political suicide (how many hundreds of billions that could have gone to health care instead?) If it happens in the next 3 years, tho, and Altman promises enough pork to the man, it could happen.

This administration has "committed political suicide" dozens of times this year. What's one more to add to the pile?

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

#262

Post by johnnyanmac »

Aurornis wrote: post #214
CharlieDigital wrote: post #187

Earlier quoted context omitted.

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.

>OpenAI’s customer base is global.

I'd be willing to bet that, like many US websites, OpenAI's users are at lest 60% American. Just because there's 20x more people out there doesn't mean they have the same exposure to American products.

For instance, China is an obvious one. So that's 35%+ of the population already mostly out of consideration.

>It’s also obvious that they’re selling heavily to businesses, not consumers.

I don't think a few thousand companies can outspend 200m users paying $200 a month. I won't call it a "mathematical impossibility", but the math also isn't math-ing here.

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

#263

Post by [deleted] »

monocasa wrote: post #233
Nextgrid wrote: post #227

Earlier quoted context omitted.

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.

And we're probably already starting to see that, given the semirecent escalations in game of cat and also cat of youtube and the likes of youtube-dl. Reminds me of Reddit's cracking down on API access after realizing that their data was useful. But I'd expect both youtube to be quicker on the gun knowing about AI data collection, and have more time because of the orders of magnitude greater bandwidth required to scra…

[deleted]

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

#264

Post by jeffbee »

bjt wrote: post #243
gizmodo59 wrote: post #225

Earlier quoted context omitted.

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

And at one point in the 90s, Internet=Netscape Navigator. I see Google doing to OpenAI today what Microsoft did to Netscape back then, using their dominant position across multiple channels (browser, search, Android) to leverage their way ahead of the first mover.

That's funny, the way I see it is Microsoft put tens of billions of dollars behind an effort to catch Google on the wrong foot, or at least make Google look bad, but they backed the wrong guy and it isn't quite going to make it to orbit.

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

#265

Post by simonsarris »

fooblaster wrote: post #160
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 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.

Google has several enviable, if not moats, at least redoubts. TPUs, mass infrastructure and own their own cloud services, they own delivery mechanisms on mobile (Android) and every device (Chrome). And Google and Youtube are still #1 and #2 most visited websites in the world.

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

#266

Post by sigbottle »

mark_l_watson wrote: post #198
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…

> in 5-10 years, most entry-level laptops will be able to manage a local 30B sized model I suspect most of the excitement and value will be on edge devices. Models sized 1.7B to 30B have improved incredibly in capability in just the last few months and are unrecognizably better than a year ago. With improved science, new efficiency hacks, and new ideas, I can’t even imagine what a 30B model with effective tooling ava…

Very interested in this! I'm mainly a ChatGPT user; for me, o3 was the first sign of true "intelligence" (not 'sentience' or anything like that, just actual, genuine usefulness). Are these models at that level yet? Or are they o1? Still GPT4 level?

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

#267

Post by jjulius »

bloppe wrote: post #197
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.

Bailing out OAI would be entirely unnecessary (crowded field) and political suicide (how many hundreds of billions that could have gone to health care instead?) If it happens in the next 3 years, tho, and Altman promises enough pork to the man, it could happen.

>Bailing out OAI would be ... political suicide (how many hundreds of billions that could have gone to health care instead?)

Not that I have an opinion one way or another regarding whether or not they'd be bailed out, but this particular argument doesn't really seem to fit the current political landscape.

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

#268

Post by zozbot234 »

johnnyanmac wrote: post #257
Aurornis wrote: post #208

Earlier quoted context omitted.

> 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 eff…

The closest analogy is the dot-com crash and there really wasn't any bailout for that, despite the short term GDP impact. And billion-dollar companies were involved back in the day too, like Apple, Microsoft, Amazon, Ebay etc. etc.

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

#269

Post by what »

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…

Probably more people use googles AI than anything else. Every search result has an LLM generated summary at the top.

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

#270

Post by bdangubic »

oh_my_goodness wrote: post #119
bdangubic wrote: post #113

Earlier quoted context omitted.

I wouldn’t but path to success can clearly come from running 10-digit losses for a loooong time, no?

I think you're saying that just running up huge losses is sufficient to create a successful company? But that you personally wouldn't want to run up huge losses? Not sure.

nah, I am saying that many (super) successful businesses ran in red financially for a very long time. I would not run a business that way but I am also (fortunately) not a CEO of a multibillion dollar company
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