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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

#261

Post by chrisgd »

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…

This is the venture model now though. Spend until profitable. Uber did it. It seems OpenAI could do it as well given we seem to be in a 2 horse race for foundation models and having capital to get better pushes them further ahead.

Gemini is number 3 in this race

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

#262

Post by wg0 »

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…

Yeah insane that people think it'll be okay in the long run but wondering how much different the financial status of other such company would be? Not much I guess.

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

#263

Post by tty456 »

Elon must be licking his chops right now, hoping that the "OpenAI problem" will just solve itself which bumps up X.ai as a competitor to Anthropic but under the guise and financial manipulation of all of SpaceX and it's subsidiaries to fool the public into thinking it is a long term player.

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

#264

Post by thraway3837 »

Good analysis. But who cares? It takes a long time for companies to figure out how to become profitable. And I honestly believe that OpenAI/Anthropic etc. have done humanity a huge favor. The money they're burning is not yours or mine. They're institutional investor money. So, again, who cares?

It will become profitable. Local models and local on-laptop inference will get good enough. This argument has been made for decades. It's not like everyone is walking around hosting email and photos on their personal machines. Sometimes it takes a large investment to make servers and clouds for this stuff possible.

We need to get away from this idea that in order for one thing to succeed, the other must fail. We also need to stop thinking in binary and accept that all these things (profitability, local models, powerful laptops, etc.) can all happily coexist.

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

#265

Post by egeozcan »

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,…

If a model comes and makes developer + Deepseek even a little more productive, from employers perspective, it'd still make sense to pay a lot of money for that.

Deepseek shines for personal usage because it's possible to use it however you want and whenever you want with no session/weekly limits stress because you use the API and it's priced very reasonably.

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

#266

Post by thorbutt »

qntmfred wrote: post #244
dogecoinbase wrote: post #240

Earlier quoted context omitted.

I think we can all understand the ways in which embedded advertisement in LLMs will be fundamentally different than view-based advertisement.

the AI providers will experiment with sustainable ad models and users will demand transparency and responsibility. An equilibrium will be reached, I'm sure.

The AI providers will experiment on their users, and keep going until they lose users

It'll be like Facebook; they're not losing money but it's awful to use

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

#267

Post by dev1ycan »

Remember when Nvidia gave us HBM for the 1080 ti and then took it away because it was "too expensive for consumer products"? I remember.

I feel like the 1080 ti is like a prophet of the current crisis, these companies are buying $10k paperweights per user to MAYBE... LUCKILY... charge what... $200 a year? and that is for every 1/100 users.

this same 10k hardware will be outdated in a couple of years...

It just doesn't make financial sense, if you couldn't sell standalone GPUs that people PAID for with HBM in them, what makes you think that you can sell a POSSIBLE subscription utilizing a $10k+ GPU?

This is the most obvious bubble of all time.

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

#268

Post by hadlock »

chrisgd wrote: post #261
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…

This is the venture model now though. Spend until profitable. Uber did it. It seems OpenAI could do it as well given we seem to be in a 2 horse race for foundation models and having capital to get better pushes them further ahead. Gemini is number 3 in this race

Before Uber did it, Amazon had been doing it for almost two decades. It's nothing new. There is a difference between 1 billion and 20 billion in losses, though. Amazon in, I forget, 2014? Ran a profitable quarter with I think $1 in profits, simply to prove they were in control of their finances, and "we can stop any time we want". Sam gets a lot of shade, but he's been around the YC block once or twice, I suspect whatever risk they're taking on is at least somewhat measured.

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

#269

Post by layer8 »

thraway3837 wrote: post #264

Good analysis. But who cares? It takes a long time for companies to figure out how to become profitable. And I honestly believe that OpenAI/Anthropic etc. have done humanity a huge favor. The money they're burning is not yours or mine. They're institutional investor money. So, again, who cares? It will become profitable. Local models and local on-laptop inference will get good enough. This argument has been made for…

Buyers of consumer storage, RAM, and GPUs care. People affected by the data center buildouts care. Workers losing jobs due to underpriced tokens care. People on the receiving end of AI slop care.

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

#270

Post by lokar »

chrisgd wrote: post #261
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…

This is the venture model now though. Spend until profitable. Uber did it. It seems OpenAI could do it as well given we seem to be in a 2 horse race for foundation models and having capital to get better pushes them further ahead. Gemini is number 3 in this race

Uber did not need this much money to cross the finish line, and faced less competition.
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