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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

#271

Post by dheera »

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,…

People seem to have the assumption that OpenAI and Anthropic dying would be synonymous with AI dying, and that's not the case. OpenAI and Anthropic spent a lot of capital on important research, and if the shareholders and equity markets cannot learn to value and respect that and instead let these companies die, new companies will be formed with the same tech, possibly by the same general group of people, thrive, and conveniently leave out the said shareholders.

Google was built on the shoulders of a lot of infrastructure tech developed by former search engine giants. Unfortunately the equity markets decided to devalue those giants instead of applaud them for their contributions to society.

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

#272

Post by rozap »

Imustaskforhelp wrote: post #34
mvkel wrote: post #27

The fact is nobody has any idea what OpenAI's cash burn is. Measuring how much they're raising is not an adequate proxy. For all we know, they could be accumulating capital to weather an AI winter. It's also worth noting that OpenAI has not trained a new model since gpt4o (all subsequent models are routing systems and prompt chains built on top of 4), so the idea of OpenAI being stuck in some kind of runaway training…

Didn't they create Sora and other models and literally burned so much money with their AI video app which they wanted to make a social media but what ended up happening was that they burned billions of dollars.

I wonder about what happens to people who make these hilariously bad business decisions? Like the person at Twitter who decided to kill Vine. Do they spin it and get promotoed? Something else?

I'd love a blog or coffee table book of "where are they now" for the director level folks who do dumb shit like this.

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

#273

Post by raw_anon_1111 »

andrekandre wrote: post #250
raw_anon_1111 wrote: post #231

Earlier quoted context omitted.

Every personal computer user except Chromebook users went out of their way to download Chrome. What exactly do you want “anti trust” to do?

maybe not allow google to bundle gemini with chrome?

So should we also not allow OpenAI to bundle the OpenAI model with the ChatGPT app

Absolutely no one besides ChromeOS users are forced to use Chrome.

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

#274

Post by mvkel »

FergusArgyll wrote: post #63
wahnfrieden wrote: post #33

Earlier quoted context omitted.

wasn't 4.5 new

Yes it was, op didn't read the reporting closely enough. It said something to the effect of "Didn't pretrain a new broadly released, generally available model"

That's what I meant, though. That's the expensive part.

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

#275

Post by nl »

mvkel wrote: post #27

The fact is nobody has any idea what OpenAI's cash burn is. Measuring how much they're raising is not an adequate proxy. For all we know, they could be accumulating capital to weather an AI winter. It's also worth noting that OpenAI has not trained a new model since gpt4o (all subsequent models are routing systems and prompt chains built on top of 4), so the idea of OpenAI being stuck in some kind of runaway training…

> It's also worth noting that OpenAI has not trained a new model since gpt4o (all subsequent models are routing systems and prompt chains built on top of 4), so the idea of OpenAI being stuck in some kind of runaway training expense is not real.

This isn't really accurate.

Firstly, GPT4.5 was a new training run, and it is unclear how many other failed training runs they did.

Secondly "all subsequent models are routing systems and prompt chains built on top of 4" is completely wrong. The models after gpt4o were all post-trained differently using reinforcement learning. That is a substantial expense.

Finally, it seems like GPT5.2 is a new training run - or at least the training cut off date is different. Even if they didn't do a full run it must have been a very large run.

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

#276

Post by cmiles8 »

AI is turning into the worst possible business setup for AI startups. A commodity that requires huge capital investment and ongoing innovation to stay relevant. There’s no room for someone to run a small but profitable gold mine or couple of oil wells on the side. The only path to survival is investing crazy sums just to stay relevant and keep up. Meanwhile customers have virtually zero brand loyalty so if you slip behind just a bit folks will swap API endpoints and leave you in the dust. It’s a terrible setup business wise.

There’s also no real moat with all the major models converging to be “good enough” for nearly all use cases. Far beyond a typical race to the bottom.

Those like Google with other products will just add AI features and everyone else trying to make AI their product will just get completely crushed financially.

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

#277

Post by devsda »

simonsarris wrote: post #265
fooblaster wrote: post #160

Earlier quoted context omitted.

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.

Don't forget the other moat.

While their competitors have to deal with actively hostile attempts to stop scraping training data, in Google's case almost everyone bends over backwards to give them easy access.

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

#278

Post by tootie »

dheera wrote: post #271
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,…

People seem to have the assumption that OpenAI and Anthropic dying would be synonymous with AI dying, and that's not the case. OpenAI and Anthropic spent a lot of capital on important research, and if the shareholders and equity markets cannot learn to value and respect that and instead let these companies die, new companies will be formed with the same tech, possibly by the same general group of people, thrive, and…

Isn't it really the other way around? Not to say OpenAI and Anthropic haven't done important work, but the genesis of this entire market was paper on attention that came out of Google. We have the private messages inside OpenAI saying they needed to get to market ASAP or Google would kill them.

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

#279

Post by madeofpalk »

CodingJeebus wrote: post #199
thisgetsit wrote: post #165

Earlier quoted context omitted.

> copyright provides such a moat. Been saying this since the 2016 Alice case. Apple jumped into content production in 2017. They saw the long term value of copyright interests. https://arstechnica.com/information-technology/2017/08/apple... Alice changed things such that code monkeys algorithms were not patentable (except in some narrow cases where true runtime novelty can be established.) Since the transformers pape…

Totally agree, people love to talk about how hopelessly behind Apple is in terms of AI progress when they’re in a better position to compete directly against Nvidia on hardware than anyone else.

Apple's always had great potential. They've struggled to execute on it.

But really, so has everyone else. There's two "races" for AI - creating models, and finding a consumer use case for them. Apple just isn't competing in creating models similar to the likes of OpenAI or Google. They also haven't really done much with using AI technology to deliver 'revolutionary' general purpose user-facing features using LLMs, but neither has anyone else beyond chat bots.

I'm not convinced ChatGPT as a consumer product can sustain current valuations, and everyone is still clamouring to find another way to present this tech to consumers.

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