Earlier quoted context omitted.
Uber did not need this much money to cross the finish line, and faced less competition.
More importanly they have moat
This. The fact that no one seems to understand that Anth and OAI don’t have a moat is beyond me.
OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
291–300 of 425 posts
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#292Good 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…
> The money they're burning is not yours or mine. They're institutional investor money. So, again, who cares?
This is not happening in a vacuum. A lot of index funds and retirement accounts have bought into AI and AI adjacent companies, many with stakes in OpenAI. If OpenAI keels over, even when private, it will affect a lot of americans. If they IPO, it's even worse.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#293Earlier quoted context omitted.
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 wha…
Amazon structured their entire operation to look like this but as you indicated, could have switched to a porfit-making, dividen-paying company more than a decade ago, that just wasn't their strategy. The same can not be said for OpenAI. Even if they slashed their R&D, their marketing and sales costs are extremely high for a tech company. On paper they look more like a utility and those are not worth double-digit multiples; they compete with t-bills and GICs
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#294The 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…
They're not really losing ground to Anthropic. 5.5 was a bit better than 4.8. Fable was good, and was a jump over 4.8, but only incremental over 5.5. Anthropic is also likely losing money, right?
I never get throttled by Codex at $20/mo however Claude throttles faster at same rate. I like Claude’s output in terms of code however
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#295My takeaway from this is that it's incredibly validating as a business model. Inference is _highly_ profitable. Of course, like any company that has ever tried to grow at breakneck pace, you run at a loss until you "win."
>> Inference is _highly_ profitable. Totally untrue.
How much does 1 million tokens cost OpenAI?
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#296Good 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…
They haven't done humanity a favor at all. The innovation that these LLMs have produced has been small. A few fun math theorems where the answer was gleaned from a pattern in the training data. Great,.but it doesn't change the world one bit. That latest drug for pancreatic cancer? Yeah, all human. After the trillions already spent, AI hasn't come up with any new medications, no new inventions to save lives... Nothing
We're only a few years into it, and yet all generations of folks are using it for all kinds of things and getting joy out of it. That's positive impact. Even folks outside of tech are having fun with it. That is a positive change for humanity. Similar to Radio, TV, smartphones, internet, microwaves and PCs.
It's already being used in the medical field in many different ways, and I believe it will be able to fold new proteins to help make new drugs. It's coming.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#297Good 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.
People aren't affected by PC component prices. The MacBook Neo was introduced and selling extraordinarily well for $500 during this component price crisis. 99% of the population isn't building their own PCs or smartphones.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#298My takeaway from this is that it's incredibly validating as a business model. Inference is _highly_ profitable. Of course, like any company that has ever tried to grow at breakneck pace, you run at a loss until you "win."
> My takeaway from this is that it's incredibly validating as a business model. Inference is _highly_ profitable. The problem is you can't just separate training costs from inference costs. If OpenAI just didn't train a new model for the next five years, sure, they'd do OK. Assuming all those dirt cheap Chinese models nipping at their heels don't make up the gap while OpenAI is resting on their laurels. Without being…
Gemini's existence disproves this
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#299Good 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…
> The money they're burning is not yours or mine. They're institutional investor money. So, again, who cares? This is not happening in a vacuum. A lot of index funds and retirement accounts have bought into AI and AI adjacent companies, many with stakes in OpenAI. If OpenAI keels over, even when private, it will affect a lot of americans. If they IPO, it's even worse.
Index funds are based on a variety of tech stock. This whole "if they keel over" has been beaten to death ever since Tesla is surpassed Ford in market cap. And then Twitter was bought. No market crash. There will be some market corrections, but nothing be alarmed about.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#300Earlier quoted context omitted.
Uber’s situation was different, though. The reason Uber were bleeding money is because they purposefully made all their rides cheap to undercut the taxi businesses. People used Uber because it was cheaper than renting a taxi. Now you can’t really find taxis anywhere, even at airports it’s a lot more difficult than it used to be. Once the taxi business was disrupted enough, Uber’s pricing skyrocketed and customers had…
People use AI because it is cheaper than paying humans to think. Soon you won’t really be able to find human thinkers.
Some humans will need to interpret the thinking and apply it somewhere and take some responsibility for those decisions. If you think AI can do all that end to end it’s a different question but we’re nowhere near that right now.