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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

#311

Post by johnnyanmac »

heavyset_go wrote: post #284
johnnyanmac wrote: post #237

Earlier quoted context omitted.

It did. I question the issue of "what problem am I trying to solve" with AI, though. Transportation across a huge swath of land had a clear problem space, and trains offered a very clear solution; created dedicated railing and you can transport 100x the resources at 10x the speed of a horseman (and I'm probably underselling these gains). In times where trekking across a continent took months, the efficiencies in comm…

> AI feels like a solution looking for a problem. The problem is increasing profits by replacing paid labor with something "good enough".

Doesn't sound like a very profitable problem to solve. At least, not in the long term (which no one orchestrating this is thinking in).

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

#312

Post by famouswaffles »

websiteapi wrote: post #293
famouswaffles wrote: post #241

Earlier quoted context omitted.

>Gemini is catching up to chatpt from a MAU perspective It is far behind, and GPT hasn't exactly stopped growing either. Weekly Active Users, Monthly visits...Gemini is nowhere near. They're comfortably second, but second is still well below first. >ai overviews in search are super popular and staggeringly more used than any other ai-based product out there Is it ? How would you even know ? It's a forced feature you…

we're curious what your source is

Monthly Visits (chatGPT #5, Gemini #26): https://www.similarweb.com/blog/research/market-research/mos...

Search Traffic: https://x.com/Similarweb/status/2003078223135990246

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

#313

Post by OGEnthusiast »

johnnyanmac wrote: post #310
OGEnthusiast wrote: post #306

Earlier quoted context omitted.

> Microsoft shareholders aren't quite that dumb. If they aren't dumb, why are they investing in MSFT now then if it's a bubble that's doomed to fail? And even in the worst case scenario, a 10-15% decline in the S&P 500 won't trigger the next Great Depression. (Keep in mind that we already had a ~20% drawdown in public equities during the interest rate hikes of 2022/2023 and the economy remained pretty robust througho…

Like I said, they aren't "that" dumb. They are playing a risky game, but when they see the number go down rapidly they will pull. Which will make the line go down even faster. >And even in the worst case scenario, a 10-15% decline in the S&P 500 won't trigger the next Great Depression Only if you believe the 10% decline won't domino and that the S&P500 is secluded from the rest of the global economy. I wish I shared…

> Only if you believe the 10% decline won't domino and that the S&P500 is secluded from the rest of the global economy. I wish I shared your optimism.

So your hypothesis is that a 10% decline in the S&P 500 will trigger the next Great Depression, i.e. years of negative GDP growth and unemployment? I agree that it could cause a slight economic slowdown, but I don't think AI and tech stocks are a large enough part of the economy to cause a Great Depression-style catastrophe.

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

#314

Post by esafak »

bdangubic wrote: post #116
jcranmer wrote: post #51

Earlier quoted context omitted.

IIRC, current estimates are that OpenAI is losing as much money a year as Uber or Amazon lost in their entire lifetime of unprofitability. Also, both Uber and Amazon spent their unprofitable years having a clear roadmap to profitability. OpenAI's roadmap to profitability is "???"

I have lived through Amazon’s rags to riches and there was never a clear plan to profitability. Vast majority of people were questioning sanity of anyone investing in Amazon. I am not saying OpenAI is Amazon but am saying I have seen this before where masses are going “oh business is bad, losses are huge, where is path to profitability…”

Your recollection is hazy. Bezos chose not to be profitable in order to grow the company, and reap greater rewards in the future. https://www.youtube.com/shorts/wjLs22dNOCE

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

#315

Post by edaemon »

jfrbfbreudh wrote: post #294
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,…

Google’s moat: Try “@gmail” in Gemini Google’s surface area to apply AI is larger than any other company’s. And they have arguably the best multimodal model and indisputably the best flash model?

That kind of makes it sound like AI is a feature and not a product, which supports avalys' point.

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

#316

Post by jakeydus »

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…

And reddit turned around and sold it all for a mess of pottage…

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

#317

Post by amkharg26 »

The comparison to railroad bubble economics is apt. OpenAI's infrastructure costs are astronomical - training runs, inference compute, and scaling to meet demand all burn through capital at an incredible rate.

What's interesting is the strategic positioning. They need to maintain leadership while somehow finding a sustainable business model. The API pricing already feels like it's in a race to the bottom as competition intensifies.

For startups building on top of LLM APIs, this should be a wake-up call about vendor lock-in risks. If OpenAI has to dramatically change their pricing or pivot their business model to survive, a lot of downstream products could be impacted. Diversifying across multiple model providers isn't just good engineering - it's business risk management.

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

#320

Post by heavyset_go »

MangoToupe wrote: post #292
heavyset_go wrote: post #284

Earlier quoted context omitted.

> AI feels like a solution looking for a problem. The problem is increasing profits by replacing paid labor with something "good enough".

This is a use case that hasn't yet been proven out, though. "Good enough" for an executive may not be "good enough" to keep the company solvent, and there's no shortage of private equity morons who have no understanding of their own assets.

I agree, but it's the bet they're making. You don't end up with trillions in investment and valuations with chatbots and meme video generators.
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