I'm just here for Ed's victory lap.
OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
321–330 of 425 posts
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#322Earlier quoted context omitted.
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
Or Claude is better at getting people to move to more expensive membership tiers. From reading here, it seems like Claude still has a lot of users. If Claude has lower limits for their $20 plan, it stands to reason that people are paying for more expensive plans to get similar levels of usage. This assumes they aren’t reducing demand through the throttling, which is a big assumption.
I’d love to know what Anthropic’s comparable numbers look like.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#323Earlier quoted context omitted.
>as evidenced by the fact that the most profitable company of all time makes 90%+ of their revenue through ads the biggest reason for this is that the digital ad market is a duopoly (charitably a triopoly if you count Amazon in), if all of the LLM companies start to go into ads that's going to be a much more competitive market for ad buyers. It's not going to be so straight forward when both customers and merchants h…
That’s why I don’t understand why Google’s stock has gone up so much recently. They already have maximum market share of digital ads; they can only lose share to competitors like OpenAI. The only way they can make more money is through paid subscriptions.
When buying something thru an ad they share the commission. With A.I, they keep the commision.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#324The 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
The problem here is that open weight models are already good enough for a majority of process automation and intelligence tasks and that is where a good chunk of efficiency corporate dollars are. So there's an ever shrinking slice of inference that will hit the frontier models and inference is where the insane margins are. Now to be fair, Claude co-work and Claude code/Codex do seem magical today and these potentially will continue to be high margin/leverage plays. Frontier models are also likely to push towards decision making - so we'll have to see how it shakes out but the bottom end is already commoditized and it is getting bigger and bigger.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#325[deleted]
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#326Earlier quoted context omitted.
I'm not a coder but now work way faster than the coder I pay, stuff breaks but it's tenable and it's easier to get things to completion as the harnesses get better. Don't give up just keep trying you can truly build personally life changing things. Don't look at it purely from a how do I sell this lense, just empower yourself with these tools while the getting is good
I have made life changing things with it, just not anything so life changing I'd consider paying more than $25. Stingy bastard, I am.
I hear you there.... too many years on my side paying over priced tools for the agencies, I'm well normalized on monthly subs and you can't compare these things to what we used to pay for. I've dropped 90% of the tools I used to sub to. But like others downstream have said no ones ever going to pay 500 to 1000 month open source models will just eat that margin up and flip the economics so ads it is lol.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#327Earlier 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.
Actually the point is total cost wise outside of subsidy it is not cheaper than humans. the bigger problem is as the parent said open AI created a market. It is selling a commodity service with investor funds. There is no moat. your second sentence soon you won't be able to find human thinkers is on its face absurd, assuming the human race continues. Thinking is the human ecological niche.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#328Earlier quoted context omitted.
It's more like you have a business making engines, each generation of engine has eventually turned out to be profitable over its lifespan, but each generation has an exponentially increasing R&D cost and your customers will switch from the old engines to a competitor if they don't like the newest generation. You're stuck racing against your competitors with the distinct possibility that your R&D costs will outgrow th…
Except this is the first generation of engine manufacturers and nobody knows if it will actually be profitable yet.
We do know that Anthropic claims earlier models eventually turned a profit, and OpenAI is presumably the same.
What is in doubt is whether past performance is an indicator of future results. How long will the ever-increasing R&D expenditure keep paying off?
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#329”The company reports over 900 million weekly active users of ChatGPT, though only about 50 million of those are paid subscribers.” With so many free models available the ai companies are going to struggle to convert active free users to paid.
Crazy that they have 50 _million_ paying subscribers and are still losing money.
Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B
#330My 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.
"Revenue: 13.07b; cost of revenue: 7.5b."
This includes running inference for ~1b free users.
What is untrue about this?