Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

wheresyoured.at

Post reply on HN
Print view View original

331–340 of 425 posts

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

#331

Post by fragmede »

sensanaty wrote: post #204
themafia wrote: post #107

I'm a simple guy and I don't understand the "sales and marketing" cost. I don't like these products. I have several negative opinions on them. To the extent they work and there is a customer base what marketing could you /possibly/ be engaged in? Doesn't the product sort of market itself? Or another way is this a product that you can market to expand your MAUs? It's so polarizing I can't imagine how that $5.7B is bei…

Half of the comments on this site at any given moment are from bots or shills shilling OpenAI and Anthropic. Now include Reddit, Twitter and everywhere else with a tech audience, paying for all that "organic" marketing doesn't come cheap.

Wait, shit, really? How do I collect the money? Tweet at @Sama to collect, or...?

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

#333

Post by alexpotato »

coherentpony wrote: post #281
chrisgd wrote: post #261

Earlier 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

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…

My family and I have gone back to using car services for rides to the airport b/c "Uber XL" seems to include a WIDE variety of vehicles in terms of size and cleanliness.

A car service is about the same cost, the car looks brand new and clean and the driver is helpful.

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

#334

Post by margalabargala »

ignoramous wrote: post #214
margalabargala wrote: post #189

Earlier quoted context omitted.

Let's say Company 1 has $1B revenue and has grown 5x in the last year, and 20x the last 2 years.. Let's say Company 2 has $1B revenue and that's the same as it was last year and the year before. Should these companies be valued the same?

> Should these companies be valued the same By who? Public money is looking for dividends (profits) not growth?

Public money is looking for profits. Dividends are one way to get there. A better way to get to larger profits is selling the stock after it gets much more valuable. In the example above the growing company has a good chance of being worth much more a few years later, and that increases the value.

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

#335

Post by strenholme »

AI is a huge bubble, just as dot-com was a huge bubble (I remember when people spent huge amounts of money to have key .com domains; as much as people paid for linux.com back then, the domain essentially went nowhere), and just as buying houses for too much money with loaned money was a huge bubble.

Just as with the two previous bubble, we’re seeing companies hemorrhaging huge amounts of money, and when the dust settles the market is going to crash big time like it did with the two previous bubbles.

Unlike previous bubbles, this bubble isn’t giving people high paying jobs until everything crashes (programmers with the dot-com bubble; construction people during the real estate bubble), but it very annoyingly is making memory and SSD storage cost far too much causing computers to cost about 150% as the cost two years ago before the AI bubble was in full force, forcing Apple to make a “MacBook Neo” model with the absolute minimum of ram and SSD storage space.

Like the dot-com bubble, we will have very few winners left (with dot-com, the big winners were Amazon and Google) but unlike the previous bubble, it’s incredible how political this particular bubble is (i.e. the controversy around Grok).

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

#336

Post by shoobiedoo »

Gigachad wrote: post #314
coherentpony wrote: post #281

Earlier 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…

You still can get taxis, at least in Australia. And they hound you at the front of the airport. They just consistently cost more and have worse service even after uber increased prices.

Japan too. never thought I'd see it here but a taxi driver took the long way after a work drinking party. I guess he thought we were too drunk to notice. Well my boss sure did and lost his mind at the guy.

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

#337

Post by Grombobulous »

hadlock wrote: post #268
chrisgd wrote: post #261

Earlier 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…

I’m not sure Sam is actually well-regarded around the YC block? Didn’t he lie about being the chairman of the board of YC? That’s what it says on his Wikipedia page.

Let’s not forget the whole fiasco where he was already almost fired from OpenAI.

His business track record is basically one failed location-based social media company.

I think it’s starting to become clear that OpenAI is going to be the first casualty of the AI race, and I think these undisciplined operations are a big part of the reason.

A major tell is how Apple Intelligence is seemingly steering away from OpenAI and is embracing Google instead.

Anthropic has the most useful B2B tooling and found their product niche, and they have the model leads in that niche.

xAI gets financially shielded by being a part of a gigantic financial instrument and the Elon Musk reality distortion field. Cursor has a similar product market fit as Anthropic and gets to consolidate with xAI.

Google and Microsoft get to use AI within their highly profitable ecosystems.

Apple gets to mostly sit out but act as one of the biggest toll booths for everyone else.

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

#338

Post by [deleted] »

skeeter2020 wrote: post #293
hadlock wrote: post #268

Earlier quoted context omitted.

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 mul…

[deleted]

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

#339

Post by madars »

coherentpony wrote: post #281
chrisgd wrote: post #261

Earlier 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

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…

Uber/Lyft takeover had little to do with price (though, yes, they were cheaper) and everything to do with reliability and overall quality of service. Even though ride sharing industry lost money in subsidy arms race and side bets it was fundamentally sound in major metros since early on (similar to how Amazon was fundamentally sound from early on, despite not recognizing profit for a long time). Popular "analyses" kept equating Uber/Lyft with firms losing money on every sale with no path to fix it but the demand was always there as riders had already left taxis and transit on reliability and convenience grounds.

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

#340

Post by epsteingpt »

A few things to note - the financial literacy here is... sometimes lacking? 1. Revenue GROWTH is 3.5x; Expense GROWTH -> Slightly less than 3x. There's a path to profitability 2. However, the COSTS probably assume a 5 (or longer) year depreciation on GPUs. If that assumption dies, the whole thing goes down.

If R&D costs don't go up - where does the moat come from? Cheaper players catch up with 'good enough' and will erode their revenue. Most of human tasks just don't require that much intelligence.

They're racing toward 'superintelligence' that recursively self-improves.

No indication we're anywhere close to reaching it.

Going to be an interesting year to say the least.

Post reply on HN