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

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

#341

Post by [deleted] »

hadlock wrote: post #308
skeeter2020 wrote: post #293

Earlier quoted context omitted.

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…

Looking at the fact that third parties are making a profit offering XYZ third party open models on OpenRouter, it stands to reason that OpenAI could turn off their R&D, marketing, hype jedi, legal departments and just sell GPT9.999 and turn a profit. Again like in the Amazon analogy, I don't think they're done growing, and unfortunately, I think they've positioned themselves (perhaps intentionally) as too big to fail…

[deleted]

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

#342

Post by esafak »

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…

But there are competitors. The race is to corner the market.

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

#344

Post by murderfs »

jcgrillo wrote: post #307
wg0 wrote: post #262

Earlier quoted context omitted.

Yeah insane that people think it'll be okay in the long run but wondering how much different the financial status of other such company would be? Not much I guess.

I can't imagine there's a large variation in costs per token for inference and training costs between companies, and since they're all basically doing exactly the same thing, and competing on price... yeah.

I'd agree for OpenAI and Anthropic, but Google is a different story, because they're renting TPUs to both OpenAI and Anthropic, and presumably making reasonable margins on them given how supply constrained the entire industry is.

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

#345

Post by chongli »

hadlock wrote: post #308
skeeter2020 wrote: post #293

Earlier quoted context omitted.

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…

Looking at the fact that third parties are making a profit offering XYZ third party open models on OpenRouter, it stands to reason that OpenAI could turn off their R&D, marketing, hype jedi, legal departments and just sell GPT9.999 and turn a profit. Again like in the Amazon analogy, I don't think they're done growing, and unfortunately, I think they've positioned themselves (perhaps intentionally) as too big to fail…

it stands to reason that OpenAI could turn off their R&D, marketing, hype jedi, legal departments and just sell GPT9.999 and turn a profit.

That rests on 2 assumptions:

1) That inference on OpenAI's frontier models is actually cost competitive with open models. Their high SG&A suggests otherwise.

2) That slashing R&D won't lead to a marketshare collapse when everyone (remaining) moves to Anthropic to get on their frontier models. All evidence suggests otherwise again, with Anthropic already exerting enormous competitive pressure on OpenAI's marketshare.

I think OpenAI is in a terribly tenuous position: they're getting squeezed from Anthropic (on the high end) and open models on the low end. A lot of companies in a lot of industries suffered this fate. Getting stuck in the middle is not a good thing!

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

#346

Post by astrange »

joshuastuden wrote: post #309
thraway3837 wrote: post #296

Earlier quoted context omitted.

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…

They already fold proteins with simulations. Just because people are using it doesn't mean it's a net good. Lots of people use social media and that's just rotting brains and making people far more polarized than they ever were before. It's use in medicine hasn't resulted in anything meaningful. Nobody's medical bill has gotten cheaper and nobody has lived longer or healthier because of anything AI did.

https://www.the-scientist.com/chatgpt-and-alphafold-help-des...

https://arxiv.org/pdf/2503.15204

> They already fold proteins with simulations.

I like how you're trying to argue with the Nobel committee here.

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

#347

Post by Auracle »

perching_aix wrote: post #202
eranation wrote: post #191

Is this surprising to anyone? I thought that was a given. I'm getting de-facto unlimited use of a model more expensive than Opus 4.8 for $20 a month.

> de-facto unlimited (...) for $20 a month Would love to hear some details on that one... Or was that a typo and you meant the $200/mo plan instead maybe? That one I could believe, assuming no or frugal subagent use that is.

I’ve hit the limit on Codex/ChatGPT one time on the $20 subscription since it came out, when I accidentally left the thinking limit on very high all day. I still could have resumed using it just 2 hours later.

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

#348

Post by krupan »

ignoramous wrote: post #211
marcosdumay wrote: post #197

So... 50% operational costs and about $100 spent on sales for each paying customer. If they manage to keep those customers for several years without more sales, that bit looks like a normal "high-touch" business. They shouldn't look like a "high-touch" business, but their unitary numbers look way better than I expected. They just need to grow some 10 times to star making a profit... Maybe 100 to cover the opportunity…

> just a matter of finding 5 billion people willing to pay US prices This is how you know ads are inevitable. YouTube is probably a good indicator of how BigLabs will operate for free users.

My coworker is already seeing ads while using ChatGPT

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

#349

Post by femto »

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.

Likely the continued existence of taxis are keeping Uber's prices in check in the Australian market.

Uber will be running an optimisation model and be charging the maximum market can sustain, with additional goals such as eliminating competition and not being shut down by regulators.

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

#350

Post by BLKNSLVR »

Gigachad wrote: post #319
CPLX wrote: post #256

Earlier quoted context omitted.

These companies are clearly calling things that are R&D that aren't R&D. If you're building a model that lasts a few months before it's no longer the most current one, and maybe a year before it's completely unusable by anybody, then that should just be COGS. Doing that, however, would betray the real problem with this business model.

They are also likely overestimating the useful lifespan of the hardware. They keep extending the number of years on the GPUs to make the accounting look better.

When are these GPUs going to be available on the second hand market?
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