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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

#351

Post by anjel »

romaniv wrote: post #248

The 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…

Not here to entirely disagree its bonkers, but Tesla lost about 6b until 2022 when it got profitable and has since returned a healthy multiple of its prior losses as profits.

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

#352

Post by fnord77 »

romaniv wrote: post #248

The 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 already losing ground to Anthropic even with this much R&D.

Do we know how bad/good misAnthropic is doing financially?

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

#353

Post by Gigachad »

BLKNSLVR wrote: post #350
Gigachad wrote: post #319

Earlier quoted context omitted.

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?

Presumably when the power consumption costs more than the cost of replacement.

It’s not so much that these GPUs stop working after 3 years, but that newer GPUs can handle more requests with less power for the same purchase price. So the useful value of the GPU degrades until eventually it’s cheaper to replace than to keep running.

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

#354

Post by winfredJa »

anjel wrote: post #351
romaniv wrote: post #248

The 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…

Not here to entirely disagree its bonkers, but Tesla lost about 6b until 2022 when it got profitable and has since returned a healthy multiple of its prior losses as profits.

Tesla didn't have any real competition until recently from chinese side. 2nd OpenAI is a software company unlike Tesla

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

#355

Post by jcgrillo »

strken wrote: post #210
fearmerchant wrote: post #169

Earlier quoted context omitted.

It's more like once you figure out how to make a really good lamp then producing lots of lamps will be profitable. But the lamps are currently suboptimal so we'll be in the red until that time.

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…

And there are just tons of free engines sitting around that are basically almost as good as the newest ones...

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

#356

Post by emodendroket »

winfredJa wrote: post #354
anjel wrote: post #351

Earlier quoted context omitted.

Not here to entirely disagree its bonkers, but Tesla lost about 6b until 2022 when it got profitable and has since returned a healthy multiple of its prior losses as profits.

Tesla didn't have any real competition until recently from chinese side. 2nd OpenAI is a software company unlike Tesla

Amazon and Uber are other examples of businesses that looked like total basket cases for years. I remember reading, and at the time being persuaded by, articles arguing that Uber was doomed because there are no real economies of scale in livery services, and so the minute they began to achieve a dominant position and hike prices, countless competitors would easily swoop in and undercut them. Didn't turn out that way.

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

#357

Post by jcgrillo »

murderfs wrote: post #344
jcgrillo wrote: post #307

Earlier quoted context omitted.

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.

That's a good point!

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

#358

Post by fny »

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…

They aim to undercut labor.

For now, businesses are getting addicted to cheap tokens. As the screws get turned, business will debate whether they should spend budget on humans or tokens. What's further devastating is that humans are also becoming addicted to cheap tokens. Much human output is nowadays a token slopfest. People are becoming dumber too. So the real business question will be spending budget on token monkeys or tokens.

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

#359

Post by emodendroket »

apatheticonion wrote: post #209

Seeing that R&D costs are the lion's share, I wonder if we are at a point where the focus can shift to improving the cost of inference. Unless we are genuinely pushing to find AGI, at which point nothing matters, LLMs in their current form don't replace knowledge workers but are an effective force multiplier. How good is enough? For instance, I pay about $1-2 a month for DeepSeek. It's not as sophisticated as Claude,…

That's interesting on Deepseek. But I think as long as the models are still making noticeable gains with each iteration it's hard to say "good enough."

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

#360

Post by DANmode »

alexpotato wrote: post #333
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…

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.

What’s the price multiplier?
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