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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

#361

Post by airstrike »

nojito wrote: post #283
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…

You're over inflating the S which is expected to increase as now they are "going to market" G&A is within expectations. Revenue is still growing faster than costs and gross margins have continued to improve. The real question is when they can start spending less on R&D and still compete.

> The real question is when they can start spending less on R&D and still compete.

As a company making SOTA models? Never.

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

#362

Post by rohansood15 »

overfeed wrote: post #310
firesteelrain wrote: post #294

Earlier quoted context omitted.

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

In other words, Codex likely has a lower demand:capacity ratio compared to Claude. Which can mean either OpenAI did a better job at building out capacity, or the demand for Claude outstripped Anthropic's projections. Or both.

Or Codex models are more efficient that Claude. Plus the two things you mentioned.

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

#363

Post by Dylan16807 »

fny wrote: post #358
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…

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 monk…

> They aim to undercut labor.

Which doesn't work the same way at all. With taxis, making them unprofitable leads to a long-lasting lack of taxis. When lots of jobs are lost, it actually becomes easier to hire someone with the right experience.

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

#364

Post by DANmode »

krupan wrote: post #348
ignoramous wrote: post #211

Earlier quoted context omitted.

> 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

Some people aren’t?

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

#365

Post by fragmede »

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?

Standard depreciation is 3-5 years.

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

#366

Post by ThunderSizzle »

pastel8739 wrote: post #305
tartoran wrote: post #300

Earlier quoted context omitted.

Some humans will need to interpret the thinking and apply it somewhere and take some responsibility for those decisions. If you think AI can do all that end to end it’s a different question but we’re nowhere near that right now.

Definitely, I’m not saying that AI can entirely replace humans. But AI is definitely replacing parts of many jobs. If AI companies raise their rates to be profitable, and it turns out that paying for profitable AI is not worth it vs paying for humans, that might be a sticky situation.

There will always be a competitor that can undercut the inference market. There is no "moat" given that you can self host decently capable LLM agents like Qwen3.6 on not super expensive hardware, like an AMD R9700, and still get competitive speeds to most cloud interfaces.

If you can self host it that easily, any Joe can scale it out much like shared web hosting, and shared web hosting or even dedicated rented boxes has always been cheaper than the big cloud providers.

I don't think OpenAI or Anthropic can reasonable compete in the long term if they can't achieve "AGI", and they won't, no matter what shareholders desire.

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

#367

Post by akomtu »

We are watching an experiment: how high the Tower of Babel can stand of it's built with AI slop.

"According to the narrative story in Genesis 11, the city received the name "Babel" from the Hebrew verb bālal,[e] meaning to jumble or to confuse, after Yahweh distorted the common language of humankind.[11] According to Encyclopædia Britannica, this reflects word play due to the Hebrew terms for Babylon and "to confuse" having similar pronunciation.[7]" (Wikipedia)

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

#369

Post by coldtea »

Dylan16807 wrote: post #363
fny wrote: post #358

Earlier quoted context omitted.

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 monk…

> They aim to undercut labor. Which doesn't work the same way at all. With taxis, making them unprofitable leads to a long-lasting lack of taxis. When lots of jobs are lost, it actually becomes easier to hire someone with the right experience.

Supply-wise yes.

But when lots of jobs are lost, consumer spending is lost, and it becomes harder to sustain a business (whether B2C or B2B) and afford to hire someone...

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

#370

Post by structural »

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's situation is exactly the same. OpenAI is offering inference for a bunch of industries at prices that make it more competitive than hiring humans to do the same work.

If the break-even price to actually provide the service wasn't actually economic compared to humans, would there be nearly as much of a market? That's the real question. OpenAI is basically betting that they can live long enough that AI systems get built around them, which creates enough of a lock-in that they still have customers when prices increase by a lot.

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