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How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

nytimes.com

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Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#371

Post by ragingregard »

logicprog wrote: post #357
belter wrote: post #58

Earlier quoted context omitted.

> Everything seems to indicate that once the models are trained, they are extremely profitable Some data would reinforce your case. Do you have it? Here is my data point: "You Have No Idea How Screwed OpenAI Actually Is" - https://wlockett.medium.com/you-have-no-idea-how-screwed-ope...

I can't read your hyperbolically titled paywalled medium post, so idk if it has data I'm not aware of or is just rehashing the same stats about OpenAI & co currently losing money (mostly due to training and free users) but here's a non paywalled blog post that I personally found convincing: https://www.snellman.net/blog/archive/2025-06-02-llms-are-ch...

The above article is not convincing at all.

Nothing on infra costs, hardware throughput + capacity (accounting for hidden tokens) & depreciation, just a blind faith that pricing by providers "covers all costs and more". Naive estimate of 1000 tokens per search using some simplistic queries, exactly the kind of usage you don't need or want an LLM for. LLMs excel in complex queries with complex and long output. Doesn't account at all for chain-of-thought (hidden tokens) that count as output tokens by the providers but are not present in the output (surprise).

Completely skips the fact the vast majority of paid LLM users use fixed subscription pricing precisely because the API pay-per-use version would be multiples more expensive and therefore not economical.

Moving on.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#372

Post by moogly »

HDThoreaun wrote: post #328
moogly wrote: post #326

Earlier quoted context omitted.

> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _r…

Why would they want to do that? The only sector that matter to nvidia is datacenter, its where 90%+ of their profits are. Making their consumer sector even less profitable just seems like a waste of time

How about positive mindshare? Regular people not growing up absolutely hating nvidia's guts and only begrudgingly buying their products. Also ensuring that a pretty big industry won't die from becoming too expensive.

Plus, diversification is good for when the bubble inevitably bursts.

But that's long-term thinking and we can't have that. People give Huang credit for having had a long-term vision on AI, but it feels like he definitely has blinders on right now.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#373

Post by tehjoker »

chermi wrote: post #135
tehjoker wrote: post #64

Earlier quoted context omitted.

That's true, but without the kind of horsepower provided by modern hardware, even though I'm skeptical that it's all needed, especially given DeepSeek's amazing results, AI would be nearly impossible. There are some important innovations on the algorithm / network structure side, but all these ideas are only able to be tried because the hardware supports it. This stuff has been around for decades.

Deepseek required existing models that required the horsepower.

That was claimed but never proven. I personally don't believe the American companies making this claim. I suspect they made this up to protect their valuations when they were hideously embarassed and lost a trillion dollars in equity.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#374

Post by JoBrad »

rw3 wrote: post #6

Hank green did a vlog on this a few weeks ago and it’s a great explainer.

Hank had another video on the interconnectedness of the industry right now, that is very much in the spirit of the original article.

https://youtu.be/Q0TpWitfxPk

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#375

Post by mvdtnz »

Lord-Jobo wrote: post #329
moogly wrote: post #326

Earlier quoted context omitted.

> Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally. Here's an idea: they could make actual GPUs used for games affordable again, and not have Jensen Huang lie on stage about their performance to justify their astronomical prices. Sure, companies might want to buy them for ML/AI and crash the market again but I'm sure a company of their caliber could solve that if they _r…

I also just don’t understand, as someone with no business experience, how they aren’t just pouring all of that money into enhancing their production capacity. That’s very clearly their bottleneck here. Yes, I’m certain they are spending an astronomical amount on that already, but why not more? Surely paying more money for construction of more facilities still nets gain even if you run into diminishing returns? Instea…

> as someone with no business experience, how they aren’t just pouring all of that money into enhancing their production capacity. That’s very clearly their bottleneck here.

They know this madness can't go on forever. The last thing they need is to be left with billions of dollars of unused capacity when the bottom falls out of this very stupid bubble.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#376

Post by embedding-shape »

noosphr wrote: post #358
embedding-shape wrote: post #315

Earlier quoted context omitted.

I've always taken that term literally, basically "top of the top". If you're not getting the best responses from that LLM, then it's not "top of the top" anymore, regardless of size. Then something could be "SOTA in it's class" I suppose, but personally that's less interesting and also not what the parent commentator claimed, which was basically "anyone with money can get SOTA models up and running". Edit: Wikipedia…

A sota decoder model is a bigger deal than yet another trillion parameter encoder only model trained on benchmarks. I don't get why you think that the only way that you can beat the big guys is by having more parameters than them.

> I don't get why you think that the only way that you can beat the big guys is by having more parameters than them.

Yeah, and I don't understand why people have to argue against some point others haven't made, kind of makes it less fun to participate in any discussions.

Whatever gets the best responses (no matter parameter size, specific architecture, addition of other things) is what I'd consider SOTA, then I guess you can go by your own definition.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#377

Post by senordevnyc »

moogly wrote: post #372
HDThoreaun wrote: post #328

Earlier quoted context omitted.

Why would they want to do that? The only sector that matter to nvidia is datacenter, its where 90%+ of their profits are. Making their consumer sector even less profitable just seems like a waste of time

How about positive mindshare? Regular people not growing up absolutely hating nvidia's guts and only begrudgingly buying their products. Also ensuring that a pretty big industry won't die from becoming too expensive. Plus, diversification is good for when the bubble inevitably bursts. But that's long-term thinking and we can't have that. People give Huang credit for having had a long-term vision on AI, but it feels l…

The consumer gaming card market is minuscule in comparison to their primary market now, to the point where worrying about diversifying there probably doesn’t make sense. Nor does it really matter whether consumer gamers hate them. That is likely to have zero effect on their core customer now.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#378

Post by baobabKoodaa »

brookst wrote: post #345
thorncorona wrote: post #340

Earlier quoted context omitted.

It's like how every big co these days is ML. It will transition to LLMs as well. Just give it a few years.

Yep. Same vibes as “ha ha who needs internet connected appliances” (pretty much all appliances are internet connected now). And the apocryphal “there is a worldwide market for maybe 5 computers”.

No-one "needs" or even wants appliances to be connected to the internet. You claim that "pretty much all" appliances are internet connected, while almost none of the appliances in my house are.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#379

Post by Eisenstein »

senordevnyc wrote: post #377
moogly wrote: post #372

Earlier quoted context omitted.

How about positive mindshare? Regular people not growing up absolutely hating nvidia's guts and only begrudgingly buying their products. Also ensuring that a pretty big industry won't die from becoming too expensive. Plus, diversification is good for when the bubble inevitably bursts. But that's long-term thinking and we can't have that. People give Huang credit for having had a long-term vision on AI, but it feels l…

The consumer gaming card market is minuscule in comparison to their primary market now, to the point where worrying about diversifying there probably doesn’t make sense. Nor does it really matter whether consumer gamers hate them. That is likely to have zero effect on their core customer now.

Underestimating compounding and secondary effects, especially while rationalizing the abandonment of their core market and capability is one of the most famous ways that big companies provide evidence of their downward spiral. I can feel the MBA energy from here.

Re: How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

#380

Post by senordevnyc »

Eisenstein wrote: post #379
senordevnyc wrote: post #377

Earlier quoted context omitted.

The consumer gaming card market is minuscule in comparison to their primary market now, to the point where worrying about diversifying there probably doesn’t make sense. Nor does it really matter whether consumer gamers hate them. That is likely to have zero effect on their core customer now.

Underestimating compounding and secondary effects, especially while rationalizing the abandonment of their core market and capability is one of the most famous ways that big companies provide evidence of their downward spiral. I can feel the MBA energy from here.

Can you name any companies that suffered by switching focus away from one market where they dominate in order to also dominate a market that is 10x the size of the first market already, and growing faster?
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