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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

#371

Post by iwontberude »

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…

If you knew about how much man power it takes to maintain, evaluate and improve agentic workflows, I don’t think you would write such a thing. In this context, AI is a jobs program for permanent employment.

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

#372

Post by grebc »

pastel8739 wrote: post #287
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…

People use AI because it is cheaper than paying humans to think. Soon you won’t really be able to find human thinkers.

Thinking doesn’t disappear because of OpenAI’s shitty LLM’s.

It certainly disappear for their customers however.

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

#373

Post by adrianN »

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.

It depends on how long you can keep those people un- or underemployed. I think engineers are rapidly bleeding experience even while being employed if all they do is prompting.

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

#374

Post by frankacter »

joshuastuden wrote: post #271
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 not really losing ground to Anthropic. 5.5 was a bit better than 4.8. Fable was good, and was a jump over 4.8, but only incremental over 5.5. Anthropic is also likely losing money, right?

According to Wash they are operationally profitable

https://www.wsj.com/tech/ai/mind-blowing-growth-is-about-to-...

Some question it

https://www.wheresyoured.at/anthropics-profitability-swindle...

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

#375

Post by BarryMilo »

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…

You've seen Sam Altman's interviews, yet you still think him a competent man? I think he's rather the embodiment of the death of meritocracy as an idea.

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

#376

Post by asdff »

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…

The uber situation was even more insidious than that. It wasn't like college students were calling cabs to go to bars in 2013. Uber created a market. It was essentially a mind virus. Gee now I can go to this place all for $7. Chum the water, establish the new pattern of living that people won't ever back away from, then twist the knife and raise prices knowing they won't revert back to whatever Old Way now long forgotten or not even engaged with by the upcoming generation.

Many such cases.

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

#377

Post by anjel »

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

Profits are irreducibly profitable, regardless.

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

#378

Post by dfee »

asdff wrote: post #376
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…

The uber situation was even more insidious than that. It wasn't like college students were calling cabs to go to bars in 2013. Uber created a market. It was essentially a mind virus. Gee now I can go to this place all for $7. Chum the water, establish the new pattern of living that people won't ever back away from, then twist the knife and raise prices knowing they won't revert back to whatever Old Way now long forgo…

> It wasn't like college students were calling cabs to go to bars in 2013.

well, in 2009, we did.

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

#379

Post by taneq »

ses1984 wrote: post #187
taneq wrote: post #180

Earlier quoted context omitted.

> R&D costs are hurting profit That’s quite the hot take, considering it’s literally an R&D company that got to where it is by doing R&D.

Isn’t the post above saying the same thing after the part where you cut it off…?

> R&D costs are hurting profit side and while you can cut that one just becomes irrelevant overnight in this space if you do, hence the problem.

I see where you're coming from but I still make a distinction between "R&D costs hurt profits but are necessary to stay relevant" and "R&D costs money but is the source of future profits". It's the difference between a necessary expense and an investment.

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

#380

Post by wbl »

structural wrote: post #370
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…

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 ge…

I think you underestimate the price by a few orders of magnitude where it makes sense to pay a model instead of a human. If someone earning 200,000 a year gets replaced by paying 500 a day to Anthropic or OpenAI their employer comes out ahead.
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