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OpenAI's cash burn will be one of the big bubble questions of 2026

economist.com

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Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#381

Post by skort »

nateb2022 wrote: post #162
avalys wrote: post #139

AI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic,…

> AI is going to be a highly-competitive, extremely capital-intensive commodity market It already is. In terms of competition, I don't think we've seen any groundbreaking new research or architecture since the introduction of inference time compute ("thinking") in late 2024/early 2025 circa GPT-o4. The majority of the cost/innovation now is training this 1-2 year old technology on increasingly large amounts of conten…

> But I think the more exciting fact is that we can probably expect LLMs to get a LOT cheaper in the next few years as the current investments in hardware begin to pay off

Citation needed!

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#382

Post by pier25 »

avalys wrote: post #139

AI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic,…

Did railroads change the world though?

They only lasted a couple of decades as the main transportation method. I'd say the internal combustion engine was a lot more transformative.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#383

Post by xnx »

choudharism wrote: post #364
fooblaster wrote: post #160

Earlier quoted context omitted.

There is a pretty big moat for Google: extreme amounts of video data on their existing services and absolutely no dependence on Nvidia and it's 90% margin.

The TAM for video generation isn't as big as the other use cases.

I agree, but isn't the TAM for video generation all of movies, TV, and possibly video games, or all entertainment? That's a pretty big market.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#384

Post by jmb99 »

Nextgrid wrote: post #227
ralph84 wrote: post #215

Earlier quoted context omitted.

The value of YouTube for AI isn't making AI videos, it's that it's an incredibly rich source for humanity's current knowledge in one place. All of the tutorials, lectures, news reports, etc. are great for training models.

Is that actually a moat? Seems like all model providers managed to scrape the entire textual internet just fine. If video is the next big thing I don’t see why they won’t scrape that too.

Scraping text across the entire internet is orders of magnitudes easier than scraping YouTube. Even ignoring the sheer volume of data (exabytes), you simply will get blocked at an IP and account level before you make a reasonable dent. Even if you controlled the entire IPv4 space I’m not sure you could scrape all of YouTube without getting every single address banned. IPv6 makes address bans harder, true, but then you’re still left with the problem of actually transferring and then storing that much data.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#386

Post by xhevahir »

pier25 wrote: post #382
avalys wrote: post #139

AI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic,…

Did railroads change the world though? They only lasted a couple of decades as the main transportation method. I'd say the internal combustion engine was a lot more transformative.

Pretty much every major historical trend of Western societies in the second half of the eighteenth century, from the development of the modern corporation to the advent of total war, was intimately tied to railroad transportation.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#387

Post by __MatrixMan__ »

conartist6 wrote: post #379
__MatrixMan__ wrote: post #373

Earlier quoted context omitted.

I think we'll find that that asymptote only holds for cases where the end user is not really an active participant in creating the next model: - take your data - make a model - sell it back to you Eventually all of the available data will have been squeezed for all it's worth the only way to differentiate oneself as an AI company will be to propel your users to new heights so that there's new stuff to learn. That gro…

Yeah except that models don't propel communities towards new heights. They drive towards the averages. They take from the best to give to the worst, so that as much value is destroyed as created. There's no virtuous cycle there...

Is that constraint fundamental to what they are? Or are they just reflecting the behavior of markets when there's low hanging fruit around?

When you look at models that were built for a specific purpose, closely intertwined with experts who care about that purpose, they absolutely propel communities to new heights. Consider the impact of alphafold, it won a Nobel prize, proteomics is forever changed.

The issue is that that's not currently the business model that's aimed at most of us. We have to have a race to the bottom first. We can have nice things later, if we're lucky, once a certain sort of investor goes broke and a different sort takes the helm. It's stupid, but its a stupidity that predates AI by a long shot.

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#388

Post by catoc »

devsda wrote: post #277
simonsarris wrote: post #265

Earlier quoted context omitted.

Google has several enviable, if not moats, at least redoubts. TPUs, mass infrastructure and own their own cloud services, they own delivery mechanisms on mobile (Android) and every device (Chrome). And Google and Youtube are still #1 and #2 most visited websites in the world.

Don't forget the other moat. While their competitors have to deal with actively hostile attempts to stop scraping training data, in Google's case almost everyone bends over backwards to give them easy access.

‘Actively hostile’ as in objecting to your content getting ripped off without permission?

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#389

Post by Zetaphor »

PeterHolzwarth wrote: post #365
thisgetsit wrote: post #165

Earlier quoted context omitted.

> copyright provides such a moat. Been saying this since the 2016 Alice case. Apple jumped into content production in 2017. They saw the long term value of copyright interests. https://arstechnica.com/information-technology/2017/08/apple... Alice changed things such that code monkeys algorithms were not patentable (except in some narrow cases where true runtime novelty can be established.) Since the transformers pape…

My goodness, are you really saying, in effect, "I wish people over 50 would just hurry up and die"?!? Good lord, expressing that kind of sentiment does not make for a useful and engaging conversation here on hacker news.

Clutch pearls

Re: OpenAI's cash burn will be one of the big bubble questions of 2026

#390

Post by krige »

woooooo wrote: post #188
robkop wrote: post #140

Earlier quoted context omitted.

I’ve heard too many rumors that much of that adoption is from copying ms i.e. bundling gemini into their office suite

Gemini adoption via search is legit, though. I had a question, I got an answer, its not forced, fake adoption in that case.

It's hardly legit for everyone. I had a question, I got an incorrect answer I didn't ask for, scrolled past it and got actual results.
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