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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

#391

Post by joshuastuden »

astrange wrote: post #346
joshuastuden wrote: post #309

Earlier quoted context omitted.

They already fold proteins with simulations. Just because people are using it doesn't mean it's a net good. Lots of people use social media and that's just rotting brains and making people far more polarized than they ever were before. It's use in medicine hasn't resulted in anything meaningful. Nobody's medical bill has gotten cheaper and nobody has lived longer or healthier because of anything AI did.

https://www.the-scientist.com/chatgpt-and-alphafold-help-des... https://arxiv.org/pdf/2503.15204 > They already fold proteins with simulations. I like how you're trying to argue with the Nobel committee here.

Did you read it? It just said AI assisted with the process. So did the Internet. AI didn't come up with the solution or even the idea. It simply helped prune the search space, which is valuable, but not worth the trillions of dollars invested and all the added CO2.

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

#392

Post by joshuastuden »

frankacter wrote: post #374
joshuastuden wrote: post #271

Earlier quoted context omitted.

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...

>The projections, which were reviewed by The Wall Street Journal

No, they're just projections of profitability

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

#393

Post by joshuastuden »

anuramat wrote: post #311
joshuastuden wrote: post #271

Earlier quoted context omitted.

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?

huh, I felt like (gpt5.5 I want to like gpt5.5 but it's like an evil genie: bugs are fixed, features are implemented, you are now a proud owner of a 2kloc file with a single function that makes you wish you had keybindings for horizontal scrolling

GPT 5.5 regularly got things correct where opus 4.8 got things wrong. Just today, it was launching an executable and putting the environments after the launch. It should have been

Env1=val env2=val ./executable ....

But instead it did

./executable

Then set the envvars. Chatgpt 5.5 made no such mistake.

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

#394

Post by JimTheMan »

nemomarx wrote: post #195
JimTheMan wrote: post #188

Earlier quoted context omitted.

None of the free models offer anything even remotely close to the output you can get on a relatively inexpensive model. I think that AI is going to become just another utility people pay to stay relevant. Same as their internet, electricity or gas.

Will they do it at utility / commodity prices though, or the inflated costs we see now?

That's a good question.

I think there's an assumption that current costs, which are high, will remain high.

Most of that seems to be going to model development, rather than model operation, which is the product we all use.

To me the most likely option will be, that development slows and prices rise somewhat, as they can't keep burning cash forever. But I'm willing to pay a little bit more, considering how powerful the tool is.

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

#395

Post by devsda »

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?

If the supply side constraints remains the same, I doubt they'll be releasing their GPUs as they could be considered strategic assets. Their current moat is largely hardware right.

In few years open weight models may be good enough for anything but advanced usecases. With right hardware, competition may grab the lower end of market using open models. There's also potential loss of interesting training data from real conversations.

I see more downsides than upsides.

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

#396

Post by marcosdumay »

ignoramous wrote: post #211
marcosdumay wrote: post #197

So... 50% operational costs and about $100 spent on sales for each paying customer. If they manage to keep those customers for several years without more sales, that bit looks like a normal "high-touch" business. They shouldn't look like a "high-touch" business, but their unitary numbers look way better than I expected. They just need to grow some 10 times to star making a profit... Maybe 100 to cover the opportunity…

> 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.

Yes, their numbers can even work out into a sustainable business with ads only.

They just have to become the world dominant LLM provider by a large margin, and become a high-value ad provider with world scale.

I mean... They just have to repeat a Google. That would make them sustainable and a reasonable value for the investment.

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

#397

Post by jcranmer »

mvkel wrote: post #330
root-parent wrote: post #178

Earlier quoted context omitted.

>> Inference is _highly_ profitable. Totally untrue.

"Revenue: 13.07b; cost of revenue: 7.5b." This includes running inference for ~1b free users. What is untrue about this?

So far as I'm aware, we don't know that inference for free users is counted as cost of revenue as opposed to sales and marketing.

With sales and marketing at 5.7b, which seems unusually high compared to cost of revenue, I think it's deeply irresponsible to ignore that when considering how profitable OpenAI may be. Even taking a charitable interpretation, OpenAI is having to spend considerable budget (more than their gross profit!) to keep people paying for using their services. The less charitable interpretation is that they're deeply unprofitable and they're pulling every legal accounting trick to hide the sources of unprofitability.

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

#398

Post by simianwords »

rpdillon wrote: post #121
simianwords wrote: post #99

Earlier quoted context omitted.

> I personally don't care much about predictions I don't know what to say other than I now know the audience Ed Zitron writes for.

Hang on; You said financially and technically illiterate. You didn't just say the predictions were inaccurate. GP is asking for evidence of illiteracy.

https://news.ycombinator.com/item?id=48553079

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

#399

Post by weavie »

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

What kind of ads would you expect to see? "Hey, you're asking a lot of questions about Postgres lately. Have you considered moving to Oracle?"

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

#400

Post by DarkUranium »

paytonjjones wrote: post #272
bruce343434 wrote: post #249

Earlier quoted context omitted.

Everyone else will be 5% more productive. Then no one is "more" productive. So everyone has a higher output, but the same wages and hours worked. There was only a gap when usable AI first came out, some contractors could do the same quantity of work in less time and enjoy time off or do more jobs. Now the gap has closed or is closing. And using AI now is more about not being less productive than peers who do use it.

That's not how productivity works. It's not a zero-sum game. If all construction workers can build houses 5% more efficiently, that's not the same as nothing changing. Depending on supply and demand, it means 5% more houses are built, or houses are 5% cheaper, or maybe 5% bigger, or some combination. Whether or not the construction workers all get a raise or 5% get fired (or both) depends on that supply and demand, b…

"Historically" is doing a lot of work here. It's a well-known fact that while productivity kept increasing, wages have stagnated since the 70s.

So you're right in an academic sense, but not for any practical purpose whatsoever, in terms of how it'll affect economy now.

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