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OpenAI's H1 2025: $4.3B in income, $13.5B in loss

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Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#41

Post by JCM9 »

adventured wrote: post #25
JCM9 wrote: post #8

These numbers are pretty ugly. You always expect new tech to operate at a loss initially but the structure of their losses is not something one easily scales out of. In fact it gets more painful as they scale. Unless something fundamentally changes and fast this is gonna get ugly real quick.

There is an exceptionally obvious solution for OpenAI & ChatGPT: ads. In fact it's an unavoidable solution. There is no future for OpenAI that doesn't involve a gigantic, highly lucrative ad network attached to ChatGPT. One of the dumbest things in tech at present is OpenAI not having already deployed this. It's an attitude they can't actually afford to maintain much longer. Ads are a hyper margin product that are ve…

For using GenAI as search I’d agree with you but I don’t think it’s as easy/obvious for most other use cases.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#42

Post by beepbopboopp »

Havoc wrote: post #34

I'd be pretty worried as a shareholder. Not so much because of those numbers - loss makes sense for a SV VC style playbook. ...but rather that they're doing that while Chinese competitors are releasing models in vaguely similar ballpark under Apache license. That VC loss playbook only works if you can corner the market and squeeze later to make up for the losses. And you don't corner something that has freakin apache…

Eh, distribution of the model is the real moat, theyre doing 700m WAU of the most financially valuable users on earth. If they truly become search, commerce and can use their model either via build or license across b2b, theyre the largest company on earth many times over.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#43

Post by bitexploder »

myth_drannon wrote: post #14

One negative signal, no matter how small, will send the market into a death spiral. That will happen in a matter of hours.

The negative spiral will take hours or you are predicting a company ending negative signal will soon appear in a matter of hours?

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#44

Post by codegeek »

I am curious to see how this compares against where Amazon was in 2000. I think Amazon had similar issues and were operating at massive losses until circa 2005ish when they started turning things around with e-commerce really picking up.

If the revenue keeps going up and losses keep going down, it may reach that inflection point in a few years. For that to happen, the cost of AI datacenter have to go down massively.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#45

Post by cs702 »

Correction: 4.3B in revenues.

Other than Nvidia and the cloud providers (AWS, Azure, GCP, Oracle, etc.), no one is earning a profit with AI, so far.

Nvidia and the cloud providers will do well only if capital spending on AI, per year, remains at current rates.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#46

Post by franktankbank »

kibwen wrote: post #13
hmate9 wrote: post #5

$2.5B in stock comp for about 3,000 employees. that’s roughly $830k per person in just six months. Almost 60% of their revenue went straight back to staff.

Sounds like they could improve that bottom line by firing all their staff and replacing them with AI. Maybe they can get a bulk discount on Claude?

[flagged]

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#47

Post by xnx »

The only way OpenAI survives is that "ChatGPT" gets stuck in peoples heads as being the only or best AI tool.

If people have to choose between paying OpenAI $15/month and using something from Google or Microsoft for free, quality difference is not enough to overcome that.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#49

Post by JCM9 »

chevman wrote: post #4
NooneAtAll3 wrote: post #3

> US$2.5 billion on stock-based compensation um...

Never having worked for a company in a position like OpenAI, how does this manifest in the real world as actual comp? Like I get 50,000 shares deposited in to my Fidelity account, worth $2 each, but i can't sell them or do anything with them?

Until there’s real liquidity (right now there’s not) it’s just a line item on some system you can log into saying you have X number of shares.

For all practical purposes it’s worth nothing until there is a liquid market. Given current financials, and preferred cap table terms for those investing cash, shares the average employee has likely aren’t worth much or maybe even anything at the moment.

Re: OpenAI's H1 2025: $4.3B in income, $13.5B in loss

#50

Post by russellbeattie »

throwacct wrote: post #48

At this point, every LLM startup out there is just trying to stay in the game long enough before VC money runs out or others fold. This is basically a war of attrition. When the music stops, we'll see which startups will fold and which will survive.

Correct. That's how Silicon Valley has worked for years.
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