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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

#401

Post by Marsymars »

thom wrote: post #248
aprilthird2021 wrote: post #204

Earlier quoted context omitted.

I'm genuinely curious. Why do you do this instead of Google Searches which also have an AI Overview / answer at the top, that's basically exactly the same as putting your search query into a chat bot, but it ALSO has all the links from a regular Google search so you can quickly corroborate the info even using sources not from the original AI result (so you also see discordant sources from what the AI answer had)?

The regular google search AI doesn’t do thinky thinky mode. For most buying decisions these days I ask ChatGPT to go off and search and think for a while given certain constraints, while taking particular note of Reddit and YouTube comments, and come back with some recommendations. I’ve been delighted with the results.

I wouldn’t be surprised if ChatGPT was Pareto optimal for buying decisions… but I suspect there are a whole pile of Pareto optimal ways to make buying decisions, including “buy one of the Wirecutter picks” or “buy whatever Costco is selling”.

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

#402

Post by Marsymars »

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.

Transportation of people, yeah, but it still carries a majority of inter-city freight in North America.

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

#403

Post by dilyevsky »

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.

What you’re competing for is people’s attention and the tam for that is biggest there is

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

#404

Post by r0b05 »

mizzao wrote: post #361
cmiles8 wrote: post #276

AI is turning into the worst possible business setup for AI startups. A commodity that requires huge capital investment and ongoing innovation to stay relevant. There’s no room for someone to run a small but profitable gold mine or couple of oil wells on the side. The only path to survival is investing crazy sums just to stay relevant and keep up. Meanwhile customers have virtually zero brand loyalty so if you slip b…

If you think of it like cloud, where it's a commodity that reaches competitive prices, then you can use it to build products and applications, instead of competing for infrastructure (see also: railroads, optical fiber) There is tons of money to be made at the application layer, and VCs will start looking at that once the infrastructure layer collapses. Here's a blog post I wrote about that: https://parsnip.substack.…

It's a good take. I think both trajectories are occurring simultaneously.

OpenAI challenging Google search is a winner takes all situation, not to mention the vast amounts of user data.

On the other hand, us lesser mortals can leverage AI like a commoditized service to build applications with it.

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

#405

Post by zeofig »

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,…

I still don't understand how it's world-changing apart from considerably degrading the internet. It's laughable to compare it to railroads.

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

#406

Post by ManuelKiessling »

578_Observer wrote: post #360
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,…

The "Railway Bubble" analogy is spot on. As a loan officer in Japan who remembers the 1989 bubble, I see the same pattern. In the traditional "Shinise" world I work with, Cash is Oxygen. You hoard it to survive the inevitable crash. For OpenAI, Cash is Rocket Fuel. They are burning it all to reach "escape velocity" (AGI) before gravity kicks in. In 1989, we also bet that land prices would outrun gravity forever. But…

I‘m aware this means leaving the original topic of this thread, but would you mind giving us a rundown of this whole Japan 1989 thing? I would love to read a first-person account.

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

#408

Post by throw-12-16 »

agentifysh wrote: post #103
gip wrote: post #31

There is no doubt that OpenAI is taking a lot of risks by betting that AI adoption will translate into revenues in the very short term. And that could really happen imo (with a low probability sure, but worth the risk for VCs? Probably).

It's mathematically impossible what OpenAI is promising. They know it. The goal is to be too big to fail and get bailed out by US taxpayers who have been groomed into viewing AI as a cold war style arms race that America cannot lose.

Unlikely, Elon bought the presidency and owns a competitor.

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

#409

Post by throw-12-16 »

acoustics wrote: post #96
jeffbee wrote: post #88

For what I use them for, the LLM market has become a two player game, and the players are Anthropic and Google. So I find it quite interesting that OpenAI is still the default assumption of the leader.

ChatGPT dominates the consumer market (though Nano Banana is singlehandedly breathing some life into consumer Gemini). A small anecdote: when ChatGPT went down a few months ago, a lot of young people (especially students) just waited for it to come back up. They didn't even think about using an alternative.

The consumer market is a loss leader.

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

#410

Post by throw-12-16 »

agentifysh wrote: post #95

2008: US Banks pump stocks -> market correction -> taxpayer bailout 2026: US AI companies pump stocks -> market correction -> taxpayer bailout Mark my words. OpenAI will be bailed out by US taxpayers.

I don't think so.

Elon owns a competitor and bought the White House.

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