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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

#441

Post by 01100011 »

asa400 wrote: post #362
nojs wrote: post #231

I think people are massively underestimating the money they will come from ads in the future. They generated $4.3B in revenue without any advertising program to monetise their 700 million weekly active users, most of whom use the free product. Google earns essentially all of its revenue from ads, $264B in 2024. ChatGPT has more consumer trust than Google at this point, and numerous ways of inserting sponsored results…

What is OpenAI's competitive moat? There's no product stickiness here. What prevents people from just using Google, who can build AI stuff into their existing massive search/ads/video/email/browser infrastructure? Normal, non-technical users can't tell the difference between these models at all, so their usage numbers are highly dependent on marketing. Google has massive distribution with world-wide brands that peopl…

I'm saying Google is going to win. They're not beholden to their current architecture as much as other shovelmakers and can pivot their TPU to offer the best inference perf/$. They also hold about as much personal data as anyone else and have plenty of stuff to train on in-house. I work for a competitor and even I think there's a good chance google "wins"(there's never a winner because the race never ends).

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

#442

Post by 01100011 »

stephc_int13 wrote: post #75

Everyone is trying to compare AI companies with something that happened in the past, but I don't think we can predict much from that. GPUs are not railroads or fiber optics. The cost structure of ChatGPT and other LLM based services is entirely different than web, they are very expensive to build but also cost a lot to serve. Companies like Meta, Microsoft, Amazon, Google would all survive if their massive investment…

The one thing smaller companies might have is allocated power budgets from power companies. Part of the mad dash to build datacenters right now is just to claim the power so your competitors can't. Now I do think the established players hold an edge here, but I don't think OpenAI/Anthropic/etc are without some bargaining power(hah).

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

#443

Post by hiatus »

andyferris wrote: post #427
MountDoom wrote: post #405

Earlier quoted context omitted.

All of these teens use Google Docs instead of OpenAI Docs, Google Meet instead of OpenAI Meet, Gmail instead of OpenAI Mail, etc. I'm sure that far fewer people to go gemini.google.com than to chatgpt.com, but Google has LLMs seamlessly integrated in each of these products, and it's a part of people's workflows at school and at work. For a while, I was convinced that OpenAI had won and that Google won't be able to re…

I think the beneficiary is wrong here. Those teens will grow up to work for organizaitons using Azure AD, Windows, Office and OneDrive/SharePoint/Teams. If any company is going to get the windfall of "AI provider by default" it is going to be Microsoft. Possibly powered by OpenAI models running on Azure. Google could make a "better" (basically - more sublime) advertising platform but little to attract new users. Perh…

> I think the beneficiary is wrong here. Those teens will grow up to work for organizaitons (sic) using Azure AD, Windows, Office and OneDrive/SharePoint/Teams.

Idk, younger companies like Anthropic and OpenAI are using google.

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

#444

Post by preommr »

Kranar wrote: post #347
hoppp wrote: post #336

Earlier quoted context omitted.

The moment they start mixing ads into responses Ill stop using them. Open models are good enough, its just more convenient to use chatgpt right now, but that can change.

People said the same thing about so many other online services since the 90s. The issue is that you're imagining ChatGPT as it exists right now with your current use case but just with ads inserted into their product. That's not really how these things go... instead OpenAI will wait until their product becomes so ingrained in everyday usage that you can't just decide to stop using them. It is possible, although not c…

> People said the same thing about so many other online services since the 90s.

And this leads to something I genuinely don't understand - because I don't see ads. I use adblocker, and don't bother with media with too many ads because there's other stuff to do. It's just too easy to switch off a show and start up a steam game or something. It's not the 90s anymore, people have so many options for things.

Idk, maybe I am wrong, but I really think there is something very broken in the ad world as a remenant from the era where google/facebook were brand new and the signal to noise ratio for advertisers was insanely high and interest rates were low. Like a bunch of this activity is either bots or kids, and the latter isn't that easy to monetize.

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

#445

Post by [deleted] »

rester324 wrote: post #227
epolanski wrote: post #223

Earlier quoted context omitted.

50x devs are not a myth. In any case the talent is very scarce in AI/ML, the one able to push through good ideas so prices are going to be high for years.

I think there is no evidence of any type of 50x devs. There is not even proof of 10x devs. So if there is no evidence, why is that not a myth?

[deleted]

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

#446

Post by fooker »

01100011 wrote: post #441
asa400 wrote: post #362

Earlier quoted context omitted.

What is OpenAI's competitive moat? There's no product stickiness here. What prevents people from just using Google, who can build AI stuff into their existing massive search/ads/video/email/browser infrastructure? Normal, non-technical users can't tell the difference between these models at all, so their usage numbers are highly dependent on marketing. Google has massive distribution with world-wide brands that peopl…

I'm saying Google is going to win. They're not beholden to their current architecture as much as other shovelmakers and can pivot their TPU to offer the best inference perf/$. They also hold about as much personal data as anyone else and have plenty of stuff to train on in-house. I work for a competitor and even I think there's a good chance google "wins"(there's never a winner because the race never ends).

Is there publicly available evidence that TPU perf/$ is better than Blackwell ?

I know it seems intuitively true but was surprised to not really find evidence for it.

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

#447

Post by stevenwoo »

andruby wrote: post #102

Too bad the market can stay irrational longer than I can stay solvent. I feel like a stock market correction is well overdue, but I’ve been thinking that for a while now

I would be bankrupt multiple times over if I moved on just Tesla stock with a rational mindset.

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

#448

Post by singron »

bfirsh wrote: post #97
simonw wrote: post #58

I think the most interesting numbers in this piece (ignoring the stock compensation part) are: $4.3 billion in revenue - presumably from ChatGPT customers and API fees $6.7 billion spent on R&D $2 billion on sales and marketing - anyone got any idea what this is? I don't remember seeing many ads for ChatGPT but clearly I've not been paying attention in the right places. Open question for me: where does the cost of ru…

Free usage usually goes in sales and marketing. It's effectively a cost of acquiring a customer. This also means it is considered an operating expense rather than a cost of goods sold and doesn't impact your gross margin. Compute in R&D will be only training and development. Compute for inference will go under COGS. COGS is not reported here but can probably be, um, inferred by filling in the gaps on the income state…

I think it makes the most sense this way, but I've seen it accounted for in other ways. E.g. if free users produce usage data that's valuable for R&D, then they could allocate a portion of the costs there.

Also, if the costs are split, there usually has to be an estimation of how to allocate expenses. E.g. if you lease a datacenter that's used for training as well as paid and free inference, then you have to decide a percentage to put in COGS, S&M, and R&D, and there is room to juice the numbers a little. Public companies are usually much more particular about tracking this, but private companies might use a proxy like % of users that are paid.

OpenAI has not been forthcoming about their financials, so I'd look at any ambiguity with skepticism. If it looked good, they would say it.

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

#449

Post by raincole »

asa400 wrote: post #362
nojs wrote: post #231

I think people are massively underestimating the money they will come from ads in the future. They generated $4.3B in revenue without any advertising program to monetise their 700 million weekly active users, most of whom use the free product. Google earns essentially all of its revenue from ads, $264B in 2024. ChatGPT has more consumer trust than Google at this point, and numerous ways of inserting sponsored results…

What is OpenAI's competitive moat? There's no product stickiness here. What prevents people from just using Google, who can build AI stuff into their existing massive search/ads/video/email/browser infrastructure? Normal, non-technical users can't tell the difference between these models at all, so their usage numbers are highly dependent on marketing. Google has massive distribution with world-wide brands that peopl…

Brand is the second most important moat (only shy to regulation capture).

If normal people start saying "ChatGPT" to refer to AI they win, just like how google became a verb for search.

It seems to be the case.

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

#450

Post by remarkEon »

chrischen wrote: post #396
loandbehold wrote: post #388

Earlier quoted context omitted.

Users' chat history is the moat. The more you use it, the more it knows about you and can help you in ways that are customized to particular user. That makes it sticky, more so than web search. Also brand recognition, ChatGPT is the default general purpose LLM choice for most people. Everyone and their mom is using it.

Walling in my personal data would be a sure sign way to get me to not use OpenAI.

Is there a way, today, for me to move the project folders I have in the paid version to another AI product?
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