[dead]
OpenAI's cash burn will be one of the big bubble questions of 2026
471–480 of 777 posts
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#472Earlier quoted context omitted.
Most startups have big upfront capital costs and big customer acquisition costs, but small or zero marginal costs and COGS, and eventually the capital costs can slow down. That's why spending big and burning money to get a big customer base is the standard startup methodology. But OpenAI doesn't have tiny COGS: inference is expensive as fuck. And they can't stop capex spending on training because they'll be immediate…
>But OpenAI doesn't have tiny COGS: inference is expensive as fuck. No, inference is really cheap today, and people saying otherwise simply have no idea what they are talking about. Inference is not expensive.
Clearly not cheap enough.
> Even at $200 a month for ChatGPT Pro, the service is struggling to turn a profit, OpenAI CEO Sam Altman lamented on the platform formerly known as Twitter Sunday. "Insane thing: We are currently losing money on OpenAI Pro subscriptions!" he wrote in a post. The problem? Well according to @Sama, "people use it much more than we expected."
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#473AI is going to be a highly-competitive, extremely capital-intensive commodity market that ends up in a race to the bottom competing on cost and efficiency of delivering models that have all reached the same asymptotic performance in the sense of intelligence, reasoning, etc. The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. OpenAI, Anthropic,…
for me its clear OpenAI and Anthropic have a lead. I dont buy Gemini 3 being good. it isnt. whatever the benchmark said. same for meta and deepseek.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#474Earlier quoted context omitted.
OpenAI has close to 1 billion users which are mostly free users and will switch provider the moment OpenAI start charging them or adding ads. Which they will, as OpenAI themselves said they are losing money even with 200$ subs. So that amount of users is pretty meaningless.
Google search is free to use too. So is Instagram. Facebook. Whatsapp. All of these have ads. OpenAI says they're very profitable on inference.
All of these have ads. And none of these have an equal value alternative. OpenAI, Claude, Deepseek, Mistral, Gemini, are mostly the same to a regular user.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#475Earlier quoted context omitted.
> AI is a world-changing technology, just like the railroads were This comparison keeps popping up, and I think it's misleading. The pace of technology uptake is completely different from that of railroads: the user base of ChatGPT alone went from 0 to 200 million in nine months, and it's now- after just three years- around 900 million users on a weekly basis. Even if you think that railroads and AI are equally impac…
Paid user base or free user base? Because free user base on a very expensive product is next to meaningless.
It's meaningful because it shows that people like the product a lot, and for a lot of different reasons. There are only few products that can reach such market penetration, not to mention in only three years. As the quality of AI increases, people will quickly realise that they are willing to pay for it as much as they pay for electricity. And the same goes for businesses.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#476Earlier quoted context omitted.
Didn't they create Sora and other models and literally burned so much money with their AI video app which they wanted to make a social media but what ended up happening was that they burned billions of dollars.
I wonder about what happens to people who make these hilariously bad business decisions? Like the person at Twitter who decided to kill Vine. Do they spin it and get promotoed? Something else? I'd love a blog or coffee table book of "where are they now" for the director level folks who do dumb shit like this.
Building fiefdoms elsewhere, or whatever. "Have you heard about the new hire from XYZ?"
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#477AI 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,…
Anthropic is building moat around theirs models with claude code, Agent SDK, containers, programmatic tool use, tool search, skills and more. Once you fully integrate you will not switch. Also being capital intensive is a form of moat. I think we will end up with market similar to cloud computing. Few big players with great margins creating cartel.
A GPT wrapper isn't a moat.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#478AI 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…
There is clearly a very strong moat. OpenAI is close to 1 billion active users on ChatGPT while Claude barely have any non-business users. Even though Anthropic had better models at different times this year, I never stopped using ChatGPT and paying for Plus. We just don't know who will win in which area yet. It doesn't mean there is no moat.
I don’t think it’s a question of moat. The usage limits on the chat interface with the more advanced Claud models are brutal. I feel like I can barely start a conversation before I get shutdown. However, I switched over to Gemini almost completely and barely ever checkin with ChatGPT these days.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#479For 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.
Only in HN and some reddit subs I even see the name claude. In many countries AI=ChatGPT.
From what I've seen, 99% of people are using the free version of ChatGPT. Those who are using Claude are on the subscription, very often the $100/month one.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#480Earlier quoted context omitted.
Something nobody's talking about: OpenAI's losses might actually be attractive to certain investors from a tax perspective. Microsoft and other corporate investors can potentially use their share of OpenAI's operating losses to offset their own taxable income through partnership tax treatment. It's basically a tax-advantaged way to fund R&D - you get the loss deductions now while retaining upside optionality later. T…
> OpenAI's losses might actually be attractive to certain investors from a tax perspective. OpenAI is anyways seeking Govt Bailout for "National Security" reasons. Wow, I earlier scoffed at "Privatize Profits, Socialize Losses", but this appears to now be Standard Operating Procedure in the U.S. https://www.citizen.org/news/openais-request-for-massive-gov... So the U.S. Taxpayer will effectively pay for it. And not j…
There's already a lot that the US taxpayer is on the hook for that's a lot less valuable than a best on the next big thing in software, productivity, and warfare.
It shouldn't be the job of the US taxpayer to feed someone that doesn't want to work, study, or pass a drug test, and it absolutely shouldn't be the job of the US taxpayer to feed another country's citizens half a world away.