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…
>> For the right investor base, $10B in annual losses at OpenAI could be worth $2-3B in tax shields So just a loss for governments, or in other words, socializing the losses.
Private industry loses 10B. Governments mostly affected as they have less free money to extract.
While I don’t disagree with you, for historical purposes I think it’s important to highlight why google started its push for 100% wire encryption everywhere all the time: The NSA and GHCQ and basically every TLA with the ability to tap a fibre cable had figured out the gap in Google’s armour: Google’s datacenter backhaul links were unencrypted. Tap into them, and you get _everything_. I’ve no idea whether Snowdon’s l…
When I worked at PayPal back in 2003/4, one of the things we did (and I think we were the first) was encrypt the datacenter backhaul connections. This was on top of encrypting all the traffic between machines. It added a lot of expense and overhead, but security was important enough to justify it.
And yet Venmo, a Paypal company, publishes transaction data publicly by default, no need to decrypt anything ¯\_(ツ)_/¯
> 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.
The modern welfare state is the compromise reached by capitalist democracies to stave off communist revolutions. If you’re going to kill of the welfare part, be ready for the uprising part.
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…
>> For the right investor base, $10B in annual losses at OpenAI could be worth $2-3B in tax shields So just a loss for governments, or in other words, socializing the losses.
OpenAIs losses are someone else's (taxed) earnings.
Is that actually a moat? Seems like all model providers managed to scrape the entire textual internet just fine. If video is the next big thing I don’t see why they won’t scrape that too.
Scraping text across the entire internet is orders of magnitudes easier than scraping YouTube. Even ignoring the sheer volume of data (exabytes), you simply will get blocked at an IP and account level before you make a reasonable dent. Even if you controlled the entire IPv4 space I’m not sure you could scrape all of YouTube without getting every single address banned. IPv6 makes address bans harder, true, but then yo…
IPv6 doesn't make it "harder," as they would typically ban whole /48 prefixes.
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…
> For the right investor base, $10B in annual losses at OpenAI could be worth $2-3B in tax shields (depending on their bracket and how the structure works). That completely changes the return calculation I know nothing about finances at this level, so asking like a complete newbie: doesn't that just mean that instead of risking $10B they're risking $7-8B? It is a cheaper bet for sure, but doesn't look to me like a ga…
It all depends on the actual numbers. Consider this simplified example: If you are offered a deal that requires you to lay down 10 billion today and it has a 5% chance to pay out 150 billion tomorrow, your accountants will tell you not to take this deal because your expected return is -2.5 billion. But if you can offset 3 billion in cost to the tax payer, your expected return suddenly becomes $500 million, making it a good deal that you should take every time.
> 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…
> just three years- around 900 million users on a weekly basis. Well, I rotate about a dozen of free accounts because I don't want to send 1 cent their way, I imagine I'm not the only one. I do the same for gemini, claude and deepseek, so all in all I account for like 50 "unique" weekly users Apparently they have about 5% of paying customers, the amount of total users is meaningless, it just tells you how much money…
> I rotate about a dozen of free accounts .. I do the same for gemini, claude and deepseek
For someone who doesn't like the product and doesn't care about it, you surely make a lot of effort to use it.
> The simple evidence for this is that everyone who has invested the same resources in AI has produced roughly the same result. I think this conflates together a lot of different types of AI investment - the application layer vs the model layer vs the cloud layer vs the chip layer. It's entirely possible that it's hard to generate an economic profit at the model layer, but that doesn't mean that there can't be great…
Whilst those other layers are useful, none of them are particularly hard to build or rebuild when you have many millions of dollars on hand. One doesn't need tens of billions for them.
Yeah, because making good chips (TPU) and compilers (XLA) is notoriously easy, right?
It’s also the standard methodology for a number of scams.
Scams are our entire economy now. Do whatever you can to own a market, then squeeze your customers miserably once you have their loyalty. Cash out, kick the smoking remains of the company to the curb, use your payout to buy into another company, and repeat.
Kind of like paying more and more to Social Security and Medicare and getting less and less.
And the backstop on asset prices at the expense of the currency's purchasing power.