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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

#501

Post by matwood »

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).

The problem is that Google is horrible at product. They have been so spot on at search it's covered up all the other issues around products. YT is great, but they bought that. The Pixel should the Android phone, but they do a poor job marketing. They should be leading AI, but stumbled multiple times in the rollout. They normally get the tech right, and then fumble the productizing and marketing.

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

#503

Post by t4TLLLSZ185x »

People in this comment section focus on brand ads too much.

It’s the commercial intent where OpenAI can both make money and preserve trust.

I already don’t Google anymore. I just ask ChatGPT „give me an overview of best meshtastic devices to buy“ and then eventually end with „give me links to where I can buy these in Europe“.

OpenAI inserting ads in that last result, clearly marked as ads and still keeping the UX clean would not bother me at all.

And commercial queries are what, 40-50% of all Google revenue?

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

#504

Post by jstummbillig »

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…

ChatGPT (and all the competitors) are trivially sticky products: I have a lot of ongoing conversations in there, that I pick up all the time. Add more long term memory stuff — a direction I am sure they will keep pushing — and all of the sudden there is a lot of personal data that you rely on it having, that make the product better and that most people will never care to replicate/transfer. Just being the product that people use makes you the product that people will use. "the other app doesn't know me" is the moat. The data that people put in it is the moat.

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

#505

Post by bashtoni »

sharkweek wrote: post #408
rajaman0 wrote: post #371

Earlier quoted context omitted.

Consumer brand quality is so massively underrated by tech people. ChatGPT has a phenomenal brand. That's worth 100x more than "product stickiness". They have 700 million weekly users and growing much faster than Google. I think your points on Google being well positioned are apt for capitalization reasons, but only one company has consumer mindshare on "AI" and its the one with "ai" in its name.

I’ve got “normie” friends who I’d bet don’t even know that what Google has at the top of their search results is “AI” results and instead assume it’s just some extension of the normal search results we’ve all gotten used to (knowledge graph) Every one of them refers to using “ChatGPT” when talking about AI. How likely is it to stay that way? No idea, but OpenAI has clearly captured a notable amount of mindshare in th…

In the UK, everyone refers to a vacuum as a 'hoover'. They are not the dominant vacuum brand there despite the massive name recognition.

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

#506

Post by onion2k »

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…

What prevents people from just using Google, who can build AI stuff into their existing massive search/ads/video/email/browser infrastructure?

Google have never had a viable competitor. Their moat on Search and Ads has been so incredibly hard to beat that no one has even come close. That has given them an immense amount of money from search ads. That means they've appeared to be impossible to beat, but if you look at literally all their other products they aren't top in anything else despite essentially unlimited resources.

A company becoming a viable competitor to Google Search and/or Ads is not something we can easily predict the outcome of. Many companies in the past who have had a 'monopoly' have utterly fallen apart at the first sign of real competition. We even have a term for it that YC companies love to scatter around their pitch decks - 'disruption'. If OpenAI takes even just 5% of the market Google will need to either increase their revenue by $13bn (hard, or they'd have done that already) or they'll need to start cutting things. Or just make $13bn less profit I guess. I don't think that would go down well though.

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

#508

Post by matwood »

oblio wrote: post #417
tim333 wrote: post #190

Earlier quoted context omitted.

OpenAI is now valued at $500bn though. I doubt the investors are too wrecked yet. It may be like looking at the early Google and saying they are spending loads on compute and haven't even figured how to monetize search, the investors are doomed.

Google was founded in 1998 and IPOed in 2004. If OpenAI was feeling confident they'd find ways to set up a company and IPO, 9 years after founding. It's all mostly fictional money at this point.

It's not about confidence. OpenAI would be huge on the public markets, but since they can raise plenty of money in the private market there is no reason to deal with that hassle - yet.

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

#509

Post by [deleted] »

gopheryourshelf wrote: post #496
jandy wrote: post #456

Earlier quoted context omitted.

Yep, this. I’ve switched to Claude for a while (because I can’t afford max plans for both) and nobody in the real world has any idea what it is I’m talking about. “Oh it’s like ChatGPT?”

Claude is also difficult to consistently pronounce for a non-English speaker. Sometimes people dont say that because it can get misinterpreted. ChatGPT is something easy on the the tongue and very difficult to mis-pronounce.

[deleted]

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

#510

Post by pembrook »

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…

> What is OpenAI's competitive moat? There's no product stickiness here.

20 years ago everyone said the exact same thing about Google Search.

I mean, how could you possibly build a $3T company off of a search input field, when users can just decide to visit a different search input field??

Surprise. Brand is the most powerful asset you can build in the consumer space. It turns out monetization possibilities become infinite once you capture the cultural zeitgeist, as you can build an ecosystem of products and eventually a walled garden monopoly.

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