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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

#531

Post by mupuff1234 »

Chyzwar wrote: post #431
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,…

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.

All those features are basically prompts in various formats, not much of a moat.

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

#532

Post by sunchit »

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,…

Have you thought about what happens if we get a new improvement in model architecture like transformers that grows the compute needs even further

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

#533

Post by bogdan »

iLoveOncall wrote: post #477
Chyzwar wrote: post #431

Earlier quoted context omitted.

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.

Most things are wrappers around RDBMSs.

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

#534

Post by adammarples »

mikkupikku wrote: post #528
steve1977 wrote: post #456

Earlier quoted context omitted.

That's an easy way out, isn't it?

Using thought terminating clichés in general is, and that can include "slop".

The irony of atacking thought terminating clichés while defending slop

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

#535

Post by well_ackshually »

sigmoid10 wrote: post #497
Jare wrote: post #421

Earlier quoted context omitted.

> 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…

If your accountants suggest that you take a single 5% chance deal, they probably skipped maths and statistics and you should fire them.

It's the dumb as rocks MBAs that will go head first into the 5% chance deal.

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

#536

Post by epolanski »

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,…

Like railroads, internet, electricity, aviation or car industries before: they've all been indeed the future, and they all peaked (in relative terms), at the very early stages of these industries future.

And among them the overwhelming majority of companies in the sectors died. Out of the 2000ish car-related companies that existed in 1925 only 3 survived to today. And none of those 3 ended up a particularly good long term investment.

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

#537

Post by epolanski »

alex43578 wrote: post #480
lenkite wrote: post #455

Earlier quoted context omitted.

> 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.

> 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

This would make sense if every person was given similar opportunities, like providing quality education to all of our youngest and making higher education a mission rather than a business as a starter.

As a society we move at the speed of the weakest among us, we only move forward when we start lifting and helping the weakest and most vulnerable.

You also need to realize that not doing that work is also cause for other taxpayer money to be spent elsewhere, such as spending an average of 37k $ per incarcerated person, and that ignores all the damage that criminal might've caused, all the additional police staffing and personal security that is needed to be spent outside prisons, etc.

Those are complex systems, are you sure it wouldn't be better to spend the same gargantuan amount of money that's spent on millions of inmates and fighting crime into fighting the causes that make many fall into that?

Again, those are complex, but closed systems and the argument of "we shouldn't spend on X" often ignores the cost of not spending on X.

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

#538

Post by atombender »

Chyzwar wrote: post #431
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,…

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.

I thought that, too, but lately I've been using OpenCode with Claude Opus, rather than Claude Code, and have been loving it.

OpenCode has LSPs out of the box (coming to Claude Code, but not there yet), has a more extensive UI (e.g. sidebar showing pending todos), allows me to switch models mid-chat, has a desktop app (Electron-type wrapper, sure, but nevertheless, desktop; and it syncs with the TUI/web versions so you can use both at the same time), and so on.

So far I like it better, so for me that moat isn't that. The technical moat is still the superiority of the model, and others are bound to catch up there. Gemini 3 Preview is already doing better at some tasks (but frequently goes insane, sadly).

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

#539

Post by andy12_ »

password54321 wrote: post #49

Not sure why they put so much investment into videoSlop and imageSlop. Anthropic seems to be more focused at least.

Because the general idea here is that image and video models, when scaled way up, can generalize like text models did[1], and eventually be treated as "world models"[2]; models that can accurately model real world processes. These "world models" then could be used to train embodied agents with RL in an scalable way[3]. The video-slop and image-slop generators is just a way to take advantage of the current research in world models to get more out of it.

[1] https://arxiv.org/pdf/2509.20328

[2] https://deepmind.google/blog/genie-3-a-new-frontier-for-worl...

[3] https://arxiv.org/pdf/2509.24527

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

#540

Post by tim333 »

doctaj wrote: post #56
adriand wrote: post #30

This article doesn’t add anything to what we know already. It’s still an open question what happens with the labs this coming year, but I personally think Anthropic’s focus on coding represents the clearest path to subscriber-based success (typical SaaS) whereas OpenAI has a clear opportunity with advertising. Both of these paths could be very lucrative. Meanwhile I expect Google will continue to struggle with making…

What Google AI products do people not want to use? Gemini is catching up to chatpt from a MAU perspective, ai overviews in search are super popular and staggeringly more used than any other ai-based product out there, a Google ai mode has decent usage, and Google Lens has surprisingly high usage. These products together dwarf everyone else out there by like 10x.

>Google Lens has surprisingly high usage

I use it several times a day just to change text in image form to text form so you can search it and the like.

It's built into chrome but they move the hidden icon about regularly to confuse you. This month you click the url and it appears underneath, helpfully labeled "Ask Google about this page" so as to give you little idea it's Google Lens.

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