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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

#591

Post by 0xDEAFBEAD »

crystal_revenge wrote: post #409
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…

> ads in the future. It boggles my mind that people still think advertising can be a major part of the economy. If AI is propping up the economy right now [0] how is it possible that the rest of the economy can possibly fund AI through profit sharing? That's fundamentally what advertising is: I give you a share of my revenue (hopefully from profits) in order to help increase my market share. The limit of what adverti…

If advertising helps high-quality / innovative products spread faster, it can power growth. Indeed, the rate of adoption of innovations seems a fairly critical input for growth. Advertising can speed such adoption.

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

#592

Post by aleph_minus_one »

rajaman0 wrote: post #371
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…

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.

> ChatGPT has a phenomenal brand.

My observation is different: ChatGPT may be well-known, but does not have a really good reputation anymore (I'd claim that it is in average of equal dubious reputation as Google) in particular in consideration of

- a lot of public statements and actions of Sam Altman (in particular his involvement into Worldcoin (iris scanning) makes him untolerable for being the CEO of a company that is concerned about its reputation)

- the attempts to overthrow Sam Altman's throne

- most people know that OpenAI at least in the past collaborated a lot with Microsoft (not a company that is well-regarded). But the really bad thing is that the A"I" features that Microsoft introduced into basically every product are hated by users. Since people know that these at least originated in ChatGPT products, this stained OpenAI's reputation a lot. Lesson: choose carefully who you collaborate with.

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

#593

Post by cristea »

aleph_minus_one wrote: post #592
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.

> ChatGPT has a phenomenal brand. My observation is different: ChatGPT may be well-known, but does not have a really good reputation anymore (I'd claim that it is in average of equal dubious reputation as Google) in particular in consideration of - a lot of public statements and actions of Sam Altman (in particular his involvement into Worldcoin (iris scanning) makes him untolerable for being the CEO of a company tha…

You massively overestimate what people actually know and read about. If you are in the tech sphere these things might be obvious to you, but I assure you regular people are not keeping track as closely.

I bet at most 10 % of people in the West can name the CEO of OpenAI.

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

#594

Post by devops000 »

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…

One of the feature of ChatGPT is that because there are no ads and you got straight to the information you need. If you add ads again it is all over again. You still have traction but it will not be so extraordinary and Google could do the same. OpenAI must have a difference from Google.

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

#595

Post by 0xDEAFBEAD »

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…

>ChatGPT has more consumer trust than Google at this point

"There are increasing reports of people having delusional conversations with chatbots. This suggests that, for some, the technology may be associated with episodes of mania or psychosis when the seemingly authoritative system validates their most off-the-wall thinking. Cases of conversations that preceded suicide and violent behavior, although rare, raise questions about the adequacy of safety mechanisms built into the technology."

https://www.nytimes.com/2025/08/26/technology/chatgpt-openai...

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

#596

Post by pvdebbe »

skanaley wrote: post #280
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…

"Please help me with my factorial homework." buyACoke 0 = 1 buyACoke rightNow = youShould * buyACoke (rightNow `at` walmart) where youShould = rightNow at = (-) walmart = 1

Well even without a melody, this is pretty catchy ngl

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

#597

Post by jobigoud »

aleph_minus_one wrote: post #592
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.

> ChatGPT has a phenomenal brand. My observation is different: ChatGPT may be well-known, but does not have a really good reputation anymore (I'd claim that it is in average of equal dubious reputation as Google) in particular in consideration of - a lot of public statements and actions of Sam Altman (in particular his involvement into Worldcoin (iris scanning) makes him untolerable for being the CEO of a company tha…

Normal people that use ChatGPT have never heard of Sam Altman, especially outside the US. These points are only in tech and financial circles.

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

#598

Post by jobigoud »

boston_clone wrote: post #497
parineum wrote: post #423

Earlier quoted context omitted.

> They have 700 million weekly users and growing much faster than Google. Years old company growing faster than decades old company! 2.5 billion people use Gmail. I assume people check their mail (and, more importantly, receive mail) much more often than weekly. ChatGPT has a lot of growing to do to catch up, even if it's faster

I read that as OpenAI’s WAU is showing a steeper increase than Google ever did. Not saying it’s factually accurate, just that it’s not a fixed point-in-time comparison :)

There are 2 billion more humans living now than in 2000 though, and the world is much more technology oriented.

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

#599

Post by diziet »

Cheer2171 wrote: post #315
typpilol wrote: post #252

Earlier quoted context omitted.

Where?

~$1.25-1.75/hr at Runpod or vast.ai for an A100 Edit: https://getdeploying.com/reference/cloud-gpu/nvidia-a100

The A100 SXM4 has a TDP of 400 watts, let's say about 800 with cooling etc overhead.

Bulk pricing per KWH is about 8-9 cents industrial. We're over an order of magnitude off here.

At 20k per card all in price (MSRSP + datacenter costs) for the 80GB version, with a 4 year payoff schedule the card costs 57 cents per hour (20,000/24/365/4) assuming 100% utilization.

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

#600

Post by vessenes »

plaidfuji wrote: post #586
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…

I’m also curious about your last question. Cost of goods sold would not fall into R&D or sales as far as I know. So curious, in fact, that I asked Gemini to reconstruct their income statement from the info in this article :) There seems to be an assumption that the 20% payment to MS is the cost of compute for inference. I would bet that’s at a significant discount - but who knows how much… Line Item | Amount (USD) |…

Thanks for doing the prompting work here.

One thing I read - with $6.7bn R&D on $3.4bn in Gross Profit, you need a model to be viable for only one year to pay back.

Another thing, with only $40mm / 5 months in G&A, basically the entire company is research, likely with senior execs nearly completely equity comped. That’s an amazingly lean admin for this much spend.

On sales & ads - I too find this number surprisingly high. I guess they’re either very efficient (no need to pitch me, I already pay), or they’re so inefficient they don’t hit up channels I’m adjacent to. The team over there is excellent, so my priors would be on the first.

As doom-saying journalists piece this over, it’s good to think of a few numbers:

Growth is high. So, June was up over $1bn in revenues by all accounts. Possibly higher. If you believe that customers are sticky (i.e. you can stop sales and not lose customers), which I generally do, then if they keep R&D at this pace, a forward looking annual cashflow looks like:

$12bn in revs, $9.6bn in gross operating margin, $13.5bn in R&D, so net cash impact of -$4bn.

If you think they can grow to 1.5bn customers and won’t open up new paying lines of business then you’d have $20-25bn in revs -> maybe $4bn in sales -> +2-3bn in free cashflow, with the ability to take a breather and make that +15-18bn in free cashflow as needed. A lot of that R&D spend is on training which is probably more liquid than employees, as well.

Upshot - they’re going to keep spending more cash as they get it. I would expect all these numbers to double in a year. The race is still on, and with a PE investment hat on, these guys still look really good to me - the first iconic consumer tech brand in many years, an amazing team, crazy fast growth, an ability to throw off billions in cash when they want to, and a shot at AGI/ASI. What’s not to like?

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