Can't wait for this stupid bubble to finally burst so we can all move on
OpenAI's cash burn will be one of the big bubble questions of 2026
611–620 of 777 posts
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#612AI 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,…
very few software has commoditized, doubt it will be the fate of AI tech stack.
Perhaps it would be useful to define what we mean by "commoditization" in terms of software. I would say a software product that is not commoditized is one where the brand still can command a premium, which in the world of software, generally means people are willing to pay non-zero dollars for it. Once software is commoditized it generally becomes free or ad-supported or is bundled with another non-software product or service. By this standard I would say there are very few non-commoditized consumer software products. People pay for services that are delivered via software (e.g. Spotify, Netflix) but in this case the software is just the delivery mechanism, not the product. So perhaps one viable path for chatbots to avoid commoditization would be to license exclusive content, but in this scenario the AI tech itself becomes a delivery mechanism, albeit a sophisticated one. Otherwise it seems selling ads is the only viable strategy, and precedents show that the economics of that only work when there is a near monopoly (e.g. Meta or Google). So it seems unlikely that a lot of the current AI companies will survive.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#613Earlier quoted context omitted.
I'm genuinely curious. Why do you do this instead of Google Searches which also have an AI Overview / answer at the top, that's basically exactly the same as putting your search query into a chat bot, but it ALSO has all the links from a regular Google search so you can quickly corroborate the info even using sources not from the original AI result (so you also see discordant sources from what the AI answer had)?
The regular google search AI doesn’t do thinky thinky mode. For most buying decisions these days I ask ChatGPT to go off and search and think for a while given certain constraints, while taking particular note of Reddit and YouTube comments, and come back with some recommendations. I’ve been delighted with the results.
I chuckled at "thinky thinky" mode. If some ai company used this branding it would win a lot of hearts and minds methinks
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#614Earlier quoted context omitted.
I don't know either way but every company does this, it's not saying anything meaningful to say that a new company is taking an "investment year" or two or ten. I do know that in the late aughts, people were writing stories about how Amazon was a charity run on behalf of the American consumer by the finance industry.
and those stories were in the short run correct, since Amazon and Uber succeeded by massively undercutting existing businesses. reel customers in with charity, then turn the screws. what business is ChatGPT undercutting?
all of them :)
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#615Earlier quoted context omitted.
> AI is going to be a highly-competitive, extremely capital-intensive commodity market It already is. In terms of competition, I don't think we've seen any groundbreaking new research or architecture since the introduction of inference time compute ("thinking") in late 2024/early 2025 circa GPT-o4. The majority of the cost/innovation now is training this 1-2 year old technology on increasingly large amounts of conten…
> in 5-10 years, most entry-level laptops will be able to manage a local 30B sized model I suspect most of the excitement and value will be on edge devices. Models sized 1.7B to 30B have improved incredibly in capability in just the last few months and are unrecognizably better than a year ago. With improved science, new efficiency hacks, and new ideas, I can’t even imagine what a 30B model with effective tooling ava…
I think having massive amounts of high-bandwidth memory on consumer grade hardware could become a reality via flash.
How Flash in SSDs works is you have tens to hundreds of dies stacked on top of each other in the same package, and their outputs are multiplexed so that only one of them can talk at the same time.
We do it like this because we still can get 1-2 GB/s out of a chip this way, and having the ability to read hundreds of times faster is not justified for storage use.
But if we connected these chips to high speed transcievers, we could get out all the 100s of GBs of bandwidth at the same time.
I'm probably oversimplifying things, and it's not that simple IRL, but I'm sure people are already working on this (I didn't come up with the idea), and it might end up working out and turn into a commercial product.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#616Earlier quoted context omitted.
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 yo…
> coming to Claude Code, but not there yet Wasn't this released a couple of weeks ago?
It was added in 2.0.74 according to the changelog, but it's not functional: https://news.ycombinator.com/item?id=46357036. I've certainly not been able to use it.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#617Earlier 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…
Thank you, that made perfect sense and in a very simple (simplified but relevant) way. Besides the idea that such risks get aggregated over a portfolio, I can also imagine how the raw numbers flipping from - to + may be useful to paint as acceptable to accounting a bet you want to take anyway for strategic reasons.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#618Earlier quoted context omitted.
For consumers, the chat history is the moat. Why switch to a different provider for a marginal model improvement when ChatGPT already “knows” you? The value of sticking to a single provider is already there, even with the limited memory features they’ve implemented thus far.
The chat history feature makes the product worse, I had to turn it off.
Agreed, I don't have a single user who finds a large number of old chats useful.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#619Earlier quoted context omitted.
The regular google search AI doesn’t do thinky thinky mode. For most buying decisions these days I ask ChatGPT to go off and search and think for a while given certain constraints, while taking particular note of Reddit and YouTube comments, and come back with some recommendations. I’ve been delighted with the results.
I wouldn’t be surprised if ChatGPT was Pareto optimal for buying decisions… but I suspect there are a whole pile of Pareto optimal ways to make buying decisions, including “buy one of the Wirecutter picks” or “buy whatever Costco is selling”.
Even in the case where you have a good shortlist of items, the ability to then ask follow up questions in a conversational format is very useful for me. Anyway, just explaining why one might use ChatGPT for this rather than the Google search box, obviously your mileage is welcome to vary.
Re: OpenAI's cash burn will be one of the big bubble questions of 2026
#620AI 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,…
This is so obviously right.
I may add that investors are mostly US-centric, and so will the bubble-bursting chaos that ensues.