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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

#741

Post by ManuelKiessling »

578_Observer wrote: post #434
ManuelKiessling wrote: post #406

Earlier quoted context omitted.

I‘m aware this means leaving the original topic of this thread, but would you mind giving us a rundown of this whole Japan 1989 thing? I would love to read a first-person account.

I am honored to receive a question from a fellow "Craftsman" (I assume from your name). To be honest, in 1989, I was just a child. I didn't drink the champagne. But as a banker today, I am the one cleaning up the broken glass. So I can tell you about 1989 from the perspective of a "Survivor's Loan Officer." I see two realities every day. One is the "Zombie" companies. Many SMEs here still list Golf Club Memberships o…

> I am honored to receive a question from a fellow "Craftsman" (I assume from your name).

Mh, not sure what you mean: „Manuel“ and „Kießling“ are literally my first and last name.

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

#742

Post by scrollop »

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,…

Also what will happen if/when a different lab (or a current lab) develop a new architecture that can actually achieve AGI?

The other, highly invested, companies (if openai and anthropic) may be in for a free fall.

You never wake to be left in the wake of "the next big thing".

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

#743

Post by jononor »

pvtmert wrote: post #703
rizzom5000 wrote: post #651

Earlier quoted context omitted.

> EU lawmakers should pass laws to prevent this. So EU lawmakers should determine the amount member countries collect in tax?

No, but EU should somehow mandate products and services that are built within EU and used within EU or elsewhere, should receive the benefit(s) in terms of taxation. To give an (absurd) example; You work in country X, but the parent company is in country Y. Imagine your income tax is not going to where you reside but where you work, (usually the opposite) in this case, country Y. (~20-40% of the gross salary). One da…

The VAT part does work like that, taxable where the goods are being sold.

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

#744

Post by tjwebbnorfolk »

maeln wrote: post #490
tjwebbnorfolk wrote: post #436

Earlier quoted context omitted.

It's funny that a decade ago the exit strategy of many of these startups would have been to get acquired by MSFT / META / GOOG. Now, the regulators have made a lot of these acquisitions effectively impossible for antitrust reasons. Is it better for society for promising startups to die on the open market, or get acquired by a monopoly? The third option -- taking down the established players -- appears increasingly un…

> Now, the regulators have made a lot of these acquisitions effectively impossible for antitrust reasons. Is there any evidence that this is the case ? For very big merger (like nvdia and Arm tried) sure, but I can't think of a single time regulator stop a big player from buying a start up.

I'm sure you realize you're asking me to prove a negative? I don't have the ability to prove to you that something didn't happen or why.

What I know is that a lot of deals aren't even being considered that once were, and antitrust is a huge factor in that consideration.

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

#746

Post by internet101010 »

only-one1701 wrote: post #161
piskov wrote: post #76

Earlier quoted context omitted.

Because as with the internet 99% of the usage won’t be for education, work, personal development, what have you. It will be for effing kitten videos and memes.

That’s an unusual way of saying uh…adult entertainment

Half of the open source model usage on openrouter is roleplay.

source: https://openrouter.ai/state-of-ai

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

#747

Post by mrbungie »

duxup wrote: post #690

Their acquisition of Jony Ive's organization for a ton of money and that creepy webpage https://openai.com/sam-and-jony/ makes me think OpenAI is just racing for headlines and groping in the dark for some magic fairy dust. ChatGPT isn't bad, I use it for some things / pay for it, but their spend and moves make me think that they don't seem confidant in it ... Is all the doomer-ism about AI companies not being profita…

Sam wants so bad for OpenAI to be a proper big tech company, probably one that's more culturally similar to Apple-y than Google/MSFT-y so I guess they are cargo-culting some parts of Apple. That website reminds me of a very low quality version of Apple's myth-making ala Think Different. Ive is obviously also a big part of the cargo cult.

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

#748

Post by jaggirs »

socialcommenter wrote: post #706
sigmoid10 wrote: post #497

Earlier quoted context omitted.

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…

Those 150 billion will be taxable at the same (hypothetically 30%) tax rate, reducing the expected return by 45bn * 5% chance. The expected return is still negative; all this bet does is shift tax liabilities in time, which admittedly would matter to some people who subscribe to short-termism.

I guess to truly calculate it you need to estimate how long it will take to get the ROI (i.e. reach the point where you need to pay taxes on the 150billion). And add back what you can earn by investing the money you didn't have to pay taxes on. I'm not sure what the magnificent 7 can expect as a ROI on invested money though, given that they tend to have enough cash to invest anyways and just pay out dividends.

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

#749

Post by atombender »

yellowcake0 wrote: post #737
atombender wrote: post #538

Earlier 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…

LibreOffice didn't replace MS Office, and Octave didn't replace Matlab. It seems to me that there is even less of a moat with these products than there is with Claude Code, yet neither was commoditized.

Google Workspace replaced Microsoft Office. It has around 70% market share. Microsoft Office is still dominant in much of the traditional enterprise, but the moat is shrinking.

I can use Claude in Jetbrains IntelliJ and in Zed, I can use it with OpenCode, and there are lots of other agent tools. Everyone can build these tools around an LLM, and they're already being commodified.

The moat right now is the quality of the model, not the client. Opus is just so much better than the competitors, at least for now.

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

#750

Post by atombender »

jghn wrote: post #601
atombender wrote: post #538

Earlier 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?

Also: Claude has already asked me several times the last few days if I want to install an LSP for various things. I've not seen any signs of LSP use yet.
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