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OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

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Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#91

Post by surgical_fire »

EmiDub wrote: post #68
nstart wrote: post #12

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this…

> Cost of revenue is lower than revenue. I’m not sure how people are looking at numbers that show, even if we wipe off the enormous R&D expenditures, they are still in the red for inference + sales/marketing + admin and responding “this seems positive”. It’s like being a sold a car and being told “well if you ignore the fact it has no engine it’s a good buy” yet it also has no wheels. > Unless there's an assumption t…

The leaked numbers completely ignore how much of their compute is subsidized.

It also ignores how much of "R&D" is actually needed for the thing they offer to keep working. Looking at the thread everyone seems to be presuming "R&D" is all "training new models", but that is uncertain.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#92

Post by Certhas »

simianwords wrote: post #21
Certhas wrote: post #19

Earlier quoted context omitted.

The Uber comparison makes no sense. This is the opposite situation. Uber lost money on rides, OpenAI is (possibly) making money on inference. Uber used an R+D moonshot to autonomous driving to justify capturing an established industry without reducing costs meaningfully. OpenAI has a core product that risks becoming a commodity with open source models only 6 months behind.

Uber didn’t lose money on rides other than some edge cases. What’s your source for this claim?

Do you have a source for the claim that Uber was making money on rides during its decade of enormous unprofitability?

Its public stance was that growth was more important than profit. Why wouldn't they be subsidizing rides to fuel growth if that is their publicly stated goal?

And anyway, we got the Uber Files some years ago which made it explicit:

"In October 2014 in Madrid, the presentation shows, the hourly subsidy to drivers of $17.50 was almost twice the hourly fare it charged, which was only $9.10. In Berlin, the gross hourly fare Uber charged was $2.20, while the subsidy it paid out to drivers was $10.20 an hour. Uber burned through cash to “buy revenue”, in the words of the presentation."

https://www.theguardian.com/news/2022/jul/12/they-were-takin...

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#93

Post by simianwords »

jgalt212 wrote: post #73
dgellow wrote: post #72

Earlier quoted context omitted.

Genuine question, do you have examples of inaccuracies and mistakes? If you ignore his caustic tone and predictions what I’ve seen reported by Ed Zitron has been accurate.

I concur. His tone greatly undermines the value of the facts he reports. Sometimes / oftentimes his analysis is off the mark, but I have not found him to be reporting falsehoods or inaccuracies.

It’s very very easy to find inaccuracies. In fact it’s hard to find any prediction he got right.

Here’s a compilation of things he got wrong. It’s not small things btw https://news.ycombinator.com/item?id=48447549

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#94

Post by simianwords »

dgellow wrote: post #72
saberience wrote: post #31

Earlier quoted context omitted.

Yeah he has zero credentials and authority and an agenda to push. Not to mention most of his articles are financially and technically illiterate and full of mistakes and inaccuracies. No idea why his shit keeps getting submitted.

Genuine question, do you have examples of inaccuracies and mistakes? If you ignore his caustic tone and predictions what I’ve seen reported by Ed Zitron has been accurate.

Here’s a small list https://news.ycombinator.com/item?id=48447549

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#95

Post by jgalt212 »

simianwords wrote: post #93
jgalt212 wrote: post #73

Earlier quoted context omitted.

I concur. His tone greatly undermines the value of the facts he reports. Sometimes / oftentimes his analysis is off the mark, but I have not found him to be reporting falsehoods or inaccuracies.

It’s very very easy to find inaccuracies. In fact it’s hard to find any prediction he got right. Here’s a compilation of things he got wrong. It’s not small things btw https://news.ycombinator.com/item?id=48447549

I don't think reasoning and agentic is an improvement over what came before. It's like going back to batch processing once you've had access to an interactive terminal.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#96

Post by simianwords »

jgalt212 wrote: post #95
simianwords wrote: post #93

Earlier quoted context omitted.

It’s very very easy to find inaccuracies. In fact it’s hard to find any prediction he got right. Here’s a compilation of things he got wrong. It’s not small things btw https://news.ycombinator.com/item?id=48447549

I don't think reasoning and agentic is an improvement over what came before. It's like going back to batch processing once you've had access to an interactive terminal.

> I don't think reasoning and agentic is an improvement over what came before.

Respectfully, it shows that you haven't been using agentic models or reasoning models. I would advice you to go and use them and make an opinion afterwards. If you have come to this conclusion after extensively using these models then I don't know what to say. I guess you are the audience for Ed Zitron.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#97

Post by atl_tom »

I think something people are missing in the headlines. The actual losses were 60b with 17b removed from the bottom line figure. To quote a reddit post "removing $17.87 billion in costs via that “net loss attributable to noncontrolling members capital”"

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#98

Post by dgellow »

simianwords wrote: post #94
dgellow wrote: post #72

Earlier quoted context omitted.

Genuine question, do you have examples of inaccuracies and mistakes? If you ignore his caustic tone and predictions what I’ve seen reported by Ed Zitron has been accurate.

Here’s a small list https://news.ycombinator.com/item?id=48447549

That's really not convincing. I personally don't care much about predictions, nobody is an oracle who can predict the future. If someone looks at SpaceX, talk about the financial engineering that went in the stock, then predict incorrectly that the price will go down, the meaningful information isn't the prediction, it's the analysis. The price might never go down due to how insane and detached from reality the stock market is when it comes to Elon Musk.

The facts I've seen in his reports seem to reflect reality as far as I can tell, he is correct that software companies switched from very low Capex to be extremely Capex heavy. And that announced datacenter aren't getting built. And that AI labs do not have a business model. And we've been since a few years in a financial bubble. And companies shifting to full agentic didn't take pricing into account until the switch from subscriptions to API pricing. And that nobody can say how much the use of agents cost beforehand (because both output tokens and the amount of tokens required for a given task cannot be predicted in advance). Etc.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#99

Post by simianwords »

dgellow wrote: post #98
simianwords wrote: post #94

Earlier quoted context omitted.

Here’s a small list https://news.ycombinator.com/item?id=48447549

That's really not convincing. I personally don't care much about predictions, nobody is an oracle who can predict the future. If someone looks at SpaceX, talk about the financial engineering that went in the stock, then predict incorrectly that the price will go down, the meaningful information isn't the prediction, it's the analysis. The price might never go down due to how insane and detached from reality the stock…

> I personally don't care much about predictions

I don't know what to say other than I now know the audience Ed Zitron writes for.

Re: OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

#100

Post by mike_hearn »

nstart wrote: post #81
Refreeze5224 wrote: post #14

Earlier quoted context omitted.

How in the world could you read that article and think there is anything positive about OpenAI's prospects? We've been hearing for months that these companies need to make trillions of dollars in a handful of years, growing at record rates in order to break even and justify their massive outlay. It's not going to happen.

I tend not to focus on that future too much. I used to do so long ago. For example, how could Facebook possibly justify their losses while asking for such a big valuation? Same for Uber. Same for any number of big companies. And it turns out that growth in the future is impossible to predict accurately. Shopify is a good example where at the time the addressable market of online stores was tiny. But it turned out tha…

I don't think Uber was a great ROI for investors though. It lost almost all the money they gave it in return for a business with entirely average profit margins (average across all industries, far lower than average for a SaaS app).
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