Then it didn’t make 13 billion…… and it didn’t lose 21 billion.
It lost 8 billion. That’s how math works.
You’re not wrong, but neither is the title. That’s just how business accounting works. Ultimately, it’s still the same conclusion ($8 billion loss)
So they lost $8b.
Altman is such a miserable cunt.
he pretty much is created by thiel, so yes he is. since ALtman met his husband at one of thiels “pool” parties. just like how he plucked vance out of obscurity from yale. he does love his gay puppets.
indeed
Vibe stocks
That’s a weird way of saying that they had a net loss of $8 billion. Are you trying to imply that this is somehow extraordinary for a growth company?
Yep, defo not a bubble.
What’s their op ex though? I feel like there must be a sizable portion of that which isn’t actually necessary to keep the service up.
So the the operating expense was greater than their revenue from operations by about 2, but it seems like they’re minimizing it by hiding the cost of some of the compute inside marketing and training costs. This is something that a few AI companies in China have been caught doing to make it seem like they’re doing better than they are. So they could be incinerating money at an even faster rate than they just admitted.
And in R&D
Yah, given that “training models” doesn’t stop when the model is finished and released. Like, a released model needs to be continuously tweaked to keep it up to date or to deal with problems that have occurred. Even if that’s not literally tokens used by customers, it is compute being used to provide service to customers.
And that’s just assuming that they’re not just hiding some compute costs used to service customer demand inside the R&D budget. “Oh, you see, this pool of customers are being served with an experimental version, so any compute here is actually R&D, any API fees or subscription payments made by them of course get counted towards normal revenue.”
A lot of people are gonna give openaishit over this, but the old cliché is true; gotta spend money to lose money.
At a personal scale you can just light a few bills on fire, and you’re good. Maybe even gamble away a home or something if you’re filthy rich.
But at this scale that just doesn’t work. Burning this amount of money takes infrastructure, trucks, roads, labor, and facilities. Otherwise the poor’s might take some of it.
Can you imagine what those people would spend this kind of money on?
Looks like the shovel seller is making quite a bit
JENsen still can afford his jackets, and is pretty jubilent about the whole ordeal, albeit still alarmed.
Indeed, they’re the only ones. Along with Samsung, SK Hynix, AMD, etc.
This is interesting. Nvidia cashing in while they can. They’ll come back to us consumers when/if all this AI stuff collapses.
NVIDIA has the whole ai bubble wrapped around jensen like a jacket. yea hes going to lose alot but not as much as the ai tech bros.
Wow, I like that “spent since page load”.
I want a ticker like that “Lemmy pages since bong load”.
I don’t smoke weed, I have a future
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“So what did you do with the $100,000?”
"I invested it and turned it into sixteen THOUSAND dollars. "
OpenAI:
“I DON’T NEED MONEY! I DON’T EVEN LIKE IT! I JUST WANNA THROW IT AWWWAAAAAAY!!”
im betting sam altman asked claude instead of CHAPGPT to how much to invest and where.
First thing I thought of lmao.
Do you know how to make a small fortune with AI?
First, start with a big fortune…
You have to spend money to make money :)
spend more money to lose more money.
You are not actually considering the scale of 20 billion dollars nor the jump in a single year. Those are bad things.
The actual economics behind LLMs shows us they cannot become profitable ever, and this “invest more before becoming profitable” story does not fit in part because of that. Other companies who used that model had a way to become profitable.
Sometimes you have to spend more than you make but that doesn’t mean it’s a bad idea! You just have to continue spending and one day it’ll maybe start turning a profit. Maybe not, though! 🙂 I love AI
Are you serious? You don’t know much about this if you think that’s what’s going on.
Are you being facetious or are you just dumb?
They’re being facetious but it’s actually what AI investors are thinking. AI can lose money until it’s the only AI company left then they can charge whatever they want.
I had an AI engineer tell me that hallucinations are actually AI having original thoughts. Zzzzz
Wtf, these folk s are clinically insane. It’d be funny if they weren’t literally fucking over the entire world in the process.
This is what you call a succesful business man /s
If someone gave me 21billion I bet I could only lose 1 billion, return the 20, and never be seen again.
This was standard operating procedure for Silicon Valley companies before COVID.
Bah that’s baby numbers compared to what “private space” will accomplish!
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This AI slop post keeps popping up.
Clear Channel aka Iheartradio (the media conglomerate) went a whole decade consistently losing money before they finally made a profit. If we follow that timeline then OpenAI has 9 more years to hemorrhage money before they start to see a return of investment.
Except that, over those 10+ years, iheartradio accumulated less than half of the debt that OpenAI already has.
Both of these companies are an example of a new kind of capitalist trick where they simply take advantage of the fact that they can use an infinite amount of money to invade a market and make it completely unprofitable for any competition by losing money for years.
They can then acquire all of these companies’ market share and then squeeze everyone with their new monopoly powers.
It’s blatant market manipulation that any country with a functioning government would have regulated out of existence.
This is another incorrect take. OpenAI is not the only one hemorraging money. All of these LLM companies are offering a heavily subsidized product. Once the money runs out, which it will, the bubble wil pop or deflate. It’s not a matter of “if”, just “when”. It’s simply not an economically viable product. My guess is that the only reason they’re doing this, is because they’re hoping for some wild technological breakthrough that will massively lower costs.
An incorrect take?
This isn’t a business strategy unique to tech companies, it’s used across multiple different industries.
Source: work in finance.
Yes, an incorrect take.
While the strategy is not new, the scale and speed is. Also, there wasn’t an existing market that they’re trying to capture (as opposed to services like Amazon or Uber).
The entire industry is doing the same thing and they’re all losing. It’s a race to the bottom and that is most certainly new (and stupid).
Not to mention that the cost of the unsubsidized product is insane. Hence, it’s not an economically viable product.
So, you’re saying it’s a new kind of capitalist trick where they lose money by subsidizing the product in order to make it completely unprofitable for all of the other companies?
I have it on good authority that this is an incorrect take.
Nope. They subsidize the product so that people are more willing to pay, and they’re betting that they have deeper pockets than the competition (hence, a race to the bottom). Once they can no longer subsidize the product, the idea is that you’re so addicted to it (or you’ve integrated it so much to your product) that you’ll pay the full price.
Except that no one will, because they’re already increasing prices and people and companies are waking up to the fact the cost does not outweigh the benefits.
Talking total debt is somewhat meaningless.
The important number is the ratio between their loss and their revenue.
i.e. the convenience store down the street could operate at a loss before turning profitable, and accumulate far less than half the debt of iHeartRadio, but that doesn’t mean the convenience store is the better long term investment. When it turns a profit, it’s potential profit is far smaller than iHeartRadio’s was.
Don’t know about iheartradio but OpenAI’s 3:1 ratio for 2026 does not bode well. That’s without considering therir future operational commitments, which are quite high.
OpenAI has a trillion dollars in financial obligations they need to meet by 2030. I doubt Clear Channel’s financial obligations were in the same order of magnitude.
