The $1.4T commitment is spread over multiple years. Let's assume 4 -- then that's $350B/year. Coincidentally, Google had $350B in revenue in 2024 (and projected to be ~$400B in 2025).

It's certainly possible to imagine OpenAI eventually generating far more revenue than Google, even without anything close to AGI. For example, if they were to improve productivity of 10% of the economy by 10% and capture a third of that value for themselves, that would be more than enough. Alternatively, displacing Google as the go-to place for search and selling ads against that would likely generate at least Google levels of revenue. Or some combination of both.

Is this guaranteed to happen? Of course not. But it's not in "bonkers" territory either.

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Aurornis 3 days ago | parent | next [-]

> The $1.4T commitment is spread over multiple years. Let's assume 4

The Amazon deal is actually spread over 7 years. Other deals have different terms, but also spread over multiple years.

Deals like these have cancellation terms. OpenAI could presumably pay a fee and cancel in the future if their projections are too high and they don't need some of the compute from these deals.

The deals also include OpenAI shares. The deals are being made with companies that have sufficient revenue or even cash on hand to buy the compute and electricity.

The claim above that someone needs to come up with $1.4 trillion right now or everything will collapse isn't grounded in any real understanding of these deals. It's just adding up numbers and comparing them to a single annual revenue snapshot.

	▲	cmiles8 3 days ago \| parent [-]
		I don’t think the OP is saying $1.4 trillion cash is needed “right now.” The point being made is simply that with all the circular deals and financing for this to make sense OpenAI does need to generate $1.4 trillion in cash that can eventually work its way through the economy to pay for all of this. Hype and inflated valuations can be built on numbers on paper but real business are built on cash flow. The OP is simply calling out the lack of cash flow. Even under the most bullish cases for AI the real $ requires here looks iffy at best. I think we all know that a big part of the angle here is to keep the hype going until there’s a liquidity event, folks will cash out and then at the like they won’t care what happens.

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thrance 3 days ago | parent | prev | next [-]

So their only reasonable plan is to capture a significant portion of the global economy through a tech that we have currently no idea how to build? Seems a little dodgy, to say the least. I would personally consider it well in "bonkers" territory.

	▲	Libidinalecon 2 days ago \| parent [-]
		I think we had been primed for so long by science fiction that the talking computer was always going to put us in this state of mass stupidity. The fun part is to go back now and listen to Blake Lemoine interviews from summer 2022. That for me was the start of all this.

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JumpCrisscross 3 days ago | parent | prev | next [-]

> if they were to improve productivity of 10% of the economy by 10% and capture a third of that value for themselves, that would be more than enough

This is “if we get 1% of the market” logic.

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vanviegen 3 days ago | parent [-]

That type of logic is not inherently flawed, is it?

Of course, you must also make a convincing case for getting to that 1%.

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JumpCrisscross 3 days ago | parent [-]

> That type of logic is not inherently flawed, is it?

Inherently, no. In practice, it's riddled with biases deep enough [1] to make it an informal fallacy.

"The competition in a large market, such as CRM software, is very tough," and "there are power laws which mean that you have to rank surprisingly high to get 1% of a market" [2]. Strategically, it ignores the necessity of establishing a beachhead in a small market, where "a small software company" has "a much better chance of getting a decent sized chunk."

[1] https://www.nature.com/articles/s41599-024-03403-9

[2] https://news.ycombinator.com/item?id=45804756

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wavemode 3 days ago | parent | prev | next [-]

Google themselves are an AI company (in case anyone forgot) - if LLM-powered search is going to become a popular product, then that's great news for Google. They already have an LLM capable of searching the Web, and they've already integrated it heavily into their search engine, browser, mobile phones, and Office suite.

OpenAI has nothing resembling this ecosystem, and will never be nearly as valuable a place to buy ads. Replacing Google is probably the least realistic business plan for OpenAI - if that's what they're betting on, they're cooked.

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mnky9800n 3 days ago | parent | prev | next [-]

The problem is that 10% productivity increase could be captured by workers with having to work 10% less but because everything everywhere is essentially leveraged they now have to fill that 10% gap to pay off the leverage. That’s probably wrong so I’m sure someone will explain to me why.

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ivape 3 days ago | parent | prev [-]

Google is under existential threat. In that case, OpenAI has a very legitimate trillion dollar case for carving out a piece of Google.

Search engines were never a user friendly app to begin with. You had to know how to search well to get comprehensive answers, and the average person is not that scrupulous. Google’s product is inferior, believe it or not. There will be nothing normal about seeing a list of search results pretty soon, so Google literally has a legacy app out in the wild as far as facts are concerned.

So imagine that, Google would have to remove Search as they know it (remove their core business) and standup a app that looks the same as all the new apps.

People might like one AI persona more than others, which means people will seek out all types of new apps. LLMs is the worst thing that could have ever happened to Google quite frankly.

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tim333 3 days ago | parent | next [-]

Google pretty much invented LLMs. The Attention is Attention Is All You Need paper which kicked it off was done by Google scientists and the top model in the LLMArena for text is from Google. They also made $28 bn profit last quarter as against large losses for OpenAI. I think they'll survive.

I'd be more worried about OpenAI surviving. Aside from the iffy finances, much of their top talent seems to leave after falling out with Altman.

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rubiquity 3 days ago | parent | prev | next [-]

I find it more likely that the entire "second" level of software companies are in OpenAI's cross hairs more so than Google. Salesforce, ServiceNow, Intuit, DocuSign, Adobe, Workday, Atlassian, and countless others are easier to pick off than Google.

	▲	hattmall 3 days ago \| parent \| next [-]
		Those don't seem like reasonable targets at all to me. OpenAI's product is information and their power is engagement. It's more like a cross between Facebook that thrives on engagement and Google that delivers information. Googles biggest advancement in the last ~15 years is to produce worse search results so that you spend more time engaging with Google, and doing more searches, so that Google can show more ads. Facebook is similar in that they feed you tons of rage-bait, engagement spam, and things you don't like infused with nuggets of what you actually want to see about your friends / interests. Just like a slot machine the point is that you don't always get what you want, so there's a compulsion to use because MAYBE you will get lucky. OpenAI's potential for mooning hinges on creating a fusion of information and engagement where they can sell some sort of advertisement or influence. The problem of course is that the information and engagement is pretty much coming in the most expensive form possible. The idea that the LLM is going to erode actual products people find useful enough to pay for is unlikely to come true. In particular people are specifically paying for software because of it's deterministic behavior. The LLM is by its nature extremely nondeterministic. That's fully in the realm of social media, search engines, etc. If you want a repeatable and predictable result the LLM isn't really the go to product.
	▲	ivape 3 days ago \| parent \| prev [-]
		Not every kid born in the last five years will know Google as a verb as we do. They’ll be adults in 15 years, which is a paltry investment timeline for the type of Black Swan event we’re talking about, which AI is. I don’t disagree with you entirely, but I’d argue the second level apps are harder to chase because they get so specialized. Death of Google (as everyone knows Google today) is a tricky one. It seems impossible to believe at this exact moment. It can sit next to IBM in the long run, no shame at all, amazing run.

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dvt 3 days ago | parent | prev [-]

Very true. I rarely find myself "Googling" anymore. I'd rather just ask ChatGPT. Even if the enshittification (ads, etc.) will happen down the line, at least we'll have an absolutely awesome product (like Google was to Yahoo) for 5-10 years.

OpenAI is at the very least worth at least half as much as Google. I foresee Google becoming like IBM, and these new LLM companies being the new generation of tech companies.