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nimchimpsky 18 hours ago

"In my mind, they're hardly making any money compared to how much they're spending"

everyone seems to assume this, but its not like its a company run by dummies, or has dummy investors.

They are obviously making awful lot of revenue.

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alwillis 11 hours ago | parent | next [-]

>> "In my mind, they're hardly making any money compared to how much they're spending"

> everyone seems to assume this, but its not like its a company run by dummies, or has dummy investors.

It has nothing to do with their management or investors being "dummies" but the numbers are the numbers.

OpenAI has data center rental costs approaching $620 billion, which is expected to rise to $1.4 trillion by 2033.

Annualized revenue is expected to be "only" $20 billion this year.

$1.4 trillion is 70x current revenue.

So unless they execute their strategy perfectly, hit all of their projections and hoping that neither the stock market or economy collapses, making a profit in the foreseeable future is highly unlikely.

[1]: "OpenAI's AI money pit looks much deeper than we thought. Here's my opinion on why this matters" - https://diginomica.com/openais-ai-money-pit-much-deeper-we-t...

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Daneel_ 17 hours ago | parent | prev | next [-]

To me it seems that they're banking on it becoming indispensable. Right now I could go back to pre-AI and be a little disappointed but otherwise fine. I figure all of these AI companies are in a race to make themselves part of everyone's core workflow in life, like clothing or a smart phone, such that we don't have much of a choice as to whether we use it or not - it just IS.

That's what the investors are chasing, in my opinion.

	▲	zozbot234 16 hours ago \| parent [-]
		It'll never be literally indispensible, because open models exist - either served by third-party providers, or even ran locally in a homelab setup. A nice thing that's arguably unique about the latter is that you can trade scale for latency - you get to run much larger models on the same hardware if they can chug on the answer overnight (with offload to fast SSD for bulk storage of parameters and activations) instead of just answering on the spot. Large providers don't want to do this, because keeping your query's activations around is just too expensive when scaled to many users.

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mbesto 2 hours ago | parent | prev | next [-]

> They are obviously making awful lot of revenue.

It's not hard to sell $10 worth of products if you spend $20. profit is more important than revenue.

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troupo 17 hours ago | parent | prev [-]

Revenue != profit.

They are drowning in debt and go into more and more ridiculous schemes to raise/get more money.

--- start quote ---

OpenAI has made $1.4 trillion in commitments to procure the energy and computing power it needs to fuel its operations in the future. But it has previously disclosed that it expects to make only $20 billion in revenues this year. And a recent analysis by HSBC concluded that even if the company is making more than $200 billion by 2030, it will still need to find a further $207 billion in funding to stay in business.

https://finance.yahoo.com/news/openai-partners-carrying-96-b...

--- end quote ---