zlacker

>>tedsan+(OP)
You have to keep in mind Microsoft is planning on spending almost 100B in datacenter capex this year and they're not alone. This is basically OpenAI matching the major cloud provider's spending.

This could also be (at least partly) a reaction to Microsoft threatening to pull OpenAI's cloud credits last year. OpenAI wants to maintain independence and with compute accounting for 25–50% of their expenses (currently) [2], this strategy may actually be prudent.

[1] https://www.cnbc.com/2025/01/03/microsoft-expects-to-spend-8...

[2] https://youtu.be/7EH0VjM3dTk?si=hZe0Og6BjqLxbVav&t=1077

>>serjes+ja
Microsoft has lots of revenue streams tied to that capex outlay. Does OpenAI have similar revenue numbers to Microsoft?

>>throit+Oa
OpenAI has a very healthy revenue stream in the form of other companies throwing money at them.

But to answer your question, no they aren’t even profitable by themselves.

>>tuvang+Uc
That's like saying I have a healthy revenue stream from my credit card.

>>tantal+og
Not quite. In 2 years their revenue has ~20x from 200M ARR to 3.7B ARR. The inference costs I believe pay for themselves (in fact are quite profitable). So what they're putting on their investor's credit cards are the costs of employees & model training. Given it's projected to be a multi-trillion dollar industry and they're seen as a market leader, investors are more than happy to throw in interest free cash flow now in exchange for variable future interest in the form of stocks.

That's not quite the same thing at all as your credit card's revenue stream as you have a ~18%+ monthly interest rate on that revenue stream. If you recall AMZN (& all startups really) have this mode early in their business where they're over-spending on R&D to grow more quickly than their free cash flow otherwise allows to stay ahead of competition and dominate the market. Indeed if investors agree and your business is actually strong, this is a strong play because you're leveraging some future value into today's growth.

>>vlovic+zh
All well and good, but how well will it work if the pattern continues that the best open models are less than a year behind what OpenAI is doing?

How long can they maintain their position at the top without the insane cashflow?

>>lukev+Ik
One system will be god like and then it doesn't matter

>>arisAl+Qe1
These types of responses always strike me as dogmatic.

>>shigaw+5n1
Reminds me of the crypto craze where people were claiming that Bitcoin was going to replace all world currencies.