Their revenue in the entire first half per the article was $4.3B, even if we assume it was backloaded in Q2 that’s a -500% profit margin. I’m very excited to review their S-1.
Like, for every dollar you give them they spend $5 to deliver the product. They’re selling $10 bills for $2. They seem to have taken the joke about making up losses with scale pretty seriously.
> Like, for every dollar you give them they spend $5 to deliver the product.
Well, it would be useful before concluding this to see a breakdown between OpEx, CapEx, and R&D.
What Theo claims on YouTube is that each model they make is profitable over its lifetime and the weird numbers for the company are because they keep training more models, having to pay up front to buy a bunch of future profit each time basically
How long can this go on for?
Forever, tech has become a never ending sequence of bubbles and hype cycles.
As long as investors are willing to pay for it.
Uber was in the red for like 10 years, and burned 31B, and complaints of it popping were constant. But here we are with it still going and now profitable.
They should be loosing even more. This damaging corporate closed "AI" hype bubblr must bust before it does even more harm it is already doing to society
this is bad reporting. microsoft's share of openai's cumulative loss over the lifetime of their investment is 11.5b. the microsoft share of openai's loss in the quarter was 4.1b, implying an 8b loss for openai itself assuming microsoft recognized 49% of openai losses per their ownership stake exiting the quarter. there may be some one time items that skew this, if not this is ain't good
The big winners of AI will be hyperscalers. They got the compute, storage, customers, scale, ecosystems, 100s of billion to deploy.
OpenAI may implode and absorbed by MSFT. Anthropic may implode and be absorbed by Amazon.
Nvidia may not have the same demand of chips once the datacenters have been built out, but the hyperscalers are reaaaaaaally huge.
May as well say US economy depends on being the planet’s datacenter.
Contrast this with Google who made $100Bn profit last quarter and on the side has Gemini with 650MAU and does 7B tokens/minute. It makes it clear that neither MS nor OAI know what they are doing.
Alphabet (Google) made $102.35 billion in revenue last quarter, not $100bn in profit.
Not a single AI company is cash flow positive, not even Google's AI part of the business.
It's unclear if they even can be, since commodity models you can use for free catch up to them pretty close to yearly.