> For the right investor base, $10B in annual losses at OpenAI could be worth $2-3B in tax shields (depending on their bracket and how the structure works). That completely changes the return calculation

I know nothing about finances at this level, so asking like a complete newbie: doesn't that just mean that instead of risking $10B they're risking $7-8B? It is a cheaper bet for sure, but doesn't look to me like a game changer when the range of the bet's outcome goes from 0 to 1000% or more.

>> For the right investor base, $10B in annual losses at OpenAI could be worth $2-3B in tax shields

So just a loss for governments, or in other words, socializing the losses.

Amazon already has not been paying any sort of income tax to the EU. There was a lawsuit in Belgium but Amazon has won that in late-2024 since they had a separate agreement in/with Luxembourg.

Speaking for EU, all big tech already not paying taxes one way or another, either using Dublin/Ireland (Google, Amazon, Microsoft, Meta, ...) and Luxembourg (Amazon & Microsoft as far as I can tell) to avoid such corporate/income taxes. Simply possible because all the earnings go back to the U.S. entity in terms of "IP rights".

> OpenAI's losses might actually be attractive to certain investors from a tax perspective.

OpenAI is anyways seeking Govt Bailout for "National Security" reasons. Wow, I earlier scoffed at "Privatize Profits, Socialize Losses", but this appears to now be Standard Operating Procedure in the U.S.

https://www.citizen.org/news/openais-request-for-massive-gov...

So the U.S. Taxpayer will effectively pay for it. And not just the U.S. Taxpayer - due to USD reserve currency status, increasing U.S. debt is effectively shared by the world. Make billionaires richer, make the middle class poor. Make the poor destitute. Make the destitute dead. (All USAID cuts)

this is not accurate. microsoft recognizes openai losses on their income statement, proportionate to their ownership stake. this has created a huge drag on eps, along with a lot more eps volatility than in the past. it's gotten so bad that microsoft now points people to adjusted net income, which is notable as they had always avoided those games. none of this has been welcomed

OpenAI is a corporation, so their losses do not flow up to their owners.

Their investors, if publicly traded like Microsoft do have to take write-downs on their financial statements but those aren't realized losses for tax purposes. The only tax "benefit" Microsoft might get from the OpenAI investment is writing off the amount it invested if/when OpenAI goes bankrupt.

Can you explain it in another way? What you are saying is that instead of loosing 100% they loose 70% and loosing 70% is somehow good? Or are you saying the risk adjusted returns are then 30% better on the downside than previously thought? Because if you are, I think people here are saying the risk is so high that it is a given they will fail.

Whilst that is an option, it wont cover the share price hit from the fallout, which would wipe out more than the debt as when the big domino falls, others will follow as the market panic shifts.

So kinda looking at a bank level run on tech companies if they go broke.

> The real question isn't "can OpenAI justify its valuation" but rather "what's the blended tax rate of its investor base?"

Was that an organic "it's not A, it's B" or synthetic?

It’s hardly a free option, by your numbers it’d be a 20-30% discount.

> Something nobody's talking about

Nobody is talking about this because it's not a thing.

People here will shit on LLMs all day for being confidently incorrect, then upvote aggressively financially illiterate comments like this.

None of this is how taxes work.

Lmao this is ridiculous. If MSFT really wanted the tax benefits they should’ve just wholly acquired OAI long ago to acquire the financial synergy you speak of.

Google has several enviable, if not moats, at least redoubts. TPUs, mass infrastructure and own their own cloud services, they own delivery mechanisms on mobile (Android) and every device (Chrome). And Google and Youtube are still #1 and #2 most visited websites in the world.

I have yet to be convinced the broader population has an appetite for AI produced cinematography or videos. Independence from Nvidia is no more of a liability than dependence on electricity rates; it's not as if it's in Nvidia's interest to see one of its large customers fail. And pretty much any of the other Mag7 companies are capable of developing in-house TPUs + are already independently profitable, so Google isn't alone here.

On paper, Google should never have allowed the ChatGPT moment to happen ; how did a then non-profit create what was basically a better search engine than Google?

Google suffers from classic Innovator's Dilemma and need competition to refocus on what ought to be basic survival instincts. What is worse is the search users are not the customers. The customers of Google Search are the advertisers and they will always prioritise the needs of the customers and squander their moats as soon as the threat is gone.

And yes, all their competitors are making custom chips. Google is on TPU v7. absolutely nobody is going to get this right on the first try among their competitors - Google didn't.

In this case the difference between its and it’s does alter the meaning of the sentence.

Agreed. Even xAI's (Grok's) access to live data on x.com and millions of live video inputs from Tesla is a moat not enjoyed by OpenAI.

The TAM for video generation isn't as big as the other use cases.

Hasn't it all been scraped by other ai companies already?

> Just try to compete with OpenAI, let's see you calculate the price of attempting it. Scale it to 300, 500, 800 million users.

Apparently the DeepSeek folks managed that feat. Even with the high initial barriers to entry you're talking about, there will always be ways to compete by specializing in some underserved niche and growing from there. Competition seems to be alive and well.

If the “moat” is not AI technology itself but merely sufficient other lines of business to deploy it well, then that’s further evidence that venture investments in AI startups will yield very poor returns.

That kind of makes it sound like AI is a feature and not a product, which supports avalys' point.

Try “@gmail” in Gemini

I think this is a problem for Google. Most users aren't going to do that unless they're told it's possible. 99% of users are working to a mental model of AI that they learned when they first encountered ChatGPT - the idea that AI is a separate app, that they can talk to and prompt to get outputs, and that's it. They're probably starting to learn that they can select models, and use different modes, but the idea of connecting to other apps isn't something they've grokked yet (and they won't until it's very obvious).

What people see as the featureset of AI is what OpenAI is delivering, not Google. Google are going to struggle to leverage their position as custodians of everyone's data if they can't get users to break out of that way of thinking. And honestly, right now, Google are delivering lots of disparate AI interfaces (Gemini, Opal, Nano Banana, etc) which isn't really teaching users that it's all just facets of the same system.

Also, Google doesn't have to finance Gemini using venture capital or debt, it can use its own money.

I tried it, but nothing happened. It said that it sent an email but didn't. What is supposed to happen?

> in 5-10 years, most entry-level laptops will be able to manage a local 30B sized model

I suspect most of the excitement and value will be on edge devices. Models sized 1.7B to 30B have improved incredibly in capability in just the last few months and are unrecognizably better than a year ago. With improved science, new efficiency hacks, and new ideas, I can’t even imagine what a 30B model with effective tooling available could do in a personal device in two years time.

> One could say that the introduction of the personal computer became a "race to the bottom." But it was only the start of the dot-com bubble era, a bubble that brought about a lot of beneficial market expansion.

I think the comparison is only half valid since personal computers were really just a continuation of the innovation that was general purpose computing.

I don't think LLMs have quite as much mileage to offer, so to continue growing, "AI" will need at least a couple step changes in architecture and compute.

> I don't think we've seen any groundbreaking new research or architecture since the introduction of inference time compute ("thinking") in late 2024/early 2025 circa GPT-o4

It was model improvements, followed by inference time improvements, and now it's RLVR dataset generation driving the wheel.

I haven't read much about it to understand what's going on, but the development of multi-modal models has also felt like a major step. Being able to paste an image into a chat and have it "understand" the image to a comparable extent to language is very powerful.

> But I think the more exciting fact is that we can probably expect LLMs to get a LOT cheaper in the next few years as the current investments in hardware begin to pay off

Citation needed!

You're absolutely correct! ( ;) )

The issue is that generation of error-prone content is indeed not very valuable. It can be useful in software engineering, but I'd put it way below the infamous 10x increase in productivity.

Summarizing stuff is probably useful, too, but its usefulness depends on you sitting between many different communication channels and being constantly swamped in input. (Is that why CEOs love it?)

Generally, LLMs are great translators with a (very) lossly compressed knowledge DB attached. I think they're great user Interfaces, and they can help streamline buerocracy (instead of getting rid of it) but they will not help getting down the cost of production of tangible items. They won't solve housing.

My best bet is in medicine. Here, all the areas that LLMs excell at meet. A slightly distopian future cuts the expensive personal doctors and replaces them with (few) nurses and many devices and medicine controlled by a medical agent.

Yes, exactly -- AI would only be analogous to railroads if passenger trains took you to the wrong location roughly 50% of the time.

I was really hoping, and with a different administration I think there was a real shot, for a huge influx of cash into clean energy infrastructure.

Imagine a trillion dollars (frankly it might be more, we'll see) shoved into clean energy generation and huge upgrades to our distribution.

With a bubble burst all we'd be left with is a modern grid and so much clean energy we could accelerate our move off fossil fuels.

Plus a lot of extra compute, that's less clear of a long term value.

Alas.

>Anthropic is building moat around theirs models with claude code, Agent SDK, containers, programmatic tool use, tool search, skills and more.

I think this is something the other big players could replicate rapidly, even simulating the exact UI, interactions, importing/exporting existing items, etc. that people are used to with claude products. I don't think this is that big of a moat in the long run. Other big players just seem to be carving up the landscape and see where they can can fit in for now, but once resource rich eyes focus on them, Anthropic's "moat" will disappear.

I thought that, too, but lately I've been using OpenCode with Claude Opus, rather than Claude Code, and have been loving it.

OpenCode has LSPs out of the box (coming to Claude Code, but not there yet), has a more extensive UI (e.g. sidebar showing pending todos), allows me to switch models mid-chat, has a desktop app (Electron-type wrapper, sure, but nevertheless, desktop; and it syncs with the TUI/web versions so you can use both at the same time), and so on.

So far I like it better, so for me that moat isn't that. The technical moat is still the superiority of the model, and others are bound to catch up there. Gemini 3 Preview is already doing better at some tasks (but frequently goes insane, sadly).

A GPT wrapper isn't a moat.

If AI is capable of doing what they claim then these aren‘t moats because they are just one prompt away from being replicated.

All those features are basically prompts in various formats, not much of a moat.

Except most of their product line is oriented towards software development which has historically been dominated by free software. I don't see developers moving away from this tendency and IMO Anthropic will find themselves in a similar position to JetBrains soon enough (profitable, but niche)... assuming things pan out as you describe.

We don’t need anecdotes. We have data. Google has been announcing quarter after quarter of record revenues and profits and hasn’t seen any decrease in search traffic. Apple also hinted at the fact that it also didn’t see any decreased revenues from the Google Search deal.

AI answers is good enough and there is a long history of companies who couldn’t monetize traffic via ads. The canonical example is Yahoo. Yahoo was one of the most traffic sites for 20 years and couldn’t monetize.

2nd issue: defaults matter. Google is the default search engine for Android devices, iOS devices and Macs whether users are using Safari or Chrome. It’s hard to get people to switch

3rd issue: any money that OpenAI makes off search ads, I’m sure Microsoft is going to want there cut. ChatGPT uses Bing

4th issue: OpenAIs costs are a lot higher than Google and they probably won’t be able to command a premium in ads. Google has its own search engine, its own servers, its own “GPUs” [sic],

5th: see #4. It costs OpenAI a lot more per ChatGPT request to serve a result than it costs Google. LLM search has a higher marginal cost.

I personally know people that used ChatGPT a lot but have recently moved to using Gemini.

There’s a couple of things going on but put simply - when there is no real lock in, humans enjoy variety. Until one firm creates a superior product with lock in, only those who are generating cash flows will survive.

OAI does not fit that description as of today.

I'm genuinely curious. Why do you do this instead of Google Searches which also have an AI Overview / answer at the top, that's basically exactly the same as putting your search query into a chat bot, but it ALSO has all the links from a regular Google search so you can quickly corroborate the info even using sources not from the original AI result (so you also see discordant sources from what the AI answer had)?

But some people do believe that AI is all hype and it will all go away. It’s hard to find two people who actually mean the same thing when they talk about a “bubble” right now.

I don't think anyone seriously believes AI will disappear without a trace. At the very least, LLMs will remain as the state of the art in high-level language processing (editing, translation, chat interfaces, etc.)

The real problem is the massive over-promises of transforming every industry, replacing most human labor, and eventually reaching super-intelligence based on current models.

I hope we can agree that these are all wholly unattainable, even from a purely technological perspective. However, we are investing as if there were no tomorrow without these outcomes, building massive data-centers filled with "GPUs" that, contrary to investor copium, will quickly become obsolete and are increasingly useless for general-purpose datacenter applications (Blackwell Ultra has NO FP64 hardware, for crying out loud...).

We can agree that the bubble deflating, one way or another, is the best outcome long term. That said, the longer we fuel these delusions, the worse the fallout will be when it does. And what I fear is that one day, a bubble (perhaps this one, perhaps another) will grow so large that it wipes out globalized free-market trade as we know it.

> don't expect AGI or Super intelligence to take that long

I appreciate the optimism for what would be the biggest achievement (and possibly disaster) in human history. I wish other technologies like curing cancer, Alzheimer's, solving world hunger and peace would have similar timelines.

Railroads carried the goods that everybody used. That’s like almost 100% in a given country.

The pace was slower indeed. It takes time to build the railroads. But at that time advancements also lasted longer. Now it is often cash grabs until the next thing. Not comparable indeed but for other reasons.

> just three years- around 900 million users on a weekly basis.

Well, I rotate about a dozen of free accounts because I don't want to send 1 cent their way, I imagine I'm not the only one. I do the same for gemini, claude and deepseek, so all in all I account for like 50 "unique" weekly users

Apparently they have about 5% of paying customers, the amount of total users is meaningless, it just tells you how much money they burn and isn't an indication of anything else.

> user base of ChatGPT alone went from 0 to 200 million in nine months, and it's now- after just three years- around 900 million users on a weekly basis.

Doesn't have anything to do with AI itself. Consider Instagram then TikTok before this, WhatsApp before, etc. There is a clear adoption curve timeline : it's going WorldWide faster. AI is not special in that sense. It doesn't mean AI itself isn't special (arguable, in fact Narayanan precisely argue it's "normal") but rather than adoption pace is precisely on track with everything else.

It is beside the point, but

> I think AI will be far more impactful

is not correct IMO. Those are two very different areas. The impact of railroads on transport and everything transport-related cannot be understated. By now roads and cars have taken over much of it, and ships and airplanes are doing much more, but you have to look at the context at the time.

Paid user base or free user base? Because free user base on a very expensive product is next to meaningless.

Railroads enabled people and goods to move from one place to another much easier and faster.

AI enables people to... produce even more useless slop than before?

Yeah except that models don't propel communities towards new heights. They drive towards the averages. They take from the best to give to the worst, so that as much value is destroyed as created. There's no virtuous cycle there...

Whilst those other layers are useful, none of them are particularly hard to build or rebuild when you have many millions of dollars on hand.

One doesn't need tens of billions for them.

I‘m aware this means leaving the original topic of this thread, but would you mind giving us a rundown of this whole Japan 1989 thing? I would love to read a first-person account.

> Cash is Oxygen. You hoard it to survive the inevitable crash. For OpenAI, Cash is Rocket Fuel. They are burning it all to reach "escape velocity" (AGI) before gravity kicks in.

For OpenAI, cash is oxygen too; they're burning it all to reach escape velocity. They could use it to weather the upcoming storm, but I don't think they will.

You weren’t around pre Google were you? The only thing Google learned from other search engines is what not to do - like rank based on the number of times a keyword appeared and not to use expensive bespoked servers

Isn't it really the other way around? Not to say OpenAI and Anthropic haven't done important work, but the genesis of this entire market was paper on attention that came out of Google. We have the private messages inside OpenAI saying they needed to get to market ASAP or Google would kill them.

Aaahh the beautiful free market where the energy prices keep increasing and if it all fails they will be saved by the government that they bribed before. Don't forget the tax subsidies. AKA your money. Pure honest capitalism....

Perhaps it would be useful to define what we mean by "commoditization" in terms of software. I would say a software product that is not commoditized is one where the brand still can command a premium, which in the world of software, generally means people are willing to pay non-zero dollars for it. Once software is commoditized it generally becomes free or ad-supported or is bundled with another non-software product or service. By this standard I would say there are very few non-commoditized consumer software products. People pay for services that are delivered via software (e.g. Spotify, Netflix) but in this case the software is just the delivery mechanism, not the product. So perhaps one viable path for chatbots to avoid commoditization would be to license exclusive content, but in this scenario the AI tech itself becomes a delivery mechanism, albeit a sophisticated one. Otherwise it seems selling ads is the only viable strategy, and precedents show that the economics of that only work when there is a near monopoly (e.g. Meta or Google). So it seems unlikely that a lot of the current AI companies will survive.

A penny saved is a penny earned

What exactly is "second" place? No-one really knows what first place looks like. Everyone is certain that it will cost an arm, a leg and most of your organs.

For me, I think that, the possible winners will be close to fully funded up front and the losers will be trying to turn debt into profit and fail.

The rest of us self hoster types are hoping for a massive glut of GPUs and RAM to be dumped in a global fire sale. We are patient and have all those free offerings to play with for now to keep us going and even the subs are so far somewhat reasonable but we will flee in droves as soon as you try to ratchet up the price.

It's a bit unfortunate but we are waiting for a lot of large meme companies to die. Soz!

Translation is big thing, maybe not the same scale as railroads, but still important. The rest is of dubious economic utility (as in you can do it with LLM easier than without, but if you think a little you could just as well not do it at all without losing anything). On the other hand, disrupting signalling will have pretty long-lasting consequences. People used to assume that a long formal-sounding text is a signal of seriousness, certainly so if it's personally addressed. Now it's just a sign of sloppiness. School essays are probably dead as a genre (good riddance). Hell, maybe even some edgy censorable language will enter mainstream as a definite proof of non-LLMness - and stay.

Did you try asking chatgpt to explain?

When it gets a bit better two robots can make four robots and so on to infinity.

> chips with brain matter and or light

The... what now?

You seem to have forgotten that the ruling class requires tax payers to fund their incomes. If we're all out of work, there's nobody to buy their products and keep them rich.

Pretty much every major historical trend of Western societies in the second half of the eighteenth century, from the development of the modern corporation to the advent of total war, was intimately tied to railroad transportation.

Transportation of people, yeah, but it still carries a majority of inter-city freight in North America.

Besides from he fact the freight is still universally carried by the rail when possible, railroads changed the world just like the vacuum valves did. If not for them nobody would invest in developing tire transport or transistors.

Railroads built America and won multiple large wars.

Umm yes? The metro even if not a big deal in the states is like a small but quiet way it has changed public transport, plus moving freight, plus people over large distances, plus the bullet train that mixed luxury, speed and efficiency onto trains, all of these are quietly disruptive transformations, that I think we all take for granted.

Yes they did, at least twice in the 19th century. It was the largest financial crisis before 1929

Your view is ahistorical.

I still find it so fascinating how experiences with these models are so varied.

I find codex & 5.2 Pro next to useless and nothing holds a candle to Opus 4.5 in terms of utility or quality.

There's probably something in how varied human brains and thought processes are. You and I likely think through problems in some fundamentally different way that leads to us favouring different models that more closely align with ourselves.

No one seems to ever talk about that though and instead we get these black and white statements about how our personally preferred model is the only obvious choice and company XYZ is clearly superior to all the competition.

There is always a comment like this in these threads. It’s just 50-50 whether it’s Claude or OpenAI.

I’m not saying that no company will ever have an advantage. But with the pace of advances slowing, even if others are 6-12 months behind OpenAI, the conclusion is the same.

Personally I find GPT 5.2 to be nearly useless for my use case (which is not coding).

For me OpenAI is the worst of all. Claude code and Gemini deep research is much much more better in terms of quality while ChatGPT hallucinating and saying “sorry you’re right”.

codex is sooo slow but it is good at planning, opus is good at coding but not at good at seeing the big picture

I use both and ChatGPT will absolutely glaze me. I will intentionally say some BS and ChatGPT will say “you’re so right.” It will hilariously try to make me feel good.

But Gemini will put me in my place. Sometimes I ask my question to Gemini because I don’t trust ChatGPT’s affirmations.

Truthfully I just use both.

The chat history feature makes the product worse, I had to turn it off.

Do we know as a matter of fact that people don't want to leave ChatGPT for Gemini just because of chat history?

Just wait until you ask chatgpt where the export chat history button is!

I don’t think it’s a question of moat. The usage limits on the chat interface with the more advanced Claud models are brutal. I feel like I can barely start a conversation before I get shutdown. However, I switched over to Gemini almost completely and barely ever checkin with ChatGPT these days.

OpenAI has close to 1 billion users which are mostly free users and will switch provider the moment OpenAI start charging them or adding ads. Which they will, as OpenAI themselves said they are losing money even with 200$ subs. So that amount of users is pretty meaningless.

I did, moved off to Claude in 2024 and many others around me did the same. Do you have data for non-business claim besides anecdotal evidence?

It's a good take. I think both trajectories are occurring simultaneously.

OpenAI challenging Google search is a winner takes all situation, not to mention the vast amounts of user data.

On the other hand, us lesser mortals can leverage AI like a commoditized service to build applications with it.

Not really though. The cloud has some stickiness. It’s pretty hard to move once you’ve settled in. For a lot of AI integrations though it’s just swapping some API endpoints and maybe tweaking the prompting a bit. For probably 95% of AI use cases there almost no barrier to switching.

> copyright provides such a moat.

Been saying this since the 2016 Alice case. Apple jumped into content production in 2017. They saw the long term value of copyright interests.

https://arstechnica.com/information-technology/2017/08/apple...

Alice changed things such that code monkeys algorithms were not patentable (except in some narrow cases where true runtime novelty can be established.) Since the transformers paper, the potential of self authoring content was obvious to those who can afford to think about things rather than hustle all day.

Apple wants to sell AI in an aluminum box while VCs need to prop up data center agrarianism; they need people to believe their server farms are essential.

Not an Apple fanboy but in this case, am rooting for their "your hardware, your model" aspirations.

Altman, Thiel, the VC model of make the serfs tend their server fields, their control of foundation models, is a gross feeling. It comes with the most religious like sense of fealty to political hierarchy and social structure that only exists as hallucination in the dying generations. The 50+ year old crowd cannot generationally churn fast enough.

> your competitors will be able to replicate in few months.

Will they really be able to replicate the quality while spending significantly less in compute investment? If not then the moat is still how much capital you can acquire for burning on training?

Striking deals without a proper vision is a waste of resources. And that’s the path OAI is on.

It's also why they bought 40% of the world's RAM supply, too

Going viral is great when you're a small team or even a million dollar company. That can make or break your business.

Going viral as a billion dollar company spending upward of 1T is still not sustainable. You can't pay off a trillion dollars on "engagement". The entire advertising industry is "only" worth 1T as is: https://www.investors.com/news/advertising-industry-to-hit-1...

I guess we'd have to see the graph with the evolution of paying customers: I don't see the number of potential-but-not-yet clients being that high, certainly not one order of magnitude higher. And everyone already knows OpenAI, they don't have the benefit of additional exposure when they go viral: the only benefit seems to be to hype up investors.

And there's something else about the diminishing returns of going viral... AI kind of breaks the usual assumptions in software: that building it is the hard part and that scaling is basically free. In that sense, AI looks more like regular commodities or physical products, in that you can't just Ctrl-C/Ctrl-V: resources are O(N) on the number of users, not O(log N) like regular software.

Selling a bunch of $20 a month subscriptions isn’t going to make a dent in OpenAI losses. Going viral for a day or two doesn’t help.

Normal people are already getting tired of AI Slop

That’s an unusual way of saying uh…adult entertainment

Are the posters of effing kitten videos a customer base with a significant LTV?

(The obvious well-paying market would be erotic / furry / porn, but it's too toxic to publicly touch, at least in the US.)

If only 99% of the Internet was kitten videos and memes

It is a matter who will actually pay for compute. Is it people who care about work or entertainment?

Even if developers are 1:1000 of your users, I'm going to guess that ratio shifts a lot when you look at subscribers.

> Because OpenAI stands for AI leader.

It'll just end up spreading itself too thin and be second or third best at everything.

The 500lb gorilla in the room is Google. They have endless money and maybe even more importantly they have endless hardware. OpenAI are going to have an increasingly hard time competing with them.

That Gemini 3 is crushing it right now isn't the problem. It's Gemini 4 or 5 that will likely leave them in the dust for the general use case, meanwhile specialist models will eat what remains of their lunch.

> Who wants to copy&paste prompts between ai agents?

An AI!

The specialist vs generalist debate is still open. And for complex problems, sure, having a model that runs on a small galaxy may be worth it. But for most tasks, a fleet of tailor-made smaller models being called on by an agent seems like a solidly-precedented (albeit not singularity-triggering) bet.

>Also if you want to have more semantics, you add image, video and audio to your model. It gets smarter because of it.

I think you are confusing generation with analysis. As far I am aware your model does not need to be good at generating images to be able to decode an image.

I think you're partially right, but I don't think being an AI leader is the main motivation -- that's a side effect.

I think it's important to OpenAI to support as many use-cases as possible. Right now, the experience that most people have with ChatGPT is through small revenue individual accounts. Individual subscriptions with individual needs, but modest budgets.

The bigger money is in enterprise and corporate accounts. To land these accounts, OpenAI will need to provide coverage across as many use-cases as they can so that they can operate as a one-stop AI provider. If a company needs to use OpenAI for chat, Anthropic for coding, and Google for video, what's the point? If Google's chat and coding is "good enough" and you need to have video generation, then that company is going to go with Google for everything. For the end-game I think OpenAI is playing for, they will need to be competitive in all modalities of AI.

Can Claude not do that? I've sent it pictures for simpler things and got answers, usually Id of bugs and plants.

You don't expect AGI to be multi-modal?

You and I see the tiktok slop. But as that functionality improves, its going to make its way into the toolchain of every digital image and video editing software in existence, the same way that its finding its way into programming IDEs. And that type of feature build is worth $. It might be a matter of time until we get to the point where we start seeing major Hollywood movies (for example) doing things that were unthinkable the same way that CGI revolutionized cinema in the 80s. Even if it doesn't, from my layman perception, it seems that Hollywood has spent the last ~20 years differentiating itself from the rest of global cinema largely based on a moat built on IP ownership and capital intensive production value (largely around name brand actors and expensive CGI). AI already threatens to remove one of those pillars, which I have to think in turn makes it very valuable.

Outside of this: https://openai.com/index/disney-sora-agreement/ I don't think there has been much of a win for them even in advertising for image/video slop.

And they have hardware as well, and their own cloud platform.

In my view Google is uniquely well positioned because, contrary to the others, it controls most of the raw materials for Ai.

Google's most significant advantage in this space is its organizational experience in providing services at this scale, as well as its mature infrastructure to support them. When the bubble pops, it's not lights-out or permanently degraded performance.

> ai overviews in search are super popular and staggeringly more used than any other ai-based product out there

This really is the critical bit. A year ago, the spin was "ChatGPT AI results are better than search, why would you use Google?", now it's "Search result AI is just as good as ChatGPT, why bother?".

When they were disruptive, it was enough to be different to believe that they'd win. Now they need to actually be better. And... they kinda aren't, really? I mean, lots of people like them! But for Regular Janes at the keyboard, who cares? Just type your search and see what it says.

>Google Lens has surprisingly high usage

I use it several times a day just to change text in image form to text form so you can search it and the like.

It's built into chrome but they move the hidden icon about regularly to confuse you. This month you click the url and it appears underneath, helpfully labeled "Ask Google about this page" so as to give you little idea it's Google Lens.

Is Gemini, as a chatbot, a product that sustains current valuations and investment?

>Gemini is catching up to chatpt from a MAU perspective

It is far behind, and GPT hasn't exactly stopped growing either. Weekly Active Users, Monthly visits...Gemini is nowhere near. They're comfortably second, but second is still well below first.

>ai overviews in search are super popular and staggeringly more used than any other ai-based product out there

Is it ? How would you even know ? It's a forced feature you can not opt out of or not use. I ignore AI overviews, but would still count as a 'user' to you.

Bart was a flop. Google search is losing market share to other LLM providers. Gemini adoption is low, people around me prefer OpenAI because it is good enough and known.

But on the contrary, Nano Banana is very good, so I don't know. And in the end, I'm pretty confident Google will be the AI race winner, because they got the engineers, they tech background and the money. Unless Google Adsense die, they can continue the race forever.

Anti Gravity is a flop. I mean it uses Gemini under the hood.

But you cannot use it with an API key.

If you're on a workspace account, you can't have normal individual plan.

You have to have the team plan with $100/month or nothing.

Google's product management tier is beyond me.

ChatGPT has already won a lot of people away from Google like my mum, who now defaults to ChatGPT when she has a question. I was just talking to one of their friends last night who is in his 90s and he loves using Perplexity to learn about cooking and gardening.

A lot of people now reach for ChatGPT by default instead of Google, even with the AI summaries. I wonder whether they just prefer the interface of the chat apps to Google that can be a bit cluttered in comparison.

I can see users preferring GPT for big ticket items like cars, travel or service companies where you don't have a rec and want something a bet better curated than sponsored results. Especially if they improve the integration so you can book your entire iterary through the chat interface.

> For all we know, they could be accumulating capital to weather an AI winter.

Right, this is nonsense. Even if investors wanted to be complicit in fraud, it's an insane investment. "Give us money so we can survive the AI winter" is a pitch you might try with the government, but a profit-motivated investor will... probably not actually laugh in your face, but tell you they'll call you and laugh about you later.

Prior to 5.2 you couldn’t expect to get good answers to questions prior to March 2024. It was arguing with me that Bruno Mars did not have two hit songs in the last year. It’s clear that in 2025 OpenAI used the old 4.0 base model and tried to supercharge it using RLVR. That had very mixed results.

I wonder about what happens to people who make these hilariously bad business decisions? Like the person at Twitter who decided to kill Vine. Do they spin it and get promotoed? Something else?

I'd love a blog or coffee table book of "where are they now" for the director level folks who do dumb shit like this.

they're incorrect about the routing statement but it is not a newly trained model

People would have paid it if it was actually significantly better. It was a huge cost increase for a pretty minor performance increase.

Gpt-5.2 was new pretrain run i believe

lol the typical AI boosters are down voting you.

RAG? Even for a "fresh" model, there is no way to keep it up to date, so there has to be a mechanism by which to reference eg last night's football game.

They’re just feeding a little bit of slop in every so often. Fine tuning rather than training a new one.

Yes it was, op didn't read the reporting closely enough. It said something to the effect of "Didn't pretrain a new broadly released, generally available model"

Wasn't 4.5 before 4o?

> The goal is to be too big to fail and get bailed out by US taxpayers

I know this is the latest catastrophizion meme for AI companies, but what is it even supposed to mean? OpenAI failing wouldn’t mean AI disappears and all of their customers go bankrupt, too. It’s not like a bank. If OpenAI became insolvent or declared bankruptcy, their intellectual property wouldn’t disappear or become useless. Someone would purchase it and run it again under a new company. We also have multiple AI companies and switching costs are not that high for customers, although some adjustment is necessary when changing models.

I don’t even know what people think this is supposed to mean. The US government gives them money for something to prevent them from filing for bankruptcy? The analogy to bank bailouts doesn’t hold.

> It's mathematically impossible what OpenAI is promising

Citation is needed

Bailing out OAI would be entirely unnecessary (crowded field) and political suicide (how many hundreds of billions that could have gone to health care instead?)

If it happens in the next 3 years, tho, and Altman promises enough pork to the man, it could happen.

on the one hand, i understand you are making a stylized comment, on the other hand, as soon as i started writing something reasonable, i realized this is an "upvote lame catastrophizing takes about" (checking my notes) "some company" thread, which means reasonable stuff will get downvoted... for example, where is there actual scarcity in their product inputs? for example, will they really be paying retail prices to infrastructure providers forever? is that a valid forecast? many reasonable ways to look at this. even if i take your cynical stuff at 100% face value, the thing about bailouts is that they're more complicated than what you are saying, but your instinct is to say they're not complicated, "grooming" this and "cold war" that, because your goal is to concern troll, not advance this site's goal of curiosity...

Unlikely, Elon bought the presidency and owns a competitor.

> Some players have to play, like google

I don't think you have the faintest clue of what you're talking about right now. Google authored the transformer architecture, the basis of every GPT model OpenAI has shipped. They aren't obligated to play any more than OpenAI is, they do it because they get results. The same cannot be said of OpenAI.

Yes, but that is the standard methodology for startups in their boost phase. Burn vast piles of cash to acquire users, then find out at the end if a profitable business can be made of it.

Only in as much as their product is a pure commodity like oil. Like yes it’s trivial to get customers if you sell gas for half the price, but I don’t think LLMs are that simple right now. ChatGPT has a particular voice that is different from Gemini and Grok.

That's a cool sounding phrase you heard somewhere, unfortunately, it's not related with this at all.

depends if they can monetize that spot. So either ads or subscription. It is as yet unclear whether ads/subscription can generate sufficient revenue to cover costs and return a profit. Perhaps 'enough ads' will be too much for users to bear, perhaps 'enough subscription' will be too much for users to afford.

And at one point in the 90s, Internet=Netscape Navigator.

I see Google doing to OpenAI today what Microsoft did to Netscape back then, using their dominant position across multiple channels (browser, search, Android) to leverage their way ahead of the first mover.

From what I've seen, 99% of people are using the free version of ChatGPT. Those who are using Claude are on the subscription, very often the $100/month one.

When ChatGPT starts injecting ads or forcing payment or doing anything else that annoys its userbase then the young people won't have a problem looking for alternatives

This "moat" that OpenAI has is really weak

That's pretty nuts. With the models changing so much and so often, you have to switch it up sometimes just to see what the other company is offering.

The consumer market is a loss leader.

You are already paying for several national lab HPC centers. These are used for government/university research - no idea if commercial interests can rent time on them. The big ones are running weather, astronomy simulations, nuclear explosions, biological sequencing, and so on.

if datacenters are built by the government, then i think it's fair to assume there will be some level of democratic control of what those datacenters will be used for.

Sure. Same for healthcare and education right? If you don't have a child or need medical attention, why should you pay for them?

That's like every government initiative. Same as healthcare? School? I mean if you don't have children why do you pay taxes... and roads if you don't drive? I mean the examples are so many... why do you bring this argument that if it doesn't benefit you directly right now today, it shouldn't be done?

National HPC labs have been over subscribed for decades with extensive queueing/time sharing allocation systems.

It would still likely devolve into most-money-wins, but it is not an insurmountable political obstacle to arrange some sort of sharing.

Edit: I meant to say over subscribed, not over provisioned. There are far more jobs in the queue than can be handled at once

Well, people bid for USA government resources all the time. It's why the Washington DC suburbs have some of the country's most affluent neighborhoods among their ranks.

In theory it makes the process more transparent and fair, although slower. That calculus has been changing as of late, perhaps for both good and bad. See for example the Pentagon's latest support of drone startups run by twenty-year-olds.

The question of public and private distinctions in these various schemes are very interesting and imo, underexplored. Especially when you consider how these private LLMs are trained on public data.

I'd rather live in a universe where that money is taken out of the military budget.

Without capital invested in the past we wouldn’t have almost anything of modern technology. That has done a lot more for everyone, including food affordability, than actually simply buying food for people to eat once.

As we all know, throwing money at a problem solves it completely. Remember how Live Aid saved Ethiopia from starvation and it never had any problems again?

Given where we are posting, the motive is obvious: to socialize the riskiest part of AI while the investors retain all the potential upside. These people have no sense of shame so they'll loudly advocate for endless public risk and private rewards.

Same reason they should own access lines: everyone needs rackspace/access, it should be treated like a public service to avoid rent seeing. Having a data center in every city where all of the local lines terminate into could open the doors to a lot of interesting use cases, really help with local resiliency/decentralization efforts, and provide a great alternative to cloud providers that doesn't break the bank.

Don't forget that the internet exists because of government agencies.

Tbh this whole AI thing is probably a negative ROI but it will pay off. Even if the debt is written off the AI enhancements that this whole misallocation of capital created are now "sunk" and are here to stay - the assets and techniques have been built.

There's an element of arms race between players, and the genie is out of the bottle now so have to move with it. Game theory is more driving this than economics in the short term.

Marginal gains on top of these investments probably have a ROI now (i.e. new investments from this point).

not that I disagree but would it be fair to say though that we have seen this before where it turned out OK? say Uber? Amazon?

How many gold toilets do you need? I mean, I don't even own one.

I redacted the comment because you’re right. I need a better form to express the point.

Even in a bank bailout, the equity holders typically get wiped out. It's really not that different from a bankruptcy proceeding, there's just a whole lot more focus on keeping the business itself going smoothly. I doubt OpenAI want to be in that kind of situation.

Sounds like a big nothingburger then.

I don’t really have faith the current LLMs will improve dramatically anyway, not without totally new approaches to AI.

It happens a lot. People here just want to silence voices that don’t fit their agenda.

yes. stock v flow error again ("company X cap bigger than country Y GDP" another all too common version).

I am just trying to help you write better. Your writing says "if I had to give up either AI or chocolate [...] I would probably choose AI". However, your language and intent seems to be that you would give up chocolate.

It’s a bit of a weird comparison, AI vs a luxury sweet.

Maybe instead of the chocolate market, look at the global washing machine market of $65 billion.

I’d rather give up both AI and chocolate than my washing machine.

If you really wanted to know you could stop eating chocolate or stop using ai and see if you break. Or do both at different times and see how long you last without one or the other.