[bfirsh]

Free usage usually goes in sales and marketing. It's effectively a cost of acquiring a customer. This also means it is considered an operating expense rather than a cost of goods sold and doesn't impact your gross margin.

Compute in R&D will be only training and development. Compute for inference will go under COGS. COGS is not reported here but can probably be, um, inferred by filling in the gaps on the income statement.

(Source: I run an inference company.)

[singron]

I think it makes the most sense this way, but I've seen it accounted for in other ways. E.g. if free users produce usage data that's valuable for R&D, then they could allocate a portion of the costs there.

Also, if the costs are split, there usually has to be an estimation of how to allocate expenses. E.g. if you lease a datacenter that's used for training as well as paid and free inference, then you have to decide a percentage to put in COGS, S&M, and R&D, and there is room to juice the numbers a little. Public companies are usually much more particular about tracking this, but private companies might use a proxy like % of users that are paid.

OpenAI has not been forthcoming about their financials, so I'd look at any ambiguity with skepticism. If it looked good, they would say it.