[aurareturn]

HN told me OpenAI was on the verge of collapse.

[bandrami]

I don't know that OpenAI specifically is the weak link but this definitely adds to the argument that the entire sector is a wash with the same three or four companies passing around the same $50B over and over. OpenAI is just the link that seems most likely to break first.

[aurareturn]

I've subscribed to a few AI tools for the last 3 years now. I'm someone who almost never subscribes to anything.

I'm sure that $50b has my money in there somewhere.

[wongarsu]

I've seen this sentiment (OpenAI collapse imminent) a lot on Youtube and Reddit, but it somehow evaded me on here

Bad comments about OpenAI's long-term viability I've seen plenty here. But that's not the same as the people predicting one of the hottest companies right now will somehow suddenly run out of cash all on its own

[hogwasher]

Its hottest service by far is completely free, the vast majority of users of its free service aren't converting to users of its paid services (and often stop using the free service too because they were just tourists seeing what all the fuss was about, or they were compelled to use the free service by their employer), and its data center plans are an impossible money pit.

The fact it's become a household name internationally (giving it the appearance of success) can't save it from spending dramatically more money than it makes. It's been coasting on investments, but it's not even close to being actually profitable.

Huge or well-known companies have collapsed before, even though - because people become so used to them existing - it never quite feels like it will actually happen until it does.

[nerdix]

I don't think they are going to collapse. But it was only a couple of years ago that many people thought OpenAI had a big (some thought insurmountable) lead in a race to dominate a winner take all markee. Some people did correctly state that OpenAI had no moat in those days so credit there where it's due.

Now it's looking like a competitive blood bath where ever increasing levels of investment is needed just to main market position. Their frontier models are SOTA for 4 weeks before a competitor comes and takes the crown. They are standing on much shakier ground than they were 2 years ago.

[x0x0]

A competitive bloodbath plus OpenAI has investment valuing it like it will achieve agi rather than (merely) being a huge advancement in computing, but not a fundamental rewriting of how all work is done.

[giancarlostoro]

If nobody invested in OpenAI how long could they keep the lights on? They're not profitable yet, and a lot of the wealth that Sam Altman seems to be making revolves around strange circular deals.

By comparison, Anthropic is projected to break even in 2028. Google's Gemini is already profitable.

[limagnolia]

What source do you have the Gemini is profitable? Are you referring only to the chat app, or to Google'a AI Ventures division? Or including Google Cloud AI related revenue?

[elephanlemon]

Interesting. I’m having anything on Gemini being profitable though, do you happen to have a source?

[alecco]

Nobody saw coming the huge demand for coding agents. Not even OpenAI or Anthropic themselves. Those were side projects just a year ago and now dominate token demand. And they keep rising.

[whizzter]

Oh I do think they did see it, considering how good they are they've probably been a tuning focus for a while.

The signal the agent usage is sending though is that Anthropic is way ahead since all we hear about is Claude these days despite OpenAI spending so much more money, Antrophic is also out trialling vending machines,etc.

ChatGPT apart from generating text was a bit of a query/research tool but now that Google has their AI search augmentation shit somewhat together I'm not feeling much need for ChatGPT as a research partner.

So now the big question is, with coding and search niches curtailed, where will OpenAI be able to generate profits from to justify their insane spending?

[phist_mcgee]

Does anyone see the demand for coding agents that aren't subsided 90% by the AI company?

[notatoad]

the $30b investment from nvidia is instead of a previously-announced $100b investment from nvidia, so it's not like this is an entirely good-news story for OpenAI.

[outside1234]

Well, $110B a year doesn't last long if you are losing $40B a quarter.

Also Softbank invested, which is never a great signal.

[muddi900]

That's mean.

They also invested in Uber

[sethops1]

How much revenue have they generated? How about profit?

If investors keep throwing obscene money at OpenAI, sure, they can stay afloat forever. Can't argue with that. But if we're talking about a sustainable business, I still don't see it.

[glimshe]

You'll always find someone claiming X or Y are close to collapse at any given time. As even a broken clock is right twice a day, eventually one of these predictions will randomly be proven correct. That person will then be elevated to a genius forecaster and rake in cash for a decade or two.

[muddi900]

Actually it is the other way around; every upstart claims that their invention is the mostest revolutionariest thing ever. 99.9% of them are not. The nay sayers are right most of the time.

Recent high-profile examples include Segway, NFT, Crypto as a whole, pre-tranformers voice assistants and various "Design Thinking" projects like those Amazon prime buttons.

[109847]

Thiel said around last autumn that AI is a bubble and exited Nvidia. Nvidia is now falling despite good earnings.

If OpenAI keeps getting circular financing, of course they will not collapse yet.

[captainbland]

For Nvidia's part they're just giving money to one of their largest customers. They make money back even if they "lose" the bet

[rvnx]

It's like government XX giving "help" or "grants" to countries at war so they can purchase weapons from XX.

[Vespasian]

Selling Shovels is quite lucrative whether there is an actual mining business or just a gold rush.

At one point Jensen Huang will be out (retired or forced by staginating sales) and can definitely look back on a very successful career. That much is certain.