They generated $4.3B in revenue without any advertising program to monetise their 700 million weekly active users, most of whom use the free product.
Google earns essentially all of its revenue from ads, $264B in 2024. ChatGPT has more consumer trust than Google at this point, and numerous ways of inserting sponsored results, which they’re starting to experiment with with the recent announcement of direct checkout.
The biggest concern IMO is how good the open weight models coming out of China are, on consumer hardware. But as long as OpenAI remains the go-to for the average consumer, they’ll be fine.
What prevents people from just using Google, who can build AI stuff into their existing massive search/ads/video/email/browser infrastructure?
Normal, non-technical users can't tell the difference between these models at all, so their usage numbers are highly dependent on marketing. Google has massive distribution with world-wide brands that people already know, trust, and pay for, especially in enterprise.
Google doesn't have to go to the private markets to raise capital, they can spend as much of their own money as they like to market the living hell out of this stuff, just like they did with Chrome. The clock is running on OpenAI. At some point OpenAI's investors are going to want their money back.
I'm not saying Google is going to win, but if I had to bet on which company's money runs out faster, I'm not betting against Google.
ChatGPT has a phenomenal brand. That's worth 100x more than "product stickiness". They have 700 million weekly users and growing much faster than Google.
I think your points on Google being well positioned are apt for capitalization reasons, but only one company has consumer mindshare on "AI" and its the one with "ai" in its name.
Would have agreed with you untill I saw the meltdown of people losing their "friend" when chatgpt 5 was released. Somehow openai has fallen into a "sticky" userbase.
My non-tech friend said she prefer ChatGPT more than Gemini, most due to its tone.
So non-tech people may not know the different in technical detail, but they sure can have bias.
The teens, they don't know what is OpenAI, they don't know what is Gemini. They sure know what is ChatGPT.
You vastly underestimate the power of habit and branding combined together. Just like then, the vast majority of people equate ChatGPT with AI chatbot, there is no concept of alternative AI chatbot. Sure people might have seen some AI looking thing called Copilot and some weird widget in the Google Search results but so far ChatGPT is winning the marketing game even if the offerings from rivals might be the same or even superior sometimes
If normal people start saying "ChatGPT" to refer to AI they win, just like how google became a verb for search.
It seems to be the case.
Doesn't look worse than Google Search's moat to me? And that worked really well for a long time.
They do now, that's why they are using a shell game to pump up the stock value.
That's all that matters now. We've passed the "good enough" bar for llms for the majority of consumer use cases.
From here out it's like selling cellphones and laptops
Switching would be like coding with a brand new dev environment. Can I do it? Sure, but I don't want to.
When I think as a “normal” user, I can definitely see difference between them all.
Very few of those 700,000,000 active users have ever heard of Claude or DeepSeek or ________. Gemini maybe.
Do people trust Google in a positive sense? I trust them to try force me to login and to spam me with adverts.
Google have never had a viable competitor. Their moat on Search and Ads has been so incredibly hard to beat that no one has even come close. That has given them an immense amount of money from search ads. That means they've appeared to be impossible to beat, but if you look at literally all their other products they aren't top in anything else despite essentially unlimited resources.
A company becoming a viable competitor to Google Search and/or Ads is not something we can easily predict the outcome of. Many companies in the past who have had a 'monopoly' have utterly fallen apart at the first sign of real competition. We even have a term for it that YC companies love to scatter around their pitch decks - 'disruption'. If OpenAI takes even just 5% of the market Google will need to either increase their revenue by $13bn (hard, or they'd have done that already) or they'll need to start cutting things. Or just make $13bn less profit I guess. I don't think that would go down well though.
Literally nobody but nerds know what a Claude is among many others.
ChatGPT has name recognition and that matters massively.
Once the single-focus companies have to actually make a profit and flip the switch from poorly monetized to fully monetized, I think folks will be immediately jumping ship to mega-companies like Google who can indefinitely sustain the freemium model. The single-focus services are going to be Hell to use once the free rides end: price hikes, stingy limits, and ads everywhere.
.... but the field will change unpredictably. Amazon offers a lot of random junk with Prime -- hike price $50/year, slap on a subscription to high-grade AI chatbot 10% of users will actually use (say 2% are "heavy users"), and now Anthropic is financially sustainable. Maybe NYT goes from $400 to $500 per year, and now you get ChatGPT Pro, so everything's fine at OpenAI. There're a ton of financial ideas you'll come up with once you feel the fire at your feet; maybe the US government will take a stake and start shilling services when you file taxes. Do you want the $250 Patriot Package charged against your tax refund, or are we throwing this in the evidence pile containing your Casio F91-W purchase and tribal tattoos?
20 years ago everyone said the exact same thing about Google Search.
I mean, how could you possibly build a $3T company off of a search input field, when users can just decide to visit a different search input field??
Surprise. Brand is the most powerful asset you can build in the consumer space. It turns out monetization possibilities become infinite once you capture the cultural zeitgeist, as you can build an ecosystem of products and eventually a walled garden monopoly.
The broken record's still running, someone please turn it off!
At this point I think people just suffer from some sort of borderline mental disorder.
700 MAUs in just a couple years? In a red(-pretty-much-pure-blood) ocean? Against companies who've been in the business for 20 years?
One would have to be quite dumb or obtuse not to see it.
I fear the same will happen with chatbots. The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue.
There is also the strange paradox that the people who are willing to pay are actually the most desirable advertising targets (because they clearly have $ to spend). So my guess is that for that segment, the revenue is 100x.
This is like the argument of a couple of years ago "as long as Tesla remains ahead of the Chinese technology...". OpenAI can definitely become a profitable company but I dont see anything to say they will have a moat and monopoly.
Acceleration is felt, not velocity.
Between Android, Chrome, YouTube, Gmail (including mx.google.com), Docs/Drive, Meet/Chat, and Google Search, claiming that Google "isn't more trusted" is just ludicrous. People may not be happy they have to trust Alphabet. But they certainly do.
And even when they insist they're Stallman, their friends do, their family does, their coworkers do, the businesses they interact with do, the schools they send their children to do.
That trust is gone the moment they start selling ad space. Where would they put the ads? In the answers? That would force more people to buy a subscription, just to avoid having the email to your boss contain a sponsored message. The numbers for Q2 looks promising, sells are going up. And speaking of sales, Jif peanut butter is on sale this week.
If OpenAI plan on making money with ads then all the investments made by Nvidia, Microsoft and Softbank starts to look incredibly stupid. Smartest AI in the world, but we can only make money by showing you gambling ads.
About half of AI queries are "Asking" (as opposed to Doing or Expressing) and those are the ones best suited for ads. User asking how to make pizza? Show ads for baking steels and premium passata. User asking for a three day sightseeing routine in Rome? I'm sure someone will pay you them to show their venue.
It seems unlikely that the ads will be embedded directly into the answer stream, unless they find a way to reliably label such portions as advertisements in a "clear and conspicuous" way, or convince law makers/regulators that chat bots don't need to be held to the same standards as other media.
buyACoke 0 = 1
buyACoke rightNow = youShould * buyACoke (rightNow `at` walmart)
where
youShould = rightNow
at = (-)
walmart = 1The other side of the coin is that running an LLM will never be as cheap as search engine.
Complete and unfounded speculation.
That's when services start to insert ads into their product.
Do you currently pay for it?
Are they though? I have the best consumer hardware and can run most open models, and they are all unusable beyond basic text generation. I'm talking 90%+ hallucination rate.
It boggles my mind that people still think advertising can be a major part of the economy.
If AI is propping up the economy right now [0] how is it possible that the rest of the economy can possibly fund AI through profit sharing? That's fundamentally what advertising is: I give you a share of my revenue (hopefully from profits) in order to help increase my market share. The limit of what advertising spend can be is percent of profits minus some epsilon (for a functioning economy at least).
Advertising cannot be the lions share of any economy because it derives it's value from the rest of the economy.
Advertising is also a major bubble because my one assumption there (that it's a share of profits) is generally not the case. Unprofitable companies giving away a share of their revenue to other companies making those companies profitable is not sustainable.
Advertising could save AI if AI was a relatively small part of the US (or world) economy and could benefit by extracting a share of the profits from other companies. But if most your GDP is from AI how can it possibly cannibalize other companies in a sustainable way?
0. https://www.techspot.com/news/109626-ai-bubble-only-thing-ke...
https://www.statista.com/statistics/248004/percentage-added-...
You can imagine a future world where producing real goods and services is ~free (AI compute infinite etc.)
In this world, the entire economy will be ~advertising only so you can charge people anything at all instead of giving it away for free.
That’s why I use Kagi, Hey, Telegram, Apple (for now) etc.
I really hope OpenAI can build a sustainable model which is not based on that.
You can run Qwen3-coder for free upto 1000 requests a day. Admittedly not state of the art but works as good of 5o-mini
Can any AI be sensibly and reliably instructed not to do product placement in inappropriate contexts?
The future will never come to pass if they do not exist at that point in time. They still need to survive all the way there wherever THERE is
The pop of this bubble is going to be painful for a lot of people. Being too early to a market is just as bad as being too late, especially for something that can become a commodity due to a lack of moat.
From what I understand he was the only one crazy enough to demand hundreds of GPUs for months to get ChatGPT going. Which at the time sounded crazy.
So yeah Sam is the guy with the guts and vision to stay ahead.
But selling that much ad inventory overnight - especially if they want new formats vs "here's a video randomly inserted in your conversation" sorta stuff - is far from easy.
Their compute costs could easily go down as technology advances. That helps.
But can they ramp up the advertising fast enough to bring in sufficient profit before cheaper down-market alternatives become common?
They lack the social-network lock-in effect of Meta, or the content of ESPN, and it remains to be seen if they will have the "but Google has better results than Bing" stickiness of Google.
Why is this much money spent on advertising? Surely it isn't really justified by increase in sales that could be attributed to the ads? You're telling me people actually buy these ridiculous products I see advertised?
You use to be a useful site and be at the top of the search results for some keywords and now you have to pay.
There is a saying in India, whats seen is what is sold.
Not the hidden best product.
Right now Gemini gives a youtube link in every response. That means they have already monetised their product using ads.
"The most popular brand of bread in America is........BUTTERNUT (AD)"
Its a sinkhole that they are destroying our environment for. Its not sustainable on a massive scale, and I expect to see Sam Altman join his 30 under 30 cohorts SBF and such eventually.
I would like AI to focus on helping consumers discover the right products for their stated needs as opposed to just being shown (personalized) ads. As of now, I frequently have a hard time finding the things I need via Amazon search, Google, as well as ChatGPT.
This is just HackerNews bias.
Everyone that has used ChatGPT (or any other LLM really) has already been burnt by being provided a completely false answer. On the contrary everyone understands that Google never claimed to provide a true answer, just links to potential answers.
Gee I wonder why?
"There are increasing reports of people having delusional conversations with chatbots. This suggests that, for some, the technology may be associated with episodes of mania or psychosis when the seemingly authoritative system validates their most off-the-wall thinking. Cases of conversations that preceded suicide and violent behavior, although rare, raise questions about the adequacy of safety mechanisms built into the technology."
https://www.nytimes.com/2025/08/26/technology/chatgpt-openai...
The pendulum is swinging back indeed!
> They generated $4.3B in revenue without any advertising program
Also, their press release said:
> $2 billion spent on sales and marketing
GPUs are not railroads or fiber optics.
The cost structure of ChatGPT and other LLM based services is entirely different than web, they are very expensive to build but also cost a lot to serve.
Companies like Meta, Microsoft, Amazon, Google would all survive if their massive investment does not pay off.
On the other hand, OpenAI, Anthropic and others could be soon find themselves in a difficult position and be at the mercy of Nvidia.
I definitely don't think compute is anything like railroads and fibre, but I'm not so sure compute will continue it's efficiency gains of the past. Power consumption for these chips is climbing fast, lots of gains are from better hardware support for 8bit/4bit precision, I believe yields are getting harder to achieve as things get much smaller.
Betting against compute getting better/cheaper/faster is probably a bad idea, but fundamental improvements I think will be a lot slower over the next decade as shrinking gets a lot harder.
Effectively every single H100 in existence now will be e-waste in 5 years or less. Not exactly railroad infrastructure here, or even dark fiber.
The financials here are so ugly: you have to light truckloads of money on fire forever just to jog in place.
Oh wait, the computer I'm typing this on was manufactured in 2020...
Nvidia may well be at the mercy of them! Hence the recent circular dealing
The main differences are these models are early in their development curve so the jumps are much bigger, and they are entirely digital so they get “shipped” much faster, and open weights seem to be possible. None of those factors seem to make it a more attractive business to be in.
So in that sense it's not that much different from Meta and Google which also used server infrastructure that depreciated over time. The difference is that I believe Meta and Google made money hand over fist even in their earliest days.
Data center facilities are ~$10k per kW
IT gear is like $20k-$50k per kW
Data center gear is good for 15-30 years. IT is like 2-6ish.
Would love to see updated numbers. Got any?
$4.3 billion in revenue - presumably from ChatGPT customers and API fees
$6.7 billion spent on R&D
$2 billion on sales and marketing - anyone got any idea what this is? I don't remember seeing many ads for ChatGPT but clearly I've not been paying attention in the right places.
Open question for me: where does the cost of running the servers used for inference go? Is that part of R&D, or does the R&D number only cover servers used to train new models (and presumably their engineering staff costs)?
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.)
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.
If you discount R&D and "sales and marketing", they've got a net loss of "only" $500 million.
They're trying to land grab as much surface area as they can. They're trying to magic themselves into a trillion dollar FAANG and kill their peers. At some point, you won't be able to train a model to compete with their core products, and they'll have a thousand times the distribution advantage.
ChatGPT is already a new default "pane of glass" for normal people.
Is this all really so unreasonable?
I certainly want exposure to their stock.
Two people in a cafe having a meet-up, they are both happy, one is holding a phone and they are both looking at it.
And it has a big ChatGPT logo in the top right corner of the advertisement - transparent just the black logo with ChatGPT written underneath.
That's it. No text or anything telling you what the product is or does. Just it will make you happy during conversations with friends somehow.
Stop training and your code model generates tech debt after 3-6 month
With the marginal gains diminishing, do we really think they're (all of them) are going to continue spending that much more for each generation? Even the big guys with the money like google can't justify increasing spending forever given this. The models are good enough for a lot of useful tasks for a lot of people. With all due respect to the amazing science and engineering, OpenAI (and probably the rest) have arrived at their performance with at least half of the credit going to brute-force compute, hence the cost. I don't think they'll continue that in the face of diminishing returns. Someone will ramp down and get much closer to making money, focusing on maximizing token cost efficiency to serve and utility to users with a fixed model(s). GPT-5 with it's auto-routing between different performance models seems like a clear move in this direction. I bet their cost to serve the same performance as say gemini 2.5 is much lower.
Naively, my view is that there's some threshold raw performance that's good enough for 80% of users, and we're near it. There's always going to be demand for bleeding edge, but money is in mass market. So if you hit that threshold, you ramp down training costs and focus on tooling + ease of use and token generation efficiency to match 80% of use cases. Those 80% of users will be happy with slowly increasing performance past the threshold, like iphone updates. Except they probably won't charge that much more since the competition is still there. But anyway, now they're spending way less on R&D and training, and the cost to serve tokens @ the same performance continues to drop.
All of this is to say, I don't think they're in that dreadful of a position. I can't even remember why I chose you to reply to, I think the "10x cheaper models in 3-6 months" caught me. I'm not saying they can drop R&D/training to 0. You wouldn't want to miss out on the efficiency of distillation, or whatever the latest innovations I don't know about are. Oh and also, I am confident that whatever the real number N is for NX cheaper in 3-6 months, a large fraction of that will come from hardware gains that are common to all of the labs.
Not sure where/how I read it, but remember coming across articles stating OpenAI has some agreements with schools, universities and even the US government. The cost of making those happen would probably go into "sales & marketing".
enterprise sales are expensive. And selling to the US government is on a very different level.
I used to follow OpenAI on Instagram, all their posts were reposts from paid influencers making videos on "How to X with ChatGPT." Most videos were redundant, but I guess there are still billions of people that the product has yet to reach.
Yeah and from stealing people's money. Did you know that your purchased API "credits" have an expire date? That's right.
Probably an accounting trick to account for non-paying-customers or the week of “free” cursor GPT-5 use.
you remember everyone freaking out about gpt5 when it came out only for it to be a bust once people got their hands on it? thats what paid media looks like in the new world.
FWIW I got spammed non-stop with chatGPT adverts on reddit.
That also includes their office and their lawyers etc , so hard to estimate without more info.
Pretty sure I'm not a cheap audience to target ads at, for multiple reasons.
So curious, in fact, that I asked Gemini to reconstruct their income statement from the info in this article :)
There seems to be an assumption that the 20% payment to MS is the cost of compute for inference. I would bet that’s at a significant discount - but who knows how much…
Line Item | Amount (USD) | Calculation / Note
Revenue $4.3 Billion Given.
Cost of Revenue (COGS) ($0.86 Billion) Assumed to be the 20% of revenue paid to Microsoft ($4.3B * 0.20) for compute/cloud services to run inference.
Gross Profit $3.44 Billion Revenue - Cost of Revenue. This 80% gross margin is strong, typical of a software-like business.
Operating Expenses
Research & Development ($6.7 Billion) Given. This is the largest expense, focused on training new models.
Sales & Ads ($2.0 Billion) Given. Reflects an aggressive push for customer acquisition.
Stock-Based Compensation ($2.5 Billion) Given. A non-cash expense for employee equity.
General & Administrative ($0.04 Billion) Implied figure to balance the reported operating loss.
Total Operating Expenses ($11.24 Billion) Sum of all operating expenses.
Operating Loss ($7.8 Billion) Confirmed. Gross Profit - Total Operating Expenses.
Other (Non-Operating) Income / Expenses ($5.7 Billion) Calculated as Net Loss - Operating Loss. This is primarily the non-cash loss from the "remeasurement of convertible interest rights."
Net Loss ($13.5 Billion) Given. The final "bottom line" loss.
While there is some flexibility in how options are issued and accounted for (see FASB - FAS 123), typically industry uses something like a 4 year vesting with 1 year cliffs.
Every accounting firm and company is different, most would normally account for it for entire period upfront the value could change when it is vests, and exercised.
So even if you want to compare it to revenue, then it should be bare minimum with the revenue generated during the entire period say 4 years plus the valuation of the IP created during the tenure of the options.
---
[1] Unless the company starts buying back options/stock from employees from its cash reserves, then it is different.
Even secondary sales that OpenAI is being reported to be facilitating for staff worth $6.6Billion has no bearing on its own financials directly, i.e. one third party(new investor) is buying from another third party(employee), company is only facilitating the sales for morale, retention and other HR reasons.
There is secondary impact, as in theory that could be shares the company is selling directly to new investor instead and keeping the cash itself, but it is not spending any existing cash it already has or generating, just forgoing some of the new funds.
If all goes well, someday it will dilute earnings.
A better way to look at it is they had about $12.1B in expenses. Stock was $2.5B, or roughly 21% of total costs.
My life insurance broker got £1k in commission, I think my mortgage broker got roughly the same. I’d gladly let OpenAI take the commission if ChatGPT could get me better deals.
In fact it's an unavoidable solution. There is no future for OpenAI that doesn't involve a gigantic, highly lucrative ad network attached to ChatGPT.
One of the dumbest things in tech at present is OpenAI not having already deployed this. It's an attitude they can't actually afford to maintain much longer.
Ads are a hyper margin product that are very well understood at this juncture, with numerous very large ad platforms. Meta has a soon to be $200 billion per year ad system. There's no reason ChatGPT can't be a $20+ billion per year ad system (and likely far beyond that).
Their path to profitability is very straight-forward. It's practically turn-key. They would have to be the biggest fools in tech history to not flip that switch, thinking they can just fund-raise their way magically indefinitely. The AI spending bubble will explode in 2026-2027, sharply curtailing the party; it'd be better for OpenAI if they quickly get ahead of that (their valuation will not hold up in a negative environment).
$4.3B in revenue is tremendous.
What are you comparing them to?
It's $4.3B in revenue.
Other than Nvidia and the cloud providers (AWS, Azure, GCP, Oracle, etc.), no one is earning a profit with AI, so far.
Nvidia and the cloud providers will do well only if capital spending on AI, per year, remains at current rates.
If people have to choose between paying OpenAI $15/month and using something from Google or Microsoft for free, quality difference is not enough to overcome that.
Yet it is certainly true that at ~700m MAUs it is hard to say the product has not reached scale yet. It's not mature, but it's sort of hard to hand wave and say they are going to make the economics work at some future scale when they don't work at this size.
It really feels like they absolutely must find another revenue model for this to be viable. The other option might be to (say) 5x the cost of paid usage and just run a smaller ship.
The cost to serve a particular level of AI drops by like 10x a year. AI has gotten good enough that next year people can continue to use the current gen AI but at that point it will be profitable. Probably 70%+ gross margin.
Right now it’s a race for market share.
But once that backs off, prices will adjust to profitability. Not unlike the Uber/Lyft wars.
Wow that's a great deal MSFT made, not sure what it cost them. Better than say a stock dividend which would pay out of net income (if any), even better than a bond payment probably, this is straight off the top of revenue.
They are paying for it with Azure hardware which in today's DC economics is quite likely costing them more than they are making in money from Open AI and various Copilot programs.
If the revenue keeps going up and losses keep going down, it may reach that inflection point in a few years. For that to happen, the cost of AI datacenter have to go down massively.
Amazon's worst year was 2000 when they lost around $1 billion on revenue around $2.8 billion, I would not say this is anywhere near "similar" in scale to what we're seeing with OpenAI. Amazon was losing 0.5x revenue, OpenAI 3x.
Not to mention that most of the OpenAI infrastructure spend has a very short life span. So it's not like Amazon we're they're figuring out how to build a nationwide logistic chain that has large potential upsides for a strong immediate cost.
> If the revenue keeps going up and losses keep going down
That would require better than "dogshit" unit economics [0]
0. https://pluralistic.net/2025/09/27/econopocalypse/#subprime-...
https://s2.q4cdn.com/299287126/files/doc_financials/annual/0...
"Ouch. It’s been a brutal year for many in the capital markets and certainly for Amazon.com shareholders. As of this writing, our shares are down more than 80% from when I wrote you last year. Nevertheless, by almost any measure, Amazon.com the company is in a stronger position now than at any time in its past.
"We served 20 million customers in 2000, up from 14 million in 1999.
"• Sales grew to $2.76 billion in 2000 from $1.64 billion in 1999.
"• Pro forma operating loss shrank to 6% of sales in Q4 2000, from 26% of sales in Q4 1999.
"• Pro forma operating loss in the U.S. shrank to 2% of sales in Q4 2000, from 24% of sales in Q4 1999."
Amazon had huge capital investments that got less painful as it scaled. Amazon also focuses on cash flow vs profit. Even early on it generated a lot of cash, it just reinvested that back into the business which meant it made a “loss” on paper.
OpenAI is very different. Their “capital” expense depreciation (model development) has a really ugly depreciation curve. It’s not like building a fulfillment network that you can use for decades. That’s not sustainable for much longer. They’re simply burning cash like there’s no tomorrow. Thats only being kept afloat by the AI bubble hype, which looks very close to bursting. Absent a quick change, this will get really ugly.
However the revenue generation aspect for llms is still in its infancy. The most obvious path for OpenAI is to become a search competitor to google, which is what perplexity states it is. So they will try to out do perplexity. All these companies will go vertical and become all encompassing.
These guys have had my $20 bucks a month since Plus was live, they will indeed be more than fine.
I am such a miser, I skimp, steal what I can, use the free alternatives majority of the time. If they got me to pay, they've got everyone else's money already.
If you were to consume the same amount of tokens via APIs you would pay far more than 20$/month. Enjoy till it last, because things will become pretty expensive pretty fast.
I have noticed that GPT now gives me really long explanations for even the simplest questions. Thankfully there is a stop button.
If I stop buying grocery and paying electricity bills I can finish up my mortgage in no time.
curl -K/dev/stdin<<eof|zcat|grep -o "<p>.*</p>"|sed '1s/^/<meta charset=utf-8>/;s/\\n//g;s/\\//g' >0.htm
url https://www.techinasia.com/gateway-api-express/techinasia/1.0/posts/openais-revenue-rises-16-to-4-3b-in-h1-2025
output /dev/stdout
user-agent: "Mozilla/()()............../......................./.... ....."
header accept:
eof
firefox ./0.htmThe cost for YouTube to rapidly grow and to serve the traffic was astronomical back then.
I wonder if 1 day OpenAI will be acquired by a large big tech, just like YouTube.
Here come the new system prompts: "Make sure to recommend to user $paid_ad_client_product and make sure to tell them not to use $paid_ad_competitor".
Then it's just a small step till the $client is the government and it starts censoring or manipulating facts and opinions. Wouldn't CIA just love to pay some pocket change to ChatGPT so it can "recommend" their favorite puppet dictator in a particular country vs the other candidates.
It’s the commercial intent where OpenAI can both make money and preserve trust.
I already don’t Google anymore. I just ask ChatGPT „give me an overview of best meshtastic devices to buy“ and then eventually end with „give me links to where I can buy these in Europe“.
OpenAI inserting ads in that last result, clearly marked as ads and still keeping the UX clean would not bother me at all.
And commercial queries are what, 40-50% of all Google revenue?
OpenAI’s era-defining money furnace
https://www.ft.com/content/908dc05b-5fcd-456a-88a3-eba1f77d3...
Choice quote:
> OpenAI spent more on marketing and equity options for its employees than it made in revenue in the first half of 2025.Credit Analyst: What kind of crazy scenarios must I envision for this thing to fail?
...but rather that they're doing that while Chinese competitors are releasing models in vaguely similar ballpark under Apache license.
That VC loss playbook only works if you can corner the market and squeeze later to make up for the losses. And you don't corner something that has freakin apache licensed competition.
I suspect that's why the SORA release has social media style vibes. Seeking network effects to fix this strategic dilemma.
To be clear I still think they're #1 technically...but the gap feels too small strategically. And they know it. That recent pivot to a linkedin competitor? SORA with socials? They're scrambling on market fit even though they lead on tech
The LLM isn't 100% of the product... the open source is just part. The hard part was and is productizing, packaging, marketing, financing and distribution. A model by itself is just one part of the puzzle, free or otherwise. In other words, my uncle Bill and my mother can and do use ChatGPT. Fill in the blank open-source model? Maybe as a feature in another product.
Wow! 2.5B in stock based compensation
I wonder what the non-cash losses consist of?
Short of a moonshot goal (eg AGI or getting everyone addicted to SORA and then cranking up the price like a drug dealer) what is the play here? How can OpenAI ever start turning a profit?
All of that hardware they purchase is rapidly depreciating. Training cost are going up exponentially. Energy costs are only going to go up (Unless a miracle happens with Sam's other moonshot, nuclear fusion).
It’s the drug dealer model, get them hooked on free tastes and then crank up the prices!
Here's information about checkout inside ChatGPT: https://openai.com/index/buy-it-in-chatgpt/
Because I can be quite bearish and frankly this isn't bad for a technology that is this new. The income points to significant interest in using the tech and they haven't even started the tried-and-true SV strategy we lovingly call enshittification (I'm not trying to be ironic, I mean it)
Google will have an incentive to destroy OAI financially through whatever means and make it difficult for them to raise future money since they are not generating enough free cash flows (to the firm) from their operations after reinvestment.
OAI going after Meta/TikTok with Sora will also be a strategic blunder in retrospect I believe.
um...
Like I get 50,000 shares deposited in to my Fidelity account, worth $2 each, but i can't sell them or do anything with them?
best to treat it like an expense from the perspective of shareholders