Comment by Ronsenshi
11 days ago
So, about 2 years worth of operations based on alleged $14 billion burn rate projected for 2026.
What an absurd amount of money - if only this was invested in energy sector scientific research and development, or healthcare or anything else practical.
I really hoped to see compact molten salt nuclear reactors in operation before 2030.
To be fair Softbank really likes to invest in lemons, so you know, let them do what brings them joy.
Love this for them.
"90% of VCs quit investing right before hitting the jackpot"
- Softbank's motto
I think people aren't being charitable enough. OpenAI could easily be the next WeWork.
> if only this was invested in energy sector scientific research and development, or healthcare or anything else practical.
Haven’t you heard? AGI is going to solve every problem for us!!!
"Solving" problems is useless. Spending trillions building a robot that might be able to solve a problem is way better.
> invested in (...) anything else practical.
I don't understand how this is the top comment. LLMs have unlocked a lot of value for me personally, and arguably for the society as a whole. They are also one of the coolest technologies I've tried in years. As a technologist, I'm really glad that money is pouring in and allowing us to find its limits.
Not sure if this is the same sentiment, but I feel that even though the technology is handy, the investment is speculation. Billions and billions are being spent on developing this technology hoping to create a unicorn that turns billions into trillions.
I know it's unrealistic, but imagine you took $30b and just started ploughing into a random city. Real estate, development grants, EV charging infra, renewable projects, transit. Just boring existing technology, but concentrated investment to make the other investments more valuable. You could turn that $30b into $60b in a few years while changing the lives of an entire city.
But American capital says no, and gambles it, because it's just a game to the people in charge.
Money is responsibility. While I pinch my pennies and show up to my day job, the people with the keys throw billions on an oil fire hoping it magically turns into gold.
> LLMs have unlocked a lot of value for me personally, and arguably for the society as a whole.
The second part doesn't follow from the first which, in turn, is irrelevant here because we aren't talking about any value for society, we're trying to figure out if that value is greater than its opportunity cost.
The "AI" has been with us for several years now but it hasn't improved overall productivity in any meaningful way and while it's use is already plateauing it keeps sucking in capital like a giant black hole.
> As a technologist, I'm really glad that money is pouring in and allowing us to find its limits.
That's not a good thing when it happens at the expense of the rest of society.
It's only natural that workers at NVIDIA and other suppliers of AI-related products would like the gravy train to travel their way in perpetuity, but they are literally wasting capital, which isn't theirs, for their own enrichment, while creating inflation, shortages and misallocations on a grand scale.
The issue isn't whether LLMs are useful: it's whether OpenAI is positioned to deliver substantial future profitability.
Given their competition consists of the largest tech companies in the world, several of which are vertically-integrated, have advanced AI research programs, and own the last hardware mile to the customer...
OpenAI better hope it can maintain a performance lead, while being able to run inference cheaper than its competitors, while also launching a must-have device it controls (AR/audio glasses?).
> $14 billion
Incidentally that’s how much SoftBank lost on WeWork.
You're not counting the money they paid to Adam Neumann to walk away, which was over a billion dollars as well.
Imagine doing what was effectively fraud, building a cult around you, everything going completely to the fan, and then the team you defrauded turns around and gives you a billion dollars.
And then, you get Marc Andreesen to write you a $350 million check not too long after.
A major cost in building and operating datacenters is energy, so it does mean that significant share of those money would go into energy development. Large demand is one of the best things for stimulating technology development, and in this case we'd definitely see investment in solar and compact/safer nuclear of which MSRs are a part of.
xAI already brings gas turbines on-site, and i think the trend of on-site energy generation will grow, which will open opportunity (by providing well finaned demand) for compact/mobile/safer nuclear, and BigTech companies are among the best for any new tech development. I expect nuclear engineer positions get opened with Google and the likes :)
This .. doesn't seem like such a terrible deal? At the purported growth rates, you'd expect OpenAI to reach 60-100 billion revenue by 2028. This is more or less the equivalent of building a new AWS.
Provided they keep cost growth slower than revenue and don't get disrupted by another model provider/commodification etc.
“My 3-month-old son is now TWICE as big as when he was born. He's on track to weigh 7.5 trillion pounds by age 10”
Your son could reach the age of 10 in 5 weeks using our agentic SaaS product.
> At the purported growth rates, you'd expect OpenAI to reach 60-100 billion revenue by 2028.
I hope that’s “real” revenue and not the cyclic quid pro quo that seems to be propping the whole thing up.
Nonsense. To give you a sense about how much $100B in revenue is, that would be the equivalent of every person in the United States paying $25/mo. Obviously that’s not happening, so how many businesses can and will pay far more than that, when there’s also Anthropic and Gemini offerings?
> when there’s also Anthropic and Gemini offerings?
For average people the global competitors are putting up near identical services at 1/10th the cost. Anthropic and Google and OpenAI may have a corporate sales advantage about their security and domestic alignment, or being 5% better at some specific task but the populace at large isn't going to cough up $25 for that difference. Beyond the first month or two of the novelty phase it's not apparent the average person is willing to pay for AI services at all.
This can happen using government funds. What if the government takes 25 USD / mo from citizens and offer them to the "best" AI ?
You can squeeze 25 USD/month of all US people on average, and claim the US government gives you "free AI".
I think it could get there with business alone, and also with consumer alone given the hardware, shopping, and ads angles. It’s an everything business and nobody on HN seems to understand that.
2020s ai could be the first systemic stall I see. Let's assume agentic could really be a force for improvement but the cost model is unsustainable and will choke.
I suppose the idea is that the LLMs will invent the compact molten salt nuclear reactors. Double win.
LLMs will create the pitch deck for molten salt reactors, provide progress reports, plans, and documentation, accept payment for delivery, and disappear into the night.
That's just magical thinking.
And Ethiopia couldn't get US$5 billion loan for a dam to service 60 million people.
The world is sick.
Out of curiosity, what personal blight have you faced to better the world?
why are you obsessed with how other people allocate their money?
>why are you obsessed with how other people allocate their money?
I suggest you stop viewing the actions of multi billion dollar multinational corporations as anything similar to individual action.
Tu Quoque AND false equivalency. Impressive.
We should all care how resources are used, even if don't own them. That investment is going to make things more expensive for everyone. See RAM, SSD, and GPU prices.
Because Softbank are really bad at it, and they have lots of it.
https://www.reuters.com/business/softbanks-wework-once-most-...
How did they get it?
2 replies →
What made you think that I'm "obsessed" with how other people spend money?
It's not their money.