Comment by senordevnyc
19 hours ago
It’s not more hype than product, it has found a market (making many billions in revenue), and it’s not valued at trillions. So wrong on all counts.
19 hours ago
It’s not more hype than product, it has found a market (making many billions in revenue), and it’s not valued at trillions. So wrong on all counts.
> It’s not more hype than product, it has found a market (making many billions in revenue)
Speculation based on selling at below cost.
> it’s not valued at trillions
Fair, it's only $852 billion. Nowhere near trillions.. you got me.
Inference is quite profitable, so wrong again.
Right. Going to take "inference is quite profitable" apart, because there's nothing else in your reply.
OpenAI's adjusted gross margin: 40% in 2024, 33% in 2025. Reason cited: inference costs quadrupled in one year.
https://sacra.com/c/openai/
Internal projections leaked to The Information: ~$14B loss on ~$13B revenue in 2026. Cumulative losses through 2028: ~$44B.
https://finance.yahoo.com/news/openais-own-forecast-predicts...
A business burning more than a dollar for every dollar of revenue is a lot of things. "Quite profitable" is not one of them.
If you're reaching for the SaaStr piece on API compute margins hitting ~70% by late 2025: yes, that exists, and it describes one tier. The volume is on the consumer side. The consumer side is the bit on fire. Pointing at the API margin and calling the whole business profitable is the financial equivalent of weighing yourself with one foot off the scale.
The original argument, in case it got lost: Microsoft holds (held) a 49% stake in a company projecting another $44B of cumulative losses through 2028, against unit economics that depend on competitors not catching up. That's textbook hedge-the-bet territory. "They have paying customers" doesn't refute that, MoviePass had paying customers too.
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