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by loeber3 hours ago |
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upvoteby rvnx3 hours ago|
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They had a first-mover advantage for sure.

It used to be revolutionary, but now there is a huge difference: plenty of competition, and a growing number of high-quality models that can run offline (for free!) or cheaper (Gemini-Flash for example).

They are in some way the Nokia of AI, "we have the distribution, product will sell", but this is not enough if innovation is weak.

They are even lagging behind (GPT-5 is a weaker coder than Claude, Sora is a toy compared to Seedance 2.0, etc).

One Apple releases the AIPhone, running offline models, with 32 GB of unified memory, with optional cloud requests, then it's going to be super though for OpenAI.

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upvoteby 7speter43 minutes ago|
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Local ai is cool and all but the models that run on typical consumer hardware doesn’t really compare to the breadth of information available by the likes of chatGPT, lets be real.
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upvoteby DauntingPear73 hours ago|
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How will they make money on their product exactly? To the tune of being worth nearly a trillion dollars? There is no guarantee that inference will go down, we’ve seen some improvement with cheap models, but they aren’t what people want, and otherwise models stay expensive to run and use
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upvoteby babelfish3 hours ago|
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Inference is already profitable (training is not)
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upvoteby nradov3 hours ago|
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So what. In a highly competitive industry they can't keep selling inference unless they continually train better models. It's like saying my airline is profitable if you don't count the cost of buying new airplanes.
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upvoteby stingraycharles3 minutes ago|
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This is a completely new market and players are currently burning money in order to capture market share. The money will stop flowing in at some point, but until then, you can’t compare it to an industry like aviation which is extremely mature and heavily optimized.
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upvoteby zippothrowaway2 hours ago|
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[citation needed]

OpenAI have made this claim and maybe it is with API pay-per-use (there's also good evidence eveb that is not if you dive into how much a rack of B200s cost to operate), but I'd be very sceptical that the free, $20 or $200 a month plans are profitable.

Then the questions are if the market will bear the real cost and if so how competitive OpenAI are with Google when Google can do what Microsoft did to Netscape and subsidize inference for far longer than OpenAI can.

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upvoteby dfp333 hours ago|
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The only reason to draw this comparison is to show SoftBank are not as competent as they'd like to appear to be - so putting their name in relation to investors of OAI does not strengthen the prospects we should share re. OAI.
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upvoteby mountainriver3 hours ago|
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It’s one of the worst takes I’ve heard. OpenAI creates the fastest growing app ever, spawns a revolution bigger than the internet, and this guys take is they are like WeWork…
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upvoteby yibg2 hours ago|
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Both can be true. Just because you've created a revolutionary product doesn't mean it's a viable business, let alone one worth $700+ billion. There is a lot of history of the first movers that created revolutionary products that eventually faded away into nothing, while others capitalized on the innovation.
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upvoteby runlaszlorun42 minutes ago|
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> There is a lot of history of the first movers that created revolutionary products that eventually faded away into nothing, while others capitalized on the innovation.

I'd say most first movers fade away. Microsoft wasn't the first OS, Google wasn't the first search engine, Facebook wasn't the first social network... etc... etc... etc...

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upvoteby hk__23 hours ago|
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Being the first doesn’t mean you’ll win. They have no product, only a commodity that you can find at other companies or even for free (DeepSeek).
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upvoteby rvnx2 hours ago|
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They have a product but it’s a commodity now.

They are in the business of selling compute / datacenter rack spaces. A server where you pay per GBs transferred in/out.

If it’s Gemini or GPT behind, for most use cases users wouldn’t care.

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upvoteby engineer_223 hours ago|
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Will they maintain an edge over other AI companies long term? With so many market participants will it become a race to the bottom?

This valuation puts their P/E around 40.

Anthropic $380B valuation on $13B ARR. P/E around 30.

5 years ago Uber was in similar territory. Tesla... Well we won't mention Tesla.

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