> OpenAI Had $13.07 Billion In Revenue, $34 Billion In Costs and Expenses, and $20.92 Billion In Losses, with a net loss attributable to the company of $38.53 Billion

This is going to be the new most misquoted/misunderstood data of the year, isn't it? The cost is mostly from a one-time accounting situation due to their pivot from a non-profit organization.[0] If we trust the leak [1] OpenAI is likely turning profitable this year.

[0]: $30Bn of it is the one-time cost. https://www.ft.com/content/e15b0d7e-ff6b-4f16-ba7a-4068feddb...

[1]: I suspect OpenAI itself leaked that financial report. It's almost unbelievably healthy.

Whenever I see the cost indicator in my harness while building some probably useless thing, I'm reminded that probably everyone else is doing the same thing. Spending loads of imaginary money (according to the harness, I spent $10 worth of tokens for this single issue, but I have a $20 sub) building something of imaginary value. And then I go on social media and see a wall of slop posts, many talking about skills, systems, agents, and "Karpathy Wiki Systems" to build more useless things. Then I hear about all jobs going to AI, and I figure surely someone has to be the sane one to direct people not to build useless things. Surely you can't leave that up to the AI sales guy. Every single idea I have ever passed by GPT is BRILLIANT! I don't know where I'm going with this. At least it wasn't written by AI. ;)

Edit to add: Just use Deepseek Flash 4. You can hit those servers all day for next to nothing and still scratch the itch to build useless things. ;)

The issue is the cost is not going to be a hindrance for companies that have gone all in on the AI development. They may still find it cheaper than hiring engineers and if needed they will layoff a few more.

The companies that did not yet jump on this bandwagon and are still evaluating will have a decision to make.

No matter what the AI companies are going to change their pricing strategy and it’s going to become a lot lot more expensive to use. I am just hoping the price stays like this until I am done with my big chunk of work

I think a lot of the cost comparisons to employees are off by a factor of 2 or more. AI is the ultimate contractor. Available instantly. Doesn't charge during idle periods. Pre-vetted and pre-trained. No contract negotiations or complex accounting.

That is worth a small multiple of the fully-loaded employee cost. So AI might be easily worth more than $200 per human-equivalent hour. With high utilization, that might be $8000-10000 a month.

With that kind of spend, AI provider financials looks less frightening.

Once locals get to Opus levels I think it we may see a phase change because that + a reasonably competent programmer is going to be a very powerful combination for most practical programming problems.

Frontier models may eventually achieve super-intelligence (no opinion beyond mild skepticism) but super-intelligence isn't necessary for most practical day-to-day programming. The problems, as always, become communication, understanding what users really need, etc. that is, softer skills.

I don't see any real point being made in (or point of) the article. The author sort of just...dumped a bunch of links with the noise that is so incredibly mainstream at the moment that I doubt any of it is news to anyone even somewhat tracking the AI cycle. Most of it (except for maybe the BLS[1] stat) is just regurgitation.

[1]: And this too is incorrect, should be " the number of jobs displaced would be around 32.5M" (the post says 32.5K)

I feel like the author is jumping way too fast from "OpenAI is losing money" to "the whole AI economy is broken." A company being in the red during aggressive scaling doesn't automatically mean the unit economics don't work.

These companies biggest source of revenue is per-token pricing though, not subscriptions. On tokens they make a good margin.

Is it not also possible that some of the shift is a consequence of increase of use? While we can be extremely cynical at the finances at play, the lock down and increase of token pricing might be demonstrating a burgeoning demand, which would be a positive indicator.