[hadlock]

Before Uber did it, Amazon had been doing it for almost two decades. It's nothing new. There is a difference between 1 billion and 20 billion in losses, though. Amazon in, I forget, 2014? Ran a profitable quarter with I think $1 in profits, simply to prove they were in control of their finances, and "we can stop any time we want". Sam gets a lot of shade, but he's been around the YC block once or twice, I suspect whatever risk they're taking on is at least somewhat measured.

[skeeter2020]

Amazon structured their entire operation to look like this but as you indicated, could have switched to a porfit-making, dividen-paying company more than a decade ago, that just wasn't their strategy. The same can not be said for OpenAI. Even if they slashed their R&D, their marketing and sales costs are extremely high for a tech company. On paper they look more like a utility and those are not worth double-digit multiples; they compete with t-bills and GICs

[hadlock]

Looking at the fact that third parties are making a profit offering XYZ third party open models on OpenRouter, it stands to reason that OpenAI could turn off their R&D, marketing, hype jedi, legal departments and just sell GPT9.999 and turn a profit.

Again like in the Amazon analogy, I don't think they're done growing, and unfortunately, I think they've positioned themselves (perhaps intentionally) as too big to fail, and need to continue growth at all costs.

I'm glad I'm not OAI's CFO sounds like a stressful job trying to justify/account for whatever Sam says to the board, or whatever the board demands. Sam hasn't said hardly anything since about February so I'm guessing the CFO simply bends to the will of the board these days. But that's speculation.

[chongli]

it stands to reason that OpenAI could turn off their R&D, marketing, hype jedi, legal departments and just sell GPT9.999 and turn a profit.

That rests on 2 assumptions:

1) That inference on OpenAI's frontier models is actually cost competitive with open models. Their high SG&A suggests otherwise.

2) That slashing R&D won't lead to a marketshare collapse when everyone (remaining) moves to Anthropic to get on their frontier models. All evidence suggests otherwise again, with Anthropic already exerting enormous competitive pressure on OpenAI's marketshare.

I think OpenAI is in a terribly tenuous position: they're getting squeezed from Anthropic (on the high end) and open models on the low end. A lot of companies in a lot of industries suffered this fate. Getting stuck in the middle is not a good thing!

[hadlock]

It wouldn't surprise me if they have an unadvertised model router. Like, it's extremely clear you're chatting with a lobotomized model if you use voice mode in their app. Wild speculation here but I'm reasonably confident that as a $20/mo user I am not getting the same level of max thinking model that my enterprise account gets for the same question, despite both being labeled as the same model. Nowhere in their literature does it say $20/mo users get the exact same model/thinking effort, either

[Grombobulous]

I’m not sure Sam is actually well-regarded around the YC block? Didn’t he lie about being the chairman of the board of YC? That’s what it says on his Wikipedia page.

Let’s not forget the whole fiasco where he was already almost fired from OpenAI.

His business track record is basically one failed location-based social media company.

I think it’s starting to become clear that OpenAI is going to be the first casualty of the AI race, and I think these undisciplined operations are a big part of the reason.

A major tell is how Apple Intelligence is seemingly steering away from OpenAI and is embracing Google instead.

Anthropic has the most useful B2B tooling and found their product niche, and they have the model leads in that niche.

xAI gets financially shielded by being a part of a gigantic financial instrument and the Elon Musk reality distortion field. Cursor has a similar product market fit as Anthropic and gets to consolidate with xAI.

Google and Microsoft get to use AI within their highly profitable ecosystems.

Apple gets to mostly sit out but act as one of the biggest toll booths for everyone else.

[BarryMilo]

You've seen Sam Altman's interviews, yet you still think him a competent man? I think he's rather the embodiment of the death of meritocracy as an idea.