> Exclusive: OpenAI Losses Increased Nearly 8X in 2025, With Spending Hitting $34 Billion
Start with the headline. He's comparing the net losses between 2024 and 2025, but $41.55 billion of the 2025 loss is a non-cash charge from "changes in fair value of convertible interests and warrant liability" tied to the for-profit conversion. He notes this but doesn't actually seem to understand (or want to explain) what that means.
It's a non-cash charge. This is not money actually going out. It's not an operating loss.
He could have used the increase in operating loss or expenditures to make his point, but he basically chose the biggest number he could find and present it in a way that distorts what it is. The only two possibilities seem to be that he is trying to be bombastic ("8X") or he actually doesn't understand what he's looking at.
> It then marked $3.74 billion of losses as “net loss attributable to noncontrolling members capital,” leaving the net loss attributable to the company as $5.09 billion.
> It’s unclear what this means, nor how OpenAI reconciled the removal of $3.74 billion in costs.
This is so strange because it's basic consolidation accounting: allocating a share of losses to minority equity holders. There's nothing sinister about it, and it's not anything that's being hidden. This is a standard practice for companies and anyone who is positioning himself as having the requisite expertise to comment about the financials of AI companies (or any companies for that matter) should know this basic accounting and an absolute nothingburger.
There are other aspects of his writing that are pretty distorted. Like, he states "I’m not sure how this company finds a way toward any kind of sustainability or profitability" while ignoring that OpenAI actually improved its gross margin from around 28% to 43%. Whether it ever becomes sustainably profitable is still a big question mark but again, someone acting as a financial commentator should know this stuff. So he's either feigning ignorance to sell his narrative (and newsletter subscriptions), or he's really ignorant.
> Exclusive: OpenAI Losses Increased Nearly 8X in 2025, With Spending Hitting $34 Billion
Start with the headline. He's comparing the net losses between 2024 and 2025, but $41.55 billion of the 2025 loss is a non-cash charge from "changes in fair value of convertible interests and warrant liability" tied to the for-profit conversion. He notes this but doesn't actually seem to understand (or want to explain) what that means.
It's a non-cash charge. This is not money actually going out. It's not an operating loss.
He could have used the increase in operating loss or expenditures to make his point, but he basically chose the biggest number he could find and present it in a way that distorts what it is. The only two possibilities seem to be that he is trying to be bombastic ("8X") or he actually doesn't understand what he's looking at.
> It then marked $3.74 billion of losses as “net loss attributable to noncontrolling members capital,” leaving the net loss attributable to the company as $5.09 billion.
> It’s unclear what this means, nor how OpenAI reconciled the removal of $3.74 billion in costs.
This is so strange because it's basic consolidation accounting: allocating a share of losses to minority equity holders. There's nothing sinister about it, and it's not anything that's being hidden. This is a standard practice for companies and anyone who is positioning himself as having the requisite expertise to comment about the financials of AI companies (or any companies for that matter) should know this basic accounting and an absolute nothingburger.
There are other aspects of his writing that are pretty distorted. Like, he states "I’m not sure how this company finds a way toward any kind of sustainability or profitability" while ignoring that OpenAI actually improved its gross margin from around 28% to 43%. Whether it ever becomes sustainably profitable is still a big question mark but again, someone acting as a financial commentator should know this stuff. So he's either feigning ignorance to sell his narrative (and newsletter subscriptions), or he's really ignorant.