In this niche you can be irrellevant in months when your models drop behind.
The news that they did that would make them lose most of their revenue pretty fast.
OpenAI has claimed this. But Altman is a pathological liar. There are lots of ways of disguising operating costs as capital costs or R&D.
OpenAI models are already of the most expensive, they don’t have a lot of levers to pull.
It’s ok to not buy into the vision or think it’s impossible. But it’s a shallow dismissal to make the unnuanced comparison, especially when we’re talking about a brand new technology - who knows what the cost optimization levers are. Who knows what the market will bear after a few more revs.
When the iPhone first came out, it was too expensive, didn’t do enough, and many people thought it was a waste of apples time when they should be making music players.
This comparison is always used when people are trying to hype something. For every "iPhone" there are thousands of failures
> But it’s a shallow dismissal to make the unnuanced comparison, especially when we’re talking about a brand new technology - who knows what the cost optimization levers are. Who knows what the market will bear after a few more revs.
You're acting as-if OpenAI is still the only player in this space. OpenAI has plenty of competitors who can deliver similar models for cheaper. Gemini 2.5 is an excellent and affordable model and Google has a substantially better capacity to scale because of a multi-year investment in its TPUs.
Whatever first mover advantage OpenAI had has been quickly eliminated, they've lost a lot of their talent, and the chief hypothesis they used to attract the capital they've raised so far is utterly wrong. VCs would be mad to be continuing to pump money into OpenAI just to extend their runway -- at 5 Bln losses per year they need to actually consider cost, especially when their frontier releases are only marginal improvements over competitors.
... this is a bubble despite the promise of the technology and anyone paying attention can see it. For all of the dumb money employed in this space to make it out alive, we'll have to at least see a fairly strong form of AGI developed, and by that point the tech will be threatening the general economic stability of the US consumer.
Is that a bubble? I suppose it is; it’s also probably the right strategy.
I feel like people overuse this criticism. That's not the only way that companies with a lot of revenue lose money. And this isn't at all what OpenAI is doing, at least from their customers' perspective. It's not like customers are subscribing to ChatGPT simply because it gives them something they were going to buy anyway for cheaper.
Why does the forum of an incubator that now has a portfolio that is like 80% AI so routinely bearish on AI? Is it a fear of irrelevance?
Even five years into this "AI revolution," the boosters haven't been able to paint a coherent picture of what AI could reasonably deliver – and they've delivered even less.
The world is changing and that is scary.
This makes me want to invest in malpractice lawyers, not OpenAI
The other point is still suspect: that LLMs will ever scale to AGI.
Which specifically means reliability and explainability for higher-order thinking.
The writing is on the wall that LLMs are going to automate failure-tolerant work.
But the rub there is that failure-tolerant work is also tolerant of less than state of the art, cost-optimized LLMs.
Which leaves OpenAI where? AGI or bust.
And I wouldn't take that bet, when MS, Google, and Apple are alternative options.
I don't think there is serious argument that LLMs won't generate tremendous value. The question is who will capture it. PCs generated massive value. But other than a handful of manufacturers and designers (namely, Apple, HP, Lenovo, Dell and ASUS), most PC builders went bankrupt. And out of the value generated by PCs in the world, the vast majority was captured by other businesses and consumers.
Oh we know: https://pmc.ncbi.nlm.nih.gov/articles/PMC11006786/
The article could just as easily be about “Delayed diagnosis of a transient ischemic attack caused by talking to some rando on Reddit” and it would be just as (non) newsworthy.
AI isn't going to be the world changing, AGI, that was sold to the public. Instead, it will simply be another B2B SaaS product. Useful, for sure. Even profitable for startups.
But "take over the world" good? Unlikely.
There is little to no money to be made in GAI, it will never turn into AGI, and people like Altman know this, so now they’re looking for a greater fool before it is too late.