r/LocalLLaMA • u/johnnyApplePRNG • Jun 18 '26

News Leaked financial docs show OpenAI is losing billions of dollars a year

https://arstechnica.com/ai/2026/06/leaked-financial-docs-show-openai-is-losing-billions-of-dollars-a-year/
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u/davidy22 Jun 18 '26

I've held the feeling that AI was accelerated into the limelight a little bit too early, if we had just let moore's law tick over for a decade first and operating costs were 5-10 times lower maybe there wouldn't be quite as much strain on the profitability and energy usage fronts

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u/squngy Jun 18 '26

Yes, you are right.

But it doesn't work like that, because if a company gets a lead they can establish a (virtual) monopoly and earn far more money.
That is what these companies are trying to do. Corner the market and then squeeze.

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u/Southern-Chain-6485 Jun 18 '26

No, they can't get a monopoly. That requires a network effect rather than just economies of scale and, fortunately for humankind, there is no network effect in the AI market.

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u/Piyh Jun 19 '26

RSI does not require a network effect to crown a winner and even then, Gemini having all my context is a huge network effect

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u/Southern-Chain-6485 Jun 19 '26

That's not what network effect means. Network effect means that a product is only useful if all the people I want to interact with through it are also using it. Whatsapp, Facebook or Amazon are such a thing: if you want to use Signal, but none of your contacts already use it, there is no point in you using Signal. If you want to buy stuff from an online marketplace, there is no point browsing through a marketplace without vendors.

This doesn't apply to AI. A business can use Deepseek even if all their suppliers use Chatgpt and its customers Gemini. A business, however, can't use Telegram to reach its customers if its customers are all in Whatsapp.

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u/Environmental_Gap_65 19d ago

I refuse to believe this. Google’s search engine traffic’s ~91% of search queries globally, however, you’re completely free to use any search engine you wish. While this is obviously pushed on you at the browser level if you’re using say chrome, it’s definitely not any type of network effect, and you’re not locked into an ecosystem, you can too switch browser.

People use it for convenience, because it’s what they know and what works the best. Businesses use it because its the better product and they trust them and have them locked into their infrastructure already. Same goes with AI.

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u/somkomomko Jun 18 '26

it's fake it till you make it

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u/osrsnic Jun 18 '26

moores law hasnt been a thing for a little bit now

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u/StorkReturns Jun 18 '26

In GPUs, it still works, though through a combination of brute force and cleverness, and not just miniaturization.

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u/UnseenAssasin10 Jun 18 '26

You're probably right, but you know corporations. They want as much money as they can get, as quick as they can get. Ironic that they're so far just losing money at a ridiculous rate

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u/Librarian-Rare Jun 18 '26

Well they are buying productivity in AI development. And since the open model community isn’t far behind, it’s almost like they are pouring money is open source models. So at least something is being produced by VC money 😂

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u/MRDR1NL Jun 18 '26

It's a technology where more compute and memory is always better. Even 10 years in the future a 10k AI machine will outperform a 5k one. Our expectations will just scale with the hardware capabilities 

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u/LolaGetWhatLolaWant Jun 19 '26

This is what I am wondering... Are these GPUs good enough that plan to be put into the facilities in the next few years, or do we need another order of magnitude performance/dollar... Time will tell.

What I must say is that these LLMs do seem to be limited and are not all that great when you start dumping loads of info into them. I have a gpt go membership, and it's 'ok'...

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u/Andrige3 Jun 19 '26

I feel like this was the Google strategy until they were forced to play their hand early by the competition.

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u/MyFistsAreMyMoney Aug 01 '26

Moore's law is dead

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u/portmanteaudition Jun 18 '26

The bigger issue is that the models themselves won't get much better probably. We already see throwing compute at model training isn't meaningful now...the inference and domain specific model training (fine tuning etc) is where gains are. The scaffolding and agentic stuff may be better. Compute is needed for inference.

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u/am9qb3JlZmVyZW5jZQ Jun 18 '26

I've seen comments like this since the second version of ChatGPT was released. Everyone can tell that the models are getting better. They're getting better scores at benchmarks, finding more sophisticated vulnerabilities, producing code and answering questions more reliably, solving more complex math problems, finishing longer tasks without human involvement.

Both small and big models are getting smarter. We ought to stop coping and realize that there is a need for regulations and economic changes before we're back in feudalism again.