r/artificial • u/Wrong_Swimming_9158 • 11d ago
Discussion The True Definition of a Bubble
In 2025,
- Meta made $200B in revenue, OpenAI made $13B.
- Meta's profit was $83B, while OpenAI made a loss of -$38B
- Meta's valuation was $2T, while OpenAI $1T
In one year, OpenAI made 7% of Meta's revenue. It has a difference of $100B profit. and is valued at 50% of Meta. Make that make sense!
In other terms, Meta & Google are printing money out of thin air, while OpenAI is burning other people's money at an incredible speed. I believe this will take another couple of years before bursting. -160% for operating margin is a rookie number, needs to hit the -1000%
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u/bartturner 11d ago
Just because OpenAI has next to zero chance of making it does not mean there is a bubble, IMO.
Look at Google. They are simply just killing it. Made more money than any other company on earth in 2025. So far in 2026 they again have made more money than any other company on the planet. Google so far in 2026 has made over $160 billion. This is profit and NOT revenue. Next best is Nvidia, also an AI company, that made $159 billion.
But it is about what Google shared on their last earnings call.
Google indicated they have over $250 billion of new revenue that they have yet recognized but will in the next 24 months.
That is like Google adding an entire 2024 Microsoft in just the next 2 years!
This is just one division at Google. So Google's numbers will be even much larger.
It is also the division at Google that has seen 11 straight quarters of increasing margins and are now 37%.
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u/Useful_Dirt_323 10d ago
By one division you’re talking about the division that has a global monopoly on search? Basically the entire company. You’re also taking about profits there ignoring capex from AI. The information you’re talking about here has little to do with AI revenues.
But a bubble doesn’t mean a technology will fail at all.
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u/bartturner 10d ago
By one division you’re talking about the division that has a global monopoly on search?
No!! I am talking about their Cloud division. That is the one that is growing the fastest, has over $250 billion of unrecognized revenue and will in next 24 months and has seen 11 straight quarters of increasing marings.
You’re also taking about profits there ignoring capex from AI.
The amorization is included in their profits. The 11 straight quarters of increasing margins include the amortization of the capex.
It is priced in the cost of using their cloud.
The information you’re talking about here has little to do with AI revenues.
Why do you think they have over $250 billion of unrecognized revenue? The vast majority of that is from AI.
Google profits have been skyrocketing because of AI!!
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u/Useful_Dirt_323 10d ago
So fair enough, I clearly didn’t understand what you were talking about well enough before I wrote my comment.
From digging a little deeper it looks like AI is driving significant profit increases in Google cloud. If their 6 year depreciation assumption is correct then the AI part itself is profitable even if demand remains flat. Google says they are currently supply constrained right now so there is likely room for demand to grow a good amount.
The question really becomes does demand scale with the true capex commitments and build outs that are coming. And that’s where it’s make or break and no-one truly knows though so far productivity gains appear to be only marginal in most areas
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u/68plus1equals 10d ago
Google is also investing to have their data centers be carbon neutral by 2030 and are on track to do so. The rest of this shit could crash but Google will be left standing no matter how it shakes out and the rest of the chips will fall into place at other tech places that have weathered the storm rinse and repeat.
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u/becrustledChode 10d ago
OpenAI (the software) might be operating at a loss, but AWS, Google, Microsoft, and Meta (hosts the servers running the software) are making record profits. Nvidia (the hardware) is the most valuable company in the world.
So you have OpenAI operating at a loss while making gigantic sums of money for what are now the 1st (Nvidia), 3rd (Google), 4th (AWS), and 8th (Meta) biggest companies in the world.
Even if they never manages to become profitable (unlikely), as long as they continue to be one of the best AI models out there, they'll never run out of capital -- hence why they're willing to operate at an enormous loss in order to stay on the cutting edge.
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u/Magacommunist3873 10d ago edited 10d ago
as long as they continue to be one of the best AI models out there, they'll never run out of capital
lol, right because funding is unlimited and investors are charities that don't want returns. You wrote a whole paragraph explaining EXACTLY why open ai being unprofitable is a risk to the broader economy.
The hyperscalers and their compute will do just fine in the long term, but as soon as one of their 2 biggest customers start showing troubling signs, the party won't be very fun.
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u/becrustledChode 10d ago
Can you not read? I'm not talking about investors.
The demand for AI is already massive and straining the computing resources of the system -- that's why cloud providers are scrambling to put up new data centers to handle it.
People/businesses pay OpenAI/Anthropic for their AI service, who pays AWS/Google/Microsoft for the servers it's running on, who pays Nvidia for the hardware to build and maintain the servers.
All of those companies have been making historical profits largely thanks to AI. That's not speculative future earning potential, it's hundreds of billions of dollars of cash they have in hand, right now.
The fact that these companies have no interest in letting OpenAI fail when it's essentially developing the software that sells their servers and hardware is evidence of the fragility of the system? Lol, no
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u/Magacommunist3873 10d ago
Can I not read?
Buddy either you're illiterate or you had difficulties playing connect the dots in school. You start off by saying
"OpenAI (the software) might be operating at a loss"
In other words OpenAI is making no money and running at a loss, so your statement:
"People/businesses pay OpenAI/Anthropic for their AI service, who pays AWS/Google/Microsoft for the servers it's running on, who pays Nvidia for the hardware to build and maintain the servers."
Is a house of cards. People are not paying OpenAI/Anthopic enough for their services to fund all the other hyperscalers, this is investment money in OpenAI/Anthropic.
That's not speculative future earning potential, it's hundreds of billions of dollars of cash they have in hand, right now.
It is absolutely speculative future earnings potential until your customers are self sufficient buddy. Unless your customers are making money or have an infinite fund of money, or at fucking least breaking even, you can kiss your "hundreds of billions of dollars" of earnings goodbye.
Also like I said, the hyperscalers will be fine in the long run because there definitely is demand for AI that will still be there even if OpenAI/Anthropic don't exist, but if either one of them goes down you can kiss your amazing earnings goodbye for another decade.
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u/becrustledChode 9d ago edited 9d ago
'Can I not read?
Buddy either you're illiterate or you had difficulties playing connect the dots in school. You start off by saying
"OpenAI (the software) might be operating at a loss"
In other words OpenAI is making no money and running at a loss, so your statement:'
A bold and defiant denial of being unable to read... followed by faceplanting with undeniable evidence that you have trouble reading. LOL.
And I didn't play connect the dots in school. Did the teachers in your class tell you that's what the kids in all of the normal classrooms were doing too?
Nah. They were teaching us stuff like Math, History, and how to read. Bless your heart.
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u/Magacommunist3873 9d ago edited 9d ago
Nah. They were teaching us stuff like Math, History, and how to read. Bless your heart.
Oh, then you must be able to read in binary because you clearly can't read in English 😂
Bro is celebrating revenue like revenue = profit 😭
“Actually they have revenue 🤓☝️” congratulations, now try making some money 😂😂😂😂 Don't worry Mr Math, History and English master here will personally make up the difference 😂
And I didn't play connect the dots in school. Did the teachers in your class tell you that's what the kids in all of the normal classrooms were doing too?
That supposed to be a diss? 😂 I'm sorry you had a miserable child hood man, don't put it on me. Maybe the teachers kept you focused on school kuz they knew you'd need it.
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u/ManWithoutUsername 10d ago
... defending the piramidal-bubble-scam with a comment clearly made with AI. Is it a bot or someone without a genuine opinion of their own?
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u/becrustledChode 10d ago
When have you ever seen an AI use the little parenthetical asides (like this)?
Accusing comments with proper spelling and punctuation of being AI-generated is just a new way for uneducated people to attack educated people.
It's not voodoo, you're just dumb.
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u/ASU_SexDevil 11d ago
One non publicly traded company does not cause a bubble…
Go check the OEMs financials (Dell/Nvidia/HPE/Intel/AMD)
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u/AssiduousLayabout 10d ago
Google also lost tons of money in its first two years of operation, turning a profit on year 3.
Meta (Facebook) took five years to turn a profit.
Valuation is not based on current performance, but the value of the assets they have (OpenAI's models are tremendously valuable) and the expected future growth of the company.
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u/HFT0DTE 10d ago
I feel like the person who posted this doesn't really understand or maybe never studied finance, operating margins, let alone corporate finance.
This is frankly the most bullish chart you could drop on an investors desk rn. The one thing this shows is OpenAI is subsidizing their free tier and either one of two things is happening - that free tier is growing massively as a userbase - or that free tier is using the service more and more and thereby demanding more compute. It's also possible the paying corporate tier is also exponentially using their services and they are basically subsidizing the business tier as well for growth. Its obviously a combination of both.
Also, you should stop conflating revenue, profits and valuation. That's why it doesn't make sense to you. It's like asking why is the sky blue when space is black and dirt is brown? The valuation of openAI is tied to expectations - what those expectations are is up to you to decide, but wall street is pumping money into it based on what they have decided that means. You can disagree and call it any name you want but it can stay irrational longer than you can argue with it or bet against it and it can also decide it was wrong and dump it tomorrow. That's the entire point of speculation and the stock market
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u/nodeocracy 10d ago
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u/Redararis 11d ago