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Comment by reitzensteinm | Hacker News Reader

OpenAI spends $255 million a year running ChatGPT, and only survives because of a $10 billion investment from Microsoft? Ok then.

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Right?! Even if we round everything they possibly spend into 2B a year which is very high IMO, they have at least 4 years of burning money.

You'd also have to assume zero revenue...

Many here are not accounting for other costs such as training, fine-tuning, inflated salaries and most importantly the competition from either other cloud-based AI models and especially $0 or close to free AI models and their services.

Eventually, they will catch up and GPT-5 will take much longer to train and right now, they currently cannot raise prices as their current AI models begin to degrade.

2024 is extremely unlikely, but the AI bros reacting here that it is fine to burn $2B+ a year over a $10B investment with rapidly increasing costs for one AI model with no sight of profitability is beyond amusing. (and of course the AI bros flagged the post)

The only result I can predict is that OpenAI will have to IPO with in the next 4 - 6 years or Microsoft just 100% acquires them.

I don’t get why it’s not fine? I worked for small companies (the whole company had less than 100M revenue but profitable) to large tech companies that burn money. End of the day, it’s a business strategy. The money they’re “burning” is an investment. Whether it crash and burns or rockets to the moon is part of the risk.

You call "less than 100M revenue" small?? Has to be A LOT less to be considered small in my book :)

Why can't they raise prices? I'd probably pay more for it.

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