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jonplackett

Is this a reflection of OpenAI’s massive scale making it so cheap for them?

Or is it the deal with Microsoft for cloud services making it cheap?

Or are they just operating at a massive loss to kill off other competition?

Or something else?

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Probably all three:

1) They hiring too talent to make their models as efficient as possible.

2) They have a sweetheart deal with MS.

3) They’re better funded than everyone else and bringing in substantial revenue.

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Is this a guess or is it informed by facts?

Are just suggesting this as an option or do you have evidence that it is true?

They are also trying to lobby the government for AI "regulation" in order limit any competitors ability achieve OpenAI's level

They basically are MS by now. Everyone at Microsoft I work with literally calls it an 'aquisition'. Even though they only own a share. It's pretty clear what their plans are.

> Microsoft will reportedly get a 75% share of OpenAI's profits until it makes back the money on its investment, after which the company would assume a 49% stake in OpenAI.

49% isn't _just_ a share, it's a significant portion of the company.

It's what we call a non-controlling interest. Definitely not something that qualifies as an acquisition.

Of course, and it's also not _just_ a share, which is the comment I was responding to. 49% of a company's outstanding public shares is a significant portion. It's 2% away from controlling, and a fun merger event.

> Or are they just operating at a massive loss to kill off other competition?

Bingo.

> the deal with Microsoft for cloud services making it cheap?

It should make it cheaper, but it takes time and engineers to migrate work load from AWS (which is reasonably adept at scaling) to azure, which is not.

I think they run k8s in something like 4k groups of nodes, which is spectacular, because k8s isn't really designed to do that. Running it at that scale is challenging because the traffic required to coordinate is massive (well it was last time I looked into it.)

Probably the first two, plus first-mover brand recognition. Millions of $20 monthly subs for GPT4 add up.

They might also be operating at a loss afaik, but I suspect they're one of the few that can break even just based on scale, brand recognition, and economics.

$20/mo subs which is also the lead in to also unlocking paid API access.

I haven’t heard any evidence that they have millions of Plus subscribers.

I’ve seen 100 to 200 million active users, but nothing about paid users from them. The surveys I saw when doing a quick google search reported much less than 1% of users paying.

Yeah I don't know what the actual subscription numbers are, would be surprised if OpenAI is publishing that info.

Revenue runrate is over a billion a year now.

https://seekingalpha.com/news/4007459-microsoft-backed-opena...

My guess is that’s mostly API users not chatgpt plus users.

I’m also very curious how much of that money is VC money coming from startups trying to build their customer base, vs how much actually sustainable.

There’s also just the benefits of being in market, at scale and being exposed to the full problem space of serving and maintaining services that use these models. It’s one thing to train and release and OSS model, it’s another to put it into production and run all the ops around it.

Probably some combination of all the above! I think 1 and 2 are interlinked though — the cheaper they can be, the more they build that moat. They might be eating the cost on these APIs too, but unlike the Uber/Lyft war, it'll be way stickier.

I think it's mostly the scale. Once you have a consistent user base and tons of GPUs, batching inference/training across your cluster allows you to process requests much faster and for a lower marginal cost.

> Or something else?

They've got a landfill of cash.

They're mining the gullible for phone numbers, among other things.

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