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Comment by ur-whale | Hacker News Reader

AI as it stands in 2025 is an amazing technology, but it is not a product at all.

As a result, OpenAI simply does not have a business model, even if they are trying to convince the world that they do.

My bet is that they're currently burning through other people's capital at an amazing rate, but that they are light-years from profitability

They are also being chased by fierce competition and OpenSource which is very close behind. There simply is no moat.

It will not end well for investors who sunk money in these large AI startups (unless of course they manage to find a Softbank-style mark to sell the whole thing to), but everyone will benefit from the progress AI will have made during the bubble.

So, in the end, OpenAI will have, albeit very unwillingly, fulfilled their original charter of improving humanity's lot.

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I've been a Plus user for a long time now. My opinion is there is very much a ChatGPT suite of products that come together to make for a mostly delightful experience.

Three things I use all the time:

- Canvas for proofing and editing my article drafts before publishing. This has replaced an actual human editor for me.

- Voice for all sorts of things, mostly for thinking out loud about problems or a quick question about pop culture, what something means in another language, etc. The Sol voice is so approachable for me.

- GPTs I can use for things like D&D adventure summaries I need in a certain style every time without any manual prompting.

Except that if OpenAI goes bust, very little of what they did will actually be released to human kind.

So their contribution was really to fuel a race for opensource (which they contributed little to). Pretty complex of an argument.

> My bet is that they're currently burning through other people's capital at an amazing rate, but that they are light-years from profitability

The Information leaked their internal projections a few months ago, and apparently their own estimates have them losing $44B between then and 2029 when they expect to finally turn a profit, maybe.

That's surprisingly small

> AI as it stands in 2025 is an amazing technology, but it is not a product at all.

Here I'm assuming "AI" to mean what's broadly called Generative AI (LLMs, photo, video generation)

I genuinely am struggling to see what the product is too.

The code assistant use cases are really impressive across the board (and I'm someone who was vocally against them less than a year ago), and I pay for Github CoPilot (for now) but I can't think of any offering otherwise to dispute your claim.

It seems like companies are desperate to find a market fit, and shoving the words "agentic" everywhere doesn't inspire confidence.

Here's the thing: I remember people lining up around the block for iPhone releases, XBox launches, hell even Grand Theft Auto midnight releases.

Is there a market of people clamoring to use/get anything GenAI related?

If any/all LLM services went down tonight, what's the impact? Kids do their own homework?

JavaScript programmers have to remember how to write React components?

Compare that with Google Maps disappearing, or similar.

LLMs are in a position where they're forced onto people and most frankly aren't that interested. Did anyone ASK for Microsoft throwing some Copilot things all over their operating system? Does anyone want Apple Intelligence, really?

I think search and chat are decent products as well. I am a Google subscriber and I just use Gemini as a replacement for search without ads. To me, this movement accelerated paid search in an unexpected way. I know the detractors will cry "hallucinations" and the ilk. I would counter with an argument about the state of the current web besieged by ads and misinformation. If people carry a reasonable amount of skepticism in all things, this is a fine use case. Trust but verify.

I do worry about model poisoning with fake truths but dont feel we are there yet.

> I do worry about model poisoning with fake truths but don't feel we are there yet.

In my use, hallucinations will need to be a lot lower before we get there, because I already can't trust anything an LLM says so I don't think I could even distinguish a poisoned fake truth from a "regular" hallucination.

I just asked ChatGPT 4o to explain irreducible control flow graphs to me, something I've known in the past but couldn't remember. It gave me a couple of great definitions, with illustrative examples and counterexamples. I puzzled through one of the irreducible examples, and eventually realized it wasn't irreducible. I pointed out the error, and it gave a more complex example, also incorrect. It finally got it on the 3rd try. If I had been trying to learn something for the first time rather than remind myself of what I had once known, I would have been hopelessly lost. Skepticism about any response is still crucial.

speaking of search without ads, I wholeheartedly recommend https://kagi.com

I'll second this. Kagi is really impressive and ad-free is a nice change.

> I genuinely am struggling to see what the product is too.

They're nice for summarizing and categorizing text. We've had good solutions for that before, too (BERT, et al), but LLM's are marginally nicer.

> Is there a market of people clamoring to use/get anything GenAI related?

No. LLM's are lame and uncool. Kids especially dislike them a lot on that basis alone.

> LLM's are lame and uncool. Kids especially dislike them a lot on that basis alone.

Not just kids.

> LLM's are lame and uncool. Kids especially dislike them a lot on that basis alone.

That's interesting and the first time I hear of this. Could you provide any links that might elucidate this?

Yes: the real truth is, if there really was a good AI created, then we wouldnt even know about it existing until a billion dollar company takes over some industry with only a handful of developers in the entire company. Only then would hints spill out into the world that its possible.

No "good" AI will ever be open to everyone and relatively cheap, this is the same phenomenon as "how to get rich" books

> As a result, OpenAI simply does not have a business model, even if they are trying to convince the world that they do.

They have a super popular subscription service. If they keep iterating on the product enough, they can lag on the models. The business is the product not the models and not the API. Subscriptions are pretty sticky when you start getting your data entrenched in it. I keep my ChatGPT subscription because it’s the best app on Mac and already started to “learn me” through the memory and tasks feature.

Their app experience is easily the best out of their competitors (grok, Claude, etc). Which is a clear sign they know that it’s the product to sell. Things like DeepResearch and related are the way they’ll make it a sustainable business - add value-on-top experiences which drive the differentiation over commodities. Gemini is the only competitor that compares because it’s everywhere in Google surfaces. OpenAI’s pro tier will surely continue to get better, I think more LLM-enabled features will continue to be a differentiator. The biggest challenge will be continuing distribution and new features requiring interfacing with third parties to be more “agentic”.

Frankly, I think they have enough strength in product with their current models today that even if model training stalled it’d be a valuable business.

Sir they are selling text by the ounce just like farmers sold tomatoes before Walmart, How is that not a business model?

https://podcasts.apple.com/us/podcast/better-offline/id17305...

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