OpenAI spent 119% of revenue for employee stocks

Ed Zitron over on wheresyoured.at has done some great work showing how all of these companies are just burning through money.

No reasonable businesses would spend such money if they have none. They should work on becoming profitable. OpenAI can't really be called a startup anymore and they should have for a long time have had a path to profitability. Right now it feels like they are all just running around aimlessly, like chicken without a head, trying to make up the promises they made 2 years ago. All the while they are burning through money, like it is growing on trees, until they have none left.

This is also not limited to OpenAI. Just watch what is happening at Facebook and their hiring bonuses. Feels like a bubble ready to burst.

Every provider of AI as a service (AaaS), including OpenAI, has no choice but to spend money like a drunken sailor who recently touched land after being out at sea for a year.

The reckless spending is not fueled only by hype and FOMO. Customer switching costs are low or non-existent, so AaaS businesses can only charge as much as their most reckless competitor.

Speaking of which, all competitors in this space, being in the same position, are vying for the title of most reckless, to avoid losing out to the others.

As I understand it, none of these AaaS businesses can generate enough revenue to cover the cost of R&D, training, inference, or even, as we now know, employee compensation.

Everyone in this space is throwing cash into a giant bonfire.

Let me get this straight, now we're mad openai spends too much on stock? That makes no sense the last articles were about onerous equity terms from that company. We should celebrate founders offering significant equity.

u know, mixed feels.

on one hand, sure, they over played.

on the other hand who used genAI as much before ppl used chatgpt?

on the backhand of the other hand: oh god all is lost.

:'k

i guess i hope for all the talent who contributed good to the world to also get what they deserve. it can be in the mist if the c-level is included in that but id be sad if the wrong people get the wrong end of the stick once the dust settles.