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Comment by ElProlactin | Hacker News Reader

You can look up ASC 810-10-45.

OpenAI isn't a single company. I haven't followed all the details with its structure change/recapitalization, but it's (I believe) a parent sitting on top of an LLC that outside investors like Microsoft hold a large minority stake in.

The rules say that the parent has to report 100% of the LLC's revenue and expenses as if it owned everything and then, at the end, back out the share of the loss that economically belongs to the minority holders.

So $8.84 billion is the whole loss, $3.74 billion is approximately the outside members' proportional share of it, and $5.09 billion is what's left for the parent. Nothing disappeared or was hidden. It's one number presented two ways because two sets of people own it.

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OK interesting. Who specifically are these other subsidiaries that clearly account for this loss though? I get it's just a trueism for those in the know like you, but it's pretty fascinating for me at least! Like is there one example company we can point to here? Even if there were like 20 subsidiaries and the combined loss was 3 billion, that would feel noteworthy on its own?

Like to be absolutely honest, this point ends up just sounding more alarmist than the claim you took issue with originally. But perhaps I am just misunderstanding.

Microsoft owns a significant minority stake in the LLC to my understanding.

Here's an analogy (as far as I understand the situation...)

Let's say I own a lemonade stand. I sell you a 20% stake.

My stand loses $10. When I report my financial results, I report losing $10. Then I report that your share of those losses is $2, and my share is $8. This creates transparency.

So OpenAI really did lose $8.8B or whatever, but some of those losses are 'attributed' to other shareholders/owners of their subsidiaries, because they have a complicated corporate structure. So they report both numbers - the total loss, and then the part they 'own'.

So when Ed says "It’s unclear what this means", he's either terribly uninformed or intentionally misleading his readers into thinking something fishy is going on when it isn't.

Either way, it's bad journalism - if you don't know what it means, shouldn't you try to find out or ask an expert or something and then inform your readers? (And the thing is, it would easy enough to dunk on them for losing $8 billion, without adding these weird insinuations!)

OK got it. I guess this is a good call out or whatever then from you all, but, I gotta say, the point can't help but feel a little incommensurate to the $8.8 billion elephant in the room.. Like even in the original article, this is like a passing point to the overall thing, right?

Like its you want to both say that you agree with the overall point here, but also can't trust that very same conclusion because one part in the article reveals an obvious ignorance. Except no one has been able to actually state the exact ignorance here other than the suggestion that Microsoft is in fact the one losing $3 billion dollars, which doesn't really feel very far from Zitron's original implication anyway given all the stuff he writes!

The problem is that you can't be considered a credible critic of this stuff when you either don't understand accounting or are dishonest to make a point.

Zitron makes too many "mistakes" like this to be taken seriously. In other words, he just isn't the right person to make the "huge AI bubble" argument because he doesn't understand (or he's being dishonest about) the financials.

I wouldn't consider OpenAI's financials to be pretty. There's circularity in the market that is a bit concerning. And while OpenAI's unit economics have improved it's still questionable as to whether the R&D and capex expenditure ever aligns to the business.

But Zitron is too sure of his argument (without the credibility to support that confidence) and is trying to pretend that there's absolutely nothing of value here. My best guess: there's some "irrational exuberance" and malinvestment but there is something real here and the unwind of the irrational exuberance and malinvestment won't be nearly as painful as Zitron believes for a variety of reasons, including the fact that there just isn't enough leverage in play.

I guess I am just in a different world here... I didn't realize the stakes were about who is the one who is gonna take up the mantle of having the platform and voice to make one argument or another, and I guess there is maybe some cultural context here I am missing.

Like I just don't know how to trace this almost moralistic fixation everyone has just about this particular guy.. Everyday we see articles exactly like his by different people (or at least I do), but none attract the same kind of distinct attention.

What even leads you to the concern? Like, why should we think he will be the one conquering the narrative here?

> Everyday we see articles exactly like his by different people (or at least I do), but none attract the same kind of distinct attention.

Who else does a detailed financial breakdown like Zitron and thinks things are as corrupt/fishy as him (in particular make specific claims about certain unexplained sums of money)? All the articles I see ultimately just trace back to Zitron. Curious who else you've found.

> ... detailed financial breakdown like Zitron...

Except his financial breakdowns almost always get basic points wrong, treat as mysteries things that are clear, cast simple accounting practices in a conspiratorial light, etc.

He's not an accountant or financial analyst and it seems obvious to me that he doesn't even care to educate himself.

Sure. I'm mainly curious who beepbooptheory is thinking of.

Feels maybe a little specific but I have seen a number of pieces just on HN in the past month that feel at least adjacent:

- https://io-fund.com/ai-stocks/nvidia-coreweave-nebius-circul...

- https://archive.ph/kTjLr

- https://www.bloomberg.com/news/articles/2026-08-05/microsoft...

Cory Doctorow's feed gives me some pretty diverse but certainly Zitron-adjacent articles every week, one example: https://pluralistic.net/2026/08/01/dare-snot

Oh this guy! https://prospect.org/2026/08/03/ai-bailout-could-be-baked-in...

I can hear the response now that these are all not exactly repeating what Zitron is saying, but I will just leave it up to you all to decide if that is a good faith thing to retort here or not :). Godspeed!

I really don't understand your comment.

Zitron has become the poster boy for the "AI bubble". His hyperbolic claims make for good content, which I presume is why he gets such a large platform, but they pollute the dialog and make it harder for people to have meaningful conversations about what's going on.

Many discussions of the AI market largely mirror what he says. People who don't understanding basic accounting and who haven't taken the time to educate themselves making bombastic claims about 2008-style bubbles, fraud, etc.

So we end up with discussions like this: simple basic consolidation accounting is misread as fraud. Malinvestment using little to no leverage is predicted to produce financial crises that were caused by 10x and higher leverage. And so on.

So to answer your question ("why should we think he will be the one conquering the narrative here"): his claims already have.

I don't know what to say really but you certainly give him more credit than I ever would wow! Can't think of anything else comparable to this, where one guy becomes the single de facto voice of dissent or critique. Is there any similar people you can point to who gained a position like this?

Its like saying David Gerard dominated the crypto backlash, yet I doubt many even know who he is now, and it would seem laughable to give him so much credit these days.

Again, you keep asserting some adult-in-the-room wisdom to your outlook here but only end up offering even crazier pictures of reality! Its a weird a mix, but I do respect it.

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