That’s because it’s just gambling.
That’s how every single company targeting consumer market in the web started. No profit for many years. Majority because of scale of the market. Facebook started making profit after 2012 so for 8 years they were burning money figuring out where to sell their soul to. Now the scale and risk for OpenAI is way bigger, because they have not sold their users fully or we don’t know if they sold it and for exchange for what. It would be funny if they at some point alter their privacy policy and turn out to sell people’s chats to advertising agencies. They might also go bankrupt or turned out to be a scam that hires thousands of people to answer questions.
No.
So now we are actually to the point where we can ask if a corporation or more widely anything at all has any value if it makes no profit.
There are people in the world who by luck of birth or circumstance have amassed obscene wealth and they after the fact are trying to convince everyone that profit is the only thing of value. These are the real public enemies.
Altman has since said the company is losing money on its $200-per-month Pro subscriptions, which offer limitless access to its most recent model, OpenAI o1, and to its video generator, Sora AI. “People use it much more than we expected,” he wrote in a post on X.
It’s ridiculous. More people use the product, so they’re losing money? What. That’s the complete opposite of what a business is.
Not to mention the environmental damage they’ve been doing for close to no positive results.
It’s not more people using the product, it’s the limited population who are paying $200/month use it way more than they thought they would. So the costs per person paying that are going way over $200/month. Basically, they made the mistake of setting a fuck off price that was too low and a bunch of people did the math and took them up on the offer.
If the product costs that much to run, and most users aren’t abusing their access, it’s possible the product isn’t profitable at any price that enough users are willing to pay.
This is the post-scarcity shift. This is how it happens.
We need to take, by force, those who have too much and give it to those who have too little.
They will be kicking and screaming. That means we’re doing something right, because they are not our allies.
It shouldn’t be, but it is. 20 years ago, in the far-off year of 2005, a lot of tech companies more or less followed the same path, where it took decades for them to actually be profitable, if they were at all.
YouTube ran at a deficit for something close to 15 years. AI companies are likely following this trend, and running mostly on investment money, rather than being self-sufficient.
Tech companies were in that boat in the late 90s as well.
The dot com bust deflated it somewhat, but somehow the industry got right back to it within a couple of years.
removing the cost of R&D I would assume its profitable right? Once the model is trained running it takes significantly less computing. OpenAI has a fuck ton of customers so I would assume they are making back the cost of running their model API.
Edit: on further inspection this is covered in the article
