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OpenAI Is a Bad Business
OpenAI, a non-profit AI company that will lose anywhere from $4 billion to $5 billion this year, will at some point in the next six or so months convert into a for-profit AI company, at which point it will continue to lose money in exactly the same way. Shortly after
Interestingly (and worryingly), the article also confirms another hypothesis of mine — that "fund-raising material also signaled that OpenAI would need to continue raising money over the next year because its expenses grew in tandem with the number of people using its products" - in simpler terms, that. OpenAI's primary revenue source is one of the most easily-commoditized things in the world — a Large Language Model in a web browser — and its competitor is Mark Zuckerberg, a petty king with a huge warchest that can never, ever be fired, even with significant investor pressure. Even Microsoft, which has a vast marketing apparatus and deep pockets, struggled to sell Copilot — which is based on OpenAI’s GPT models — on its weird (and presumably expensive) Superbowl ads, or on the countless commercials that dotted the 2024 Olympic Games.
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