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OpenAI made $13 billion in 2025 and lost $21 billion doing it (www.techspot.com)
submitted 4 months ago by to c/technology@lemmy.world
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[–] 1 point 4 months ago (4 children)

This is another incorrect take. OpenAI is not the only one hemorraging money. All of these LLM companies are offering a heavily subsidized product. Once the money runs out, which it will, the bubble wil pop or deflate. It's not a matter of "if", just "when". It's simply not an economically viable product. My guess is that the only reason they're doing this, is because they're hoping for some wild technological breakthrough that will massively lower costs.

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  • [–] 2 points 4 months ago (3 children)

    An incorrect take?

    This isn't a business strategy unique to tech companies, it's used across multiple different industries.

    Source: work in finance.

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  • [–] 0 points 4 months ago* (2 children)

    Yes, an incorrect take.

    While the strategy is not new, the scale and speed is. Also, there wasn't an existing market that they're trying to capture (as opposed to services like Amazon or Uber).

    The entire industry is doing the same thing and they're all losing. It's a race to the bottom and that is most certainly new (and stupid).

    Not to mention that the cost of the unsubsidized product is insane. Hence, it's not an economically viable product.

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  • [–] 1 point 4 months ago (1 child)

    So, you're saying it's a new kind of capitalist trick where they lose money by subsidizing the product in order to make it completely unprofitable for all of the other companies?

    I have it on good authority that this is an incorrect take.

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  • [–] 1 point 4 months ago

    Nope. They subsidize the product so that people are more willing to pay, and they're betting that they have deeper pockets than the competition (hence, a race to the bottom). Once they can no longer subsidize the product, the idea is that you're so addicted to it (or you've integrated it so much to your product) that you'll pay the full price.

    Except that no one will, because they're already increasing prices and people and companies are waking up to the fact the cost does not outweigh the benefits.

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