The doomerism on OpenAI finances is unfounded IMO. They will survive and be a large company at this point. The big question marks are on just how big, when, and the cost to get there. If they lost all financing tomorrow, they'd deploy a cheaper model and slow down research. I don't have a hard time imagining that they could pull off a 75% reduction in costs in such a scenario.
No one is OpenAI’s financing while anthropic et al. keep raising. The big risk is that future innovation fails to live up to the hype and they can't afford full priced GPUs or the proposed datacenters.
They've made 8 billion this year with 800 million users, or $10 ARPU (average revenue per user). They have committed to spend a trillion dollars over the next 5 years. I'll call it $200 billion/year, with a (rounded-up) billion active users, they would need to make $200 ARPU . For comparison Meta has about $50 ARPU. I'm having a harder time finding Google's ARPU, but with $350 billion in revenue last year if they made $200 ARPU they would have less than 2 billion users (I can't find how many user's they actually have but I would bet money it's a lot more). They would have to be making 3-4x more money per user than two of the largest companies in the world for this bet to work out.
I don't see how this is going to work out for them.
I'd doubt that they intend to spend a full trillion. The spend commitment is such that no one else can plausibly outspend them. If you take the position that spend is correlated with outcome - then they are on a positive track to win. The existence of this spend commitment will motivate some market players to exit the market.
I think I agree here. I don't have all the numbers, but I'm under the impression that OpenAI spend is much higher than their competitors, with Meta trailing behind them. I don't think Anthropic or Xai is spending nearly as much as OpenAI, yet ChatGPT performance is not scaling with spend. Their moat seems to be entirely based on having the most users.
No one is OpenAI’s financing while anthropic et al. keep raising. The big risk is that future innovation fails to live up to the hype and they can't afford full priced GPUs or the proposed datacenters.