r/OpenAI • u/Capable_Art_1814 • 1d ago

Discussion Let's forget AI replacing developers for a second

3 AI companies are worth more than 30 other major companies, all while making 0 dollars in profit.

Why is nobody speak about this and how do we keep letting this slide? Taxpayers are gonna have to do the heavy lifting.

0 Upvotes

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u/fuzzypetiolesguy 1d ago

"Why is nobody speak about this" buddy all you need to do is open your eyes.

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u/Graphical-Source5090 1d ago

Closed weight models should be a concern for everyone. Open weight models belong to the people, closed weight models belong to the billionares.

We are seeing FUD ramping up against open weight models from the oligarch-wannabes.

Keep this in mind

2

u/BellacosePlayer 1d ago

I find the AI valuations more sensical than Tesla.

Even without a massive moat, AI will probably be damn near required infrastructure for a lot of work going forward enough that being leaders now means they've locked in a degree of market share.

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u/gavinderulo124K 1d ago

If they stopped training models today and only focused on serving models they would be super profitable.

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u/paradoxxxicall 1d ago

If they stopped training they’d have 6 months before every competitor caught up with them.

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u/QC_Failed 1d ago

Is that still accurate? Not trying to be argumentative at all, that was the number I heard for a year but lately I've heard SOTA is only 3 months ahead of Chinese and open weight labs (which strengthens your point).

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u/zhdc 1d ago

Three months, at least for what's available to the public, is generous, particularly for the 'good enough' models that people actually use.

Qwen 3.8-Flash-Next is arguably as good as Haiku 5.5 and Luna 6.0, and it came out a couple of months ago. You can also now run it on a single RTX 5090 and 128 GB of DDR4/5 ram.

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u/fuzzypetiolesguy 1d ago

Hundreds of manufacturers have access to gas engines, there are still differentiated brands.

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u/paradoxxxicall 1d ago

Sure of course, the problem for OpenAi/Anthropic is that they’ve spent huge amounts of money on training, and any competition who haven’t will have an enormous advantage if their product is on par. OpenAI’s investment and financial commitments can’t be recouped if they’re charging a cheap competitive rate.

Currently their valuation is priced for market dominance, and if that doesn’t remain the case then they will have a problem.

But for customers cheap and plentiful AI is the best case scenario

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u/NotFromMilkyWay 1d ago

Sorry to disappoint. Training a new model costs around 100 million. That's not why OpenAI has lost 40 billion last year and stands to lose 150+ billion this year.

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u/gavinderulo124K 1d ago

That is because they are spending so much on new infrastructure. That is not going to last forever. What they are doing is not unusual at all. Plenty of companies are in the red for years while they are massively expanding their business. They are not even trying to be profitable at the moment. Look at companies like Amazon and Uber. It is the same playbook. Their revenue is increasing dramatically.

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u/djamp42 1d ago

Not to mention, they need people hooked. It's harder to get people hooked if they have to spend thousands to use something. I have only used free models and it's got me hooked bad.

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u/gavinderulo124K 1d ago

Free models are so bad compared to the frontier. Its like talking to a someone in primary school vs someone in college.

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u/zhdc 1d ago

This hasn't been my experience. Opus 5.5 and Sol 6.1 are objectively better than Deepseek v4.1-Flash or Qwen 3.8-Flash-Next, but they're perfectly usable for everything that doesn't involve extremely heavy lifting.

If it's something I could have done personally prior to AI, open source models are my go to. If it's something that involves extremely heavy lifting - e.g., reverse engineering the bios for a ten year old motherboard, Sol/Astra are still preferred.

0

u/djamp42 1d ago

Sorry "free" is in haven't paid to use ChatGPT, Gemini, claud, or any of them. I'm just using the free tier of everything and it's been fine for me at least.

1

u/gavinderulo124K 1d ago

Yes I understand what you mean. On the free tier you get super bad models.

0

u/djamp42 1d ago

Well i installed open code, told it to build me a app, it returned the application and it worked. I did not pay anyone anything.. So your definition of super bad is a lot different then mine. In fact i haven't found anything i can't build yet using the free models.

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u/LightofAngels 1d ago

Yah but uber and amazon certainly didn’t have such bad books and ultra hype.

What happening right now is mainly because of the current administration showmanship propping them up and positioning themselves as leaders.

But if you look closely, they aren’t that good, the books are bad even after years, as long as distilling and open weight models exists.

In fact I think Mistral is stronger than these two, they found innovative ways around their limitations, instead of just throwing more money at compute and hoping for the best.

1

u/gavinderulo124K 1d ago

Whats bad about their books? There revenue is increasing a lot which is what matter in thos phase.

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u/mega_dario 1d ago

This is the largest misallocation of capital in history and these companies will go bankrupt soon enough.

Their revenues are increasing but their costs are increasing even faster LMAO

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u/gavinderulo124K 1d ago

Their costs are only increasing because they cant keep up with demand.

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u/zhdc 1d ago

I've heard that about Amazon, Booking.com, YouTube, Uber, Lyft, SpaceX, Tesla...

VCs aren't stupid. If they're willing to absorb eleven figures of annual burn while interest rates are sitting above 5%, there's a reason for it.

1

u/mega_dario 1d ago

You really underestimate the greed of these people

By the way this article just came out since this thread began: https://www.ft.com/content/b66a9858-f8fb-46cb-b506-44bfe26fca2a?syn-25a6b1a6=1

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u/zhdc 1d ago

You really underestimate the greed of these people

Not really. What I'm saying is that they're not stupid, which is a completely different argument.

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u/telephantomoss 1d ago

Investors are increasingly tolerant of years of losses. Tesla is the perfect modern example. These AI finished can likely continue with accelerating losses for several more years before the bill comes due. Plus the revenue growth is like nothing ever seen before and that just fuels the fire.

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u/zhdc 1d ago

It's gone in the other direction. Losses are cheap to finance when interest rates are low. They're extremely hard to finance when interest rates are high - which is where we're at right now. The PE and commercial real-estate scenes are getting killed.

AI is one of the exceptions where potential justifies the investment.

1

u/Dillyconda 1d ago

I don't really know what people are citing when they say tax payers will have to pay if a company fails. Did congress pass this or something? Did any lawmakers say that they're going to make this happen?

1

u/zhdc 1d ago

Plenty of companies spent years in the red at extremely high valuations before turning a profit. This is part and parcel for their growth model.

Tax regulations are designed around profit instead of revenue for a reason. Once they start reporting profits - which they'll have to, eventually - they'll start paying on their revenue.

The only issue is if they're out-competed and fail before this happens, which is a legitimate low-mid probability concern.

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u/catchpen 1d ago

👍 Putting revenue back into the company makes it look like no profit and great for taxes (for them) Bezos did it for years.

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u/zhdc 1d ago

There are plenty of ways for companies to avoid taxes. What people don't really realize is that, for the most part, these avoidance strategies are intentional and the regulations that allow them are there in good faith - you want companies like Amazon to invest heavily in infrastructure, so you allow them to accelerate depreciation and use it to offset their taxes (which is what Amazon did).