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How OpenAI uses complex and circular deals to fuel its multibillion-dollar rise

(www.nytimes.com)
387 points reaperducer | 8 comments | 31 Oct 25 13:03 UTC | HN request time: 0.002s | source | bottom
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vmg12 ◴[31 Oct 25 14:20 UTC] No.45772274[source]▶
Here is a charitable perspective on what's happening:

- Nvidia has too much cash because of massive profits and has nowhere to reinvest them internally.

- Nvidia instead invests in other companies that use their gpus by providing them deals that must be spent on nvidia products.

- This accelerates the growth of these companies, drives further lock in to nvidia's platform, and gives nvidia an equity stake in these companies.

- Since growth for these companies is accelerated, future revenue will be brought forward for nvidia and since these investments must be spent on nvidia gpus it drives further lock in to their platform.

- Nvidia also benefits from growth due to the equity they own.

This is all dependent on token economics being or becoming profitable. Everything seems to indicate that once the models are trained, they are extremely profitable and that training is the big money drain. If these models become massively profitable (or at least break even) then I don't see how this doesn't benefit Nvidia massively.

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belter ◴[31 Oct 25 14:30 UTC] No.45772362[source]▶
> Everything seems to indicate that once the models are trained, they are extremely profitable

Some data would reinforce your case. Do you have it?

Here is my data point: "You Have No Idea How Screwed OpenAI Actually Is" - https://wlockett.medium.com/you-have-no-idea-how-screwed-ope...

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trollbridge ◴[31 Oct 25 14:40 UTC] No.45772469[source]▶
Right. As far as I can tell, OpenAI, Grok, etc sell me tokens at a loss. But I am having a hard time figuring out how to turn tokens into money (i.e. increased productivity). I can justify $40-$200 per developer per month on tokens but not more than that.
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1. koolba ◴[31 Oct 25 14:54 UTC] No.45772633[source]▶
There’s about 5M software devs in the US so even at $1000/year/person spend, that’s only $5B of revenue to go around. Theres plenty of other uses cases but focusing on pure tech usage, it’s hard to see how the net present value of that equates to multiple trillions of dollars across the ecosystem.
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2. treis ◴[31 Oct 25 15:36 UTC] No.45773259[source]▶
It's the first new way of interacting with computers since the iPhone. It's going to be massively valuable and OpenAI is essentially guaranteed to be one of the players.
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3. _aavaa_ ◴[31 Oct 25 17:02 UTC] No.45774220[source]▶
Why is their product not palm? Or windows mobile?
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4. treis ◴[31 Oct 25 17:30 UTC] No.45774516{3}[source]▶
It's not windows mobile because OpenAI was first and is the clear leader in the market. Windows mobile was late to the party and missed their window.

Palm is closer but it's a different world. It's established that Internet advertising companies are worth trillions. It's only in retrospect that what Palm could have been is obvious.

Barring something very unexpected OpenAI is coming out on top. They're prepaying for a good 5-10 years of compute. That means their inference and training for that time are "free" because they've been paid for. They're going to be able to bury their competition in money or buy them out.

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5. _aavaa_ ◴[31 Oct 25 18:01 UTC] No.45774844{4}[source]▶
Windows mobile by the time it looked like the iPhone was late to the party. But windows had been releasing a mobile os for a long time before that. Microsoft was first, they just didn’t make as good of a product as Apple despite their money.

OpenAI is also first, but it is absolutely not a given that they are the Apple in this situation. Microsoft too had money to bury the competition, they even staged a fake funeral when they shipped windows phone 7.

> Barring something very unexpected

Like the release of an iPhone?

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6. HDThoreaun ◴[31 Oct 25 18:28 UTC] No.45775136[source]▶
> Theres plenty of other uses cases

This is where the money is. Anthropic just released claude for excel. If it replaces half of the spreadsheet pushers in the country theyre looking at massive revenue. They just started with coding because theres so much training data and the employees know a lot about coding

7. treis ◴[31 Oct 25 19:47 UTC] No.45775959{5}[source]▶
Yep. It would have to be something that dramatic to render all the technology and infrastructure OpenAI has obsolete. But if it's anything like massive data training on a huge number of GPUs then OpenAI is one of the winners.
8. red-iron-pine ◴[31 Oct 25 20:19 UTC] No.45776259[source]▶
I'm waiting for my Google Glass smart glasses to be useful for anything other then annihilating the privacy of everyone around me

Blackberry was a big deal for a while, too