←back to thread

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

(www.nytimes.com)
387 points reaperducer | 4 comments | 31 Oct 25 13:03 UTC | HN request time: 0.612s | source
Show context
nova22033 ◴[31 Oct 25 14:59 UTC] No.45772702[source]▶
Related

https://www.theregister.com/2025/10/29/microsoft_earnings_q1...

Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter

replies(4): >>45772839 #>>45772875 #>>45773834 #>>45774300 #
guywithahat ◴[31 Oct 25 15:07 UTC] No.45772839[source]▶
It's incredible how Tesla used to lose a few hundred million a year and analysis shows would freak out claiming they'd never be profitable. Now Rivian can lose 5 billion a year and I don't hear anything about it, and OpenAI can lose 11 billion in a quarter and Microsoft still backs them.

I do think this is going to be a deeply profitable industry, but this feels a little like the WeWork CEO flying couches to offices in private jets

replies(12): >>45772879 #>>45773109 #>>45773135 #>>45773192 #>>45773193 #>>45773301 #>>45773367 #>>45773571 #>>45773718 #>>45773861 #>>45774054 #>>45774102 #
1. OtherShrezzing ◴[31 Oct 25 15:25 UTC] No.45773109[source]▶
>and OpenAI can lose 11 billion in a quarter and Microsoft still backs them.

For Microsoft, and the other hyperscalers supporting OpenAI, they're all absolutely dependent on OpenAI's success. They can realistically survive through the difficult times, if the bubble bursts because of a minor player - for example if Coreweave or Mistral shuts down. But if the bubble bursts because the most visible symbol of AI's future collapses, the value-destruction for Microsoft's shareholders will be 100x larger than OpenAI's quarterly losses. The question for Microsoft is literally as fundamental as "do we want to wipe $1tn off our market cap, or eat $11bn losses per quarter for a few years?" and the answer is pretty straightforward.

Altman has played an absolute blinder by making the success of his company a near-existential issue for several of the largest companies to have ever existed.

replies(3): >>45773398 #>>45773400 #>>45773853 #
2. whimsicalism ◴[31 Oct 25 15:47 UTC] No.45773398[source]▶
They’re dependent on usage of their cloud. I don’t agree that they are as dependent on OAI as you suggest. Ultimately, we’ve unlocked a new paradigm and people need GPUs to do things - regardless of whether that GPU is running OAI branded software or not.
3. adastra22 ◴[31 Oct 25 15:47 UTC] No.45773400[source]▶
Why? Microsoft has permanent, royalty free access to the frontier models. If OpenAI went under, MSFT would continue hosting GPT-5 on Azure, GitHub Copilot, etc. and not be affected in the slightest.
4. TYPE_FASTER ◴[31 Oct 25 16:25 UTC] No.45773853[source]▶
> Altman has played an absolute blinder by making the success of his company a near-existential issue for several of the largest companies to have ever existed.

Yeah true, the whole pivot from non-profit to Too Big to Fail is pretty amazing tbh.