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

(www.nytimes.com)
387 points reaperducer | 2 comments | 31 Oct 25 13:03 UTC | HN request time: 0.444s | source
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jacquesm ◴[31 Oct 25 14:01 UTC] No.45772081[source]▶
These kinds of deals were very much a la mode just prior to the .com crash. Companies would buy advertising, then the websites and ad agencies would buy their services and they'd spend it again on advertising. The end result is immense revenues without profits.
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zemvpferreira ◴[31 Oct 25 14:25 UTC] No.45772318[source]▶
There’s one key difference in my opinion: pre-.com deals were buying revenue with equity and nothing else. It was growth for growth’s sake. All that scale delivered mostly nothing.

OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go another way.

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0xbadcafebee ◴[31 Oct 25 15:24 UTC] No.45773088[source]▶
Eventually when ChatGPT replaces Google Search, they will run ads, and so have that whole revenue stream. Still isn't enough money to buy the trillions worth of infrastructure they want, but it might be enough to keep the lights on.
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1. schmidtleonard ◴[31 Oct 25 15:49 UTC] No.45773428[source]▶
That's an insightful point! Making insightful points like that one is taxing on the brain, you should consider an electolyte drink like Brawndo™ (it's got what plants crave) to keep yourself sharp!

Ugh I hate it so much, but you're right, it's coming.

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2. upboundspiral ◴[31 Oct 25 17:53 UTC] No.45774764[source]▶
One thing I've been contemplating lately is that from a business perspective, when your competitors expand their revenue avenues (generally through ads) you have three options: copy them to catch up, do nothing and perish, and lobby the government for increased consumer protections.

I've started to wonder why we see so few companies do this. It's always "evil company lobbying to harm the its customers and the nation." Companies are made up of people, and for myself, if I was at a company I would be pushing to lobby on behalf of consumers to be able to keep a moral center and sleep at night. I am strongly for making money, but there are certain things I am not willing to do for it.

Targeted advertising is one of these things that I believe deserves to fully die. I have nothing against general analytics, nor gathering data about trends etc, but stalking every single person on the internet 24/7 is something people are put in jail for if they do it in person.