Lol
Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter
Submitted 13 hours ago by Alphane_Moon@lemmy.world to technology@lemmy.world
https://www.theregister.com/2025/10/29/microsoft_earnings_q1_26_openai_loss/
Comments
jlow@discuss.tchncs.de 1 hour ago
ReHomed@lemmy.cafe 3 hours ago
Good.
Fuck AI, send it directly to hell.
Taldan@lemmy.world 1 hour ago
AI is here to stay. AI is also in an unsustainable bubble. Both things are true
UnderpantsWeevil@lemmy.world 1 hour ago
Words do not compute. Issuing a $1T IPO to Sam Altman.
AnAverageSnoot@lemmy.ca 12 hours ago
AI is funded solely by sunk cost fallacy at this point. I wonder how long it will be before investments start getting pulled back because of a lack of ROI. I can already feel the sentiment towards AI and it getting pushed in everything turning negative amongst consumers recently.
Taldan@lemmy.world 1 hour ago
I wouldn’t have a problem if they were actually investing the money in something useful like R&D
Nearly all the investment is in data centers. Their approach for the past 2 years seems to be just throwing more hardware at existing approaches, which is a really great way to burn an absurd amount of money for little to nothing in return
cupcakezealot@piefed.blahaj.zone 9 hours ago
AI is funded solely by sunk cost fallacy at this point.
and the us economy an gdp relies solely on ai make of that what you will.
SaharaMaleikuhm@feddit.org 7 hours ago
Yeah, Trump will prop it up with tax dollars to prolong the inevitable. That’s the American way.
SSUPII@sopuli.xyz 11 hours ago
Investment is done really to train models for ever more miniscule gains. I feel like the current choices are enough to satisfy who is interested in such services, and what really is lacking is now more hardware dedicated to single user sessions to improve quality of output with the current models.
But I really want to see more development on offline services, as right now it is really done only by hobbyists and only occasionally large companies with a little dripfeed (Facebook Llama, original Deepseek model [latter being pretty much useless as no one has the hardware to run it]).
I remember seeing the Samsung Galaxy Fold 7 presentation and listening to them talking about all the AI features instead of the real phone capabilities. “All of this is offline, right? A powerful smartphone… makes sense to have local models for tasks.” but it later became abundantly clear it was just repackaged always-online Gemini for the entire presentation.
Taldan@lemmy.world 1 hour ago
what really is lacking is now more hardware dedicated to single user sessions to improve quality of output with the current models
That is the exact opposite of my opinion. They’re throwing tons of computing at the current models. It has produced little improvement. The vast majority of investment is in compute hardware, rather than R&D. They need more R&D to improve the underlying models. More hardware isn’t going to get the significant gains we need
mcv@lemmy.zip 10 hours ago
They’re investing this much because they honestly seem to think they’re on the cusp of super intelligent AGI. They’re not, but they really seem to think they are, and that seems to justify these insane investments.
But all they’re really doing is the same thing as before but even bigger. It’s not going to work. It’s only going to make things even more expensive.
I use Copilot and Claude at work, and while it’s really impressive at what it can do, it’s also really stupid and requires a lot of hand holding. It’s not on the brink of AGI super intelligence. Not even close. Maybe we’ll get there some day, but not before all these companies are bankrupt.
artyom@piefed.social 9 hours ago
I knew it was a bubble since Computex January 2024 when Derb8uer showed an “AI PC case”. He asked “What’s AI about this PC case?” and they replied that you could put an AI PC inside it.
ferrule@sh.itjust.works 6 hours ago
The problem is there is little continuous cash flow for on prem personal services. Look at Samsung’s home automation, its nearly all online features and when the internet is out you are SOL.
To have your own Github Copilot in a device the size and power usage of a Raspberry Pi would be amazing. But then they won’t get subscriptions.
humanspiral@lemmy.ca 5 hours ago
more development on offline services
There is absolutely massive development on open weight models that can be used offline/privately. Minimax M2, most recent one, has comparable benchmark scores to the private US megatech models at 1/12th the cost, and at higher token throughput. Qwen, GLM, deepseek have comparable models to M2, and have smaller models more easily used on very modest hardware.
Closed megatech datacenter AI strategy is partnership with US government/military for oppressive control of humanity. Spending 12x more per token while empowering big tech/US empire to steal from and oppress you is not worth a small fraction in benchmark/quality improvement.
jordanlund@lemmy.world 9 hours ago
One of our biggest bookstores contracted with a local artist for some merch. That artist used AI with predictable results. Now everyone involved is getting raked over the coals for it.
No surprise, they just announced a 4th round of layoffs too. 😟
gian@lemmy.grys.it 10 hours ago
I wonder how long it will be before investments start getting pulled back because of a lack of ROI.
Just wait for the next hot thing to come out
DevoidWisdom@sh.itjust.works 4 hours ago
I’d love to see a revisit to META Spaces. Lmao.
Strider@lemmy.world 7 hours ago
Why do you think AI is pushed so hard?
Everyone is aware this has to be useful. Too much money.
hanrahan@piefed.social 8 hours ago
How many years did Uber go markiing a loss ? Amazon similarly.
Son_of_Macha@lemmy.cafe 8 hours ago
Amazon didn’t make a profit, they didn’t lose 11Billion a quarter
Jhex@lemmy.world 5 hours ago
this is not a bad analogy, but you are off by orders of magnitude
more importantly, both Uber and Amazon always had a path to profitability (Amazon specifically was already making tons of money on AWS long before the store front made money). AI has already been shown to not have a path to profitability; whatever little value companies around the world have been able to extract, cannot pay the cost of producing it.
think of it this way:
You produce a little car that can drive 2 people and some bags around, it costs you $1000 to make and you sell it for $3000 which a ton of people can afford… you have a path to profitability
I enter the market with a car that can carry 20 people, plus full on luggage for all and it moves twice as fast… but, in practice, I can only really move 3 people and often take them the wrong way, also the luggage was a complete lie and I can only allow passengers with their purses… also my car cost $50,000 to make so I would have to sell it for $70,000 and nobody would pay that when they could get 20 of your cars for less… also also, I promised the people making some parts of my car that would invest 7 kajillion on their companies somehow.
Which company would succeed? yours or mine?
someacnt@sh.itjust.works 6 hours ago
Maybe, just maybe, the bubble started bursting now.
kameecoding@lemmy.world 5 hours ago
Would be nice, I want to buy some ETFs at a discount
x00z@lemmy.world 4 hours ago
The whole “AI” thing is one big grift.
SugarCatDestroyer@lemmy.world 2 hours ago
I agree, and essentially they used slightly reworked old neural network technologies, increasing their power with the help of data centers.
oakey66@lemmy.world 4 hours ago
Wow. Glad they just converted to a for profit entity! Can’t wait for them to unleash all this success on to the the general financial market.
SeeMarkFly@lemmy.ml 12 hours ago
When I lose $11 Billion dollars, I have to go to bed without supper.
Alphane_Moon@lemmy.world 12 hours ago
If you owe the bank $100, that’s your problem; if you owe the bank $100 million, that’s the bank’s problem.
Kirp123@lemmy.world 12 hours ago
The difference between 100 million and 11.5 billion is about 11 billion. If you own a bank 11 billion that’s not only that bank’s problem, it’s the economy’s problem.
XLE@piefed.social 2 hours ago
What’s the deal with the “HPE” in some Register articles? It’s apparently the Hewlett-Packard Enterprise logo, but articles about HPE don’t appear to have that logo.
Is The Register affiliated with HPE now?
Arcane2077@sh.itjust.works 11 hours ago
is this $11,500,000,000 in real money or speculative money?
msage@programming.dev 10 hours ago
Yes, lol.
Jhex@lemmy.world 5 hours ago
There is no difference anymore
Krompus@lemmy.world 7 hours ago
You think they pay in gold bars?
TommyJohnsFishSpot@lemy.lol 7 hours ago
Catch yourself up on the discourse; you look like a fool.
avidamoeba@lemmy.ca 7 hours ago
This reminds me of something that came up recently. Copilot started hallicinating quite a bit more than usual in Copilot reviews. That made me think about the cost of operarion. As they burn money like this, I won’t be surprised if they start decreasing inference quality to decrease cost per user. Which also means people relying on certain model behaviour for tasks could get nasty surprises. Especially within automation workflows where model outputs aren’t being reviewed.
SaveTheTuaHawk@lemmy.ca 4 hours ago
Copilot and Gemini are trash. They are driving away future business.
Treczoks@lemmy.world 2 hours ago
And that is probably only the beginning.
SaveTheTuaHawk@lemmy.ca 1 hour ago
brownsugga@lemmy.world 9 hours ago
apparently the bubble might not be as extreme as some people think because the major AI players are all being propped up by companies that actually produce revenues and profits
ragas@lemmy.ml 8 hours ago
You know if you invest all your winnings into all the companies that buy your stuff so that they can buy more of your stuff, you are actually not generating any winnings.
IndustryStandard@lemmy.world 6 hours ago
Like Nividia which… Oh it’s all based on AI revenue.
Jhex@lemmy.world 5 hours ago
And even though NVIDIA is better place as they do produce something, but the something in play has little value out of the AI bubble.
NVIDIA could be left holding the bag on a super increased capacity to produce something that nobody wants anymore (or at least nowhere near at the levels we have now) so they are still very much exposed.
Saledovil@sh.itjust.works 5 hours ago
They’re the ones selling shovels in this gold rush, though.
Rooster326@programming.dev 6 hours ago
This.
The Metaverse was a Multi-Billion dollar bubble. Did anything happen when it popped? No? Because the company behind it prints money.
Jhex@lemmy.world 5 hours ago
What? there was no such thing a “bubble” around the Metaverse… (at least not the economic slang term “bubble”)
From the first video of the Zuck presenting the idea, everyone just laugh it off… Meta did waste tons of money on it but they had the money to burn so there was no bubble at all in play here
If I am rich and stupid, I may think a pool in the roof of my house is a great idea. I can spend the value of the house having it built and then have the house collapse on me. Since I am rich, I can just buy another house or pay to rebuild it and that’s the end… no bubble.
However, if I am pitching plans for pools on roofs… and millions of people buy into it, many of whom can barely afford my terrible plans, when the houses start collapsing, too many people will be left with no house or means to procure another one… that’s a bubble
Ledivin@lemmy.world 4 hours ago
lol, what? “Bubble” doesn’t just mean something is expensive
bebabalula@feddit.dk 8 hours ago
Hard to say, really. Yes, MS can absorb loss if the value of their stake in OpenAI goes to $0 overnight, but how much of their stock value is based on expectations that they can sell cloud compute for billions of dollars? And how many private and institutional investors have a stake in that?
EncryptKeeper@lemmy.world 5 hours ago
The problem is that the companies that actually produce revenues and profits are also in turn being propped up by AI.
Jhex@lemmy.world 5 hours ago
such as?
Emilien@lemmy.world 11 hours ago
So they “lost” $11.5B? Cool, I lost 20 bucks last week and still had to explain it to my accountant 🤭 Feels like the entire AI industry is built on “don’t worry, growth will save us”, but at some point someone has to pay the electricity bill…
zipzoopaboop@lemmynsfw.com 23 minutes ago
The entire American economy in a nutshell
mcv@lemmy.zip 10 hours ago
It’s magic that will magically transform the world and make everybody rich and magically do our work for us. Like in Disney’s Sorcerer’s Apprentice.
baggachipz@sh.itjust.works 9 hours ago
No, you don’t understand. Lose money on every sale, but make up for it in volume!
emergencyfood@sh.itjust.works 5 hours ago
If you lose enough money, you trigger an integer overflow and end up with a profit!
blueamigafan@lemmy.world 12 hours ago
I look forward to the AI bubble bursting, and billionaires looking shocked, ‘because there were no signs’
Taldan@lemmy.world 1 hour ago
A lot of them are actively talking about how it could be a bubble and the implications. No one is going to be surprised. Billionaires are just really hoping they can make it work before the bubble pops
Valmond@lemmy.world 12 hours ago
They won’t lose any money…
turdcollector69@lemmy.world 1 hour ago
Yeah all the people praying for a crash are praying for nobody to have retirement funds.
You can easily tell who’s actually employed in this thread because anyone with a 401k is going to get dicked down while the 0.1% get a bailout.
tburkhol@lemmy.world 11 hours ago
In contrast to the housing bubble, where a lot of the value was in overpriced houses sold to individuals, this overpricing is almost entirely in tech stocks, and tech stocks are almost entirely owned by by the wealthiest 10%, even 1%. The tech billionaires have limited ability to divest themselves of their own overpriced companies and absolutely will lose money.
None of them are going bankrupt, they’ll all be just fine when the market recovers in a few years, because that’s the nature of capitalism. A bunch of peons, who convinced themselves that the bubble-value of their 401k meant it was safe to retire, will suffer, will have to go back to work - if you’re not an oligarch, losing money is painful.
Alphane_Moon@lemmy.world 10 hours ago
They will be fine either way…
vane@lemmy.world 9 hours ago
They also lowered their share in OpenAI from 32.5% to 27%
…microsoft.com/…/the-next-chapter-of-the-microsof…humanspiral@lemmy.ca 6 hours ago
the smaller the share, the smaller the quarterly losses. Other sources have included that MSFT now gets a 20% royalty on openAI revenue, but its not in that PR. It’s not clear why else MSFT share would have fallen.
popekingjoe@lemmy.world 10 hours ago
Oh no!
Anyway…
IWW4@lemmy.zip 11 hours ago
12 billion in one quarter…. Holy fuck
TeamAssimilation@infosec.pub 6 hours ago
What’s a few billion to a TRILLION company? That’s peanuts. Everything is fine fellow citizen.
sirico@feddit.uk 12 hours ago
Hubble bubble S&P’s in trouble
humanspiral@lemmy.ca 6 hours ago
IIRC, OpenAI lost $12b for all of 2024. CNBC reported that OpenAI restructuring this week, has MSFT not only with 27% equity stake, but a 20% royalty rate on revenue going forward which is certainly a nearly impossible hole for OpenAI to get out of.
OpenAI has published analytics on “suicide interactions” which proves that they mine their users data. Support for US military and Israel ensures that their mission is to destroy humanity, unless humanity pays it more to be more loyal to it. Everyone’s “don’t be evil” actually means “don’t be evil unless fascism pays more”
The Israel/US empire needs OpenAI to build ever bigger/more comprehensive models that are even more expensive to use than ChatGPT/Sora’s status as most expensive models. They need the analytics function to oppress population, and the empire is certain to side with OpenAI if it seeks revenue enhancement through theft of IP, including their users’ IP. It is dangerous for anyone to use OpenAI services because theft and oppression by empire condoned symbiosis is by design. But the race for ever larger more expensive models means trashing the previous generation models quickly, which means no time for ROI from development.
OpenAI will need massive military/government contracts to support its $1T in investment promises. All of those are to opppress Americans/humanity. Meanwhile, government has just sponsored 9 independent supercomputer projects, and so OpenAI must commit to unrestrained evil in order to get their fair share of the oppression mission, and survive. Expect US government contracts to develop models for it, but with OpenAI profitting from government and private surveillance use.
Zwuzelmaus@feddit.org 12 hours ago
But that’s what they wanted anyway, isn’t it?
Burning shitloads of money.
Waiting until they can later, finally, rule the world.
1984@lemmy.today 10 hours ago
Im watching all this and im thinking you guys are being convinced to not buy these stocks.
I just keep buying.
elgordino@fedia.io 11 hours ago
Remember when OpenAI launched Dall-E 2? You got a few tokens for free images and then had to pay for it. Presumably that was at least some reflection on the cost of producing the images.
Now you can create video for free and consumer expectations that generative AI should be super cheap have been set. That genie is not going to go easily back into the bottle.
rimu@piefed.social 12 hours ago
It that a lot of money? I can’t tell anymore.
kokesh@lemmy.world 11 hours ago
Yeeees! Down with this crap!
angelmountain@feddit.nl 11 hours ago
Don’t underestimate the impact of AI on web development and the amount of people using chats for every day questions.
Bronzebeard@lemmy.zip 35 minutes ago
Is that why MSFT dumped like 3.5% today?