They also lowered their share in OpenAI from 32.5% to 27%
…microsoft.com/…/the-next-chapter-of-the-microsof…
Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter
Submitted 6 months ago by Alphane_Moon@lemmy.world to technology@lemmy.world
https://www.theregister.com/2025/10/29/microsoft_earnings_q1_26_openai_loss/
Comments
vane@lemmy.world 6 months ago
humanspiral@lemmy.ca 6 months 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.
brownsugga@lemmy.world 6 months 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
EncryptKeeper@lemmy.world 6 months 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 6 months ago
such as?
IndustryStandard@lemmy.world 6 months ago
Like Nividia which… Oh it’s all based on AI revenue.
Saledovil@sh.itjust.works 6 months ago
They’re the ones selling shovels in this gold rush, though.
Jhex@lemmy.world 6 months 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.
Rooster326@programming.dev 6 months ago
[deleted]Ledivin@lemmy.world 6 months ago
lol, what? “Bubble” doesn’t just mean something is expensive
Jhex@lemmy.world 6 months 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
bebabalula@feddit.dk 6 months 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?
ragas@lemmy.ml 6 months 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.
popekingjoe@lemmy.world 6 months ago
Oh no!
Anyway…
1984@lemmy.today 6 months ago
Im watching all this and im thinking you guys are being convinced to not buy these stocks.
I just keep buying.
sobchak@programming.dev 6 months ago
I don’t invest in these companies on principle. I ain’t going to fund the rise of fascism for stock gains. That won’t help me when I’m shot dead or in a camp.
Flamekebab@piefed.social 6 months ago
There’s always money to be made if one doesn’t stand for anything.
1984@lemmy.today 6 months ago
Nothing will help you when you are shot dead in a camp. You live your life until that happens, if that happens.
But yeah, I understand your principles. The problem is that if only bad people have money, only bad people have power as well.
BananaTrifleViolin@lemmy.world 6 months ago
The key is getting out at the right time, and that is weighed massively against small investors. The big investors and institions control the market and can move quickly while small investors cannot.
Tesla is not doing well - look at its falling sales. It’s a risky stock to hold. The AI companies are also highly risky stocks to hold.
That doesn’t mean don’t hold them - all anyone is saying really is that these are high risk investments, and at some point they are going to probably crash because it’s a bubble.
That doesn’t necessarily mean “don’t invest”. It does certainly mean be prepared to get out fast and also only use money you can afford to lose when investing with such high risk stocks.
1984@lemmy.today 6 months ago
If you look at Tesla graph, or any other tech stock graph, you can see that nobody would have lost money if they didnt sell. They are all going up long term.
Just dont sell, ever, until you retire. This is super hard to do but its what the charts show is actually best.
Alphane_Moon@lemmy.world 6 months ago
What’s investment got to do with the article (or even the comments or people’s sentiment on the Threadiverse)?
There are a wide variety of investment strategies depending on your situation and other factors. I don’t see how these are related to tech news discussions.
I am not saying your are wrong or right, just an observation.
1984@lemmy.today 6 months ago
Negative news about stock bubbles = influencing people to not buy the tech stocks because they get scared. No?
DivineDev@piefed.social 6 months ago
This will no doubt keep working for a while, but eventually the bubble will burst. Without selling stocks just before that, chances are you’ll lose money, and since apparently a Nazi salute isn’t enough to crash a company nowadays, this shit completely unpredictable.
RememberTheApollo_@lemmy.world 6 months ago
Hang on… unless it tanks below his/her entry price they aren’t losing anything. Just gains that were missed by the drop in value, but selling at any time before that point will make them money (above any brokerage/trade fees).
1984@lemmy.today 6 months ago
Of course its not enough. Stock market cares about money, not morals. They know negative emotions are temporary and doesnt last.
IWW4@lemmy.zip 6 months ago
12 billion in one quarter…. Holy fuck
TeamAssimilation@infosec.pub 6 months ago
What’s a few billion to a TRILLION company? That’s peanuts. Everything is fine fellow citizen.
Arcane2077@sh.itjust.works 6 months ago
is this $11,500,000,000 in real money or speculative money?
baduhai@sopuli.xyz 6 months ago
What’s the difference?
Jhex@lemmy.world 6 months ago
There is no difference anymore
Krompus@lemmy.world 6 months ago
You think they pay in gold bars?
TommyJohnsFishSpot@lemy.lol 6 months ago
Catch yourself up on the discourse; you look like a fool.
msage@programming.dev 6 months ago
Yes, lol.
Emilien@lemmy.world 6 months 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 6 months ago
The entire American economy in a nutshell
baggachipz@sh.itjust.works 6 months ago
No, you don’t understand. Lose money on every sale, but make up for it in volume!
emergencyfood@sh.itjust.works 6 months ago
If you lose enough money, you trigger an integer overflow and end up with a profit!
mcv@lemmy.zip 6 months 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.
angelmountain@feddit.nl 6 months ago
Don’t underestimate the impact of AI on web development and the amount of people using chats for every day questions.
TheBlackLounge@lemmy.zip 6 months ago
Will they pay for it though? The real cost of it, I mean.
elgordino@fedia.io 6 months 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.
favoredponcho@lemmy.zip 6 months ago
Don’t worry, you’ll pay for it with your data. It will always be listening and watching and analyzing and selling you something.
SSUPII@sopuli.xyz 6 months ago
I definitely think that was such a major blunder, but also it was probably done to make it a struggle to compete for smaller or starting companies.
bookmeat@lemmynsfw.com 6 months ago
It was necessary. The tech is so expensive to run and develop that getting customers to actually use it and build demand was essential to the tech’s survival.
kokesh@lemmy.world 6 months ago
Yeeees! Down with this crap!
blueamigafan@lemmy.world 6 months ago
I look forward to the AI bubble bursting, and billionaires looking shocked, ‘because there were no signs’
Taldan@lemmy.world 6 months 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
scarabic@lemmy.world 6 months ago
Yeah… I mean billionaires have at least as much information as a random person on Lemmy :D
Alphane_Moon@lemmy.world 6 months ago
They will be fine either way…
Valmond@lemmy.world 6 months ago
They won’t lose any money…
turdcollector69@lemmy.world 6 months 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 6 months 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.
rimu@piefed.social 6 months ago
It that a lot of money? I can’t tell anymore.
jaykrown@lemmy.world 6 months ago
Pretty sure it’s just a number on a computer screen.
Zwuzelmaus@feddit.org 6 months ago
Computer screens grow wider every year.
SeeMarkFly@lemmy.ml 6 months ago
When I lose $11 Billion dollars, I have to go to bed without supper.
Alphane_Moon@lemmy.world 6 months 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 6 months 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.
Zwuzelmaus@feddit.org 6 months ago
But that’s what they wanted anyway, isn’t it?
Burning shitloads of money.
Waiting until they can later, finally, rule the world.
zaphod@sopuli.xyz 6 months ago
Yeah, the usual startup approach. Burn investor money to get into the market (or in this case create a market) by offering services below cost. Once they have enough users and their investors want their money back they’ll ramp up prices.
RedGreenBlue@lemmy.zip 6 months ago
Problem is they are competing with cheap web services like deepseek and local free models. Those alternatives are gonna become more popular when chatgpt starts charging.
They are spending like crazy in the hope for some inovation that will give them an advantage that others can’t copy for cheap. That is a very difficult thing to accomplish. I bet they will fail. That money ain’t coming back.
AnAverageSnoot@lemmy.ca 6 months 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 6 months 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
brucethemoose@lemmy.world 6 months ago
It’s very corporate, isn’t it? “Just keep scaling what we have.”
That being said, a lot of innovation is happening. It’s incredible how my promising papers come out, and get completely passed over by Big Tech AI. The Chinese firms are picking up some at least, but are kinda falling into local maxima too.
sirico@feddit.uk 6 months ago
Hubble bubble S&P’s in trouble
avidamoeba@lemmy.ca 6 months 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.
JcbAzPx@lemmy.world 6 months ago
Anyone using something with inconsistent output in their automation deserves what they get.
SaveTheTuaHawk@lemmy.ca 6 months ago
Copilot and Gemini are trash. They are driving away future business.
floofloof@lemmy.ca 6 months ago
Github Copilot is somewhat useful for programming, but of course Microsoft have given a range of products all the same name for maximum confusion, as they do. The Copilot in Windows may be rubbish. I haven’t touched it once.