Microsoft’s $440 billion wipeout, and investors angry about OpenAI’s debt, explained

Comments

• empireOfLove2@lemmy.dbzer0.com ⁨2⁩ ⁨weeks⁩ ago

  Please fucking crash I want to be able to buy basic computing hardware again

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  • FiniteBanjo@feddit.online ⁨2⁩ ⁨weeks⁩ ago

    Since OpenAI just announced the possibility of bankruptcy, it’s definitely coming. It’s going to be wild for whichever idiot in charge at MS to go down in history as the man who ruined one of the most powerful and integral companies on earth.

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    • zqwzzle@lemmy.ca ⁨2⁩ ⁨weeks⁩ ago

      Wait, where? I wanna read and savour it.

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    • gustofwind@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      lol they havnt even put the ads in yet

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  • BarneyPiccolo@lemmy.today ⁨2⁩ ⁨weeks⁩ ago

    I’m ready for all those tech psychos to go down, and take Tesla with them.

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  • Zorsith@lemmy.blahaj.zone ⁨2⁩ ⁨weeks⁩ ago

    Doubt that’ll happen for a few mor years unfortunately. I can’t imagine most of the hardware made for AI datacenters is compatible with consumer stuff :/

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    • Strider@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      Yep the good times are over for now

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  • Tattorack@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

    So much money is tied up in AI, that when it crashes you’re likely to end up poor, or worse, homeless, than being able to afford anything.

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  • Corkyskog@sh.itjust.works ⁨2⁩ ⁨weeks⁩ ago

    I wonder how fast you could run Farcry on one of those AI GPU units.

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    • SkunkWorkz@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      Pretty sure MS will just seize the OpenAi data centers and repurpose them for Azure and rent out compute time or use it for XBox streaming. Non of the hardware will reach the open market.

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• anakin78z@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  “market reaction suggests that more capital isn’t going to be a viable substitute for a business model anymore.”

  Time to find the next vague thing that investors can pour trillions into without really knowing what it is or does.

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  • Pringles@sopuli.xyz ⁨2⁩ ⁨weeks⁩ ago

    It’ll be quantum computing. Since the last hype around it, a lot of progress has been made to the point that quantum computers are actually becoming useful, since error correction is now mostly resolved.

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    • Grolly@feddit.dk ⁨2⁩ ⁨weeks⁩ ago

      I would be surprised. Quantum computers haven’t even been proven to be theoretically useful.

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    • slowcakes@programming.dev ⁨2⁩ ⁨weeks⁩ ago

      The amount of cooling they need for a simple quantum CPU with 104 qubits. Can you even do anything with it that is useful, you can’t even brake encryption because you don’t have enough processing power.

      The science is advancing, but then as always is the question of, how you scale it to be economical viable, which is a hard problem by it self to solve.

      Don’t think the market is interested in tech that they can’t hype, or have a natural hype cycle.

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  • purrtastic@lemmy.nz ⁨2⁩ ⁨weeks⁩ ago

    Robotics. It will be a pivot to robotics.

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    • elucubra@sopuli.xyz ⁨2⁩ ⁨weeks⁩ ago

      Which will create a labor boom, to operate the robots, a la Tesla

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    • jj4211@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      Challenge there being that seems to have proven elusive. It’s not too surprising, but trying to use machine learning for robotics is actually really hard.

      Driving is much easier, training data with video, audio, and other sensor input complete with how the human manipulated steering and two pedals.

      But direct human interaction with the environment is both much more complicated than three controls and is not instrumented. They are trying to build training data from remote operators, but it turns out we aren’t very good at controlling these things remotely anywhere close to acting directly. We are terrible teachers and there’s a fraction of the actionable data that other more successful models had to work with.

      If an AI sees a video of someone doing someone, it can make a similar video, but can’t model how that might map to what it would see as unrelated motor and hydraulic operation.

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  • mrnobody@reddthat.com ⁨2⁩ ⁨weeks⁩ ago

    Don’t forget, though, it does that one thing for that one reason I forgot already as I typed it… But its still good, clearly!

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• UnspecificGravity@piefed.social ⁨2⁩ ⁨weeks⁩ ago

  The real lesson here is that if you are a company that was founded on stupid imaginary bullshit your investors are comfortable with investing in stupid imaginary bullshit and it isn’t going to hurt your price.

  When you are a legacy tech company whose investors expect you to actually make products that you sell for money, they don’t like to hear that blew every penny you had on fucking magic beans.

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  • Truscape@lemmy.blahaj.zone ⁨2⁩ ⁨weeks⁩ ago

    This would be like Big Oil investing in Enron, no?

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• Jankatarch@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  I miss consistent weather.

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  • KyuubiNoKitsune@lemmy.blahaj.zone ⁨2⁩ ⁨weeks⁩ ago

    The snow keeps melting

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    • partofthevoice@lemmy.zip ⁨2⁩ ⁨weeks⁩ ago

      The hurricanes keep getting stronger

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• UnderpantsWeevil@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  A company with a $3.2T market share. The game is made up and the points don’t matter.

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  • chiliedogg@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

    3.2 trillion is a stupid amount of money, but it isn’t all liquid. A 440 billion dollar hit (nearly 14%) would be very, very bad for them.

    With the memory and SSD fiasco going on right now, fewer people are buying new PCs, which impacts their sales. Combined with the Windows 11 fiasco, the massive gaming division investments going nowhere, and the AI bubble, they’re probably the most vulnerable they’ve been in decades.

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    • jj4211@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      OEM license revenue represents a tiny tiny bit of their financials these days. They could just charge nothing for it and business wise no one probably notice much of a difference.

      It is foundational to a lot of what they do, but older devices are just as good for their subscription and tie in revenue. Hell I use my work subscription for office from Linux, complete with OneDrive filesystem synchronization. Microsoft gets all their money from my headcount even as I don’t even use Windows.

      But that capex could bite them hard if revenue falls to follow from it. That’s pretty much the only exposure investors care about.

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• hellothere@sh.itjust.works ⁨2⁩ ⁨weeks⁩ ago

  Oh no…

  Anyway.

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• supersquirrel@sopuli.xyz ⁨2⁩ ⁨weeks⁩ ago

  Image

  and so it does

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• homesweethomeMrL@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  OpenAI has made about $1.4 trillion in commitments to procure both the energy and compute it needs to fuel its operations. But its revenue barely crossed $20 billion in 2025.

  Investors are increasingly critical of what they describe as “circular” deals involving the industry’s biggest players. On Wednesday evening, The Information reported that OpenAI is seeking a fresh $60 billion in funding from heavyweights like Nvidia and Amazon. However, market reaction suggests that more capital isn’t going to be a viable substitute for a business model anymore. “Maybe Oracle stock got way ahead of fundamentals, and now the market’s saying, ‘All right, show me, I want to see it,’” Eric Diton, president of the Wealth Alliance, told**Yahoo Finance.

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  • GarbadgeGoober@feddit.org ⁨2⁩ ⁨weeks⁩ ago

    Thanks for sharing, really insightful.

    In my personal opinion after being also responsible in AI for our company, I do not see how it will be profitable for them.

    For example Microsoft Copilot license, costs 30$/month, but a lot of things I can do with it a free Chatbot can do too.

    It definitely has it strengths and use cases and I am sure it will not go away. But it is not the way the market it as a full AI, it just generates answers with the highest probability. I cannot see it developing from there to the real AI.

    I think this year will be really interesting to watch all the AI companies, especially Oracle as they have to refinance a lot. If one falls it will send them into to a spiral, the big companies will be fine, but I am sure they will cut their funding of OpenAI.

    But who knows could be the other way around and OpenAI finds anything new to make them more profitable.

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• unnamed1@feddit.org ⁨2⁩ ⁨weeks⁩ ago

  So it begins

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• UnspecificGravity@piefed.social ⁨2⁩ ⁨weeks⁩ ago

  Wait.

  You mean that dedicating the majority of their business to buying things from themselves has not proven to be a sound strategy in the eyes of investors?

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• SinningStromgald@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  The AI ouroboros if finally consuming itself.

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• TachyonTele@piefed.social ⁨2⁩ ⁨weeks⁩ ago

  Sucks to suck

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• redbrick@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  I hate AI…it never was AI. It was useless in all my tests.

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  • Earthman_Jim@lemmy.zip ⁨2⁩ ⁨weeks⁩ ago

    The gig was up for me when i tried to get it to play dungeon master in a game of DnD. It would start out great, but eventually it would forget what we were doing and instead of giving me choices it started just telling me the story of me playing dnd and it would stop giving me options. This would happen about 6 minutes into playing, or 3 or 4 "turns, and that’s when I realized the incredible memory sync it is if it can’t reference instructions given moments ago. A newer model won’t fix that.

    At the end of the day it’s complex predictive text that amounts to a Rorschach test.

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    • Wispy2891@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      You need to do a custom program if you want to do that. I mean a traditional program where variables are stored properly.

      The models have no memory at all, at every question it starts from scratch, so the clients are just “pretending” it has a memory by simply including all previous questions and answers in your last query. You reply “ok”, but the model is getting thousands of words with all the history.

      Because each question becomes exponentially expensive, at some point it starts to prune old stuff. It either truncates the content (for example the completely useless meta ai chatbot that WhatsApp forced down the throat loses context after 2-3 questions) or it uses the model itself to have a condensed resume of past interactions, but this is how it hallucinates.

      Otherwise it will cost like $1 per question and more

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• veeesix@lemmy.ca ⁨2⁩ ⁨weeks⁩ ago

  Looks like that magic well of social permission is about to dry up.

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• fort_burp@feddit.nl ⁨2⁩ ⁨weeks⁩ ago

  owing to a slight miss on revenue

  Nope, try again.

  spending surged 66% to $37.5 billion in the latest quarter … approximately 45% of the company’s $625 billion in remaining performance obligations (RPO)—a key measure of future cloud contracts—is tied directly to OpenAI

  Ding ding ding! That’s right, OpenAI, the company where being profitable is a physical and mathematical impossibility!

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• BeatTakeshi@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  Image

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  • k0e3@lemmy.ca ⁨2⁩ ⁨weeks⁩ ago

    Off topic, but interesting username. Are you a fan? Wait, are you him?

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    • BeatTakeshi@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      Not him haha. Big fan indeed! He is an unclassifiable art man even within the super eclectic cinema landscape that are Korean movies.

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• phantomwormhole@hilariouschaos.com ⁨2⁩ ⁨weeks⁩ ago

  I hope it burns. Altman can kick rocks.

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• ell1e@leminal.space ⁨2⁩ ⁨weeks⁩ ago

  economictimes.indiatimes.com/…/127780471.cms This isn’t investment advice, I just thought this might be interesting to read!

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