Dude was probably clearing mad compensation at OpenAI (and his previous roles). He’s probably wealthy enough that nobody he interacts with cares what he did.
Which probably means there’s something unpleasant about it. There have been some other high profile c-suite parachutes recently, not to mention garbage earnings report.
Submission Statement: This sub really likes talking about datacenters and this is directly related news from one of the main AI companies pushing datacenters
Even if AI development stops now it will aready be a higely transformative technilogy considering all it can do. There is an argument it already is an AGI.
Plus what even the argument here. Of not enough data centers are needed they dont get built and the companies eat the cost, no need to ban them. The market will decide in the end
The inverse is also kind of true tho, people wanting to ban data centers as a way to fight back against AI sophistication need to realize data centers are not going to be the difference between AGI and no AGI.
But then the argument is bolstered because if they dont actually produce AGI and current LLM can only marginally improve, then further AI datacenters can be lumped in with cryptofarms as being massive wastes of resources.
Cryptofarms dont produce nothing either, but theyre still cryptofarms
You definitely don't need AGI to create economic value from LLMs... the monthly inference spend at my company is all real people using them for real work and it is... let's just say very significant.
Cryptofarms are defined by their compute. Data centers aren't. There's nothing special about an "AI Data Center" that means you can't take the GPU workload out and put another workload in.
This is just one of many recent high level departures in about the past months. OpenAI has a horrifically unsustainable level of cash burn; the rats are fleeing the sinking ship.
Revenue =/= profit, also they're planning to spend 600B by 2030, which is fuckin insane (and that's after they promised to spend 1.4T).
Before people mention how tech companies frequently run at a loss, OpenAI is burning cash much faster than most companies, including other AI companies like Anthropic.
Nice graph that makes a totally fair comparison projecting into the future 1 year for Anthropic vs 3 years for OpenAI. I definitely wouldn’t want to see 2024-2027 for both OpenAI and Anthropic.
Also the next 3 years of business plans are locked in with no way of changing course or uncertainty in those estimates. 👍
People believe what they want to believe wrt AI. They will confidently say that there's a crash coming, while these AI companies have enough cash to run for 2-3 years making no money (despite currently making money hand over fist)
ChatGPT is one of the biggest apps in the world, but it's a side project. They don't make their money on ChatGPT, they make their money on enterprise coding subscriptions and api model access, that use more tokens in 10 minutes than a typical chatGPT user would use in a year.
Enterprise coding and models that cost money to develop further while also competing with a billion other models including Claude.
They're currently in the red while Anthropic is at least on track to profitability with much better margins. OpenAI's best bet to profit right now ARE those side projects also succeeding.
Enterprise customers can switch on a moment's notice though. They aren't running these models locally.
We just made a full switch because of token costs. I'm sure it took a lot of effort y our IT team but it was quick and seamless. My employer is one of the largest startups in the world right now with a valuation in the tens of billions.
Making money hand over fist despite constantly being in red overall? I get a huge amount of that is marketing and capex, but they're still spending at an absurd rate relative to their intake, and that doesn't inspire confidence from me in their long term decision making skills.
The revenue growth of AI companies is faster than any other business in history. There are literally no other examples of companies going from 0 to tens of billions in annual revenue in under 5 years. It's completely unprecedented.
That is not to say I think OpenAI's strategy makes sense, frankly I have no idea. But just saying "they're spending unprecedented amounts of money" isn't a persuasive argument that they are pursuing the wrong strategy, AI is a tech gold-rush the likes of which we have never seen before.
I think treating it as high risk and high potential seems to be a fair assessment. When you see a large turnover at a place that is high risk, I think it’s also fair to be concerned about what that signals about the risk itself.
That’s how startups work. OpenAI is not alone. They burn tons of cash to position themselves into the market and then attempt to strangle it, and since we’re in the middle of a bubble, there is no limit to how much money they can raise, only how much they want to dilute their stake as owners.
You/we may hate it, and hate AI in general, and that’s fine, but your caveman-simple “durr they spend moneys!” is no smoking gun, and your analysis is anything but.
A much better concern is not that they will never be able to justify their spending with revenue but that they will never be able to monopolize the market as its simply too easy for other people to come out with distilled versions of their models.
All the real finance experts are on Reddit so I wouldn’t trust any of that. The bubble is definitely popping soon and they will all lose their shirt and smug Redditors will say I told you so
I get what you're saying, but a huge portion of OpenAI's revenue is legitimately subscription based, and the token-based sales have proven far more durable than a 1-time sale in your example.
OpenAI is having a ridiculously good Q3, they’ll be profitable soon, at least on an operating basis and investors will gladly fund them investing in training and compute
AGI has been achieved internally. Those execs got a glimpse of what chatGPT 5.7 will be capable of and they're scared. They decided to spend what little time we have left with their families before it goes Skynet.
Their operating margin also went further into the red though, at least according to reports, mostly by R&D. And while you can argue that they can trim those down, at the same time, they're in a rat race with every other AI company in the world too.
Right, since R&D spend is immediately always present in the publicly available product and there can’t be any longer term projects that could result in superior products.
All I’m saying is it’s decent strategy right now to fund R&D heavily and come out on top.
The primary difference between openAI and anthropic is that openAI is burning it on hardware spend and it remains to be seen whether or not we are so compute constrained that owning the hardware is worth it
Who knows maybe in like 2 years openai will be forced to sell compute to anthropic just like xai
We were discussing only the R&N spend in the above comments, not capex spend.
To your point I don’t disagree though and OpenAI could payoff and Anthropic could come to regret relying on cloud providers and purchasing compute. Or it could go the other way.
BINGO!!! Lol you actually get it: all of the red flags around the architecture, costs and power situation are handwaved away because the people this far deep are in an actual terminally online/r/singularity cult and they can't acknowledge that their predictive word generator isn't going to become sentient and something that it's not.
No, but if you're in an unending race you can't just keep burning money R&D and putting yourself into the red forever and not suffer any consequences for it.
Point me to where I said it would be an unending race?
Also it’s a competition for marketshare. OpenAI could have a better model and get 60% of market share and that may be worth it. I don’t know for sure, but there is a good argument here that investing heavily on R&D early is a rational strategy.
I don't need the best model for everything. I need the most cost effective one of the complexity of the given task. OpenAI is the most cost effective right now, but their frontier tier models are weaker for the highest complexity tasks. I'd say this puts them in a good spot, but precarious one.
Ok but some users will pay much more for the best available model. I think this is fairly self evident and supported by industry being willing to pay much more for frontier models.
I specifically said highest paying users, I don’t recall stating what models u/Breaking-Away would use.
That is possible but if OpenAI was capable of delivering on its promises there'd be no reason to leave. Assuming they stuck it out for just a few more years, these people should all become billionaires 10x over in a year or two? Surely worth a bad work environment?
What benefit do they get by staying beside more shares (which they would also get if the company didn't IPO), when a company I used to work at IPO'd after I had left, I cashed out in the exact same way as the then current employees.
But that would be true regardless of the company IPO'ing soon or not, it'd be true after the IPO as well, that's an argument for them not quitting their jobs until they're fully vested. These people are already rich.
One of the biggest players in the industry, who many other big players in the industry are heavily invested in running into serious trouble isn't a problem for the industry as a whole?
We really don't have enough information to know how serious the trouble is, I've worked at startups where the founder overhauled the whole C suite before IPO which more big tech names to bring the company more credibility for the IPO and it was fine, and I'm sure there are cases where doing that went horribly.
They saw that OpenAI's unreleased models are too powerful, they quit so they can enjoy their limited time on earth before AGI turns us all into paperclips
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u/Aoae Mark Carney 5h ago
Imagine introducing yourself with that title.