Charlie StrossOct 3, 2025

Bubble's gonna burst!

OpenAI generated US$4.3 billion in revenue in the first half of 2025, according to financial disclosures to shareholders.

The artificial intelligence firm reported a net loss of US$13.5 billion during the same period, with more than half attributed to the remeasurement of convertible interest rights.

Research and development expenses were its largest cost, totaling US$6.7 billion in the first half.

(OpenAI current valuation: $500Bn.)

https://www.techinasia.com/news/openais-revenue-rises-16-to-4-3b-in-h1-2025

Show threadScott LairdOct 3, 2025
@cstross that's a lot more revenue than I would have expected, frankly.
Show threadCharlie StrossOct 3, 2025
@laird A lot of it is probably churn by big corporate customers like MSFT, AAPL, and META who want to convince their shareholders they're all in on AI. Once the bubble bursts they'll have no reason to keep throwing money at OpenAI.
Show threadDavid Chisnall (*Now with 50% more sarcasm!*)Oct 3, 2025

@cstross @laird

For those who haven't been watching:

A load of AI companies are actually just OpenAI resellers. OpenAI is among the biggest investors in these companies, but NVIDIA is also big. The way it works is something a bit like this:

  • NVIDIA invests $10M in some AI company.
  • That company takes $2M in revenue for effectively reselling OpenAI models at well below cost.
  • That company buys $12M of OpenAI credits (from their revenue plus investor money).
  • OpenAI reports $12M of revenue and uses this to justify raising $100M more investor money.
  • OpenAI buys $100M of GPUs from NVIDIA.
  • NVIDIA reports $100M of revenue and an asset worth at least $10M.

    • Everyone wins! Money from thin air!

    There's a more fun variant that is, roughly:

  • Investment firm has a $100M stake in NVIDIA.
  • Investment firm borrows $50 against this stake and uses it to invest in a load of AI startups (maybe even OpenAI).
  • Demand for GPUs goes up!
  • NVIDIA valuation increases significantly and now the firm's NVIDIA portfolio is worth $1B
  • Company slowly sells 20% of their stake (slowly, so it doesn't spook the market, but it's a fairly small fraction of market cap, so that's fine).
  • Company writes off the $50M investment in startups.
  • Company now has $150M in cash and an NVIDIA stake valued at $800M that they can borrow against.

    • If anyone except Trump were in the White House, I'd expect the end result of a bunch of SEC investigations to result in a lot of folks going to prison.

    Show threadORCACommanderOct 4, 2025
    @david_chisnall @cstross @laird in a gold rush, the only people who profit are selling the shovels.
    Show threadKay Ohtie 🔜 FWA
    @ORCACommander @david_chisnall @cstross @laird
    Wonder if the current version of that includes the folks who sell services at a premium to fix problems Cursor etc bring into code
    Oct 4, 2025 at 7:04pmWeb