OpenAI signs $38B cloud computing deal with Amazon

https://www.nytimes.com/2025/11/03/technology/openai-amazon-cloud-computing.html

by donohoe • 9 months ago

225 230 9 months ago

nytimes.com

thelastgallon• 9 months ago

How much is Amazon 'investing' in OpenAI for this deal?

throw03172019• 9 months ago

Will OpenAI models be available in Bedrock?

easton• 9 months ago

Last week's Microsoft deal said Azure was still exclusive: https://openai.com/index/next-chapter-of-microsoft-openai-pa...

But that feels weird combined with this. You can buy OpenAI API access which is served off of AWS infrastructure, but you can't bill for it through AWS? (I mean, lots of companies work like that. but Microsoft is betting that a lot of people move regular workloads to Azure so they can have centralized billing for inference and their other stuff?)

f4uCL9dNSnQm2• 9 months ago

It says

Non-API products may be served on any cloud provider.

I am not sure if Bedrock counts. There are 2 OpenAI models already there: https://aws.amazon.com/blogs/aws/openai-open-weight-models-n...

JCM99• 9 months ago

Does OpenAI have $38 billion to buy this? Does AWS have sufficient free cash flow to pay for this “infrastructure” investment they speak of?

Recent analysis shows AWS is burning through Amazon’s free cash on AI buildouts which is very concerning if the bubble pops, leaving Amazon holding the bag of invested capital not making returns.

Amazon is a bit late to the party on these headlines, and lots of unanswered questions about what’s really going on here.

gizajob3• 9 months ago

No, they don’t have the money at the bottom of their burning pit of other peoples cash.

vessenes3• 9 months ago

oAI is growing rapidly at over $1bn a month in revenues, maybe as much as $2bn if you read between the lines from Sam's interviews. Over 7 years will they see $38bn of revenue demand against inference? ABSOLUTELY. Is it an incredibly good trick to get access to that much infrastructure without having to run a datacenter while you pilot the fastest growth ever consumer tech company? I'd say it is. Others might disagree

cmiles84• 9 months ago

Amazon is a bit late to the announcements party on this front so this comes across as a bit “hey guys, us too!”

Lots of questions on if this makes sense, and highly likely Amazon never gets $38B cash from OpenAI out of this.

mocha_nate• 9 months ago

i think this shows Amazon filling a need Microsoft couldn't. They probably tried, but decided to use Amazon cloud services after reviewing infrastructure needs.

Handy-Man2• 9 months ago

MSFT is power constrained.[0]

[0] https://www.tomshardware.com/tech-industry/artificial-intell...

ahmeneeroe-v22• 9 months ago

"hey guys, us too!"

In what context? This isn't fashion, being the 2nd mover has benefits which often outweigh the costs.

Havoc• 9 months ago

They sure seem to be writing a lot of cheques. Hope they all cash ok because if they don’t it’ll suck the entire tech industry down with it

gizajob3• 9 months ago

Those cheques absolutely are going to bounce at some point and will bring the entire tech industry down. At least on the stock market.

jgbuddy2• 9 months ago

This is crazy, satya punching the air rn

Handy-Man2• 9 months ago

I don't think they care that much. They just aren't able to keep up with the infra that OpenAI wants.

https://www.tomshardware.com/tech-industry/artificial-intell...

ChrisArchitect• 9 months ago

Official post: https://openai.com/index/aws-and-openai-partnership/ (https://news.ycombinator.com/item?id=45799021)

datax2• 9 months ago

Looks like someone knew about this on Thursday, gotta love those over efficient market trends.

silisili• 9 months ago

Thursday was their last earnings call.

PKop• 9 months ago

No they just had a great quarterly earnings report that day. Try to put the absolute minimal effort into checking the obvious before you revert to conspiracy.

netdevphoenix4• 9 months ago

This looks quite concerning imo. We all know this is a bubble. When the transformer implosion happens, you can be sure that OpenAI will be ground zero. All these investors feeding OpenAI and all these adjacent companies exposing themselves to OpenAI will suffer huge losses. Everyone is chasing growth so hard that they are making questionable choices regarding returns from a far future that may never come. And let's be clear, the future that is going to pay this off is a future where this tech or a direct successor to this tech brings about a level of general learning skills and autonomy that should be pretty close to a third revolution. Anything else is massive loves for all of these companies.

lm28469• 9 months ago

Like in politics, all they care about is getting out before shtf and pass the bag to the next sucker while making $$$ in the meantime

empath75• 9 months ago

You are stating a lot of things as fact that aren't really supported. We don't know this is a bubble, we don't know that there will be a transformer implosion, whatever that means, we don't know that OpenAI would ground zero if this is a bubble and it pops, etc..

indigodaddy2• 9 months ago

No one ever knows before these things happen. These predictions are obviously always conjecture, they can’t be stated as fact, ever— at best you can give some supporting evidence often based on similar prior art

indigodaddy2• 9 months ago

loves is typo for losses I assume?

netdevphoenix4• 9 months ago

Yes, sorry. I can't edit the post anymore

treis6• 9 months ago

Nah this is a repeat of Google's early days. They built storage at such a scale that it was hard for anyone else to compete in anything that required storage like email.

OpenAI is doing the same with compute. They're going to have more compute than everyone else combined. It will give them the scale and warchest to drive everyone else out. Every AI company is going to end up being a wrapper around them. And OpenAI will slowly take that value too either via acquisition or cloning successful products.

kilroy123• 9 months ago

Google, too, has a lot of compute. Not to mention the chips to power the compute.

gizajob3• 9 months ago

If only everyone in the world had compute in their pockets or on their desk…

sipjca• 9 months ago

seems like a flawed assumption when the cost of tokens -> 0

mdasen• 9 months ago

But is OpenAI building that compute or are they renting it?

OpenAI and Anthropic are signing large deals with Google and Amazon for compute resources, but ultimately it means that Google and Amazon will own a ton of compute. Is OpenAI paying Amazon's cap ex just so Amazon can invest and end up owning what OpenAI needs over the long term?

For those paying Google, are they giving Google the money Google needs to further invest in their TPUs giving them a huge advantage?

JimDabell• 9 months ago

OpenAI is doing the same with compute.

No, it’s Amazon that’s doing this. OpenAI is paying Amazon for the compute services, but it’s Amazon that’s building the capacity.

pphysch4• 9 months ago

Pretty sure this "compute is the new oil" thesis fell flat when OAI failed to deliver on GPT-5 hype, and all the disappointments since.

It's still all about the (yet to be collected) data and advancements in architecture, and OAI doesn't have anything substantial there.

Keyframe• 9 months ago

Every AI company is going to end up being a wrapper around them.

the race is for sure on: https://menlovc.com/perspective/2025-mid-year-llm-market-upd...

lizknope• 9 months ago

Are we at the Pets.com stage of the bubble yet?

I started working in 1997 at the height of the dot com bubble. I thought it would go on forever but the second half of 2000 and 2001 was rough.

I know a lot of people designing AI accelerator chips. Everyone over 45 thinks we are in an AI bubble. It's the younger people that think growth is infinite.

I told them to diversify from their company stock but we'll see if they have listened after the bubble pops

weeeeelp• 9 months ago

https://archive.is/6DtPq

JCM99• 9 months ago

At this point these announcements are more PR posturing than anything that makes financial sense for shareholders.

I do worry what the other side of this looks like when the circular feedback loop driving hype up eventually reverses and drives things down with amplifying effect.

justchad• 9 months ago

Came to post something with a similar sentiment. It's going to have broad market effects when the circle dealing doesn't work out as intended. OpenAI is losing so much money every quarter that they will undoubtedly have to raise prices I would think and people may not be willing to pay them.

whalesalad• 9 months ago

At this point these announcements are more PR posturing than anything that makes financial sense for shareholders.

corporate would like you to find the difference between these two photos

bwfan1232• 9 months ago

The negative drumbeat has started, and the narrative is changing to become critical. Every new fad reaches a saturation point, and people's attention spans are short. Already, I see folks piling onto the quantum bandwagon as if LLMs are passe.

Here, the clouds have pulled a trick to inflate their revenues with their own cashflows, and have not been punished yet for it by shareholders - except meta which is getting asked some difficult questions.

hypeatei• 9 months ago

We all know this is going to pop at some point but I personally think Amazon would be a good investment for the next 6 months or so. They just did layoffs, can ride the OpenAI hypetrain, and they beat recent earnings. If they beat next earnings with a lower headcount and mention "AI" a couple times, I think their stock price easily goes to $300.

Not financial advice, obviously, but that's my personal outlook. I've said it before: Alphabet is probably the safest play long term as they haven't been infected by any NVIDIA or OpenAI deals (yet)

treis6• 9 months ago

OpenAI is an existential threat to Google. They're both solving the same problem for consumers. Something like "there's information on the Internet that I want but don't know where it is". Almost all of Google's value derives from being the default solution to that problem. They can't give up that space to OpenAI. And, at least IMHO, it's obvious LLMs are the future in this area.

The other side to that coin is monetization. Google is dominant there as well. OpenAI can't yield that space to Google because it's how the value is extracted from the consumer.

bwfan1232• 9 months ago

reverse that. Google is the existential threat to openAI. Google can price tokens to make openAI never profitable.

Marazan• 9 months ago

At this point it is getting beyond parody

xnx2• 9 months ago

All these stories should have the dollar amounts in quotes as they are farcical.

damnesian• 9 months ago

Great, can I buy hallucinated products now?

JCM99• 9 months ago

Reading between the lines of Trainium left out of the announcement says they tried it, weren’t impressed, and wanted NVidia chips instead.

Insanity4• 9 months ago

I don't think that's super surprising though. Nvidia has deals with OpenAI as well, so not using Trainium might have as much to do with OpenAI keeping Nvidia happy, as with Trainium not being on-par.

JCM99• 9 months ago

Didn’t stop OpenAI doing a mega deal with AMD.

They just didn’t like the chips is the most logical answer. Particularly given AWS has been doing everything they can to pump up interest, and this huge PR release doesn’t even mention it at all. That omission speaks volumes.

belval• 9 months ago

Maybe but I wonder if it's just moving capacity around.

Anthropic is moving to Trainium[1], that will free Nvidia GPUs and allow AWS to rent those GPUs to OpenAI.

[1] https://finance.yahoo.com/news/amazon-says-anthropic-will-us...

Yizahi• 9 months ago

Only 38 billion dollars? I thought we are in the age of triple digit billion sums by now in the LLM space. What is that paltry change worth for, a couple seconds worth of OpenAI daily expenses?

jcranmer3• 9 months ago

The main question I have with all of these deals: how much of the deal is OpenAI actually required to buy, versus how much of it is an option for OpenAI to buy? Because if you tot up all of these numbers, it's something like 10× current annual revenue that OpenAI is signing deals for, and if OpenAI is actually committing to all of that spend... there is a serious cash crunch looming. But if OpenAI is merely optioning to spend up to that much, and only has to commit to a tenth of those numbers, well, that's not as threatening to OpenAI as a going concern.

JCM99• 9 months ago

This does all smell a bit like when WeWork was buying up seemingly every available office for rent. When it came time to actually pay for said offices… oops.

mike_d3• 9 months ago

When it came time to actually pay for said offices… oops

I was at WeWork around the time of its downfall. I have a lot of opinions about how that place was ran, but I can assure you pre-pandemic they were buying up every office space because they were filling them with tenants. Not paying for offices was a result of tenants not paying due to the pandemic.

jsnell• 9 months ago

It's actually more like 100x their current revenue; they stated last week[0] that they have spending commitments for $1.4T of compute.

Or, well, they stated that the TCO of the compute they have commitments for is $1.4T, which is a somewhat strange phrasing. I assume it's due to it being a mix of self-owned vs. rental compute, and what they mean is the TCO to OpenAI rather than the TCO to the owner of the compute.

[0] https://x.com/sama/status/1983584366547829073

JCM99• 9 months ago

That’s absolutely insane.

I get that folks are now just engaged in “keeping up with the Jones’” FOMO behavior but none of this is making any sense.

jcranmer3• 9 months ago

I went to 10× revenue because I figured the ~$1 trillion was over something like a decade, rather than over a year.

mkhattab• 9 months ago

These deal numbers have lost all meaning for me.

There’s been some buzz around the official opening of the Grand Egyptian Museum, which I visited last month. That project took 1.1 to 1.2B USD. Double its original budget estimate but still the museum looks fantastic and it feels, tangibly, like it’s worth a billion.

In contrast with all the money spent on AI, it just feels like monopoly money. Where’s the monument to its success? We could’ve built flying cars or been back to the moon with this much money.

whycome• 9 months ago

I’d rather useful AI tools than a flying car or someone else going to the moon.

But I agree that the numbers are increasingly beyond reasonable comprehension

Aperocky• 9 months ago

I've been using AI and so did many people I knew. It's resulted in tangible difference in my life.

It's much less likely that I'd drive a flying car and there is 0 chance that I would be the one going to the moon if we spent the equivalent money on those things instead.

malux854• 9 months ago

Me too, once you’ve had a lot of practice with it (like anything) and know how to mitigate some of its weaknesses, then it’s a superpower.

I currently pay 200 USD a month for AI, and my company pays about 1,200 USD for all employees to use it essentially unlimited - and I get AT LEAST 5x the return on value on that, I would happy multiply all those numbers by 5 and still pay it.

Domain knowledge, bug fixing, writing tests, fixing tests, spotting what’s incomplete, help visualising results, security review generation for human interpretation, writing boilerplate, and simpler refactors

It can’t do all of these things end to end itself, but with the right prompting and guidance holy smokes does it multiply my positive traits as a developer

paxys• 9 months ago

What percent of the world is going to set foot in this museum in the next few years? What percent has used or will use AI tools?

ahmeneeroe-v22• 9 months ago

it feels, tangibly, like it’s worth a billion

Lot of feeling going on in this comment, but that's not really how money works.

throw_m239339• 9 months ago

I wouldn't be surprised if a few weeks later, Amazon was investing $38B in NVIDIA for new server processors... like nothing to see here folks, totally not a giant circular bubble...

Insanity4• 9 months ago

And so the bubble grows.

I'd be happy if the industry/stock market proves me wrong, but I can't see this ending any other way than with a major crash that makes the dot-com boom seem like a minor blimp.

PeaceTed• 9 months ago

I really don't know with this. By that I mean all logic says that, yes this is absolutely a bubble. But the markets have been irrational for a very long time now, just look at Tesla stock and it wild valuations for years now as an example. This could go on for a lot longer than anyone would think reasonable.

burningChrome2• 9 months ago

I lived through the first dot com bubble and bust and it was pretty nasty. I was working for a telecom company at the time. The building we were in were chocked full of bright eyed, bushy tailed startups who were pushing the edge on all kinds of things. Less than a year later, they were all gone.

We used to have lunch at the bar across the street and just about once or twice a week for several months, we'd walk in and there would be a table with about 15-20 people sitting around drinking and reminiscing about how they were going to change the world.

A lot of developers I know just completely left the industry and never came back.

If this crash exceeds that one? We're in for some seriously tough times.

semiinfinitely• 9 months ago

I can't see a prediction like this as anything other than a description of what would be maximally emotionally satisfying for you personally.

Insanity4• 9 months ago

Why? The numbers don’t make sense for the expected revenue.. they are significantly disconnected. And I have yet to see a “killer app” that can be monetized.

Spivak• 9 months ago

It would be emotionally satisfying for the AI bubble to burst, bringing the rest of the industry down with it, and having a good chance of costing them their job?

It doesn't come off as schadenfreude to me as much as it does the emotional clarity of accepting the oncoming train and knowing there's nothing you could have done to stop it. This brand of "just along for the ride" nihilism seems pretty damn common now.

Libidinalecon5• 9 months ago

That makes no sense. I started my career just past the peak of the dot com bubble and got absolutely crushed. It was probably the most demoralizing experience of my life. It was so damaging but no one is going to come out unscathed on the back side of all this.

random9749832• 9 months ago

What is the end goal? GPT-5 wasn't even a step up from o3.

ChatGPT has 800 million weekly users but only 10 million are paying.

vessenes3• 9 months ago

GPT 5 codex is definitely a step up from o3. I could use o3 still for chat, but prefer 5-thinking. Do you still use o3?

JCM99• 9 months ago

OpenAI is generating $13B a year in revenue. Let’s be generous and say $20B. They’ve signed commitments to spend something like $1.4 trillion on compute. An asset that to date has proven to have a hyper-depreciation cycle.

Someone has to come up with $1.4 trillion in actual cash, fast, or this whole thing comes crashing down. Why? At the end of all this circular financing and deals are folks that actually want real cash (eg electricity utilities that aren’t going to accept OpenAI shares for payment).

If the above doesn’t freak you about a bit at how bonkers this whole thing has become then you need a reality check. “Selling ads” on ChatGPT ain’t gonna close that hole.

hluska2• 9 months ago

Is there a reason you’re posting so often on this thread? Everyone gets your point.

JCM99• 9 months ago

Fair enough. I guess I’m just like those guys at the investors conference in The Big Short and can’t believe what I’m seeing.

Razengan2• 9 months ago

electricity utilities that aren’t going to accept OpenAI shares for payment

What if AI invents fusion power?

(Thanks for the downvotes I wanted to keep my karma at 69)

jdlshore2• 9 months ago

1. There’s no indication that AI is capable of doing so.

2. Outside of software, inventions have to be turned into physical things like power plants. That doesn’t happen overnight and is expensive.

3. The industry is already going through a power revolution in the form of battery + solar and it’s going to take a while for a new technology to climb the learning curve enough to be competitive.

4. What if AI gives us all a pony?

JumpCrisscross9• 9 months ago

Thanks for the downvotes

“Please don't comment about the voting on comments. It never does any good, and it makes boring reading.”

https://news.ycombinator.com/newsguidelines.html

jonas21• 9 months ago

The $1.4T commitment is spread over multiple years. Let's assume 4 -- then that's $350B/year. Coincidentally, Google had $350B in revenue in 2024 (and projected to be ~$400B in 2025).

It's certainly possible to imagine OpenAI eventually generating far more revenue than Google, even without anything close to AGI. For example, if they were to improve productivity of 10% of the economy by 10% and capture a third of that value for themselves, that would be more than enough. Alternatively, displacing Google as the go-to place for search and selling ads against that would likely generate at least Google levels of revenue. Or some combination of both.

Is this guaranteed to happen? Of course not. But it's not in "bonkers" territory either.

Aurornis2• 9 months ago

The $1.4T commitment is spread over multiple years. Let's assume 4

The Amazon deal is actually spread over 7 years. Other deals have different terms, but also spread over multiple years.

Deals like these have cancellation terms. OpenAI could presumably pay a fee and cancel in the future if their projections are too high and they don't need some of the compute from these deals.

The deals also include OpenAI shares. The deals are being made with companies that have sufficient revenue or even cash on hand to buy the compute and electricity.

The claim above that someone needs to come up with $1.4 trillion right now or everything will collapse isn't grounded in any real understanding of these deals. It's just adding up numbers and comparing them to a single annual revenue snapshot.

ivape2• 9 months ago

Google is under existential threat. In that case, OpenAI has a very legitimate trillion dollar case for carving out a piece of Google.

Search engines were never a user friendly app to begin with. You had to know how to search well to get comprehensive answers, and the average person is not that scrupulous. Google’s product is inferior, believe it or not. There will be nothing normal about seeing a list of search results pretty soon, so Google literally has a legacy app out in the wild as far as facts are concerned.

So imagine that, Google would have to remove Search as they know it (remove their core business) and standup a app that looks the same as all the new apps.

People might like one AI persona more than others, which means people will seek out all types of new apps. LLMs is the worst thing that could have ever happened to Google quite frankly.

JumpCrisscross9• 9 months ago

if they were to improve productivity of 10% of the economy by 10% and capture a third of that value for themselves, that would be more than enough

This is “if we get 1% of the market” logic.

thrance• 9 months ago

So their only reasonable plan is to capture a significant portion of the global economy through a tech that we have currently no idea how to build? Seems a little dodgy, to say the least. I would personally consider it well in "bonkers" territory.

wavemode• 9 months ago

Google themselves are an AI company (in case anyone forgot) - if LLM-powered search is going to become a popular product, then that's great news for Google. They already have an LLM capable of searching the Web, and they've already integrated it heavily into their search engine, browser, mobile phones, and Office suite.

OpenAI has nothing resembling this ecosystem, and will never be nearly as valuable a place to buy ads. Replacing Google is probably the least realistic business plan for OpenAI - if that's what they're betting on, they're cooked.

mnky9800n• 9 months ago

The problem is that 10% productivity increase could be captured by workers with having to work 10% less but because everything everywhere is essentially leveraged they now have to fill that 10% gap to pay off the leverage. That’s probably wrong so I’m sure someone will explain to me why.

Aurornis2• 9 months ago

Someone has to come up with $1.4 trillion in actual cash, fast, or this whole thing comes crashing down.

These deals aren't for 100% payment up front. The deals also include stock, not just cash. So, no, they do not need to come up with $1.4 trillion in cash quickly.

This AWS deal is spread over 7 years. That's $5.4 billion per year, though I assume it's ramping up over time.

At the end of all this circular financing and deals are folks that actually want real cash (eg electricity utilities that aren’t going to accept OpenAI shares for payment).

Amazon's cash on hand is on the order of $100 billion. They also have constant revenue coming in. They will not have any problem accepting OpenAI shares and then paying electricity bills with cash.

These deals are also being done in the open with publicly traded companies. Investors can see the balance sheets and react accordingly in the stock price.

mandevil• 9 months ago

Interestingly, it looks like there is a move away from financing these data centers with tech company cash-on-hand and moving to Special Purpose Vehicles over the past 18 months or so. So now there is a lot more debt involved in funding DC's than equity, in ways that are a sudden change to what was largely a funded-by-equity process at the beginning of 2024.

The one I found best documented (1) is a Meta's SPV to fund their Hyperion DC in Louisiana, which is a deal that is 80% financed by private credit firm Blue Owl. There is a lot of financial trickery to getting the SPV to be counted by the ratings agencies as debt belonging to a different entity that does not count against Meta's books but treated by the market as basically something that Meta will back. But xAI's Memphis DC is also a SPV, and Microsoft is doing that as well. I'm not sure about AMZN, but that we're starting to see that from their competitors suggests they will also be going to this way.

1: By the invaluable Matt Levine, here: https://www.bloomberg.com/opinion/newsletters/2025-10-29/put... but the other major companies have their own SPV's

slg• 9 months ago

These deals are also being done in the open with publicly traded companies. Investors can see the balance sheets and react accordingly in the stock price.

I'm no expert on the specifics of the circular financing we're seeing here so the rest of what you wrote might be true, but I know enough about how Wall Street and the world in general works to know that closing with this as a defense shows an incredible naivete that makes me question everything else you have said.

jgbuddy2• 9 months ago

The obvious answer is that they are going to IPO

officeplant2• 9 months ago

I hope so just so I can watch the funny line graph of people burning money.

confirmmesenpai2• 9 months ago

token usage is growing exponential at all providers.

it will grow even more with the next generation of models.

shellfishgene• 9 months ago

Are these tokens paid for by customers, or is it mostly the freebies thrown around by ChatGPT et al.?

mv4• 9 months ago

This circular game is wholly dependent on OpenAI's ability to access public funds via IPO.

rdsubhas• 9 months ago

The proportion of the utilities involved are a fraction of 1.4T.

jstummbillig3• 9 months ago

Let's actually be generous and assume that all parties involved did the math and some due diligence and are not just idiots. If we try that approach, what could that plausibly tell us about a situation where OpenAI has struck deals with not one, but basically all the major chip/infra providers?

dontlikeyoueith• 9 months ago

Let's actually be generous and assume that all parties involved did the math and some due diligence and are not just idiots

Economic history strongly suggests this would be a bad assumption.

cmiles84• 9 months ago

The history of bubbles strongly suggests this is precisely evidence of a bad decision, not a good one. For a bubble to exist and be sustained everyone needs to get on board with things that wouldn’t normally make any sense.

Bleehmi• 9 months ago

Why would it freak me out?

I have not invested in OpenAi.

But the truth is, right now the potential revenue is not achievable with a relevant investment into energy generation.

Interesting rat race which will lead to something. Let's see what it will be

mise_en_place2• 9 months ago

It doesn't freak me out and it's actually completely rational. If both OpenAI and AMZN expect real rates to keep rising while inflation spirals out of control, this deal makes a lot of sense for both of them. They're just duration hedging.

JumpCrisscross9• 9 months ago

If both OpenAI and AMZN expect real rates to keep rising while inflation spirals out of control, this deal makes a lot of sense for both of them. They're just duration hedging

It can’t be the same hedge on both sides of the trade.

lumost3• 9 months ago

If OpenAI continues on their current revenue growth trajectory, they should be larger than AWS by 2027. Burning 2x revenue to grow that fast is not really a concern beyond your continued ability to attract financing. Given the trajectory of inference cost, it unlikely that they would fail to reach profitability.

The big question would be how much of this revenue is unjustifiably circular, and how much of it is extractable - but those are questions for when the growth slows. Im certain every supplier has ways to back out of these commitments if the finances look shaky.

mvdtnz• 9 months ago

https://xkcd.com/605/

hiq• 9 months ago

Given the trajectory of inference cost, it unlikely that they would fail to reach profitability.

Is there evidence that their revenues are growing faster than their costs?

Libidinalecon5• 9 months ago

I don't know, this coming month will be the first time that my subscription is going to lapse.

I have got incredible value from ChatGPT up to this point but I have been using it less and less.

What I have mostly extracted from it is a giant list of books I need to read. A summary of the ideas of a book I haven't read is obviously not the same as reading the whole book.

Before all this there were so many areas I was curious about that ChatGPT gave me a nice surface level summary of. I now know much better what I want to focus on but I don't need more surface level summaries.

JumpCrisscross9• 9 months ago

“OpenAI CEO Sam Altman sounded exasperated when Altimeter Capital founder—and OpenAI shareholder—Brad Gerstner asked him the question that Gerstner said was ‘hanging over the market’: how a company generating $13 billion in revenue this year would pay for the $1.4 trillion in computing capacity that Altman has said the company is on the hook for.

‘Brad, if you want to sell shares, I’ll find you a buyer…I just—enough,’ Altman said on Gerstner’s podcast.”

https://www.theinformation.com/articles/ilya-saw-mira-murati...

dgfitz• 9 months ago

I’ll find you a buyer…I just—enough,’ Altman said on Gerstner’s podcast.”

Hopefully nobody reading this has experienced it: these are the words of a true sociopath/addict.

"I'm mad you questioned me" is fucking classic.

I told dang I was out and I am after this. Sorry dang.

xnx2• 9 months ago

Can the "bubble" pop/deflate in a way that just takes out OpenAI? I don't see Google overextended at all.

Imustaskforhelp3• 9 months ago

The bubble will burst and I think it might take the S&P 500 down with it simply because of how damn concentrated it is.

The effects would be devastating to say the least in how I feel like it.

If S&P 500 grew thanks to this AI bubble, it sure as well will shrink as well due to the popping of this bubble too.

There is no free lunch but more precisely I am worried more about the retirement schemes in which people put their money into etc.

Personally I was saying this thing a long time ago that AI feels like a bubble and maybe S&P 500 would have some issues and thus to diversify into international or gold etc. and I was met with criticism because "S&P 500 is growing the fastest so I am wasting money investing in gold etc.", Yea because that's because bubbles can also grow... and they also shrink... and they do both of these things fast.

f4uCL9dNSnQm2• 9 months ago

OpenAI might actually survive, even if investors lose significant part of their investment. It those those companies that took out loans to invest in "AI" or took overpriced shares as a payment that are getting wiped out.

parsimo2010• 9 months ago

You're probably right about how disconnected the spending vs. revenue is, but I've also seen the entire USA's public debt go so high that it requires nearly $1 trillion per year just to service the interest payments [1]. That sounds ludicrous to me too, and yet somehow the economy is booming.

There are two important points by Keynes that are relevant:

1. The market can remain irrational longer than you can remain solvent. Even if you're betting on a crash, it will probably happen after you get margin called and lose all your money. You can be absolutely right about where this is headed, but keep your personal investments away from this.

2. The value of a company isn't determined by any sound fundamentals. It's determined by how much you can get a sucker to pay (aka Keynes' castles in the air theory). Until we run out of suckers OpenAI will be able to keep getting cash infusions to pay whoever actually demands cash instead of stock. And as long as there are suckers that are CEOs of big tech companies they are going to be getting really big cash infusions.

[1] https://www.pgpf.org/programs-and-projects/fiscal-policy/mon...

RA_Fisher• 9 months ago

Or, maybe you don’t understand why it’s rational?

raincole• 9 months ago

The logical conclusion is that we don't have an AI bubble. We have a USD flood. Or consequentially, fiat floods. You see stupid expected valuation of OpenAI et al. not because investors are stupid. It's because there is a stupid amount of USD and it has to go somewhere. You either get real estate bubble or AI bubble or whatever bubble.

tim3333• 9 months ago

Headlines say:

OpenAI thought to be preparing for $1tn stock market float. ChatGPT developer is considering filing for an IPO by the second half of 2026...

browningstreet• 9 months ago

We had impossible financial projections written up just like this for Uber and WeWork. They’re still here. The MBAs will probably win this too.

hattmall2• 9 months ago

What is WeWork's market cap today?

drake99• 9 months ago

Sam can pay the cloud bill by selling openai shares , it is very expensive and very limitation

tartoran• 9 months ago

They're going for too big to fail because failing would wipe out a lot of profits and that's a nono.

fathermarz• 9 months ago

Doesn’t this mean that some percentage of Microsoft’s investment is being given directly to their competitor? This feels like a bubble moment.

markus_zhang• 9 months ago

I don’t know but this feels more and more like jumping by stepping one’s own feet…

system2• 9 months ago

If it is a bubble, why are huge companies like Amazon and Microsoft feeding it? What do they get by doing this nonstop? All I hear is that this is a bubble on the internet, yet big companies are making these huge deals. Don't they see what we, the uspeasants, see with their highly paid finance departments?

pfortuny• 9 months ago

It is not a panic if you are the first out…

jdlshore2• 9 months ago

Big companies are made out of people, and those people are just as fallible as everyone else… and more so, in fact. They’re prone to group-think and suppressing bad news.

The existence proof is, well, every financial crisis ever. Start with the housing bubble and ask, why did huge banks whose entire job was financial modeling get caught up in it? What makes companies today immune to those same types of decision-making errors?

tacker2000• 9 months ago

Tbh these juggernauts could survive an AI bubble bursting and pick up the pieces, they are playing with a little bit more than their spare change here.

chaosprint• 9 months ago

https://founderboat.com/interviews/2025-11-01-openai-sam-sat...

A central theme of the discussion was the staggering demand for computational power. Gerstner highlighted OpenAI’s reported commitment of $1.4 trillion for compute over the next five years, questioning how a company with reported revenues of $13 billion could manage such an outlay.
Altman pushed back forcefully. “First of all, we’re doing well more revenue than that. Second of all, Brad, if you want to sell your shares, I’ll find you a buyer,” he quipped. He expressed profound confidence in the company’s trajectory. “We do plan for revenue to grow steeply. Revenue is growing steeply. We are taking a forward bet that it’s going to continue to grow.”

This seems to be just the tip of the iceberg; what about the rest?

dude250711• 9 months ago

Could they not at least increase their profits by simply replacing expensive technical staff with AI?

bfkwlfkjf• 9 months ago

LOL Sam Conman trying to rope everybody in.

TheAlchemist• 9 months ago

"It's only when the tide goes out that you know who's been swimming naked." - Warren Buffett

This bubble is one for the history books !

nprateem• 9 months ago

Obviously the plan is to lock Anthropic and others out of AWS.

All financial analysis misses the point. They just need to buy enough time and compute to out-last the competition.

All bets are off if China find a way of reducing processing power by 50% or more.

If only killing off grok and Gemini was so easy...

OpenAI signs $38B cloud computing deal with Amazon

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