OpenAI has a negative 122% operating margin and growth of usage has stopped.

[scottmichaud@mastodon.gamedev.place]

@GossiTheDog -122% is actually better than I expect. I'm wondering how many "large line items" are being excluded. Does it include some things that are core to the business?

[chrisp@cyberplace.social]

@GossiTheDog

[dirkhh@hachyderm.io]

@scottmichaud
IIRC they are excluding the cost of training.
So this is just the cost of inference...

@GossiTheDog

[scottmichaud@mastodon.gamedev.place]

@dirkhh @GossiTheDog I hear training is frequently excluded in a lot of their numbers, but I don't know which ones. (And, of course, that is silly because their entire point is compressed human knowledge, so they're going to need to continually compress human knowledge.)

[azuaron@cyberpunk.lol]

@shtrom @GossiTheDog It would be absolutely amazing if the bubble popped before they even IPOed.

[dirkhh@hachyderm.io]

@scottmichaud
Also, of course, is the actual cost of obtaining training data. Because "stealing all the data in the world" isn't really valid accounting in most systems I'm aware of.

@GossiTheDog

[shtrom@piaille.fr]

@Azuaron Yeah! Though that would be no mean feat. IPO is when the VCs make their money back from retail investors and finally get to pull out. I suspect they'll sunk-cost until then @GossiTheDog

[scottmichaud@mastodon.gamedev.place]

@dirkhh @GossiTheDog So... well, in a utopia, it would be free. I can see them getting away with it being nearly-free in a dystopia. It could be super-expensive, though.

[gary_alderson@infosec.exchange]

@GossiTheDog the valuations seem to be basically fake - china is the value option now and they actually include freedom dust

[tootbrute@fedi.arkadi.one]

@GossiTheDog incredible business minds running AI.

[ggmcbg@mstdn.plus]

@GossiTheDog

Lie-writing. They didn't generate anything then.

[huronbikes@cyberplace.social]

@GossiTheDog really looking forward to the next batch of corporate financial thrillers such as "Margin Call 2: 2 Margin 2 Call" and "The Big Shart".

[cybeej@infosec.exchange]

@Azuaron @shtrom @GossiTheDog my over-under with my bestie is November. We’ve a fancy steak dinner riding on it. Remarkably just last week he admitted that’s it’s gonna pop, but he estimates Q1 ‘27 after Q4 numbers are cooked/announced.

[npars01@mstdn.social]

@shtrom @Azuaron @GossiTheDog

The last time petrostate despots & oil oligarchs laundered their cash via Deutsche Bank, private equity, & the housing market.

This time they're laundering their cash through US tech.

In any other situation, the C-suite would be swiftly turfed out, but Zuckerberg is still in charge at Meta, despite losing $77 billion on the Metaverse.

In the AI situation, the same insane losses & the same retention of money-losing executives. Odd.

Circular Finance Fraud.

[casandro@f-ckendehoelle.de]

@fencepost @GossiTheDog Yeah, that's why nobody is actually building factory capacity.

[richrants@toot.community]

@dirkhh Oh, if they moved from IFRS to AIFRS (which I just invented, stroke of genius, will need to start this as a side hustle) that’d be easy. They can just activate all the data they … found … as “Fair Use Data Inventory” at arbitrary valuation. Also, model training is not expensed, it’s an asset called “Capitalised Weights & Biases” (amortised over 99 years). And whatever they pay for compute = Deferred Compute Debt. Makes the numbers look so much better.

@scottmichaud @GossiTheDog

[1337@techhub.social]

@scottmichaud @dirkhh @GossiTheDog These companies are classifying training as CapEx instead of what it actually is, OpEx. Ed Zitron talks about this a lot. He thinks once the AI-only companies go public (OpenAI and Anthropic), their stocks will crash because they won't be able to get away with their accounting tricks as easily. I'm personally not sure. Investors and execs seem to be going through a sort of AI psychosis, and these companies are in bed with politicians and regulators.

[su_liam@mas.to]

@Npars01 @shtrom @Azuaron @GossiTheDog “So Big They Must Fail”
Anyone who even suggests an AI bail-out needs to leave Congress in tar and feathers.

[andres4ny@social.ridetrans.it]

@shtrom @GossiTheDog Seriously. I had flood damage to some computers yesterday so I need to get some new hardware.. and I ain't paying these ridiculous prices.

[david_chisnall@infosec.exchange]

@shtrom @Azuaron @GossiTheDog

IPOs won’t be when all of the shares go on the market. The early investors may add theirs to the pile, but usually they won’t sell all of them early because doing so would crash the stock price. The goal when you’re running a scam company is to IPO at a decent price that goes up a bit, then sell your shares slowly, at just below the quantity that there are buyers for, which keeps pushing the price up until you’ve offloaded them.

It’s easier to cook the books for one filing than to do so over a series, so you want to do this quite quickly before it’s obvious that the company’s fundamentals are terrible.

All of that said, sometimes companies crash when they IPO. Release the shares and watch the price plummet. If this happens, the early investors need to either dump their stock and get something back, or hold it in the hope that it will recover. That can be the thing that precipitates a bubble bursting.