[HN Gopher] OpenAI's cash burn will be one of the big bubble que...
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OpenAI's cash burn will be one of the big bubble questions of 2026
Author : 1vuio0pswjnm7
Score : 54 points
Date : 2025-12-30 21:44 UTC (1 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| dredmorbius wrote:
| Archive/Paywall: <https://archive.is/rHPk3>
| bariswheel wrote:
| thank you!
| laweijfmvo wrote:
| why does the article used words like burn and incinerate,
| implying that OpenAI is somehow making money disappear or
| something? They're spending it; someone is profiting here, even
| if it's not OpenAI. Is it all Nvidia?
| zaphar wrote:
| Because that's normal language idioms in financial analysis
| reporting?
| popalchemist wrote:
| Because typically one expect a return on investment with that
| level of spending. Not only have they run at a loss for years,
| their spending is expected to increase, with no path to
| profitability in sight.
| bdangubic wrote:
| not that I disagree but would it be fair to say though that
| we have seen this before where it turned out OK? say Uber?
| Amazon?
| oh_my_goodness wrote:
| To become the next Uber, do I just need to run huge losses?
| simonw wrote:
| Your burn is the money you spend that exceeds the money you
| earn, see also "burn rate".
| wat10000 wrote:
| "Burn rate" is a standard financial term for how much money a
| startup is losing. If you have $1 cash on hand and a burn rate
| of $2 a year, then you have six months before you either need
| to get profitable, raise more money, or shut down.
| lexicality wrote:
| I suspect most of it is going to utilities for power, water and
| racking.
|
| That being said, if I was Sam Altman I'd also be stocking up on
| yachts, mansions and gold plated toilets while the books are
| still private. If there's $10bn a year in outgoings no one's
| going to notice a million here and there.
| andsoitis wrote:
| In a parallel universe, governments invest in the
| compute/datacenters (read: infra), and let model makers compete
| on the same playing field.
| websiteapi wrote:
| why would they do that? not to mention governments are already
| doing that indirectly by taking equity stakes in some of the
| companies.
| candiddevmike wrote:
| Same reason they should own access lines: everyone needs
| rackspace/access, it should be treated like a public service
| to avoid rent seeing. Having a data center in every city
| where all of the local lines terminate into could open the
| doors to a lot of interesting use cases, really help with
| local resiliency/decentralization efforts, and provide a
| great alternative to cloud providers that doesn't break the
| bank.
| websiteapi wrote:
| should the government own all types of "public services"?
| e.g. search index, video serving infra, etc?
| simonw wrote:
| If that did happen, how would the government then issue those
| resources?
|
| OpenAI ask for 1m GPUs for a month, Anthropic ask for 2m, the
| government data center only has 500,000, and a new startup
| wants 750,000 as well.
|
| Do you hand them out to the most convincing pitch? Hopefully
| not to the biggest donor to your campaign.
|
| Now the most successful AI lab is the one that's best at
| pitching the government for additional resources.
|
| UPDATE: See comment below for the answer to this question:
| https://news.ycombinator.com/item?id=46438390#46439067
| 3eb7988a1663 wrote:
| National HPC labs have been over subscribed for decades with
| extensive queueing/time sharing allocation systems.
|
| It would still likely devolve into most-money-wins, but it is
| not an insurmountable political obstacle to arrange some sort
| of sharing.
|
| Edit: I meant to say over _subscribed_ , not over
| provisioned. There are far more jobs in the queue than can be
| handled at once
| simonw wrote:
| Huh, TIL - thanks for the correction.
|
| https://www.ornl.gov/news/doe-incite-program-
| seeks-2026-prop...
|
| > The Innovative and Novel Computational Impact on Theory
| and Experiment, or INCITE, program has announced the 2026
| Call for Proposals, inviting researchers to apply for
| access to some of the world's most powerful high-
| performance computing systems.
|
| > The proposal submission window runs from April 11 to June
| 16, 2025, offering an opportunity for scientific teams to
| secure substantial computational resources for large-scale
| research projects in fields such as scientific modeling,
| simulation, data analytics and artificial intelligence.
| [...]
|
| > Individual awards typically range from 500,000 to
| 1,000,000 node-hours on Aurora and Frontier and 100,000 to
| 250,000 node-hours on Polaris, with the possibility of
| larger allocations for exceptional proposals. [...]
|
| > The selection process involves a rigorous peer review,
| assessing both scientific merit and computational
| readiness. Awards will be announced in November 2025, with
| access to resources beginning in 2026.
|
| Not sure OpenAI/Anthropic etc would be OK with a six month
| gap between application and getting access to the
| resources, but this does indeed demonstrate that government
| issued super-computing resources is a previously solved
| problem.
| pear01 wrote:
| Well, people bid for USA government resources all the time.
| It's why the Washington DC suburbs have some of the country's
| most affluent neighborhoods among their ranks.
|
| In theory it makes the process more transparent and fair,
| although slower. That calculus has been changing as of late,
| perhaps for both good and bad. See for example the Pentagon's
| latest support of drone startups run by twenty-year-olds.
|
| The question of public and private distinctions in these
| various schemes are very interesting and imo, underexplored.
| Especially when you consider how these private LLMs are
| trained on public data.
| wat10000 wrote:
| That seems like a terrible idea. Data centers aren't a natural
| monopoly. Regulate the externalities and let it flourish.
| echelon wrote:
| That's malinvestment. Too much overhead, disconnected from long
| term demand. The government doesn't have expertise, isn't lean
| and nimble. What if it all just blows over? (It won't? But who
| knows?)
|
| Everything is happening exactly as it should. If the "bubble"
| "pops", that's just the economic laws doing what they naturally
| do.
|
| The government has better things to do. Geopolitics, trade,
| transportation, resources, public health, consumer safety,
| jobs, economy, defense, regulatory activities, etc.
| aucisson_masque wrote:
| I'd rather stay far away from this parallel universe.
|
| Why would you want my money to be used to build datacenter that
| won't benefit me ? I might use a LLM once a month, many people
| never use it.
|
| Let the one who use it pay for it.
| inerte wrote:
| That's like every government initiative. Same as healthcare?
| School? I mean if you don't have children why do you pay
| taxes... and roads if you don't drive? I mean the examples
| are so many... why do you bring this argument that if it
| doesn't benefit you directly right now today, it shouldn't be
| done?
| magpi3 wrote:
| Healthcare, schools, roads, generative AI. One of these
| things is not like the others.
| inerte wrote:
| We gave incentives to broadband, why not generative AI?
| 3eb7988a1663 wrote:
| You are already paying for several national lab HPC centers.
| These are used for government/university research - no idea
| if commercial interests can rent time on them. The big ones
| are running weather, astronomy simulations, nuclear
| explosions, biological sequencing, and so on.
| cambrianentropy wrote:
| In a completely alternate dimension, a quarter of the capital
| being invested in AI literally just goes towards making sure
| everyone has quality food and water.
| dmitrygr wrote:
| Without capital invested in the past we wouldn't have almost
| anything of modern technology. That has done a lot more for
| everyone, including food affordability, than actually simply
| buying food for people to eat once.
| marcellus23 wrote:
| I'd rather live in a universe where that money is taken out
| of the military budget.
| paulcole wrote:
| Do you like this idea?
| Zigurd wrote:
| Prediction: on this thread you'll get a lot of talk about how
| government would slow things down. But when the AI bubble
| starts to look shaky, see how fast all the tech bros line up
| for a "public private partnership."
| nutjob2 wrote:
| That sounds like a nightmare.
| mvkel wrote:
| The fact is nobody has any idea what OpenAI's cash burn is.
| Measuring how much they're raising is not an adequate proxy.
|
| For all we know, they could be accumulating capital to weather an
| AI winter.
|
| It's also worth noting that OpenAI has not trained a new model
| since gpt4o (all subsequent models are routing systems and prompt
| chains built on top of 4), so the idea of OpenAI being stuck in
| some kind of runaway training expense is not real.
| micromacrofoot wrote:
| they're paying million dollar salaries to engineers and
| building data centers, it's not a huge mystery where their
| expenses are
| wahnfrieden wrote:
| wasn't 4.5 new
| Imustaskforhelp wrote:
| Didn't they create Sora and other models and literally burned
| so much money with their AI video app which they wanted to make
| a social media but what ended up happening was that they burned
| billions of dollars.
| computerphage wrote:
| Why do you think they have not trained a new model since 4o?
| You think the GPT-5 release is /just/ routing to differently
| sized 4o models?
| wahnfrieden wrote:
| they're incorrect about the routing statement but it is not a
| newly trained model
| ta9000 wrote:
| How are they updating the data then? Wouldn't the cutoff date
| be getting further away from today?
| adriand wrote:
| This article doesn't add anything to what we know already. It's
| still an open question what happens with the labs this coming
| year, but I personally think Anthropic's focus on coding
| represents the clearest path to subscriber-based success (typical
| SaaS) whereas OpenAI has a clear opportunity with advertising.
| Both of these paths could be very lucrative. Meanwhile I expect
| Google will continue to struggle with making products that people
| actually want to use, irrespective of the quality of its models.
| esel2k wrote:
| Where does google struggle to make products people don't want
| to use? Is it a personal opinion?
| gip wrote:
| There is no doubt that OpenAI is taking a lot of risks by betting
| that AI adoption will translate into revenues in the very short
| term. And that could really happen imo (with a low probability
| sure, but worth the risk for VCs? Probably).
| Avicebron wrote:
| On the radio they mentioned that the total global chocolate
| market is ~100B, I googled it when I was home and it seems to be
| about ~135B. Apparently that is ... all chocolate, everywhere..
| OpenAI's valuation is about 500B. Maybe going up to like 835B.
|
| I'd love to see the rationale that OpenAI (not "AI" everywhere)
| is more valuable than chocolate globally.
|
| ... so crash early 2026?
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