> Demand for chips is come from the inference providers. Demand for inference was (and still is) being sold at below cost. OpenAI, for example, has a spend rate of $5b per month on revenues of $0.5b per month.

This is definitely wrong, last year it was $725m/month expenses and $300m/month revenue. Looks like the nearly-2:1 ratio is also expected for this year: https://taptwicedigital.com/stats/openai

This also includes the cost of training new models, so I'm still not at all sure if inference is sold at-cost or not.

> This is definitely wrong, last year it was $725m/month expenses and $300m/month revenue.

It looks like you're using "expenses" to mean "opex". I said "spend rate", because they're spending that money (i.e. the sum of both opex and capex). The reason I include the capex is because their projections towards profitability, as stated by them many times, is based on getting the compute online. They don't claim any sort of profitability without that capex (and even with that capex, it's a little bit iffy)

This includes the Stargate project (they're committed for $10b - $20b (reports vary) before the end of 2025), they've paid roughly $10b to Microsoft for compute for 2025. Oracle is (or already has) committed $40b in GPUs for Stargate and Softbank has committments to Stargate independently of OpenAI.

> Looks like the nearly-2:1 ratio is also expected for this year: https://taptwicedigital.com/stats/openai

I find it hard to trust these numbers[1]: The $40b funding was not in cash right now, and depends on Softbank for $30b with Softbank syndicating the remaining $10b. Softbank themselves don't have cash of $30b and has to get a loan to reach that amount. Softbank did provide $7.5b in cash, with milestones for the remainder. That was in May 2025. In August that money had run out and OpenAI did another raise of $8.3b.

In short, in the last two to three months, OpenAI spent $5b/month on revenues of $0.5b/m. They are also depending on Softbank coming through with the rest of the $40b before end of 2025 ($30b in cash and $10b by syndicating other investors into it) because their commitments require that extra cash.

Come Jan-2026, OpenAI would have received, and spent most of, $60b for 2025, with a projected revenue $12b-$13b.

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[1] Now, true, we are all going off rumours here (as this is not a public company, we don't have any visibility into the actual numbers), but some numbers match up with what public info there is and some don't.

> It looks like you're using "expenses" to mean "opex"

I took their losses and added it to their revenue. That seems like that sum would equal expenses.

> The $40b funding was not in cash right now,

Does this matter? I'm not counting it as revenue.

> In short, in the last two to three months, OpenAI spent $5b/month on revenues of $0.5b/m.

You're repeating the same claim as before, I've not seen any evidence to support your numbers.

The evidence I linked you to suggests the 2025 average will be double that revenue, $1bn/month, at an expense of ($9bn loss after $12bn revenue / 12 months = $21bn / 12 months) = $1.75bn/month

>> The $40b funding was not in cash right now,

> Does this matter? I'm not counting it as revenue.

Well, yes, because they forecast spending all of it by end of 2025, and they moved up their last round ($8.3b) by a month or two because they needed the money.

My point was, they received a cash injection of $10b (first part of the $40b raise) and that lasted only two months.

>> In short, in the last two to three months, OpenAI spent $5b/month on revenues of $0.5b/m.

> You're repeating the same claim as before, I've not seen any evidence to support your numbers.

Briefly, we don't really have visibility into their numbers. What we do have visibility into is how much cash they needed between two points (Specifically, the months of June and July). We also know what their spending commitment is (to their capex suppliers) for 2025. That's what I'm using.

They had $10b injected at the start of June. They needed $8.3b at the end of July.

It's crazy how many people are completely confident in their "knowledge" of the margins these products have despite the companies providing them not announcing those details!

(To be clear, I'm not criticising the person I'm replying to.)

Mm, quite.

I tend to rough-estimate it based on known compute/electricity costs for open weights models etc., but what evidence I do have is loose enough that I'm willing to believe a factor of 2 per standard deviation of probability in either direction at the moment, so long as someone comes with receipts.

Subscription revenue and corresponding service provision are also a big question, because those will almost always be either under- or over-used, never precisely balanced.