Comparing OpenAI and WeWork is a nonsensical perspective. OpenAI is shipping the most revolutionary product in a generation, with 800 million monthly active users. It's the fastest revenue ramp ever, at incredible scale -- $20B+ ARR. These are real fundamentals. They matter. And the cost of inference is coming down all the time.
WeWork was a short-term/long-term lease arbitrage business. The two are nothing alike.
It used to be revolutionary, but now there is a huge difference: plenty of competition, and a growing number of high-quality models that can run offline (for free!) or cheaper (Gemini-Flash for example).
They are in some way the Nokia of AI, "we have the distribution, product will sell", but this is not enough if innovation is weak.
They are even lagging behind (GPT-5 is a weaker coder than Claude, Sora is a toy compared to Seedance 2.0, etc).
One Apple releases the AIPhone, running offline models, with 32 GB of unified memory, with optional cloud requests, then it's going to be super though for OpenAI.
Local ai is cool and all but the models that run on typical consumer hardware doesn’t really compare to the breadth of information available by the likes of chatGPT, lets be real.
They aren't making money on the vast majority of those 800 million monthly actives. I wonder how many will stick around once they roll out ads. If they keep those users with ads, they definitely will be worth their valuation.
How will they make money on their product exactly? To the tune of being worth nearly a trillion dollars? There is no guarantee that inference will go down, we’ve seen some improvement with cheap models, but they aren’t what people want, and otherwise models stay expensive to run and use
So what. In a highly competitive industry they can't keep selling inference unless they continually train better models. It's like saying my airline is profitable if you don't count the cost of buying new airplanes.
This is a completely new market and players are currently burning money in order to capture market share. The money will stop flowing in at some point, but until then, you can’t compare it to an industry like aviation which is extremely mature and heavily optimized.
Nah. The software industry never really becomes mature. Microsoft is still spending a fortune churning on new versions of Windows and Office. The moment that OpenAI cuts spending on training they'll start to slide into irrelevance. Training costs are no longer just for compute resources and engineers: now they need to pay for proprietary training data to differentiate from competitors.
OpenAI have made this claim and maybe it is with API pay-per-use (there's also good evidence eveb that is not if you dive into how much a rack of B200s cost to operate), but I'd be very sceptical that the free, $20 or $200 a month plans are profitable.
Then the questions are if the market will bear the real cost and if so how competitive OpenAI are with Google when Google can do what Microsoft did to Netscape and subsidize inference for far longer than OpenAI can.
Just try using Claude with API for an hour and you will see that the subscriptions are definitely not profitable (unless they percent off “partying but dormant” is very high).
The only reason to draw this comparison is to show SoftBank are not as competent as they'd like to appear to be - so putting their name in relation to investors of OAI does not strengthen the prospects we should share re. OAI.
It’s one of the worst takes I’ve heard. OpenAI creates the fastest growing app ever, spawns a revolution bigger than the internet, and this guys take is they are like WeWork…
Both can be true. Just because you've created a revolutionary product doesn't mean it's a viable business, let alone one worth $700+ billion. There is a lot of history of the first movers that created revolutionary products that eventually faded away into nothing, while others capitalized on the innovation.
> There is a lot of history of the first movers that created revolutionary products that eventually faded away into nothing, while others capitalized on the innovation.
I'd say most first movers fade away. Microsoft wasn't the first OS, Google wasn't the first search engine, Facebook wasn't the first social network... etc... etc... etc...
That's not P/E. That's Price to Sales. P/E is price to earnings ratio. Earnings is profit. Since neither of these companies is profitable, they don't have a P/E ratio today.
WeWork was a short-term/long-term lease arbitrage business. The two are nothing alike.