How Does OpenAI Survive?
We recorded 24 claims from this post. 24 can’t be checked. 6 more are held. Read the post at its source.
Claims from this post (24)
In the order they appear in the post. Each quotation is the speaker’s words in this post. A label such as “Supported” or “Can’t be checked” is the claim’s current assessment; its page has the evidence and the reasons.
Assessment: Can’t be checkedSaid
Observation
“Sadly, that may be the truth for OpenAI.”
Our reading: OpenAI may be burning so much cash that it needs a deep-pocketed benefactor to bail it out repeatedly.
No horizon
Assessment: Can’t be checkedSaid
Recommendation or value judgment
“It is fundamentally not the media’s job to convince the world that OpenAI is a stable company with great things ahead — that’s OpenAI’s job.”
Our reading: The media should not take on the job of convincing the world that OpenAI is a stable company; that is OpenAI's job.
No horizon
Assessment: Can’t be checkedSaid
Conditional forecast
“Raise more money than anyone ever has before — likely at least $3 billion, but more like $10 billion, and do so soon, likely within the next six months.”
Our reading: At its current pace, OpenAI would have to raise more money than anyone ever has before, likely at least $3 billion but more like $10 billion, and do so soon, likely within the next six months.
No horizon
Only if: at its current pace
Assessment: Can’t be checkedSaid
Forecast
“This isn't impossible, but it feels extremely unlikely that OpenAI would be able to do this for more than a few years.”
Our reading: It is extremely unlikely OpenAI can keep raising record sums and showing growth to investors for more than a few years.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“As a result, OpenAI's revenue might climb, but it's likely going to climb by reducing the cost of its services rather than its own operating costs.”
Our reading: Any growth in OpenAI's revenue will likely come from cutting prices rather than cutting its own operating costs.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“Doing so is also likely going to lead to perpetual legal action, especially as 404 Media reports that Runway, a generative video company, likely trained its model on thousands of hours of videos taken from YouTube and pirated sources.”
Our reading: Acquiring training data for generative models is likely to lead to perpetual legal action.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“And, to be abundantly clear, I am not sure there is enough training data in existence to get these models past the next generation.”
Our reading: There may not be enough training data in existence to take these models past the next generation.
No horizon
Qualifier: past the next generation
Assessment: Can’t be checkedSaid
Observation
“But what they are not, at this time, is essential.”
Our reading: Generative AI models are useful but not essential at present.
No horizon
Qualifier: at this time
Assessment: Can’t be checkedSaid
Causal claim
“It is inherently limited by its architecture, and in turn can only get "better" in a linear fashion.”
Our reading: Generative AI is inherently limited by its architecture, and as a result it can only get 'better' in a linear fashion.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“it’s tough to make the case that these products will fill the burning shortfall in OpenAI’s balance sheet, and would likely only add to its operational costs”
Our reading: Products like Sora and SearchGPT are unlikely to fill OpenAI's balance-sheet shortfall and would likely add to its operating costs.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“And, to be clear, it is very, very unlikely this happens.”
Our reading: It is very unlikely that OpenAI succeeds in building Strawberry with advanced reasoning capabilities.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“While there may be ways to reduce the costs of transformer-based models, the level of cost-reduction would be unprecedented, and likely require entirely new chips, cooling solutions and physical server architecture, none of which OpenAI develops.”
Our reading: While there may be ways to reduce the costs of transformer-based models, the level of cost reduction would be unprecedented and would likely require entirely new chips, cooling solutions and physical server architecture, none of which OpenAI develops.
No horizon
Qualifier: while there may be ways to reduce the costs
Assessment: Can’t be checkedSaid
Forecast
“While theoretically Nvidia could produce a much-more-efficient chip, doing so would likely take longer than OpenAI has.”
Our reading: A much more efficient Nvidia chip would likely take longer to arrive than OpenAI can survive.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“This is a bigger existential threat than a lack of adoption. It means people are using it and not getting enough out of it, which could potentially lead to a significant loss of revenue as the hype cycle dies down.”
Our reading: Because users are not getting enough out of generative AI, revenue could fall significantly as the hype cycle fades.
No horizon
Qualifier: as the hype cycle dies down
Assessment: Can’t be checkedSaid
Causal claim
“OpenAI is inherently limited by GPT's transformer-based architecture, which does not actually automate things, and as a result may only be able to do "more" and "faster," which does not significantly change the product, at least not in such a way that would make it as valuable as it needs to be.”
Our reading: OpenAI is inherently limited by GPT's transformer-based architecture, which does not actually automate things, and as a result may only be able to do 'more' and 'faster', which does not significantly change the product, at least not enough to make it as valuable as it needs to be.
No horizon
Assessment: Can’t be checkedSaid
Conditional forecast
“For OpenAI to scale, it would require a massive capital expenditure on multiple levels, chief of them the American power grid (see page 15 of this Goldman Sachs report for a conversation with Microsoft's former VP of energy), which will likely require extensive expansion the likes of which hasn't happened in decades at a time when America is far less apt at infrastructural development.”
Our reading: For OpenAI to scale, the US power grid would likely need an expansion unseen in decades.
No horizon
Only if: for OpenAI to scale
Assessment: Can’t be checkedSaid
Observation
“a frank evaluation of a company that I believe may be teetering on the brink of collapse.”
Our reading: OpenAI may be teetering on the brink of collapse.
No horizon
Assessment: Can’t be checkedSaid
Conditional forecast
“In the event that it has less than a billion in the bank, OpenAI will likely have to raise $5 billion, and do so in the next three to six months.”
Our reading: If OpenAI has under $1 billion banked, it will likely have to raise $5 billion within three to six months.
No horizon
Only if: if it has less than a billion in the bank
Assessment: Can’t be checkedSaid
Conditional forecast
“Even if these problems are surmountable, there is simply not enough training data, and even if there were, the cost of processing it will likely vastly outweigh whatever revenue OpenAI makes.”
Our reading: Even if these problems are surmountable, there is simply not enough training data, and even if there were, the cost of processing it will likely vastly outweigh whatever revenue OpenAI makes.
No horizon
Only if: even if there were enough training data
Assessment: Can’t be checkedSaid
Rhetoric
“Perhaps there’s something I’m missing, but if investors have no path to an IPO, this feels like a game of hot potato, except the loser is left with a big, useless stock.”
Our reading: Allowing that he may be missing something, Zitron says that if investors have no path to an IPO, investing in OpenAI feels like a game of hot potato in which the loser is left with a big, useless stock.
No horizon
Only if: if investors have no path to an IPO
Assessment: Can’t be checkedSaid
Forecast
“It could come up with something new, or find a way to make generative AI much cheaper, but again, that is so very, very unlikely.”
Our reading: It is very unlikely that OpenAI comes up with something new or makes generative AI much cheaper.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“Doing so multiple times is possible, but very, very unlikely, in the same way that continuing to increase revenue at hundreds of percent each year is possible, but very, very unlikely.”
Our reading: It is very unlikely that OpenAI will raise huge rounds multiple times or keep growing revenue by hundreds of percent each year.
No horizon
Assessment: Can’t be checkedSaid
Forecast
“I fear OpenAI will compete on price, sending its costs upward, or charge what it needs to to approach break-even, which I don't think it’s willing to do.”
Our reading: Zitron fears OpenAI will compete on price, sending its costs upward, or else charge what it needs to approach break-even, which he does not think it is willing to do.
No horizon
Qualifier: I fear
Assessment: Can’t be checkedSaid
Observation
“What I am describing here is a deeply unsustainable company that many have pinned their hopes on, and even if I’m wrong, this kind of analysis is necessary when there is a company burning billions of dollars that will likely attempt to absorb billions more dollars of capital to survive.”
Our reading: OpenAI is a deeply unsustainable company burning billions that will likely try to absorb billions more in capital to survive.
No horizon
Held from this post (6)
These records did not pass every check, so nothing about them is published. Held is not a finding.
- The two reviews read the claim differently
- The two reviews read the claim differently
- The two reviews reached different assessments. Our reading, not assessed: If OpenAI's February 2024 secondary round provided $5 billion in cash, which Zitron guesses is more than it actually provided while admitting nobody knows, the company still needs another lifeline within the next 12 months.
- The two reviews read the claim differently
- The two reviews read the claim differently
- The two reviews read the claim differently