> they aren’t even profitable

Depends on your definition of profitability, They are not recovering R&D and training costs, but they (and MS) are recouping inference costs from user subscription and API revenue with a healthy operating margin.

Today they will not survive if they stop investing in R&D, but they do have to slow down at some point. It looks like they and other big players are betting on a moat they hope to build with the $100B DCs and ASICs that open weight models or others cannot compete with.

This will be either because training will be too expensive (few entities have the budget for $10B+ on training and no need to monetize it) and even those kind of models where available may be impossible to run inference with off the shelf GPUs, i.e. these models can only run on ASICS, which only large players will have access to[1].

In this scenario corporations will have to pay them the money for the best models, when that happens OpenAI can slow down R&D and become profitable with capex considered.

[1] This is natural progression in a compute bottle-necked sector, we saw a similar evolution from CPU to ASICS and GPU in the crypto few years ago. It is slightly distorted comparison due to the switch from PoW to PoS and intentional design for GPU for some coins, even then you needed DC scale operations in a cheap power location to be profitable.

Given the release of the new DeepSeek R1 model [0], OpenAI’s future revenue stream is probably more at risk than it was a week ago.

[0] - https://arstechnica.com/ai/2025/01/china-is-catching-up-with...

That's like saying I have a healthy revenue stream from my credit card.

They do get a lot of customers buying their stuff, but on top of that, a company with unique IP and mindshare can get investors to open their wallet easily enough; I keep thinking of AMD that was not or barely profitable for like 15 years in a row.