OpenAI Losses Increased Nearly 8X in 2025, with Spending Hitting $34B

I'm a little confused here. Cost of revenue is lower than revenue. That's good. R&D is the main contributor to losses here and this seems normal in an industry like this. For OpenAI specifically, I think this is problematic. They were the first movers but despite the large R&D they've lost so much ground to Anthropic despite Anthropic seemingly gifting them with weird PR self owns. But if we were to extrapolate this to the industry as a whole, this seems more positive than negative. Am I reading this incorrectly? Unless there's an assumption that R&D costs have to forever go up in order to increase revenue, I feel like this shows that the AI industry is actually on a path to profitability in the long term.

Whether it can physically be as all encompassing as it makes itself out to be or whether it will just be healthily profitable remains to be seen. Kind of like how Uber went from "We'll autonomously drive the world" to "Look, we deliver food, goods, and people to locations and we figured out how to do that in a way that makes profits. Also, ads".

To be honest I almost think the numbers are irrelevant. In 2024/25 there was a lot going on - will AI replace authors, film makers etc. Will it replace social media (anyone remember Sora?). A tonne of that stuff didn't work out. At the tail end of 2025 a real product market fit emerged. Coding agents. They work. They do a job that you can actually profit from.

So everything else is kind of academic. Of course they were losing money in 2025, they had a technology that was kind of cool - clearly eventually going to deliver something great, but they didn't actually have anything somebody should pay for. Now they have a thing that people will pay for. So who cares what they lost in 2025?

So what's important today is - how competitive are they with Anthropic in delivering that product. How do the economics of companies using AI agents for coding work. That's all. I don't think there's really an argument about them losing money on inference any more.

Revenue went from $3.7B to $13.07B — roughly 3.5x.

Operating loss went from ~$8.8B to ~$20.9B — roughly 2.4x.

Doesn't seem like a domesday scenario.

At the end of his previous article (https://www.wheresyoured.at/ai-is-slowing-down/), Ed hyped this news as "a story that will possibly burst the AI bubble" and "imagine what the worst possible thing for me to get would be and you’re probably close." This news doesn't fit either criteria: OpenAI losing billions of dollars isn't shocking news and both AI boosters and AI skeptics have likely assumed that. If anything, the news that OpenAI has $25B on hand in cash as reported here, plus the $122B raised in March, show that OpenAI won't implode for another year or two if it does...and that doesn't say anything about the AI bubble. There's also the confounder that Codex wasn't released until this year which turbocharged revenue with an uncertain increase in operating costs, so it will be difficult to extrapolate 2025 finances to 2026 and beyond.

When I read "the worst possible thing for me to get" I had assumed it would be evidence that inference/Codex is fundamentally unprofitable (as Ed often blogs about) but there isn't enough information here to support that argument either: revenue is still greater than cost of revenue, and the major losses are clearly delineated.

“I had a guaranteed military sale with ED 209, renovation program, spare parts for twenty-five years… Who cares if it worked or not?!?”

They know it is a scam, but it doesn’t matter as it is now too late.

That ship has sailed long ago into the IPO sunset.

Ed Zitron has proven trump wrong so many times it's going to be hilarious how right it will come out on this

What is the right way to deal with Ed Zitron articles because he’s historically extremely inaccurate and makes wild claims.

People ignore all his horrendous takes from last year and still eat this years “analyses” like it’s Gods words.

He has been predicting the doom for years and years now and it is strange to see HN still putting credence here.

This is what he said around a week back

“ One of my sources has come forward and brought me a story that will possibly burst the AI bubble. The reason they brought this to me is that I’ve shown — and will continue to show — that I actually give a shit about this industry and the people in it.

If you’re wondering what the story is, know that it’s the information I’ve wanted for years, delivered as I have always wanted it, and I will treat it with the reverence it deserves. Imagine what the worst possible thing for me to get would be and you’re probably close.

I expect it to be out in the next two weeks, and you’ll know exactly when it runs. There’ll be a podcast and a newsletter, and very likely follow-on coverage elsewhere.

I can guarantee you it’ll be worth it, and you’ll be stunned by what I report.”

This is qanon tier stuff. He’s been pulling this shtick for a while and people still haven’t caught on.