Yes if you ignore all the reasons why they’re horribly unprofitable, they’re profitable.

R&D costs are hurting profit side and while you can cut that one just becomes irrelevant overnight in this space if you do, hence the problem.

So you’re saying if you cut all the cost centers a company would only have profit centers? If you ignore all the losses you’ll only have profits?

OpenAI can easily cut R&D costs by replacing engineers with Claude Code

Cut down on the one thing they need to keep themselves relevant in this space?

Actually reduce R&D to ZERO and they are still losing money.

While you cant discount 100% R&D they are close, agreed

I bet any FAANG spend is mostly R&D.

If it's not materials, not energy or taxes, not manufacturing, not licensing or rental fees, then I can only think of R&D.

If they cut down on R&D they will be no better than the open source models you can run at cost yourself.

Even if they keep the R&D costs, more efficient inference and 0 Marketing spend also gets you there. Inference is honestly super inefficient at this point, we can do far better than GPUs, push utilisation up, build more efficient datacentres.

Numbers are probably not right as classifying everything aa r&d is going to the temptation

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