alt Hacker NewsSure. Here's an example:
https://www.wheresyoured.at/exclusive-openai-financials/
Zitron wrote:
> Additional factors – including interest income and interest expense – left it with a net loss of $8.84 billion. It then marked $3.74 billion of losses as “net loss attributable to noncontrolling members capital,” leaving the net loss attributable to the company as $5.09 billion.
> It’s unclear what this means, nor how OpenAI reconciled the removal of $3.74 billion in costs. I will not speculate further.
It is very clear what this means, and no speculation is required if you understand basic consolidation accounting, which you would expect someone in his position to understand.
It's not rocket science: when you have a parent company with entities it doesn't wholly own, the slice of losses belonging to the other equity holders is split out as "noncontrolling interests." Nothing is removed or hidden; the total loss is unchanged, it's just allocated to reflect that the parent company doesn't own the whole. Framing it as OpenAI removing costs implied something sketchy and requiring speculation where there's only routine GAAP accounting.
But it's even worse than this. So many of Ed's claims conflate the foundational R&D and capital expenditures these companies are incurring with the unit economics of their businesses. He seems woefully unable to understand that you could sped gobs of money on the former and still have positive gross margins that scale over time with the latter.
Replies
Can you explain which partly owned subsidiaries lost $3.74 billion and why it is legitimate to exclude that from their losses in a non-handwavy fashion? Your condemnation leaves me none the wiser and this does matter.
This can of course be used to distort the financial picture and this is a significant amount, almost 50% of losses. Is this from the ‘non-profit’ which used to be OpenAI or something else?
Smells like creative accounting to me and the CEO was accused by his board of dishonesty.
Maybe I am little confused here but what you just described here doesn't sound great either? What smaller entities who OpenAI is parent to lost 3.74 billion dollars?
Or maybe just can you point to some primary sources about this? I am not too bright about this stuff.. I guess I always thought it was usually about having more money than when you started? Or at least about having a story of how you will have more money? Is that not right?
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But how does that detract from the overall point that Open AI is losing billions of dollars? If there's an insatiable demand for AI compute, where's the profit?