·E100

Inside the economics of OpenAI (exclusive research)

February 13

49 mins

Episode Description

Welcome to Exponential View, the show where I explore how exponential technologies such as AI are reshaping our future. I've been studying AI and exponential technologies at the frontier for over ten years. Each week, I share some of my analysis or speak with an expert guest to make light of a particular topic.

To keep up with the Exponential transition, subscribe to this channel or to my newsletter: https://www.exponentialview.co/

----

In this episode, I'm joined by Jaime Sevilla, founder of Epoch AI; Hannah Petrovic from my team at Exponential View; and financial journalist Matt Robinson from AI Street. Together we investigate a fundamental question: do the economics of AI companies actually work?

We analysed OpenAI's financials from public data to examine whether their revenues can sustain the staggering R&D costs of frontier models.

The findings reveal a picture far more precarious than many assume; we also explore where the real infrastructure bottlenecks lie, why compute demand will dwarf energy constraints, and what the rise of long-running agentic workloads means for the entire industry.

Read the study here: https://www.exponentialview.co/p/inside-openais-unit-economics-epoch-exponentialview

We covered:

(00:00) Do the economics of frontier AI actually work?

(02:48) Piecing together OpenAI's finances from public data

(05:24) GPT-5's "rapidly depreciating asset" problem

(13:25) Why OpenAI is flirting with ads

(17:31) If you were Sam Altman, what would you do differently?

(22:54) Energy vs. GPUs; where the real infrastructure bottleneck lies

(29:15) What surging compute demand actually looks like

(33:12) The most surprising finding from the research

(38:02) The race to avoid commoditization

(43:35) Agents that outlive their models