Speaker 1: Zon Media. I'm d Zetron. This is better offline and
Speaker 1: I've seen open ayes audited financial so twenty twenty four
Speaker 1: and twenty twenty five play the goddamn music maps. Today
Speaker 1: I can exclusively report, based on audit did financial documents
Speaker 1: view by this podcast that have been independently verified by
Speaker 1: the Financial Times, the Open Aye lost around thirty eight
Speaker 1: point five billion dollars in twenty twenty five, growing said
Speaker 1: losses by nearly eight hundred percent year of a year,
Speaker 1: as well as other crucial details about the financial condition
Speaker 1: of this company. Due to the seriousness of this story,
Speaker 1: I'm not going to do very much editorializing. I'm going
Speaker 1: to keep things straight laced, as the numbers speak for themselves,
Speaker 1: and well, I want to come up with better jokes,
Speaker 1: but no, seriously, folks, who've got to take this one seriously.
Speaker 1: I'm serious. I'm also going to somewhat punt on giving
Speaker 1: every single number here. You can find the companion newsletter
Speaker 1: in the show notes, which goes into much more detail.
Speaker 1: But I want to give you the top line and
Speaker 1: let you know that I intend to do more with this.
Speaker 1: But I had to get this out when I had
Speaker 1: to get it out, and there were, by the way,
Speaker 1: no situations where I was trying to delay this. This
Speaker 1: went out the second I could. Let's start with twenty
Speaker 1: twenty four, open Ai had three point seven billion dollars
Speaker 1: in revenue, twelve point four billion dollars in costs and expenses,
Speaker 1: and a net loss attributable to open Ai of five
Speaker 1: point h nine billion dollars. Its cost of revenue was
Speaker 1: two point six five billion dollars and its R and
Speaker 1: D costs was seven point eight one billion dollars. I
Speaker 1: do not have a breakdown of how these terms are defined. Technically,
Speaker 1: open ai was left with an eight point eight four
Speaker 1: billion dollar loss at the end of twenty twenty four,
Speaker 1: but it then marked three point seven four billion dollars
Speaker 1: of losses as net loss attributable to non controlling members capital,
Speaker 1: leaving the net loss tributable to the company, as I mentioned,
Speaker 1: at five point oh nine billion dollars. Speculate as to
Speaker 1: what that means now. In twenty twenty five, open ai
Speaker 1: had around thirty eight point five billion dollars in losses
Speaker 1: attributable to the company. Its revenue was thirteen point zero
Speaker 1: seven billion dollars, its cost of revenue was seven point
Speaker 1: five billion dollars, and its R and D was nineteen
Speaker 1: point one eight billion dollars. Please note that twenty twenty
Speaker 1: five was also the year that open ai converted from
Speaker 1: a nonprofitable for profit entity, leading to a forty one
Speaker 1: point five to five billion dollar loss due to changes
Speaker 1: in the fair value of convertible interest and warrant liability.
Speaker 1: In the end, open ai is left with a net
Speaker 1: loss of sixty point three five billion dollars, which it lowered.
Speaker 1: The thirty eight point five three billion dollars are removing
Speaker 1: seventeen point eight seven billion dollars in costs via that
Speaker 1: net loss attributable to non controlling members capital line, and
Speaker 1: another three point nine five billion dollars via a net
Speaker 1: loss attributable to redeeming non controlling interests. It's unclear what
Speaker 1: these terms mean. They are not defined, and I have
Speaker 1: nothing else to add there. In twenty twenty five, eight
Speaker 1: hundred and sixty seven million dollars of open AI's revenue
Speaker 1: was from soft Bank and three hundred and three million
Speaker 1: dollars was from Microsoft. I intend to follow up this
Speaker 1: story in the next month with more in depth reporting
Speaker 1: related to the documents. They're detailed, and I need time
Speaker 1: to fully pass them. Once I've done so, you'll know.
Speaker 1: I will say that the financial condition of open Ai
Speaker 1: is deeply concerning. Thirty eight point five billion dollars in
Speaker 1: losses are around there. Are astronomical and are far higher
Speaker 1: than most believed it would be, and indeed are very
Speaker 1: different to those that have been previously reported. Losses also
Speaker 1: appear to be mounting year of a year at a
Speaker 1: dramatic rate, and I'm not sure how this company finds
Speaker 1: a way toward any kind of sustainability of profitability. I have,
Speaker 1: as mentioned, save the editorializing today, not going to do it.
Speaker 1: I need more time. I believe the best thing I
Speaker 1: can do for the general public is to deliver this
Speaker 1: news as plainly as possible. More to come Zitro now