Hannah Petrovic

Absolutely.

So, Matt, a little bit here of the context of why we were doing this before I get into the takeaway.

To our understanding, no one had really taken on this humongous task of piecing together all the public information that there is about the finances of OpenAI or any large AI company, really, and trying to paint a picture.

of what are their margins like, whether they are making enough money to recoup the large cost of developing new products.

So we did this hermeneutic exercise of just hunting for all the information that we could find

and trying to make sense of it.

Now, I won't pretend that we have arrived at the definitive answer.

In fact, our views are constantly evolving as we learn more about the companies and their finances.

But I'm pretty happy with the overall framework that we have established for even trying to think about this question in the first place.

If I was trying to now communicate like, okay, in summary, what did we learn and what did we find?

For me, the two most important takeaways is that one, it seems likely that OpenAI during the last year, and especially while operating GPT-5, was making more money than the cost of the compute, which is the primary expense of operating their product.

Though they seem to have made like a very small margin or even having lost money after accounting for all the other operating expenses that are going to run in the model.

So this is paying for staff.

This is sales and marketing spending.

This is administrative costs.

And this also includes the revenue sharing agreement that they have with Microsoft.

Now, the raw profitability, the operating margins of a company are not necessarily what you want to look at when you are trying to assess whether the company will be profitable in the long term.

As Asim alluded to earlier, Uber lost billions upon billions of dollars before they finally became profitable.

And really, if you are an investment-minded person, when you are looking at a growing business, you do not look so much at how much profit they are turning.

in their early years where they're still growing, but rather you will rather look at the gross profit that they're making at their gross margins and how the revenue is scaling year after year.