“And, more worryingly, they're building all of these tools on top of generative AI, which is extremely expensive and, as I've argued, unsustainable at the rates being charged.”
Our reading, the sentence that was checked:
Generative AI is extremely expensive and unsustainable at the prices currently charged.
Assessment: Unresolved Evidence as of
Where and when Ed Zitron wrote it
Where's Your Ed At, The Other Bubble, paragraph 77.
- Said
- Source observed
- live page, full text, public
- Evidence as of
- the cutoff for this assessment
- Assessment recorded
- assessment wyea-saaspocalypse-now-ce91e3-a2
We recorded 27 claims from this post. See every claim from this post.
The wording above is the version this site observed on 2026-10-28. The source may have been edited after 2024-09-26. This page does not claim the wording was captured then.
What the claim commits to
- Kind
- Observation
- Deadline, as the speaker wrote it
- None stated. This site does not add one.
- Deadline state when assessed
- No horizon
- Deadline state on 2026-10-29
- No horizon (the release’s reference date)
Conditions
- at the rates being charged (qualifier, stated by the speaker)
From the speaker
- generative AI
- extremely expensive
- unsustainable at the rates being charged
Our interpretation
- The ordinary reading is that prevailing prices did not cover the costs of sustainably providing generative AI services.
- For the ongoing financial condition, use April–June 2024, the latest completed calendar quarter before publication. September prices would also need to be matched to the relevant services.
- Sustainable provision includes operating costs and an appropriate allocation of model development costs. Corporate losses alone do not establish that service prices were inadequate.
- The claim names neither individual providers nor an accounting basis. Evidence about one provider cannot establish an industry-wide conclusion.
Counts as supported if: Representative, comparable provider records show that revenues at the relevant prices failed to cover sustainable service-provision costs.
Counts as contradicted if: Representative, comparable provider records show that revenues at those prices covered sustainable service-provision costs.
Retrospective: these criteria were written after the outcome was public.
Current assessment
Was it true for the period described?
Outcome: Unresolved
The record was checked, and the evidence available by the cutoff does not settle it.
Scored on a plain reading. The speaker named no measure for this claim, so it was judged on the reading an informed reader would take, stated below under our interpretation. Both reviews had to find that reading fair.
- Evidence as of
- Deadline state when assessed
- No horizon
- Assessment recorded
- Policy version
- 2026-10-28.7
Rationale
On September 27, 2024, CNBC reported that OpenAI expected about $5 billion in company-wide losses on $3.7 billion in revenue for 2024 [e1]. FutureSearch estimated OpenAI's June 2024 API gross margin after GPU rental costs at around 75%; this estimate remains unverified [e2]. These items cover one provider and different financial measures, and neither establishes whether prevailing prices covered sustainable service costs across providers in April–June 2024 [e1, e2].
Limitations
- The annual loss forecast does not show realized April–June 2024 service revenue and costs [e1].
- The API estimate excludes costs needed to establish full sustainability [e2].
- Neither item provides representative provider records or matches September 2024 prices to full service-provision costs [e1, e2].
Evidence (2 items)
Context only: CNBC,
$5 billion in losses
Why it matters here: This supports concern about OpenAI's overall economics, but describes projected annual losses rather than realized quarterly service margins. CNBC relied on a confidential source and said it had not seen the financial statements.
- Publisher
- CNBC
- Kind of source
- News report
- Measures
- OpenAI, Projected company-wide loss, excluding stock-based compensation and some other expenses, USD billions, estimate, 2024-01-01 to 2024-12-31
- Describes events of
- Public from
Context only: FutureSearch,
75% in June 2024
Why it matters here: The model estimates positive API margins after GPU costs, challenging an inference that every service was sold below its running cost. Its dated 2026 self-assessment explicitly says the estimates remain unverified; it also excludes costs needed to establish full sustainability.
- Publisher
- FutureSearch
- Kind of source
- Independent measurement
- Measures
- OpenAI, Estimated API gross margin after GPU rental costs percent, estimate, 2024-06-01 to 2024-06-30
- Describes events of
- Public from
What would settle it
Representative, comparable provider records matching realized April–June 2024 service revenue, usage and prices to operating costs and appropriately allocated model development costs, with September 2024 prices mapped to the same services, would establish whether prevailing prices covered sustainable provision costs.
Where it was said (1)
Said once in the sources this register covers.
: Where's Your Ed At, The Other Bubble
And, more worryingly, they're building all of these tools on top of generative AI, which is extremely expensive and, as I've argued, unsustainable at the rates being charged.
- Where
- paragraph 77
- Published
- 2024-09-26
- Source observed
- , live page
- Access
- full text, public
History
Assessment versions
- Assessment wyea-saaspocalypse-now-ce91e3-a2: Current. Outcome: Unresolved. Evidence as of 2026-10-28. Public date not recorded.
Recorded events
Assessment publishedBy this site
First assessment published after both reviews and the final-text check passed.
HeldBy this site
The final-text check failed: rationale_supported_by_evidence, citations_correct; overclaims: Reported OpenAI losses give the concern a factual basis | The available API analysis points toward positive direct margins, while acknowledging that its estimates remain unverified..
About assessment wyea-saaspocalypse-now-ce91e3-a1, which was not published.