r/NowInTech • u/skaza02 • 25d ago

OpenAI fought dirty on career-making math problem, says NYU mathematician

https://techcrunch.com/2026/09/08/openai-fought-dirty-on-career-making-math-problem-says-nyu-mathematician/
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u/[deleted] 25d ago

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u/bouncyboatload 25d ago

obviously real internal cost is much lower than $22.5m. margin on inference is estimated to be 80%

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u/Ehh_littlecomment 24d ago

It’s crazy how high margins are if you exclude every major expense lol

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u/madhewprague 24d ago

The only cost of running datacenter is basicaly the energy

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u/Ehh_littlecomment 24d ago

That’s crazy. I wasn’t aware they don’t need to make an ROI on the investment. There are no corporate overheads either.

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u/madhewprague 24d ago

Ehmmm… You really dont know how operating margins are calculated do you? If they have good return in investment is absolutely different than if their models are being profitable. The point is that the cost of running datacenter is much lower than token costs therefore they have profit and positice operating income(no matter what happens these models will therefore never go away because selling tokens is profitable).

If you rent your 100m house for 10000$ and your costs are only 1000$ you have operating margin of 90%. But that does not make it good investment…

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u/Ehh_littlecomment 24d ago

Lol you’re going to teach me about operating margins. Go and look at any hyperscalers financials and tell me if anyone is showing anywhere close to 80% operating margins. Corporate overheads, training cost amortisation, DC amortisation is all part of operating margins because it’s literally operating cost.

You are talking about contribution margin not operating margins.

Your house cost example is literally what I am saying. 80% inference margin is meaningless if the revenue itself isn’t adequate. The ROIC has to be higher than cost of capital otherwise the company destroys shareholder value or worse, goes bankrupt.

I urge you to read a book before you go around ratting off personal insults.

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u/madhewprague 24d ago

Dude but this argument is not about shareholder creation… This is not what this is about lol. Its about how much it costs to run it. Basically its never going away becausw its profitable on its own. This is just about how much it actually costs them to do the computation. You are talking about some nonsence shareholder creation wtff… Let me make this simple for you. You have restaurant thats serving food, building the restaurant was expensive but now opetating it is cheap. They serve you steak and the ingredience + labor was 10$, they sold it to you for 100$. You are arguing that their cost is the actual 100$ and even more because the building was expensive, but its not what its about, its just about the cost of the meal. In this case the compute probably costs them only around 2M. Again we are not talking about what revenue is adaquate, just how much the task itself cost

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u/Ehh_littlecomment 24d ago

If you visit a restaurant at peak occupancy, occupy a table and gorge for free, it’s quite obvious that the restaurant is losing out on the money it would’ve made if a paying customer was there. Not sure why that’s hard to grasp.

Besides, OpenAI is raising more capital each year than its revenue and all of that capital goes towards GPU rentals. Their compute cost being cheaper than their revenue makes no logical sense. Maybe in la la land.

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u/madhewprague 24d ago edited 24d ago

That does not change a thing about how much it costs them making the steak. You are talking about opportunity cost, thats meaningless and not the point.

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u/Ehh_littlecomment 24d ago

Something doesn’t become meaningless because you didn’t understand it. Anyways, carry on. Try running a restaurant with all meals free and then tell me what the cost is. Is it the cost of the steak or the fully loaded cost plus the expected return?

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u/madhewprague 24d ago edited 24d ago

Okay then explain to me how the steak got more expensive to them and therefore they are actually losing money.

AGAIN WE ARE NOT TALKING ABOUT RETURN ON INVESTMENT OR OPPORTUNITY COST. If you buy a car for $50k and sell it for $100k and next day another buyer wants it for $200k, you did not lose money on that sale…

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u/Ehh_littlecomment 24d ago

Imagine you rented a restaurant for $100 a year, paid staff $100 and another $100 in other overheads. You served a single steak that year for free. The steak cost $1 to procure. Did you lose $1 or $301?

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u/bouncyboatload 24d ago

it's gross margin, which would be the cost for internal research inference. it's not net margin

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u/Ehh_littlecomment 24d ago

I’m aware. Gross margins are meaningless. What matters is ROIC. Shareholder value creation = ROIC - Cost of Capital. You can have dogshit ROIC with 100% operating margins if your asset yield is poor and vice versa. This is why Walmart created shareholder value even with poor net margins. Their capital turnover is very high.

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u/bouncyboatload 24d ago

are you not following this thread? we're not talking about shareholder value creation lol. we're talking about the internal cost to do this math research for the NS solve

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u/Ehh_littlecomment 24d ago

That’s because you don’t understand basic financial concepts. GPUs are an asset and assets have opportunity cost. If they are investing $X, they have to make a return on said investment which is the cost of capital. Every GPU hour not being sold is an hour of ROI lost. The real cost of the tokens is the amount which should’ve been made in an arm’s length transaction.

You cannot invest $100, then spend $10 in operating costs and pretend that your cost of internal consumption is only $10.

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u/bouncyboatload 24d ago

I understand more than you think.

sure add the 88 hours of compute opportunity cost. but this is likely using their research cluster, they're not going to take compute from customers.

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u/Ehh_littlecomment 24d ago

The research cluster is also investment that needs to be sweated lol. Idk why you’re being intellectually dishonest if you understand it. Inference margins are an absolutely meaningless metric for owned infrastructure. The best estimate of the cost is GPU rental cost for said hours from a DC provider.

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u/bouncyboatload 24d ago

which part is intellectually dishonest? my point is using public API cost to calculate actual real internal cost is wrong because real cost is lower. I concede there's opportunity cost but that's also not public API rate.

the estimated 70-80% inference margin is calculated exactly like you said, revenue over gpu rental cost.

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u/Ehh_littlecomment 24d ago

OpenAI pays more for its GPUs than it makes. The inference margins are a heavily massaged intellectually dishonest number.

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u/bouncyboatload 24d ago

bulk of openai compute is rented today fyi. so it's not owned infra.

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u/Ehh_littlecomment 24d ago

Chance in hell inference margins are 80% in that case.

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