Why OpenAI's $157B valuation misreads AI's future (Oct 2024) • Hacker News Board

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#11

Post by PKop » Tue, Jan 28, 2025, 4:29 AM UTC

trhway wrote: post #6

> But while Facebook’s costs decreased as it scaled, OpenAI’s costs are growing in lockstep with its revenue, and sometimes faster And here comes DeepSeek and takes the steam out of this and the cost arguments that follow it.

Isn't that argument that after all the spending by OpenAI, an upstart derived from their investment a cheaper but similarly capable alternative? Where's the profitability in the equation coming from?

Now there's another supplier to match the (potential?) consumer or corporate demand that's diffused among more competitors, and open source.

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#12

Post by jack_pp » Tue, Jan 28, 2025, 4:29 AM UTC

anothermathbozo wrote: post #9

coldpepper wrote: post #7

AI is still a fad.

How so?

I'd write a script that crawls all these AI topics and use an LLM to count how many times this conversation has been had but I'm too tired to do so lol. Just don't feed the troll / dumb person. If they're too stupid to see how revolutionary LLMs are by this point.. just let them be stupid. Just downvote and move on with your life

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#13

Post by manquer » Tue, Jan 28, 2025, 4:31 AM UTC

Stokley wrote: post #3

Whether you love or hate OpenAI, the CapEx involved with this company will be viewed as historic in the future, and will change (has already changed) the paradigm of how tech startups/projects are funded

I think it will have an adverse affect to funding ecosystem.

The inevitable haircut all the funds are going to take in OpenAI and other AI startups when revenue fails to materialize[1] will herald a bust cycle and lot more circumspection in large investments like it happened few years back when a large number of Soft Bank investments did not pan out, notably most of them relied on big funding rounds to muscle out other players, not all of them have failed but all of them lost of enterprise value for investors.

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[1] This is inevitable regardless of success of the space, either because cost of inference keeps dropping in combination with competing with high quality open weight models as DeepSeek, Stable Diffusion and others have shown. It will have strong downward pressure on pricing impacting both revenue and profit.

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#14

Post by deadbabe » Tue, Jan 28, 2025, 4:31 AM UTC

anothermathbozo wrote: post #9

coldpepper wrote: post #7

AI is still a fad.

How so?

When everyday people are telling you their opinions about what AI is gonna do you know it’s a fad.

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#15

Post by diego_sandoval » Tue, Jan 28, 2025, 4:32 AM UTC

croes wrote: post #8

trhway wrote: post #6

> But while Facebook’s costs decreased as it scaled, OpenAI’s costs are growing in lockstep with its revenue, and sometimes faster And here comes DeepSeek and takes the steam out of this and the cost arguments that follow it.

Until now we know only what the they claim what that costs are.

Inference costs can't be faked though, since the model can be run locally by anyone with capable hardware.

Even if the whole story about the training cost was fake, R1 and the distilled models are still very efficient at inference.

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#16

Post by nextworddev » Tue, Jan 28, 2025, 4:34 AM UTC

Just playing devil's advocate:

VCs (esp those who missed out on OAI) are heavily incentivized to root for OAI to fail, and commoditize the biggest COGs item (AI models).

This guy is just talking his book.

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#17

Post by SlightlyLeftPad » Tue, Jan 28, 2025, 4:36 AM UTC

jack_pp wrote: post #12

anothermathbozo wrote: post #9

Earlier quoted context omitted.

How so?

I'd write a script that crawls all these AI topics and use an LLM to count how many times this conversation has been had but I'm too tired to do so lol. Just don't feed the troll / dumb person. If they're too stupid to see how revolutionary LLMs are by this point.. just let them be stupid. Just downvote and move on with your life

We’ll know when it can park a car in an everyday parking spot without messing up your Grandma’s Camry I suppose.

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#18

Post by tonyhart7 » Tue, Jan 28, 2025, 4:37 AM UTC

and microsoft literally spent 80 billions on top of its, like bro imagine 80 billions dollar company is like top 0,01 percent

and that valuation would crumble because of deepseek

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#19

Post by [deleted] » Tue, Jan 28, 2025, 4:37 AM UTC

croes wrote: post #8

trhway wrote: post #6

> But while Facebook’s costs decreased as it scaled, OpenAI’s costs are growing in lockstep with its revenue, and sometimes faster And here comes DeepSeek and takes the steam out of this and the cost arguments that follow it.

Until now we know only what the they claim what that costs are.

[deleted]

Re: Why OpenAI's $157B valuation misreads AI's future (Oct 2024)

#20

Post by halfcat » Tue, Jan 28, 2025, 4:39 AM UTC

It’s the year 2000. We have the internet, a technology that will change the world. Yahoo is the most valuable company on earth. Among the coolest things people do is go to CompUSA and pay money for a web browser, Netscape Navigator, because it supports the tag so you can make your geocities page even more awesome. Google is still operating out of a garage somewhere, and won’t be household name until after the bubble bursts.

That’s where we are in the AI journey in 2025. The year 2000.