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XAI seeks up to $200B valuation in next fundraising

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Re: XAI seeks up to $200B valuation in next fundraising

#31

Post by alexnes »

Analemma_ wrote: post #24
Aurornis wrote: post #16

Earlier quoted context omitted.

I think Hacker News readers underestimate how sticky the typical customer is. The average subscriber to these services isn’t following a constant stream of LLM news and jumping from platform to platform every time the leaderboard changes slightly. The average customer signs up and then inertia and familiarity take over. They stay signed and comfortable.

Doesn't that suggest a 200B valuation in xAI is stupid, though? Nobody is using Grok except Elon's fanboys, where do they imagine these sticky customers are going to come from?

Please check google trends in regards to Grok (on a worldwide scale, and compare to openai, claude and deepseek). The winner is not clear at all. And grok is surprisingly popular.

Re: XAI seeks up to $200B valuation in next fundraising

#32

Post by martinald »

ketzo wrote: post #20
Aurornis wrote: post #16

Earlier quoted context omitted.

I think Hacker News readers underestimate how sticky the typical customer is. The average subscriber to these services isn’t following a constant stream of LLM news and jumping from platform to platform every time the leaderboard changes slightly. The average customer signs up and then inertia and familiarity take over. They stay signed and comfortable.

I mean — the person you’re describing is just a ChatGPT user and essentially nothing else, though, right? It explains OpenAI’s valuation but no one else

I'm astonished at the stickiness of chatgpt though. It's clearly not the best platform/model but all my none tech friends just equate LLMs = ChatGPT (4o as well).

Re: XAI seeks up to $200B valuation in next fundraising

#33

Post by andsoitis »

lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

> odd that investors are still so motivated to drop money into AI, specifically LLMs

xAI > LLM

Re: XAI seeks up to $200B valuation in next fundraising

#34

Post by jowea »

Aurornis wrote: post #16
Retric wrote: post #7

Earlier quoted context omitted.

Yea, I don’t think investors really internalize that LLM companies have effectively zero moat. Customers can easily jump ship. Everyone is using effectively the same compute, nearly identical training data, very similar algorithms, etc. Worse past investments in a model become outdated quickly.

I think Hacker News readers underestimate how sticky the typical customer is. The average subscriber to these services isn’t following a constant stream of LLM news and jumping from platform to platform every time the leaderboard changes slightly. The average customer signs up and then inertia and familiarity take over. They stay signed and comfortable.

Yeah, I think grandparent has a point, but at the same time, Google Search also didn't have a strong moat, or at least not one that couldn't be replicated in a few years, and it still positively dominated the market for decades.

Re: XAI seeks up to $200B valuation in next fundraising

#35

Post by IMTDb »

mullingitover wrote: post #25
lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

Microsoft really put this notion under a spotlight with how they deal with LLMs in VSCode Copilot. The LLMs are just a drop-down menu that you can switch between at any moment, on a whim. They all plug into the same toolchains and are essentially generic commodities. They have slightly different prices for usage but that's about it, their outputs aren't wildly different. On topic for this post: it's very telling that…

Search engine are as well. At least in the eu they literally are the first thing a browser asks you when you launch it for the first time. On a dropdown you have 2 clicks to do to change. For search engine you are prompted to using Google is one click; using something else costs the same click.

Google is still managing an outrageous domination.

Being percieved as the best is still a huge headstart. 99% of the population is not using “last weeks llm that topped AIME and ARC-AGI“. They are using “ChatGPT” with the default model selected.

People are going to switch when “their tech friend tells them to switch”. The same way they switched from internet explorer to chrome. Once you reach that position you can afford being “not the best but good enough” for a long time.

xAI needs to convince investors that: OpenAI is struggling so there is an opening to take the crown and be popular enough to get people to switch. They have twitter to help make that happen.

And they need to convince that no one else is going so much better than they are anytime soon; they just need to be good enough

Re: XAI seeks up to $200B valuation in next fundraising

#36

Post by bgwalter »

andsoitis wrote: post #33
lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

> odd that investors are still so motivated to drop money into AI, specifically LLMs xAI > LLM

What is their product though? It will turn into surveillance or military applications, which would explain the interest of the Saudi sovereign wealth fund.

Re: XAI seeks up to $200B valuation in next fundraising

#37

Post by liendolucas »

lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

> I find it odd that investors are still so motivated to drop money into AI, specifically LLMs...

Me too, but what shocks me the most are the insane amounts of money that are being moved. Does the tech really cost or has that value? Why always the ridiculous amounts?

Re: XAI seeks up to $200B valuation in next fundraising

#38

Post by mullingitover »

IMTDb wrote: post #35
mullingitover wrote: post #25

Earlier quoted context omitted.

Microsoft really put this notion under a spotlight with how they deal with LLMs in VSCode Copilot. The LLMs are just a drop-down menu that you can switch between at any moment, on a whim. They all plug into the same toolchains and are essentially generic commodities. They have slightly different prices for usage but that's about it, their outputs aren't wildly different. On topic for this post: it's very telling that…

Search engine are as well. At least in the eu they literally are the first thing a browser asks you when you launch it for the first time. On a dropdown you have 2 clicks to do to change. For search engine you are prompted to using Google is one click; using something else costs the same click. Google is still managing an outrageous domination. Being percieved as the best is still a huge headstart. 99% of the populat…

> They are using “ChatGPT” with the default model selected.

Funny, because the OpenAI models are not the first or even second choice for anyone I know who uses Copilot for coding agents. Anthropic and Google are absolutely stomping them in this space.

Search engines are pretty different from LLMs, in any case: they all have different UX right in your face, different functionality, etc. The LLMs simply generate text, that's all they do, and the differences are far more subtle.

Re: XAI seeks up to $200B valuation in next fundraising

#39

Post by willahmad »

lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

B2C might not be sticky, but enterprises can't easily migrate and it takes a quite long cycle of decision making to replace one product with another, in this case LLM.

I think everyone is betting on making a good product and convince enterprises to buy from them, this is where you can get sticky customers

Re: XAI seeks up to $200B valuation in next fundraising

#40

Post by pphysch »

liendolucas wrote: post #37
lemoncookiechip wrote: post #4

I find it odd that investors are still so motivated to drop money into AI, specifically LLMs, not because I don't see value in the technology, I do, but because it feels to me like it only takes a few months (if that) for your company which might currently dominate with the leading product, to be left behind by someone else who just came out with a better, cheaper, and faster product. I guess this is true for most te…

> I find it odd that investors are still so motivated to drop money into AI, specifically LLMs... Me too, but what shocks me the most are the insane amounts of money that are being moved. Does the tech really cost or has that value? Why always the ridiculous amounts?

> Why always the ridiculous amounts?

Too much money with no place to go?

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