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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

#41

Post by crystal_revenge »

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 used to not understand as well, but then a friend asked me a question: "When Claude recommends a book, why doesn't it just link directly to Amazon and get a referral fee?"

I believe what investor's are chasing in LLMs is the same thing that Zuckerberg was chasing in the metaverse: not a new "technology" a new medium. The key insight in the development of the web was that a few companies can effectively control the entire thing (at it's peak both FB and Google basically had their tendrils on every page out there).

Apple's mobile play showed that their seeing the value in the fact that mobile was a brand new medium early on. This lead them to having control over a market that Google had some play in, and Facebook really couldn't get a hold on.

LLMs represent a new opportunity. The answer to my friend's question is very likely: "Because they eventually want to sell you the book through them". Sure there's not much of a moat, there wasn't much of a social media moat back in the day either, but eventually there will be a few winners and those winners will divide what may very well be the next "mobile" or even "web".

I already spend more and more of my online time chatting with Claude about various thing, most of the books I've ordered in the last few months came from conversations with Claude. I can absolutely imagine a world where AI is how I accomplish most of my purchasing, precisely because right now AI is not rotten with SEO spam. That will of course change, but likely not in exactly the same way the web changed.

There's a very likely future where Claude/ChatGPT/DeepSeek become iPhone/Android/Huawei, what investors are hoping is that they can make it Claude/XAI/DeepSeek (or some variant), because owning a piece of that can effectively be even bigger than owning a large amount of stock in early Amazon.

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

#42

Post by riffraff »

marcusverus wrote: post #29
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…

Say you're trying to value a 1% stake in a leading AI company. You use a standard "expected value" formula to calculate the current value of the investment opportunity. For each possible outcome, you take the dollar value of that outcome, multiply it times the likelihood of the outcome, then sum the values of all possible outcomes. With this type of calculation, possible outcomes which are very unlikely can still be…

Pascal's wager does not seem a solid investment strategy tho.

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

#44

Post by donny2018 »

mullingitover wrote: post #38
IMTDb wrote: post #35

Earlier quoted context omitted.

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,…

Your sample are tech people using Copilot, which is very small population sample. Hundreds of millions of casual users around the world default to ChatGPT, and for example in my country, it's basically household name at this point. They haven't even heard about Claude or Gemini. For Google, it looks like like Google+ vs Facebook situation all over again.

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

#45

Post by [deleted] »

jowea wrote: post #34
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.

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.

[deleted]

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

#46

Post by ori_b »

crystal_revenge wrote: post #41
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 used to not understand as well, but then a friend asked me a question: "When Claude recommends a book, why doesn't it just link directly to Amazon and get a referral fee?" I believe what investor's are chasing in LLMs is the same thing that Zuckerberg was chasing in the metaverse: not a new "technology" a new medium . The key insight in the development of the web was that a few companies can effectively control the…

> I used to not understand as well, but then a friend asked me a question: "When Claude recommends a book, why doesn't it just link directly to Amazon and get a referral fee?"

How much do I pay to make it recommend my book, rather than your book?

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

#47

Post by DaSHacka »

martinald wrote: post #32
ketzo wrote: post #20

Earlier quoted context omitted.

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).

It just benefitted from the Kleenex/Google effect due to being the first real mainstream breakthrough of GPT tech among average users ("normies").

I expect, whether OpenAI is even still around in 15+ years or not, that my grandparents will continue telling me about "that ChatGPT" well into the future.

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

#48

Post by A_D_E_P_T »

martinald wrote: post #32
ketzo wrote: post #20

Earlier quoted context omitted.

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).

o3/o3-pro is probably the best model, or very close to being the best model, overall. It beats Grok 4 in writing/composition and analysis tasks. [1] Performance is a toss-up between o3 and Claude 4 Opus, but I find o3 easier to interact with and more trustworthy. (Less likely to push back against requests and more likely to attempt to fulfill them in good faith.)

4.5 is also great for certain things. Of all models, it's the second best writer. (DeepSeek R1 is the best prose stylist, surprisingly!)

[1] - This is Grok 4: https://x.com/i/grok/share/e51O9rK0W7UaIN81nFBQoJDSs

This is o3-pro, same question: https://chatgpt.com/s/t_68710185cf04819185dc25233280e46b

o3 made fewer mistakes and drafted a more neatly structured and better written output.

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

#49

Post by andsoitis »

bgwalter wrote: post #36
andsoitis wrote: post #33

Earlier quoted context omitted.

> 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.

> What is their product though?

mission > product

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

#50

Post by 827a »

crystal_revenge wrote: post #41
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 used to not understand as well, but then a friend asked me a question: "When Claude recommends a book, why doesn't it just link directly to Amazon and get a referral fee?" I believe what investor's are chasing in LLMs is the same thing that Zuckerberg was chasing in the metaverse: not a new "technology" a new medium . The key insight in the development of the web was that a few companies can effectively control the…

Yeah but that last paragraph is the crux of it: No one is using Grok. They have no path to profitability. They have very low traction among consumers, and even lower traction among enterprises. Their CEO seems to think that copy-pasting code into a web browser is a good strategy for attracting programmers. Its most common usage is on X where people say "@grok is this true", which is fine, except its unclear if anyone is actually paying for that. Over the past week, OpenRouter has been processing ~125M x-ai/grok-3 tokens per day; compare that to anthropic/claude-sonnet-4 @ ~45B/day and openai/gpt-4.1-mini @ ~5B/day.

Yeah its only one somewhat specialized source, but its a big one. The only time anyone talks about Grok or xAI is their now-annual accomplishment of taking the intelligence crown, for about a month, before OpenAI comes out and beats them, then Anthropic comes out and beats them, then Gemini comes out and beats them, then DeepSeek crashes the stock market because china scary, then we repeat again. These things are so damn fungible now that it startles me that any investors would touch any of these companies at their current valuations.

The future where Claude/ChatGPT/DeepSeek become the next iPhone/Android/Huawei is only going to happen if these companies make hardware and traditional software operating systems. OpenAI is trying. But, by the way, one of those companies on the right side is already doing that and has a world-leading AI strategy (Google), so I'm not convinced the status quo is as disruptable as some people think.

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